Along with the U.S. government-reported number of Americans who lose U.S. citizenship each year, various foreign governments report another number that might make American homelanders uncomfortable: the number of Americans who applied for naturalisation in other countries each year. Not all of them necessarily lose U.S. citizenship, but some certainly do.
The European Union publishes a convenient table regarding acquisition of citizenship by sex, age group and former citizenship. About seven or eight five or six thousand Americans naturalise in European Union countries each year, mostly the United Kingdom and Ireland. Below, I’ve extracted the statistics relating to Americans acquiring local nationality in European countries from 2006 to 2008. The table is split into countries which allow and disallow dual nationality, based on translations of nationality laws published on LegislationOnline.org (click the country name for a link to the law). For countries which I believe disallow dual nationality, I have listed the specific section of the law which prohibits it. If there are any errors, please inform me in the comments and I will make the needful correction.
Allow naturalised citizens to retain previous nationality | ||||||
Country | 2006 | 2007 | 2008 | |||
Belgium | : | : | 160 | |||
Bulgaria | 1 | 5 | 8 | |||
Ireland | 1,518 | 1,841 | 96 | |||
Greece | : | 37 | 175 | |||
France | : | 602 | 499 | |||
Hungary | 4 | 12 | 11 | |||
Italy | : | : | 356 | |||
Portugal | 55 | : | 26 | |||
Romania | 0 | : | 85 | |||
Slovakia | 113 | 110 | 8 | |||
Finland | 36 | 42 | 82 | |||
Sweden | 430 | 344 | 286 | |||
United Kingdom | 3,020 | 2,786 | 2,206 | |||
Subtotal | 5,177 | 5,779 | 3,998 | |||
Some naturalised citizens may retain previous nationality, others not | ||||||
Country | 2006 | 2007 | 2008 | |||
Germany (Header “Multiple nationality”) | 429 | 434 | 595 | |||
Slovenia | 9 | 9 | 9 | |||
Spain | 111 | 117 | 133 | |||
Subtotal | 549 | 560 | 737 | |||
Forbid naturalised citizens to retain previous nationality | ||||||
Country | 2006 | 2007 | 2008 | |||
Austria (Article 20) | 28 | 41 | 62 | |||
Belgium | 121 | 122 | : | |||
Cyprus (Article 6) | 40 | 30 | 65 | |||
Czech Republic (Article 7(1)(b)) | 3 | 1 | 1 | |||
Denmark (Article 4A) | 45 | 17 | 21 | |||
Estonia (Article 1(2)) | 0 | 0 | 0 | |||
Latvia (Article 29) | 0 | 0 | 0 | |||
Lithuania (Article 12(1)(6)) | 0 | 1 | 0 | |||
Luxembourg | 0 | 2 | 3 | |||
Malta (Article 5) | : | 16 | 44 | |||
Netherlands | 217 | 195 | 199 | |||
Poland (Article 8(2)) | 8 | 24 | 44 | |||
Subtotal | 462 | 449 | 339 | |||
Federal Register‘s reports of Americans losing citizenship | 276 | 446 | 226 | |||
Total number of naturalisations by Americans in EU countries | ||||||
Total | 6,188 | 6,788 | 5,174 |
Caveat lector: nationality laws are often in flux. I am not sure if Belgium actually permitted naturalised migrants to retain their previous nationality in 2006 and 2007; plenty of news releases stated that they only began allowing dual nationality as of mid-2008. (Edit: based on DonPomodoro’s confirmation, I’ve put the 2006/2007 Belgium naturalisations into the “Forbidden” category, and the 2008 ones into the “Allowed” category; some of them may have occurred during the period when it was still forbidden, but this way gives the most conservative estimate of Americans who would have had to renounce). Cypriot law allows the government to demand naturalised migrants to renounce their previous citizenship, but I am not sure how this law is applied in practise. Luxembourg only began allowing naturalised migrants to retain their previous nationality beginning in 2009; reports from before that time state that “Acquisition of Luxembourg nationality is conditional on the original nationality being relinquished”. The Netherlands will soon no longer permit dual nationality, but did permit it during the period covered by the above table. Update: And Spain generally forbids dual nationality for Americans, but seems to allow it for Puerto Ricans (for example, singer Ricky Martin). Thanks to DonPomodoro for the comments!
