Cons to getting Argentine citizenship for Americans?

[sesamosinsal]

Neither the U.S., nor Argentina* (Can't edit my posts)

 

[el_expatriado]

Want to find out what US consular assistance is worth? Download the series "Locked Up Abroad". They come to visit once a month. They give you a list of lawyers. They will bring you food or money to the jail that your family sends to the consulate.

The most important thing if you are ever found in a criminal proceeding here in Argentina is to have the means to hire your own private defender and some money to grease the wheels of justice (so I'm told).

My wife has a friend whose father is a criminal defender and the first thing he tells people to do when they come to see him is to bring the escritura to their property so he can see how much cash is available, because if you want to stay out of jail you are going to need it.

The US government is going to use up zero political capital trying to get a US citizen out of jail in a foreign country. If you want them to move for you, you'd better have political connections. You need a congressman or senator or someone in elected office on your side pressuring the state department to work for you.

So, I see way more upside to having dual citizenship, especially since I never plan on getting in trouble with the authorities.

 

[che]

Not sure your citizenship is going to help you with 2 or 3 - 4 seems kind of silly

#2 I believe you may enter Brazil with your mercosur ID, which you have with your Argentina residency, no fee no visa. As for Cuba, go and the US finds out and your are in trouble.
#3 The SEC does not prohibit foreign investment by individuals. The IRS requires full reporting. Don't tell the IRS about foreign investments and risk $100K fine plus 5 years in jail. You can open account in BsAs with DNI, you do need citizenship.
#4 governments don't routinely provide protection - seems odd to consider this of value.
Big downside: filing tax returns in 2 countries if you live in Argentina.

Only upside I find for citizenship versus residency is as a citizen you don't have to renew residency every 15 years and you may vote.

2. You can travel to Brazil, Cuba, and other countries that either require a US citizen to have a visa or charge a reciprocal fee to US citizens or are otherwise off limits for US citizens due to political reasons.
3. You can bank and invest outside of the United States without the SEC watching over you and prohibiting what you invest in. Many banks around the world won't open accounts for US citizens and almost every investment fund outside the US won't accept US investors for fear of running afoul of draconian US investor protection laws (which is getting worse).
4. Finally, it is better not to depend on a single government. I'd rather have the protection of two governments wherever I go.

My wife is also looking into what needs to be done so I can get an Italian passport also. I didn't know this, but it looks like some European countries will grant citizenship through marriage, so those of us who are married to Argentines who have European citizenship can also do the paperwork necessary to apply for European Union citizenship after being married for a certain number of years.

 

[sesamosinsal]

#2 I believe you may enter Brazil with your mercosur ID, which you have with your Argentina residency, no fee no visa. As for Cuba, go and the US finds out and your are in trouble.
#3 The SEC does not prohibit foreign investment by individuals. The IRS requires full reporting. Don't tell the IRS about foreign investments and risk $100K fine plus 5 years in jail. You can open account in BsAs with DNI, you do need citizenship.
#4 governments don't routinely provide protection - seems odd to consider this of value.

You'd have to be a citizen of a Mercosur country to avoid Brazil's reciprocal treatment of U.S., Australian, and Canadian citizens. Visas are adjudicated according to citizenship, not permanent or temporary residency.

Many brokerages who are not registered in the U.S. are threatened with lawsuits if they do business with U.S. residents. For some brokerages, this means avoiding business with U.S. citizens all-together, regardless of what country they claim to be as their permanent residence.

As far as consular assistance, U.S. consular officers can't just break an American out of jail. That's ridiculous. What they can do is ensure that an American is being treated fairly and humanely.

Another reason to avoid Argentine citizenship is if you plan on working for the U.S. government in a position that requires any sort of security clearance. A passport from another country is not necessarily a deal-breaker, but it does show foreign influence and your loyalty to the U.S. would be put into question.

 

[el_expatriado]

Not sure your citizenship is going to help you with 2 or 3 - 4 seems kind of silly

#2 I believe you may enter Brazil with your mercosur ID, which you have with your Argentina residency, no fee no visa. As for Cuba, go and the US finds out and your are in trouble.
#3 The SEC does not prohibit foreign investment by individuals. The IRS requires full reporting. Don't tell the IRS about foreign investments and risk $100K fine plus 5 years in jail. You can open account in BsAs with DNI, you do need citizenship.
#4 governments don't routinely provide protection - seems odd to consider this of value.
Big downside: filing tax returns in 2 countries if you live in Argentina.

Only upside I find for citizenship versus residency is as a citizen you don't have to renew residency every 15 years and you may vote.

Let me clarify, because I need you educate you a bit about these issues. I have researched this quite extensively.

#2. You can enter any mercosur country with your DNI if you are an Argentina citizen. If you only have Argentina residency, you cannot travel to mercosur countries without your passport.

#3. Try calling Barclays in London and tell them you want to invest in some of their mutual funds. They won't do it for US citizens. This is due to the SEC requirement that investment funds who offer funds for US citizens register in the USA. There are a ton of hedge funds and private equity funds that are domiciled in the EU that US citizens are prohibited from accessing because the banks don't want to register the funds in the USA. This has nothing to do with taxes. This is not for avoiding taxes. You simply can't invest in these funds if you hold a US passport because of SEC rules.

#4. Governments do provide protection to their citizens. This is their primary reason for existing.

Also, there are no tax differences for Argentine residents vs Argentina citizens. You have to pay income and wealth taxes in Argentina for your worldwide income and worldwide property if you are a resident.

Those of us who live here and follow the law already file two tax returns. We use accountants who are specialists in expatriate tax returns. By using the tax credits that are available it is possible to avoid paying double taxes. Yes, you have to file in both countries, but there are foreign tax credits available to ensure against double taxation.

