How to Move Abroad From the US: An Unofficial Roadmap

Wondering how to move abroad from the United States? You’re not alone. Whether you call it wanderlust, itchy feet, or travel fever, many people feel a calling to embark on adventures overseas. 

An estimated 5.4 million Americans live overseas, with more and more making the move every day. And with many countries having a lower cost of living and higher quality of life than the US, it’s no wonder some say the new American dream is to move abroad.

Fortunately, between the widespread acceptance of remote work and an abundance of new visas for digital nomads, retirees, and highly skilled workers, that dream is more attainable than ever.

As expat tax specialists, we know what it takes to prepare to move, set down roots, and eventually thrive abroad. Below, we’ll walk you through how to do just that.

1. Choose the location

Some soon-to-be expats already have their hearts set on a particular destination. Others might have a country or region in mind, but feel uncertain about the specifics. And some may have no idea where to start.

Regardless of which camp you fall into, it’s worth asking yourself some questions to help you determine your best fit:

• What’s your budget?
• How long do you want to be abroad?
• Do you want to settle in one place, or hop between destinations?
• Are you prepared to learn a new language?
• What are your health care needs?
• What kind of climate do you prefer?
• Are you looking for a place with a large expat community, or do you want to completely integrate yourself into the local culture?
• Do you need a visa? 
• Will you rent or buy a home? 
• Do you prefer an urban area, a rural area, or somewhere in between?

When evaluating specific locations, consider questions like:

• What would your living expenses be like?
• What job opportunities are available?
• What do people do for fun here?
• Is there public transportation, or will I need a car?
• How safe is it?

As you continue researching, here are some additional relevant blog posts (read: shameless self-promo).

1. The Top 5 Countries for Digital Nomad Visas in 2022
2. The Best Places to Retire in the World in 2022

Note: The US State Department maintains an index of travel advisories that can help you gauge the safety of your new potential home.

2. Select the best visa option

Don’t pack your bags just yet — before going to the country of your choice, you may need to apply for a visa. With a US passport, for example, you can only visit most European countries for 90 out of every 180 days. Stays beyond that require a long-term visa.

There are usually a handful of different visa options to choose from. Most countries offer student visas and family reunification visas for those with a partner, spouse, or family member living there. Getting a work visa is also an option, but it might be challenging to find an employer willing to sponsor one.

Recently, many countries have started offering digital nomad visas, retirement visas, and golden visas.

Be sure to read the requirements of each visa carefully to make sure you qualify. Once you’ve chosen one to apply for, it’s time to gather the required documents, submit your application, and wait for acceptance.

3. Figure out housing — at home & abroad

To save yourself the stress of figuring out your new country’s housing market upon arrival, do some research beforehand. The first thing you’ll want to ask yourself is whether you want to rent or buy.

In either case, you may want to book temporary accommodations when you first arrive so you can take the time to find the right fit.

Renting

Renting is usually best for those who:

• Expect a short-term stay
• Don’t have enough savings for at least a down payment
• Don’t want to put the work into maintaining a property

When sussing out rental options, try searching country-specific subreddits and expat Facebook groups to get a better feel for prices, popular websites, and neighborhoods. You may even want to reach out to someone who lives there for additional advice.

Once you start browsing listings, be cautious—rental scams occur worldwide. If somebody wants you to put down a deposit without visiting a property, or the price seems too good to be true, the offer may not be genuine.

Buying

On the other hand, buying may be a good fit for those who:

• Plan to settle down in a country long-term OR want to make an investment
• Have the savings necessary to make the down payment — and in more competitive real estate markets, potentially even the full cost
• Are willing to spend time and energy maintaining the property, or hire someone to do so on their behalf

While it’s good to do some overall housing market research, most expats choose to work with a real estate agent when buying property. This can be particularly helpful if you’re moving to a country where you don’t speak the language. 

You may want to consider working with a real estate attorney as well. Each country has unique laws regarding who can buy real estate, how the purchase process works, and which documents are necessary. Real estate attorneys can help you navigate those laws.

Note: If you earn income from renting out foreign property, you must report it on your US taxes.

Decide whether to sell or rent your home in the US

If you own property in the US, you’ll also have to decide whether you want to rent it out or sell it. There are pros and cons to each — on the one hand, renting out your home allows you to:

• Bring in a source of steady income
• Keep the property in case you want to move back
• Claim certain tax breaks

On the other hand, renting out your home can:

• Be time-consuming & stressful (especially from abroad)
• Require ongoing maintenance & upkeep
• Result in issues with tenants

The pros of selling your home include:

• Receiving a good chunk of change to start your new life abroad
• Avoiding the costs & stress associated with managing & maintaining a property from a foreign country
• No longer having to pay property taxes

Some of the cons of selling your home include:

• Not having a steady stream of rental income
• Not having a home to come back to if you return to the US
• Potentially earning less than you could by selling at a later date

4. Meet fellow expats & locals

There’s nothing like meeting new people to help reduce culture shock and make you feel at home. While making new friends can be nerve-racking, there are many ways for expats to do so. 

