For more than 10 years, I have been helping clients to obtain German citizenship. Those who have German parents, grand-parents or further removed ancestors either are German already (often without knowing it) or eligible for naturalization under less strict conditions than other applicants.
Those who have no such family ties have to meet a set of criteria for naturalization, similar to that in most countries: residence in Germany between 3 to 8 years (although there is an exception to that), German language skills, a citizenship test, lack of a criminal record, the ability to support yourself financially and so on. Regular stuff, nothing surprising.
But then there is one thing where German citizenship law is rather old-fashioned: it requires many applicants to give up the citizenship which they already hold. Of course there are a number of exceptions to this, for law needs to remain complicated in order to sustain thousands of my colleagues.
For clients from Ghana, Haiti or Pakistan, this usually doesn’t pose a problem. But until 2010, I had never had a US-American client who would have given up their citizenship, even if they wanted to live in Germany or Europe for the rest of their life. An American passport seemed to be something sacred, not merely a travel document that you fill with stamps.
This is actually not how you renounce your citizenship.
This has changed in the past couple of years. There still aren’t many, but I receive a steady trickle of e-mails from US citizens who wish to obtain German (or any other European) citizenship and who don’t mind losing their US citizenship in the process. Apparently, this is part of a wider trend. In 2014, a record number of 3,415 Americans renounced their citizenship, a sevenfold increase compared to a decade ago. And this is just the number of people of whom the US Treasury Department knows.
The timing and anecdotal evidence suggest to me that it does have something to do with the Foreign Account Tax Compliance Act FATCA, which requires foreign banks to report accounts held by US citizens to the US Treasury. There is more paperwork, checking and reporting involved, both for the US citizen and for the foreign bank. Some banks in Europe have reportedly told US citizens that they won’t open bank accounts for them anymore because of the paperwork (and possible criminal and civil liability) involved.
Unlike most other countries, the US taxes its citizens’ income regardless of where in the world it is earned. You may think of that what you want (I wouldn’t like it myself), but if there is an obligation to pay taxes, I can understand that the Treasury wants to follow up on that and try to combat or at least limit tax avoidance. I wish some other countries’ treasury departments would be only half as tough.
We should also put things into perspective: 779,929 people got naturalized in the US in 2013.