Germany is another complicated case. Germany normally disallows dual nationality. However, it has a special law allowing people stripped of their nationality by Nazi laws, and their descendants, to resume German nationality without giving up their other nationality. I am not sure whether the statistics on acquisition of nationality include this category. Germany also has a provision to waive the prohibition of dual nationality “in the case of unreasonable conditions for release from the foreign citizenship (including excessively high release fees or an undignified release procedure)”. (Austria has a similar provision). $450 plus an exit tax and a Form 8854 seems excessive and undignified to me, but I’m not sure if any American would-be German has ever successfully argued this.
So with those caveats in mind, this data may be another piece of evidence for the theory that the Federal Register only includes covered expatriates, or otherwise under-reports the number of persons losing U.S. citizenship. The actual number of Americans losing U.S. citizenship in any given year must include those who naturalised in “single-nationality EU countries”. But this is not the only path to loss of U.S. citizenship. Other Americans voluntarily report a recent acquisition of non-U.S. citizenship as a relinquishing act. Still others renounce U.S. citizenship while retaining their birth citizenship. This seems to be the case for many of the Cantonese-style names, which also show up in Hong Kong public records of current professional qualifications (like Law Society memberships or Securities and Futures Commission licenses); these people are likely to have retained Chinese citizenship, not gone off and naturalised in Malta.
Similarly, the post-2008 explosion in renunciations of U.S. citizenship is not matched by a rise in naturalisations in single-citizenship EU countries (Austria, Germany, and Malta showed slight falls in 2009; Denmark did not provide data at all). This suggests that the two issues are unconnected; Americans are renouncing U.S. citizenship for reasons other than their desire to naturalise in countries which refuse to let them continue to be Americans. They are renouncing because the U.S. government refuses to let them continue being Americans and passes laws to
make it impossible to continue living a normal life overseas.
Finally, if you are interested in seeing the statistics going in the “opposite direction”, the Department of Homeland Security publishes yearbooks of immigration statistics; the U.S. naturalisation data tables unfortunately only classify applicants by country of birth, not country of other citizenship. A few countries, especially ex-communist ones such as Bulgaria or Romania, send hundreds of times more naturalisation applicants to the U.S. than they receive from the U.S.; however, at the other extreme, in small and wealthy countries like Belgium and Malta, the numbers are far more closely balanced.
Good find. I think you extrapolate some of the numbers here and see very clearly that the number of people on the US renunciation list is understated.
And we haven’t even included Asia? One of the highest ranking pages on the US embassy in China’s website is “renouncing US citizenship”. I think what the US is doing is just plain crazy. Their actions are basically saying “We don’t want loyal patrotic Americans overseas, out of our control”. Given the way that the TSA and police forces are behaving, I believe this to be 100% true. Louisiana passed a law prohibiting 2nd hand sales in cash. It’s supposed to curb theft, but 99% of the people it will affect are law-abiding people. At the end of the day, what do they have? More control. It’s a police state back there.
The US doesn’t have control over US expats and they don’t like that. FATCA is a way to get that control. I’m not going to give it to them. I’m going to renounce.
@geeez I thought of doing this for Asia too but there’s just not enough information available. Most American renunciants in Asia are probably dual citizens, so they don’t show up in naturalisation statistics. I suspect most of the other Americans abroad who naturalise do so in Canada, Australia, and New Zealand, but I wasn’t able to find their statistics easily.
Hong Kong and Japan do publish statistics on naturalisations, but they only provide a breakdown for the top few nationalities or so, which don’t include Americans. In Hong Kong the top nationalities are Pakistanis, Indians, Vietnamese, Indonesians, and Nepalis who for about 80% of about ~1,500 naturalisations/year; in Japan the top nationalities are North Koreans, South Koreans, and Chinese who account for about 90% of ~15,000 naturalisations/year. Mainland China doesn’t publish statistics on resumption of nationality by former nationals, nor on naturalisations (it is theoretically possible; some North Koreans have done it, for example, but I doubt any Americans have since George Hatem and his contemporaries).
