Should I become (or not become) a permanent US resident?
February 11, 2016 12:48 PM   Subscribe

The article - Why expat Americans are giving up their passports got me thinking whether my decision to pursue my permanent residence in the US is the right one. Please help me think through this.

I have lived most of my adult life in the US. I moved to the US when I was 18 and I'm now 33. I went to undergrad at a BIG 10 school and and I got my MBA from a school in the Pacific North West. As long as I remember, the US is home for me (sort of). I have friends both here in the US and in India. My parent though live in India and so does my extended family. Also, I am the only child of my parents.

I've enjoyed my time here in the US and it has shaped the person I've become. I've always wanted to live here and build a life here in the US. But, with the way the legal immigration system works, I'm still on my work permit (H-1B) and I can't possibly expect to get my green card through my employer for at least 7-8 years, because I was born in India.

I now have the opportunity to go back to India and start a business. I'm currently writing the business plan and am certain that there exists a huge market for the product in India.

But I'd like to keep my options open of being able to return to the US if and when things don't work out. Besides I'd like to be able to own property and have assets in the US. If possible, I'd also like my kids to be born in the US. So to facilitate and plan for that, I have applied for my green card through a different route. Even then, the earliest I can expect to get my conditional green card is the first quarter of 2017. Then there's a longer wait of approximately 3 years to get the conditions removed.

Yesterday I came across this article Why expat Americans are giving up their passports . There is an interesting debate on Hacker News, which is where I read about this first. That got me thinking whether the decision I'm making is indeed the right one.

So please help me think through this. Here are my options that I've come up with so far:
* Leave the US as soon as possible and start working on setting up the business in India, and come back when the green card gets processed. Then figure a way out to maintain my residency. I know that is a totally different issue with a lot of complicated steps but that comes later.
* Leave the US as soon as possible and do not worry about the green card at all and give up on having the option of being able to come back to the US at some point.
* Wait until the green card gets approved (1st quarter of 2017) and then leave the country. Then work on maintaining residency.

So in a nutshell please help answer the following question:
* If I plan on setting up a business outside the US, does it make sense for me to still get my permanent residency in the US?
* What would you do if you were in my shoes?
posted by rippersid to Work & Money (12 answers total) 4 users marked this as a favorite
I don't think FATCA applies to you, as you are not a US citizen. I think if you became a permanent resident it would still not apply to you. I'm not an expert though...
posted by crazylegs at 1:08 PM on February 11, 2016

I have a very similar background to you but moved on to getting a green card to eventually to citizen. My parents on the other hand went back to india after getting their green card. One thing to note with green card is that there a 6 month visitation requirement , if you cannot afford that or don't want that hassle then it might be worth not getting the permanent resident card.

In your situation, it seems it would be better to not have residency in US if your primary business will be in India. The only benefit on residency is eventually if you decide to settle here or if you decide to expand your business opportunity through partnership to a US entity.
posted by radsqd at 1:10 PM on February 11, 2016

I don't think FATCA applies to you, as you are not a US citizen. I think if you became a permanent resident it would still not apply to you. I'm not an expert though...

Yes, all US citizens and resident aliens abroad must file taxes and also FATCA.

India, like many countries, has a double taxation treaty. The requirement to file is not onerous for most of us (I am an American expat in the UK) including listing your foreign bank accounts. It is not pleasant but not enough of a disturbance for most Americans abroad to give up their ciizenship: 4k out of maybe 4 million expats disagree, of course.
posted by vacapinta at 1:24 PM on February 11, 2016

Having a business may be a significantly larger headache than what most expats face. Ya gotta do a full 1040, with depreciation schedules, currency conversion, you'll have to consider US choice of entity rules, and so on.

It sounds like a potentially expensive and huge headache to me.

If you go that route, I know a top notch tax specialist in this very arcane corner of tax; he may give you a quick consult on pros and cons, but I can't really guarantee he would. Memail me if you want his contact info.
posted by jpe at 2:22 PM on February 11, 2016 [2 favorites]

On the property/investments -- you don't have to be a resident of the US to buy property or invest here. There are some tax differences based on your status, but in general there is no prohibition against land ownership or investment by foreigners (even those with no connection to the US). So that shouldn't be much of an issue.
posted by thefoxgod at 2:58 PM on February 11, 2016 [1 favorite]

You don't have to be a US citizen to own property in the US.

You'll want to know about FIRPTA.
posted by yohko at 3:27 PM on February 11, 2016

FATCA will absolutely apply to you if you're a permanent resident. It's not worth the hassle, let alone the taxes. Forget it and focus on your business in India. You can always move back through a job later.
posted by redlines at 3:34 PM on February 11, 2016 [1 favorite]

In your shoes, I would get the greencard, because it means that no-matter what the future brings, you have more options. I think it would be an asset in business also.

Check that being outside the USA while the greencard is processing does not impact your path to getting it. If that is not a problem, then pursue the business opportunity while getting the greencard.

You are 33 in a changing world. The world of 40 years from now may be unthinkably different. A greencard (and enduring the associated bullshit to keep it) is investing in a bigger foundation come what may. Legal residency in very different places is power and security against an uncertain future.
posted by anonymisc at 3:50 PM on February 11, 2016 [3 favorites]

One thing to note with green card is that there a 6 month visitation requirement

My understanding (which may be wrong, IANAA, consult an immigration attorney) is that while six month residence is safest, you do not need to do it providing you fill out appropriate paperwork (beforehand and periodically) to notify that you wish to keep the greencard. ie Lack of residence is assumed to mean you don't want the greencard any more unless you notify otherwise.

(You might also want to check if not having a greencard will affect your ability to collect social security (that you have presumably already paid) when the time comes. You can collect from overseas, but I'm not sure if there are visa/residence status requirements)
posted by anonymisc at 3:56 PM on February 11, 2016

I don't know the details, but I do think it will be difficult to legitimately maintain residency while living in India and operating a business there. That is not the intended use of a green card, and the general idea is you should give up residency and re-acquire later if you change your mind.

I've looked into this some for my wife and I (she is a PR, we may be moving overseas) and this is the conclusion I came to. Now, in our case its very different --- since she's married to US citizen, she can re-acquire a green card trivially in the future, whereas you do not have that luxury.

If you know a real path to maintaining residency while... not actually residing here... then I suppose thats good, although the tax issues might not be worth it.

If, on the other hand, you're contemplating fraudulently maintaining residence, know that if you get caught you could lose any right to enter the US on any visa, much less re-acquiring residency. Visa / green card fraud is taken very seriously if they actually catch you.
posted by thefoxgod at 4:31 PM on February 11, 2016 [1 favorite]

I own a business outside the US and had a green card. Owning more than 10% of a business requires you to file a special schedule along with your tax return that reports on the corporate financials for the calendar year (not the fiscal year). My US tax return was 72 pages long and cost $1500 to prepare. I gave back my green card.
posted by crazycanuck at 5:28 PM on February 11, 2016 [2 favorites]

You should do option (a) as maintaining your green card residency requirement is pretty onerous. Although entering the US every 6 months is recommended, it's neither sufficient nor necessary to keep your green card (although most times, Customs will not scrutinize your papers if you're touching down every 6 months). People who have touched down every 6 months have gotten their cards revoked. You need to be able to show intent to reside there permanently to Customs. This can be done by a number of ways including 1) having a US bank account 2) having a current US driver's license 3)filing your tax returns every year. The benefit is that it would make it easier for your children should they want to reside there. Also, S-corporations are not allowed to have non-resident alien shareholders. So, that is one other consequence.
posted by kinoeye at 8:24 PM on February 11, 2016

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