Renouncing US Citizenship: What It Means, What It Costs, and Why Most Expats Don't Do It
Searches for "how to renounce US citizenship" have spiked dramatically in recent years, and the US government now has a monthslong backlog of Americans requesting to give up their passports. But renunciation is a drastic, irreversible step — and most Americans who move abroad never do it. Here is what you need to know.
Why People Consider Renunciation
The primary driver of renunciation is taxes. Because the US taxes citizens on worldwide income regardless of where they live, some high-income Americans living abroad find the ongoing tax filing burden and potential tax liability not worth maintaining US citizenship. Entrepreneurs who want to structure foreign businesses without US tax complications, and retirees with complex investment portfolios, are the most common candidates for renunciation.
A secondary driver is political — some Americans who feel deeply alienated from the direction of the country choose renunciation as a symbolic and practical break. Renunciation applications hit record highs following the 2016 and 2024 elections.
What Renunciation Actually Involves
Renouncing US citizenship is a formal legal process conducted at a US Embassy or Consulate abroad. It requires two appointments, a signed oath of renunciation, and payment of a $2,350 fee — one of the highest renunciation fees in the world. The process is irreversible: once you renounce, you cannot change your mind. You will need a valid foreign passport and legal residency in another country before you can renounce.
Critically, renunciation does not automatically eliminate your US tax obligations. If you are a "covered expatriate" — meaning you have a net worth over $2 million or have had average annual net income tax liability over $190,000 for the five preceding years — you may be subject to an exit tax on unrealized capital gains. For most ordinary Americans, the exit tax is not a concern, but it is essential to consult a tax attorney before proceeding.
Why Most Expats Don't Renounce
The vast majority of Americans living abroad — including those who have lived in Brazil for decades — keep their US citizenship. The reasons are practical: a US passport remains one of the world's most powerful travel documents, providing visa-free access to 186 countries. US citizenship gives you the right to return to the US at any time, which matters for family emergencies, medical care, and the possibility of eventually returning. And for most Americans, the tax burden of living abroad is manageable — often zero — with proper planning using the Foreign Earned Income Exclusion.
Dual Citizenship as an Alternative
Rather than renouncing, most long-term expats pursue dual citizenship — obtaining Brazilian citizenship while keeping their US passport. After four years of legal residency in Brazil (or one year if married to a Brazilian), you can apply for Brazilian naturalization. Brazilian citizenship gives you the right to live and work in Brazil permanently, travel on a Brazilian passport (which has strong visa-free access in South America and Europe), and fully participate in Brazilian civic life — without giving up your US rights.
Our Recommendation
Do not renounce. Move to Brazil, build your life there, and after a few years of living abroad, you will have a much clearer picture of whether renunciation makes sense for your specific financial and personal situation. For the vast majority of Americans, the answer will be no — and you will be glad you kept your options open.