Interestingly, Japan’s renunciation statistics are also on the page I linked. According to that, about 600 people per year renounce Japanese citizenship. If you believe the Global Migrant Origin Database, the US has about 3x as many nationals living overseas as Japan. So basically the claim of the US government is that the Japanese diaspora (which is not taxed, red-taped, nor libelled as tax evaders by their home government) has the same renunciation rate as the American diaspora =)
Eric, I said somewhere on here, Japan is the tail and the US is the dog in many cases. The US makes legislation, and the Japanese do the same, especially with financial instruments.
http://forexmagnates.com/cftc-finalizes-forex-rules-leverage-reduced-to-150/
I’m trying to find the link again, but I clearly saw that Alpari UK said very clearly “No Japanese Citizens” on a page at their website. Scary for the Japanese because they are saying “citizen” and not “residents”.
If you look into the retail FOREX world, there are many more people that trade forex than stocks, options, and futures. People can literally make *nice returns* in a short period of time. There are many famous Japanese housewives that were making millions per year. Then came the regulations!!
It’s still very possible to do this, but people must either deposit more money OR have an offshore account with a different broker. Japan and the US just made it harder to do. It kind of made me wonder, all of these people were making money (most of them paying taxes), WHY would they try to make it harder? It sounded like a mix of spite/envy to me, and corruption with the CFTC/NFA in America, wanting everyone to use only futures contracts where they “regulate” the market and get a “nice fee” for every contract traded.
At the end of the day, this regulation by Japan and the US is just for corrupt and ideological reasons. US regulations really don’t “help” Americans. They only gave a monopoly to American brokers to do whatever they want to do. Forex pricing is done with the interaction of the whole world; one country’s internal regulations don’t affect a global market. There are many “regulated” brokers that take advantage of customers, so regulation to isn’t worth all that much. I prefer to hear peoples’ stories and experiences to know which brokers are good and which ones are bad.
Great post idea!
I live in Belgium and wrote my university thesis on nationality law… – Our government here didn’t allow dual nationality until 2008, so that makes Belgium difficult in the table breakup. They used to really enforce this too, since I used to have to inform the Belgium consulate of my intention to retain Belgian nationality when I was outside of Belgium or risk losing it all of the time. They are laxer now. Luxembourg didn’t allow dual citizenship until 2009? and the Netherlands and Slovenia have never allowed dual citizenship for anyone naturalising – They only allow Dutch or Slovenes abroad to retain their nationality if they naturalise in another country. Spain only allows those from Latin American countries or Portugal to retain former nationality (ie if I naturalise there I would have to renounce all of my citizenships: Italian, Belgian and US). I don’t know what their policy is for someone from Puerto Rico.
Hope this helps!
Oh want to add – The Slovene numbers are skewed because those are probably people of Slovenian descent applying for exceptional naturalisation under a special section of the Constitution in Slovenia. I know someone who did this and they are the only ones allowed to retain their former nationalities, so those 9 people each year are all of Slovenian descent probably and may not have even been resident in Slovenia (Its based on your Slovenian language ability and active ties to the country, but not related to actual residence).
Wow.. Spain is tough. Even if I naturalise Brazilian, I would still have to live their for 10 years before I could apply to be a citizen. For my Brazilian wife, 2. Spain’s stance on Portugal and Iberoamerica is quite interesting from a historical perspective. I think Spain still think that Portugal was part of Spain. I think the two countries were only united for something like 50 years.
http://en.wikipedia.org/wiki/Spanish_nationality_law
Sigh.. I would have to set up businesses in any countries that I wanted to move to. Is there any country in the world that makes the process easy, or fairly inexpensive to become a citizen? (excluding the “heritage” citizenship countries like Italy and Ireland)
There are “discussions” that when the new EU Canada Free Trade agreement is unveiled their will be a greater opportunities from Canadians to get work visas in the and vice versa. However it is still not known how far this will go.