You can even start making friends before you leave by reaching out to expats in your destination country on Reddit and Facebook. Internations is a great resource as well — it’s a network for expats with local chapters all over the world.

Once you’re actually in the country, you can meet new people by:

• Enrolling in a language course
• Working from a co-working space 
• Living in a co-living space
• Attending events through Meetup, Couchsurfing, Eventbrite, & other sites
• Signing up for classes & workshops like cooking, dancing, surfing, etc.
• Joining a club or organization for expats in your area or related to your interests (music, entrepreneurship, basketball, etc.)
• Going to a language exchange or finding a language exchange partner(s)

5. Find the best health insurance

Health care should be a major consideration when you move abroad, especially if you have pre-existing conditions. The OECD, US News & World Reports, and International Citizens Insurance can all be helpful resources to gauge the quality of a country’s healthcare system and how it works. 

Remember that depending on your visa, you may or may not have access to that country’s public system. And even if you do have access to public health care, your personal medical needs or the quality of health care in your soon-to-be home might make private insurance a better option. There are a few different types of private health insurance plans:

• Travel health insurance: It typically only covers accidents and illnesses. It’s best for true digital nomads who move from country to country frequently and don’t have complex medical needs.
• International health insurance: This type of insurance is available through global companies like IMG, GeoBlue, or Cigna and typically offers greater coverage. It’s suitable for nomads or those who plan to stay in one place.
• In-country private insurance: Available through local companies. It typically offers faster service and higher-quality facilities than public health care systems in one specific country. It’s best for those who plan to settle down in one place for a significant stretch of time.

6. Understand taxes

Unfortunately, moving to another country doesn’t eliminate your US tax and reporting obligations. Due to the US’s citizenship-based taxation system, all American citizens and permanent residents are subject to taxation. 

If you meet the minimum income reporting threshold, you must file a federal tax return (and possibly pay US taxes). In some cases, expats even have to file state taxes. The good news? Americans abroad receive an automatic two-month extension to file their taxes. 

Rather than April 15th, the tax deadline for US expats is June 15th. You can extend this deadline even further to October 15th by request. However, you still must pay any taxes you owe by April 15th.

If you’re also a tax resident of another country, you may face taxation by that government and the US. Fortunately, there are a couple of great tax breaks for expats that can help them reduce (and often even eliminate) their US tax liability. This includes: 

• The Foreign Earned Income Exclusion (FEIE): Allows Americans abroad to exclude a portion of their foreign-earned income from taxation. Expats can exclude up to $120,000 for the tax year 2023, and up to $126,500 for the 2024 tax year. To qualify, you must pass either the Physical Presence Test or the Bona Fide Residence test. As a bonus, passing these also qualifies you for the Foreign Housing Exclusion.
• The Foreign Tax Credit (FTC): Gives Americans who pay foreign income taxes dollar-for-dollar credits to apply to their US tax bill. Typically if you live in a country with higher taxes than the US, this not only eliminates your US tax liability but also gives you surplus carryover credits.

Keep in mind that moving abroad may require additional reporting obligations, such as:

• The Foreign Bank Account Report (FBAR): Required for those with more than $10,000 across foreign financial accounts.
• Statement of Specified Foreign Financial Assets (Form 8938): Required for those with over $200,000 on the last day of the tax year or over $300,000 at any time during the tax year.
  • Americans living in the US may also need to file this form, but the threshold is much lower: just $50,000.

Of course, everyone’s tax and reporting obligations are slightly different. To ensure that you’re fully compliant, it’s best to consult with an expat tax professional.

* Bonus section: Start a business!

If you’re self-employed, you may want to consider registering as an independent contractor or establishing a business. Depending on your circumstances, you may want to do this in the US, your new home country, or both.

Registering an LLC in the US, for example, can help you protect your personal assets from seizure and elect a more beneficial tax treatment (such as an S-Corp or C-Corp). While there are some upfront costs for initial registration and maintenance, many find that the benefits are well worth it. 

Many countries allow foreigners to open businesses there, but the exact business structures, benefits, and registration processes vary widely from place to place. You may want to consult an in-country lawyer, accountant, or financial advisor for specific information and tips.

Note: Owning a foreign-registered business comes with additional US reporting obligations. Depending on your business type, you’ll likely need to file either Form 8832, Form 8858, or Form 5471.

Resources:

1. How Many Americans Live Abroad?