The real owners of the “American dream” are now constantly searching for better living conditions beyond the borders of the USA. They are chasing economic stability, new job opportunities, safety, and, most importantly, an opportunity to build a better future for themselves and their families in new lands. European Union states are the places where Americans can fulfill their dreams.
In this comprehensive article, we will introduce you to what getting EU citizenship as an American means, its benefits, and the EU's taxation system, including the main differences with the USA.
Key Takeaways
- EU member states have always been a desired destination for many Americans because of their ease of life, travel opportunities, exclusive healthcare and educational services, high security, and overall peaceful lifestyle.
- The main pathways to getting EU citizenship as an American are investment programs, citizenship through descent, and naturalization.
- Americans should pay high attention to tax implications in both countries as the USA requires to file global income no matter the physical presence of its citizens. However, the USA has tax treaties with some EU countries to help its citizens avoid double taxation.
6 Benefits of EU Citizenship for Americans
Before jumping to the benefits of EU citizenship, let’s first understand what it entails. Anyone possessing citizenship of an EU member state is automatically an EU citizen. Thus, EU citizens have the right to work, live, and study in any of the 27 EU member states without restrictions. While each EU member state has its own individual identity, there is a range of rights, privileges, and responsibilities under EU law.
EU citizenship provides a number of significant benefits that make it attractive for Americans to obtain.
1. Better Quality of Life
The EU generally provides its citizens with a high quality of life, with some countries ranking the best in the world, including the Netherlands, Switzerland, Finland, and Denmark. Also, the European Quality of Life Survey shows that, on average, people from all EU member states rate their overall satisfaction with life at 7,1 out of 10. The reasons contributing to the high quality of life in the EU are access to healthcare, strong social welfare systems, low pollution levels, and high security.
2. Enhanced Global Mobility
It is well known that the European passport is one of the strongest in the world. With an EU passport in hand, the holder can travel freely to any of the 27 member states without restrictions. In addition, EU citizens can enter 61 non-EU countries without a visa. Brazil, China, and Russia are among the countries that require a visa from US citizens for entry.
EU citizens can travel to the USA under the Visa Waiver Program. Still, before traveling, they must obtain an Electronic System for Travel Authorization (ESTA) by applying online and paying a fee.
3. Access to Healthcare and Social Security
EU citizens can take advantage of all social services, including healthcare, education, public pensions, and other services. Though the healthcare system in Europe varies widely across different countries, it has lower out-of-pocket costs compared to the USA.
All EU citizens are granted a European Health Insurance Card for emergency medical assistance when visiting other member states.
4. High Quality of Education
All EU member states give high priority to ensuring that all citizens have access to high-quality education. There are many initiatives and programs that aim to improve the quality, equity, and efficiency of education in all member states. Some of those initiatives include teacher training and development. Among the highest-ranked universities for providing high-quality education and research opportunities in various fields are EPFL, a public research university in Switzerland, and ETH Zurich.
5. Maximizing Tax Efficiency
Minimizing tax liabilities to maximize financial gains is one of the primary goals in all EU states. However, the EU has no united tax system, and each country has its own tax policies. The most tax-efficient countries in the EU are Cyprus, offering a corporate tax rate of 12.5%, and Malta, with a 5% corporate tax rate. This can be especially beneficial for those Americans who plan to invest in one of the above-mentioned countries.
6. Work and Business Opportunities
Americans can find work in various industrial sectors. However, there are some nuances to be considered. Not all EU states give work permission to those holding residency status. For example, Denmark and Ireland do not participate in the EU Blue Card scheme, which means that highly qualified professionals outside the EU are not allowed to work in these countries. Other countries, like Portugal, have a residence permit program that allows Americans to start a business in the country and obtain a residence permit.
3 Ways to Get EU Citizenship as an American
We would like to start this paragraph by highlighting Americans' main advantages over other non-EU nationals in obtaining EU citizenship. First, Americans are not required to renounce their original citizenship, allowing them to hold dual citizenship and maintain their American nationality. Second, there are fewer restrictions in the process of obtaining an EU passport compared to other nationals.
So, let’s narrow down the main paths to get EU citizenship as an American.
1. Citizenship by Investment (CBI) programs
These programs allow Americans to obtain EU residency in exchange for a significant financial investment in the country. They are widely known as “golden passports” or golden visas.” Investors can apply for citizenship programs after making the investment and receiving the residency. So, they can consider citizenship by investment programs after applying for residency by investment programs.