@DonPomodoro: thanks! I updated the table based on your comments. I basically ended up starting another category for the “maybe, maybe not”s. But even with that “maybe” category separated out, the number of Americans naturalising in definitely-single-nationality countries is greater than the total number of losses of U.S. citizenship reported by the Federal Register in every single year. Even better proof that the U.S. government isn’t telling the whole story.
I think that we are witnessing the death knell of the nation state, and that immigration policies are only going to get more restrictive before they get better as citizenship is one of the only goods that a nation state, increasingly irrelevant in the face of globalisation and mega corporations, really has a monopy of control over.
I have heard that South Africa makes it easy to immigrate there…Australia, New Zealand, Canada and others are very welcoming, if you have a specific profession that they need. This isn’t necessarily something requiring an advanced degree: I know someone who immigrated as a hairdresser and another as a cook. These change all the time though. I just tried my hand at the online selector to immigrate to Quebec, and apparently they would be willing to grant me a settlement visa. Try it out for fun:
http://www.form.services.micc.gouv.qc.ca/epi/index.jsp?languageCode=en
Most ‘desirable’ countries don’t make it easy to immigrate without the skills that they are looking for though.
@Eric
@DonPomodoro
Another interesting thing I have found out was that some EU countries(I believe Beligum is one) courts have ruled that British National Overseas(Hong Kong) Passports are effectively the same as regular UK Nationals thus are entitled to the same rights under the Treaty of Rome.
@Eric
Looks great! I think that the complexity of the table just shows how out of unison EU countries are with regards to nationality laws. They really run the entire gambit in terms of how easy or limited access to citizenship is.
I just remembered that Germany allows dual citizenship with other EU countries, so if I naturalised there I could keep my EU citizenships but would have to renounce my US one.
I don’t know if Germany would accept that the US “exit tax” qualifies as excessive to exempt oneself from having to renounce since the one former US citizen in Germany that I know specifically obtained German citizenship this year due to FATCA and was intent on renouncing! The US exit tax must be one of the most overbearing exit procedures around though I would imagine and might hold in a German court if the issue were raised. I imagine that most newly minted Germans though were happy to get rid of their US passports…there are those who are fighting for Germany to change the law. Here is an article by a longtime German resident and US citizen on the very issue:
http://www.thelocal.de/opinion/20111026-38467.html
@Tim
To be honest, I would view that as being just if true, since BNO passports, which entail no right of abode anywhere in the world and aren’t even more valauble than a HKSAR passport nowadays, really were a cop-opt by the UK when they transferred sovereignty. Portugal granted Macau residents full portuguese nationality when they transferred to China and I haven’t heard of any mass exodus by the Macanese to the EU as a result! Do you have a link about the countries which are granting BNO holders freedom of movement rights? Would love to read them!
@Tim, that’s seems to be a slippery slope because I was reading just yesterday that HK citizens need a passport to enter into Portugal. I don’t think they have “harmonized” the immigration rules for Europe yet. If they ever do, I don’t think that everyone will be happy!
@Don, in your studies, are there ANY countries that are a piece of cake to immigrate to and get citizenship?
All,
One thing to remember is that most, if not all of the countries that do not recognize dual citizenship do not recognize it for persons who become naturalized citzens of those countries. They require that you either “renounce” your former citizenship allegiance when you take your oath of allegiance to your new country of citizenship, but depending on the laws of your prior country that country may well consider you to still be its citizen and require that you use only the passport of your “old” country if you enter or leave that country. Germany is likely one of the most rigid in that regard in that persons becoming naturalized German citizens must present official docments from their old country that they have indeed renounced their former citizenship before they can become a naturalized German citizen. That appears to a particularly tough requirement for Argentines, who can only renounce their Argentine citizenship by appearing personallhy in Buenos Arires. And not yet being German citizens, I am not sure how they leave Argentina to go to Germany since they no longer are citizens of any country and therefore presumably have no passport with which to travel.