 

[che]

It is not that the SEC prohibits your investment. It is that foreign funds do not accept your business due to US reporting requirements. They may accept your business but they do not want to be bothered with US reporting requirements. Regardless, how does holding two passports allow you to invest in foreign funds while having the foreign fund avoid US citizen reporting requirements? By not disclosing the fact that your are a US citizen? Is this what your tax adviser recommends?

3. You can bank and invest outside of the United States without the SEC watching over you and prohibiting what you invest in.
... You simply can't invest in these funds if you hold a US passport because of SEC rules..... We use accountants who are specialists in expatriate tax returns.

 

[el_expatriado]

It is not that the SEC prohibits your investment. It is that foreign funds do not accept your business due to US reporting requirements. They may accept your business but they do not want to be bothered with US reporting requirements.

When the government adopts burdensome regulations and enforces them in a draconian way that is tantamount to a prohibition. So, while you are technically right, the SEC rules are ipso facto a prohibition on US citizens investing in non-US domiciled investment funds.

 

[earlyretirement]

Unless you renounced your citizenship (which I'd NEVER advise any American to do unless you are pulling in Eduardo Saverin type of $$$$), then you still have to file a US tax return each year and also you still have to declare any bank account or investment account abroad that you have over $10,000 in. Yes? (Form TD F90 and Form TD 8938 from the IRS).

On the plus side, you can still exempt $95,200 for yourself in 2012 and you can make your wife an employee as well and exempt another $95,200 for a total of $190,400 a year in the USA from IRS taxes. So as long as you're not in the USA more than 30 days a year you don't have to pay taxes on that income made outside of the USA. I'd assume you are already doing that.

However, from what I've researched, you still have to file TD F90 and Form TD 8938 if you have lots of bank or investment accounts abroad. And honestly, that is what triggers an audit if you have many offshore bank or investment accounts over $10,000. (Take it from me as I've gotten audited 3 times out of the past 6 years). It's a major pain and I've worked to close down most of my offshore investment accounts because of this. Fortunately I've always declared all of them outside of the USA so I avoided problems. I stopped getting audited once I closed down most of my offshore accounts. I still have a few and fill out the TD F90 form but not nearly the amount I had before. I honestly believe those trigger audits.

And you do NOT want to get caught not declaring these offshore accounts. These days there is no such thing as "offshore account" anymore. Almost all of these countries share information with the US government now.

So that's something to think about. I also thought about getting citizenship in Argentina but never went through with it. It's true that foreign countries do not want to open new accounts for Americans. But fortunately I already have banking relationships outside of the USA so don't have to worry about that. None of them shut my account because I'm American. It's just that most aren't opening up new bank accounts for Americans due to reporting hassles.

Plus, I still have to declare all the accounts outside of the USA. And I hear that soon the IRS will start making Americans declare real estate they own outside of the USA. I think it will take a few years for that but that will really bite when that happens. And once they announce that...you're going to have a lot of Americans scrambling to sell real estate offshore.

While I think E.E. has a good list of valid reasons. Personally I just didn't feel like they were a big enough incentive to me to hassle with it. That could change in the future but I can accomplish everything I want on my US passport. Staying on the right hand of the law really prevents a ton of problems. And when I want to go to Cuba or Brazil or any other country it's still possible. More hassles and paperwork but still possible.

 

[el_expatriado]

Citizenship has nothing to do with taxes. If you are a US citizen, you have to pay taxes on your worldwide income, same as Argentina citizens.

For American expats living abroad in Argentina, they should be paying ZERO taxes in the USA. Income tax rates in Argentina are 35%, which is above the rate in the USA. So you can take a foreign tax credit on your USA return for all Argentina taxes paid and pay nothing to the United States.

On the plus side, you can still exempt $95,200 for yourself in 2012 and you can make your wife an employee as well and exempt another $95,200 for a total of $190,400 a year in the USA from IRS taxes. So as long as you're not in the USA more than 30 days a year you don't have to pay taxes on that income made outside of the USA. I'd assume you are already doing that.

What you are talking about here is called the physical presence test. If you are a resident in Argentina and pay income tax in Argentina, you get this same exclusion under the "bonafide resident test" and you can spend up to 3-4 months in the USA each year if you want. The first year or two I was filing taxes as an expat, I was always counting my days in the USA until I started to file the exclusion under the bonafide resident test, which lets you stay a lot more time in the USA when needed.

While I think E.E. has a good list of valid reasons. Personally I just didn't feel like they were a big enough incentive to me to hassle with it. That could change in the future but I can accomplish everything I want on my US passport. Staying on the right hand of the law really prevents a ton of problems. And when I want to go to Cuba or Brazil or any other country it's still possible. More hassles and paperwork but still possible.

It is not really a big hassle, especially if you get a lawyer to help you with it. I think a second passport is personal sovereignty issue, more than anything. I'll confess, I am a libertarian. I like knowing the fact that once I get my Argentine citizenship, no single government can track or prohibit my travel.

All the Argentines I know who have a second passport tell me they wouldn't trade that for anything. It is an insurance policy against something going wrong in your home country. Now, I know the USA is a long way from having the kinds of problems Argentina has, but you never know what can happen in the future. The biggest reason I want a second passport is for the unknowns in life. Maybe my Argentine citizenship will come in handy one day and get me out of a bind, maybe not. But it is nice to know that it will be there just in case.

 

[Bajo_cero2]

One downside is if you ever have a problem with the Argentine authorities, you would not be able to call upon the US Embassy for assistance.

Well, what exactly do you expect from the US embassy?

For example, if you own land with water or close to the border, being a foreigner you might loose it according to the new law of land ownership. And the US nothing can do about that. But being Argentine, that law doesn´t enforce to you.

Regards