Obtaining EU citizenship can take up to 10 years, depending on the country. The common steps that unite all CBI/RBI programs are as follows: As American investors, they should purchase or rent a property in the country they want to reside. This will grant a residence permit. Second, applicants must pass a Due Diligence test and fulfill the required conditions as an investor. If American investors want to obtain EU citizenship, they will be required to stay in the country for a given period of time and meet all the requirements.
The EU has many countries that offer CBI/RBI programs, with some countries having more favorable terms than others. For example, Spain, Portugal, Malta, and Greece are known for relatively easy application processes, minimum physical appearance, and favorable tax regimes.
4 EU Countries That Offer Citizenship by Investment and Residency by Investment Programs
Choosing the right investment program for citizenship is a time-consuming and difficult process. Contact one of the experts specializing in EU citizenship for Americans from Mirabello Consultancy.
2. Citizenship by Descent
Americans can get EU citizenship if at least one of their parents or grandparents are EU citizens. By proving their ancestry and meeting the requirements, Americans can potentially acquire EU citizenship. Some EU countries automatically grant it, while others have specific requirements. It’s worth mentioning that the ancestors shouldn’t have renounced or lost their EU citizenship.
Obtaining EU citizenship as an American through descent is one of the most straightforward and cost-effective ways. The total cost can range from €1000 to €3000, including service and administrative fees.
3. Citizenship by Naturalization
The process of obtaining EU citizenship as an American involves residing and working in an EU country. But it is not as straightforward as it may seem. Individuals should prove their ties to the country. And here are the most common ways Americans can get EU citizenship through naturalization.
Marriage
The process involves marrying an EU citizen and then applying for citizenship through the spouse. Typically, it takes less time compared to other methods.
Some countries, such as Portugal and France, have more favorable conditions, while others, like Hungary, have longer residency requirements.
Work and Business
Getting EU citizenship through employment is another widespread option. Americans can start working in one of the EU states in two ways.
- As a regular employer with no specific qualifications - The employer typically needs to apply for the work permit on behalf of the foreign employee, often through an online platform or government agency. The employee should also prove that there are no suitable local candidates.
- EU Blue Card - This is typically given to specialists with high qualifications.
Americans willing to start a business or invest in a business in one of the EU states can also apply for citizenship. European countries provide various investment programs with diverse investment options.
Tax Implications for American Citizens Obtaining EU Citizenship
EU citizenship does not exempt Americans from the US tax obligation, which leads to dual taxation as Americans are still residents in the USA for tax purposes. The US citizens must file their worldwide income and assets, including bank accounts, wages, pensions, benefits, and income from property or any other source. The ones who fail to comply with these requirements can face severe penalties. However, some European countries have tax treaties with the USA to eliminate tax burdens. This means that Americans can avoid being taxed on the same income twice. For example, the USA has a tax treaty with Greece, which has been in force since 1950. Other countries with tax agreements with the USA include Cyprus, Germany, Malta, and Spain.
Many Americans believe they can fully escape their tax liability in the USA only by renouncing their citizenship. Nevertheless, renouncing U.S. citizenship does not automatically absolve individuals of all tax obligations to the U.S. The U.S. urges an exit tax on high-net-worth individuals who renounce their citizenship, and certain tax implications can still apply even after renunciation. So, getting professional consultancy to understand the full scope of tax implications is highly advisable.
Conclusion
Obtaining EU citizenship as an American offers many benefits, including enhanced global mobility, access to social security and public services, high-quality education, tax efficiency, and various work and business opportunities across all EU member states. If the final decision is made, Americans can consider several ways to get EU citizenship: thorough investment, descent, and naturalization. While the citizenship through descent option is very specific, there are numerous investment opportunities across many EU states that grant residency, potentially leading to citizenship if desired.
So, with consideration and expert advice, Americans can make a fresh start in one of the EU member states.
FAQ
- What is the easiest EU country for getting citizenship as an American?
Portugal, Spain, and Greece offer many citizenship options, especially through investment programs. Malta and Cyprus are also included in the list.
- Which European country gives the fastest citizenship?
Malta appears to be the fastest country to obtain EU citizenship through its investment program. Applicants can obtain citizenship in 1 to 3 years.
Cyprus and Portugal allow obtaining citizenship in 5 years, while it takes 7 and 10 years to become citizens in Greece and Spain, respectively.
- What is the cheapest permanent residency in Europe?
Greece and Malta offer the cheapest permanent residency in Europe through their investment programs with a basic cost of €250,000 and €300,000 each.