But having said that, Germany, and suspect some other countries, do grant “citizenship by birth” to children of German parents (and for I don’t know how many generations beyond that) to those born outside of Germany. They are just as German as if they were born in Berlin, although the countries where they were born likely also recognize them as “citizens by birth” of those countries. I have known and worked with passport-bearing German citizens who were born in Brazil, Chile and Paraguay. When they left their native countries to travel to the US, they always used their country-of-birth passports to leave but used their German passports to enter the US. That is because the US requres expensive and very time-consuming visas for citizen of these South American countries to enter the US, whereas under its visa-waiver policy German citizens can enter the US for temporary visits without a visa. All they need to do is present their German passports. In Brazil, a country with xome 200 million population, there are only 5 US consulates, so a Brazilian applying for a visa to visit the US may have to travel 1,500 km. for the required personal interview in order to be issued a US visa, and may have to wait up to 3 months for the appointment to be interviewed to apply for the visa.
But indeed the very different citizenship laws of the differet countries of the world add nothing but confusion when it comes to one’s true nationality.
@DonPomodoro yeah, there is a lot of resentment in HK about the whole issue of BN(O) passports. And of course, British Negligence and Obstruction was the whole reason that so many HKers went abroad temporarily in the 1980s and 1990s to get foreign passports — including American ones — and then come right back to Hong Kong. Like they said in the legislature here so many times, all people ever wanted was an “insurance policy”. Which mysteriously, 20 years later, gave the IRS an excuse to start trying to sink its teeth into the HK economy and rip out chunks of flesh. The guys who just went and paid $100k for Grenada or Dominica passports got made fun of at the time, but now they’re laughing all the way to the bank.
@Roger: as far as I can tell, the countries I listed as forbidding dual nationality all have explicit provisions in their laws stating that the applicant for naturalisation must present proof of renunciation of previous citizenship (e.g. CLN) either during the application process, or within a set time afterwards. Of course the law and actual practise are two different things =) In Japan they are apparently very lax about this requirement, at least with regards to Americans (according to the former David Aldwinckle, who naturalised a while back). There are only a few countries which allow dual nationality in the sense you mention (recognising on their own soil that one of their own citizens has another citizenship). Usually this is the result of bilateral treaties between small countries that used to be part of bigger countries, e.g. Kazakhstan and Russia.
I’d imagine that in the case of, e.g. Argentines trying to naturalise in Germany, the German consulate would issue them a 1954 Convention document, travel letter, or something similar so they could exit Argentina. I’ll probably have to deal with a similar issue if the line at the US consulate in HK is too long and I want to give up my US passport. Usually countries will only issue travel documents to their own residents. But some countries issue stateless travel documents very liberally. I know Indonesia used to hand out its Travel Documents in Place of Passports to people who had lost their other passports in Indonesia and weren’t being helped by their consulate, or even those wanted come to Indonesia from overseas for a short trip, or whatever, but after they reformed the immigration laws in 2011 they clamped down significantly.
@Eric
The really smart and very rich Hong Kongers like Li Ka-shing and his two sons Victor Li and Richard Li(I don’t know if wife Isabella became a Canadian too) became Canadians. I note in the article in linked to below that Li Ka-shing despite his “non resident” tax status is very respected figure in Canada. Note the person Li Ka-shing is standing next to is Dalton McGuinty premier of Ontario and most powerful centre-left politician current in power in Canada. McGuinty as a centre left politician in fact a centre left politican that once employed Obama uber-strategist David Axelrod has no problem associating with someone most homeland Americans would consider a tax cheat to his country of citizenship.
http://www.thestar.com/news/article/1072218–hong-kong-billionaire-s-25-million-benefits-st-mike-s
Interestingly enough the last time the Li family got into controversty in Canada is when they used their Canadian citizenship to try acquire Air Canada and when PCCW was talking about purchasing Bell Canada using Richard Li’s Canadian citizenship
http://en.wikipedia.org/wiki/Victor_Li_Tzar-kuoi
http://en.wikipedia.org/wiki/Richard_Li
Another interesting page from Wikipedia below.
http://en.wikipedia.org/wiki/Canadians_in_Hong_Kong
Interestingly enough the percentage of Canadian citizens living in Hong Kong born in Canada is greater than the number of Canadian citizens living in Canada born in Canada(I have a hard time believing this but I’ll accept Wikipedia for now)
@donPodormo, in your @Eric comment: Actually as I understand the US renouncement procedure the US citizen renounces before a US consulate and then, after State Department approval, receives his Loss of Nationaliy certificate. It is only after this has been received that the State Department notifies the IRS that the person is no longer a US citizen. By this time the person would likely have moved any assets he might have had outside of the US. If this is correct, how does the IRS really have any ability to collect the exit tax? For the US citizen living in Germany he would have his Certificate in hand to present to German authorities when applying for German citizenship.
Since Argentina is so tough in allowing its citizens to renounce cititenship, requirity that they return to Argentina and do so before a government offcial in Buenos Aries, I could be wrong but this makes me suspect that the authorities there might be reluctant to issue a stateless person travel document so the person could exit Argentina and go elsewhere. But I could be wrong. And today I don’t think any airline would allow a person to board an international flight without proper documentation because they are subject to massive fines if they fly someone into a country without proper travel documents.
Roger Conklin wrote:
The only answer to that question is access to the United States. The financial refugee becomes de facto exile. But since I haven’t received the CLN, I wonder if the procedure is changing to make the Form 8854 filing the prerequisite for the CLN.
It doesn’t matter to me. I know that I know that I know that I am no longer an American citizen. I don’t give damn what Mrs. Clinton or Mr. Shulman say. They cannot take away my human rights unless I go back to the United States. There I can be locked up until I pay every last farthing.
But the Canadian government recognizes me and won’t make me pay any taxes and penalties assessed to me by the IRS me after the date that I became a Canadian citizen (February 28, 2011).
@Tim yeah, many of the 1980s/90s HK emigrants settled into the suburbs of Vancouver and didn’t come back, but their Canadian-born kids (at least the ones born before 1997) became British Dependent Territories Citizens at birth and so acquired Hong Kong right of abode (permanent residency) or right to land that way, so they can live and work freely here. Typically they also speak much better Chinese than the kids of HK emigrants who grew up in the US.
Sadly, after 1997 the child of a Hong Kong Chinese born outside Hong Kong who acquires a foreign nationality at birth has no automatic entitlement to Hong Kong right of abode any more, so this sort of “brain circulation” will slowly come to an end.
@Roger, the fundamental difference between ALL of the other countries that make it difficult to renounce is that they don’t attack their dispora like the US does. If they tried to pull something like a FATCA or FBAR, the US would condemn them publically. This hypocracy stinks!!
@Eric
So given the last kids born in Canada that would have this status are only 15 years old this could go on for while. I also believe that anyone born to Canadian citizen in Hong Kong who themselves was born in Canada will obtain Canadian citizenship. So this back and forth will go on for a little while longer.
The other thing is Hong Kong Passport holders have any easier time getting a tourist visa to enter Canada than the US thus places like Whistler BC are pretty favoured tourist destinations for people from Hong Kong.
Today’s IPod issue of the Washington Post, forwarded to me by my son, includes an important article about the thousands of US citizens who are accepting high-paying jobs and reloating to Brazil. It totally ignores any mention of the tax trap they fall into when they do that. Below is a copy and paste of that article, and immediately below it the on-line comment on this article which I submitted to the Washington Post. Very few comments have been submitted so far, so I hope mine gets read,
Here is the article: http://www.washingtonpost.com/world/americas/expats-lured-by-brazils-booming-economy/2012/01/13/gIQA4jnasQ_story.html
Expats lured by Brazil’s booming economy
By Juan Forero, Published: February 5
SAO PAULO, Brazil — It just made sense to be in South America’s economic heart, Jonathan Rosenthal reasoned, no matter that he had been working on Wall Street with some of the investment world’s most heady firms.
The fact was, the United States was in a sustained slump and Europe was tanking, but there were promising opportunities in Brazil. So like a growing number of young, highly educated professionals, Rosenthal made the leap to Brazil’s Wall Street, Faria Lima Avenue, to start a hedge fund that has ridden the country’s economic boom.
With an economy that recently surpassed Britain’s to become the world’s sixth largest, Brazil is offering a sunny and often lucrative alternative to the downcast prospects in the United States and Europe. In a sort of reverse brain drain, foreigners are flocking to Brazil.
The number of foreigners residing in Brazil reached nearly 1.5 million last year, up from 961,000 in 2010, said Paulo Abrao, the government’s highest-ranking immigration official. Work authorizations shot up 32 percent in the first nine months of 2011 compared with the corresponding period in 2010. Americans have led the way, with 7,550 receiving work permits in 2010. In addition, 2 million Brazilians who had been living overseas have returned home since 2005.
“While there is crisis in other countries, we have this phenomenon developing here,” Abrao said. “Employment levels are high, and countries that normally were the destination for Brazilians, like Portugal, the United States and Spain, are now sending people to Brazil.”
Those arriving here clearly have an adventurous streak. But they also made their decision based on pragmatic considerations: Brazil is an emerging economic power whose economy has grown by 4.4 percent a year since 2004. It has also received about $200 billion in foreign direct investment in the past six years.
And despite the formidable red tape for foreign workers, this country of 194 million has an increasingly diverse economy with room for those in finance, engineering, Web design, petro-engineering and other highly technical professions.
“When you’re talking about skilled labor, there’s a huge lack of supply, so as a result if you have the courage to come down to Brazil, or you have the language skills, or you’re Brazilian American, it’s a no-brainer to come down here,” said Rosenthal, 31, who runs Newfoundland Capital Management with a Brazilian partner.
In New York, Rosenthal had a golden career. At 22 he joined Morgan Stanley, and he later worked for one of Julian Robertson’s Tiger Cub funds. But the culture of New York’s financial world can be stiff and closed, Rosenthal said, and he was attracted by the investment possibilities in Brazil and neighboring countries.
Here, Rosenthal said he runs into the executives of big firms at the gym, and he is a cab ride away from 80 percent of the firms on the Sao Paulo exchange. “Those interactions are priceless,” he said. “You don’t get that in New York.”
And then there is the music, the spicy cuisine of northeastern Brazil and the ingenious soccer of the nearby team in Santos, which has had to replace Rosenthal’s beloved New York Jets.
‘Everything was about crisis’
Brazil has always attracted outsiders with its beaches, sultry samba and continental proportions. Poor immigrants from Italy, Spain, Portugal and Germany came by the boatloads for decades. In the 1950s, the glitz and striking beauty of Rio de Janeiro’s Copacabana attracted Hollywood stars and musicians. More recently, Brazil has been a magnet for low-skilled labor from poorer, neighboring countries.
But in recent years, Brazil also has beckoned people like Stephane Rogeau, 36, a Parisian who had sold software in the defense industry and decided his best career move would be to come here and get an MBA.
“I could see the news,” he recalled as he and his Brazilian girlfriend moved into their new apartment. “This company would be firing 2,000 people and that company would be closing. So I thought, it’s not the best time to be looking for a job.”
A fellow Frenchman, Franck Turquet, 28, recalled how in Europe “everything was about crisis, the social crisis, the economic crisis, the identity crisis.” He is now living near the beach in Rio de Janeiro and is engaged to a Brazilian woman. “My life here is really nice,” he said.
Not all, of course, is rosy. The economy has cooled in recent months, a byproduct of the global economic crisis, and growth is expected to reach only 3.5 percent this year, according to Itau, Brazil’s biggest bank. The stock market has been performing poorly lately, and President Dilma Rousseff is hamstrung in her efforts to push through economic reforms.
Still, the economic output is an improvement over Europe and the United States, and unemployment has fallen to just above 5 percent. Sectors such as oil and construction are expected to remain buoyant. The possibilities in upper-echelon jobs, the place for foreigners with sterling qualifications, remain promising.
Indeed, salaries in high-end jobs can often top those of New York or Paris, said Edmar Perfetto, a partner at the international auditing firm PwC, adding that 80 percent of foreign multinationals have operations in Brazil.
General Electric, with operations in 100 countries, moved its Latin American headquarters from Mexico to Sao Paulo, went from 7,000 to 8,000 employees in Brazil last year and is going to open a regional center for management training in Rio de Janeiro. Paul Fama, an American who is the senior human resources manager for GE here and a newcomer to Brazil, said the company has managers from several Latin American countries.
“That kind of diversity breeds better ideas,” Fama said.
A strong demand
In Belo Horizonte, 360 miles northeast of Sao Paulo, Google has actively sought engineers for its research unit. Of the 100 engineers whom engineering director Berthier Ribeiro-Neto oversees, about 10 percent are foreigners — from the Netherlands, France, Germany, India and other Latin American countries.
“The economy is growing faster than the university engineering departments in the country,” Ribeiro-Neto quipped.
One vital job was filled by Olivier Teboul, 28, a Frenchman who arrived a few months ago. He had finished a doctorate in applied mathematics in Paris and, on a whim, applied at Google in Brazil. “Being in a country which is growing and offering very attractive positions — you know, I didn’t have to think too much about it,” he said.
Other foreigners here, like David Bailey, a Briton who lives in a Rio apartment with three other Europeans, are joining the growing world of Internet startups.
He is launching a Web site called the Flying Fork that permits diners to order takeout food online. The number of restaurants in Brazil that deliver food has doubled to 50,000 since 2005, Bailey said, a clear sign that Rio is ready for his initiative.
Bailey, 28, who is also a musician, said Brazil offers both a rich culture and business possibilities.
“It’s a really fun place to live, it’s sunny, it’s a place where there’s a strong culture of music, of going to the beach, having fun,” he said. “And on the other hand, it’s a place — one of the few places, actually — where the economy is growing and there are significant opportunities.”
Here is my submitted comment:
Unfortunately this article totally ignores the massive barrier erected by our own government against US citizens taking advantage of the excellent opportunities to use their talents by relocating to Brazil: US taxation of US citizens who go abroad to accept employment. Not only are they subject income tax in Brazil, or wherever else they go, they continue to be subject to US income tax on their world wide income as if they never left home. And although banks in Brazil have been so far slow to react, under the exterritorial provisions of FATCA, enacted in 2010, which requires every foreign bank in the world to provide detailed reports to the IRS on all their accounts in which US citizens have a more than 10% interest, (including dual nationals and green card holders who have gone back home), banks in Europe are already closing down accounts of US citizens who live there, rather than violate the privacy laws of those countries by revealing confidential information to a foreign government. You can’t function or survive in Brazil without a local bank account. And if you are a “US person” entrepreneur in Brazil or anywhere else abroad you must pay Social Security taxes to both that government and to the IRS, and you must set up 3 accounting systems; 1 in Brazilian currency per local laws, and two more in equivalent US dollars converted in accordance with extremely complex IRS rules – one per US GAAP rules and the other to comply with other IRS reporting requirements, and submit horrendously complex FATCA and FBAR report to the IRS and US Treasury for which penalties for failure to submit, or for inadvertent errors start at $10,000 for each report.
The US is the only nation that taxes its citizens and green card holders who relocate abroad. These US tax laws place US citizens at such a tremendous disadvantage in accepting employment abroad that few will be able to survive.
Cuba violates the human rights of its citizens by denying them exit permits. The US does exactly the same thing through our tax laws which make it impossible for Americans to survive if they relocate abroad. In December the US joined 13 other countries in a Security Council resolution condemning Eritrea for collecting income tax from its Diaspora, yet the US is the only other nation that does exactly the same thing. Nobody in Washington objects or even raises an eyebrow. Talk about a double standard! One rule for the US and another for everybody else. Good luck for the Americans who have relocated to Brazil when they realize they have fallen into the tax trap Congress has built for them. They are going to require more than good luck just to survive.
Nice! Here’s a link to that Washington Post article. I clicked “recommend” on your comment. Let’s see if the WaPo editors will dare pick it as a “Top Comment” …
Yup, I also clicked on recommend for Roger’s comment!
I also clicked recommend for Roger,s comment!
Great Comment Roger!!