It’s not a decision made lightly, and it’s not, as some might imagine, usually motivated by politics. But more and more expats abroad are giving up their U.S. citizenship, fueled by frustrations over tax and banking questions.

The U.S., for example, is the only industrialized country to tax its overseas citizens on income earned abroad. That income is often also taxed in the country where it is earned, which means the incoming stream is dipped into not once but twice.

Double taxation is not the only problem for American expats abroad. New banking regulations have made it harder for expats to keep bank accounts in the United States and in some cases abroad. The regulations are intended to curb tax evasion and (under the Patriot Act) to help prevent money from flowing to terrorist groups. “Some U.S.-based banks have closed expats’ accounts,” according to an article in the New York Times, “because of difficulty in certifying that the holders still maintain U.S. addresses, as required by a Patriot Act provision.”

The numbers

In the last quarter of 2009 (the most recent period for which there are statistics), 502 expatriates gave up their U.S. citizenship or permanent residency status. Though it’s a tiny percentage of the over 5 million Americans the State Department says live abroad, the number is more than twice the total for all of 2008, when just 235 people gave up their citizenship. For all of 2009, the number was 743. And, reports the New York Time, “waiting periods to meet with consular officers to formalize renunciations have grown.”

What about you?

If you’re a U.S. citizen living abroad, have you ever considered giving up your U.S. citizenship?

Though Rosy Rios and Doug Ancel of Reno, Nevada, knew they wanted to run a B&B in Costa Rica, they never intended to build one from the ground up. But that’s what happened on the way to their Hideaway Hotel, which opened in 2008.

First, they chose the place, driving the length of the Nicoya Peninsula, looking for a beach town with enough tourist infrastructure to run a business but without the overbuilding and overreaching that can spoil a place.

They came equipped, with backgrounds in business, real estate and construction, and a chunk of savings that would let them take a good shot at their dream. Rosy spoke Spanish, and Doug was learning.

Looking to Buy

Once they settled on Playa Samara, halfway down the peninsula and with a sweeping half-moon beach washed by waves gentle enough for swimming, they had local realtors show them what was on offer.  They looked inland, “in the jungle,” but it was too hot. Places in the town of Samara were “too noisy—roosters, cars, and chain saws,” says Rosy. And when they liked the location, the building didn’t seem right.

They remember that one realtor showed them a hotel, assuring them, “If you buy this, I guarantee you’ll make your money back in 5 years.” Being familiar with the ups and downs of real estate and business, Doug and Rosy knew that a realtor should never in good conscience make such assurances. They put their guard up even higher.

Howler monkey at the Hideaway Hotel, Playa Samara, Costa Rica; photo by Doug Ancel

One day, after months of searching, they turned off the coast highway onto a one-lane road that ran straight to the southern end of Playa Samara. Wouldn’t it be great, they agreed, to have a place within walking distance of the beach? But there were no hotels for sale on that road.

A little later, in April 2004, they heard through the grapevine that a German woman was selling a 1-acre parcel of land on the very road that inspired their ‘wouldn’t it be nice’ musings. It wasn’t listed with any realtors.

Doug and Rosy looked at the land and loved it. But it had no structures on it; their dream had been to buy and renovate an existing hotel.

The location, however, was perfect, and the price wasn’t half-bad. And so, after checking to make sure they’d have easy access to water, electricity, and phone line, and after some back-of-envelope calculations and late-night soul-searching, they decided to go for it. They did what most people moving to a new country or starting a business have to do at some point: change the master plan in order to accommodate an opportunity that may not come your way again.

Building a dream, from the ground up

Anyone who’s ever built a house or a hotel knows what comes next. It took Doug and Rosy a little over four years from purchase of property to opening the Hideaway Hotel in July 2008. I’m sure they could write a book about those four years, but here are a few high (and low) points.

Building the Hideaway Hotel in Playa Samara; photo by Doug Ancel

They knew what they wanted-a clean, contemporary design, high-quality construction to North American/European standards, and about a dozen spacious rooms. They wanted a pool, landscaped grounds, and a modern wastewater system that would allow them to irrigate the grounds with gray water and to give North American guests the privilege of flushing toilet paper instead of putting it in a waste container next to the toilet, which is the Tico style.

They got a good lawyer (key to getting anything done in Costa Rica), who introduced them to an architect who had a good reputation. “But he didn’t deliver,” says Rosy, so they set up meetings with several architect/ builder pairs, chose their favorite, and got to work. “The design process took some time,” continues Rosy “We wanted to be sure to choose the finishes, tile, granite, etc. ourselves.”

The permit process was also challenging. “We were held up in SETENA for 6 months,” Rosy says. “Apparently SETENA [the Secretaria Tecnica Nacional Ambiental] was backed way up at the time.”

“We were ‘next in line,’” adds Doug, “for a good 5 or 6 months.”

The web site costaricalaw.com explains, “the sole mission of SETENA is the administration of the process to review and evaluate environmental impact considerations. Builders and real estate developers cringe when they hear the word SETENA.”

“But our building permit didn’t take much time,” says Rosy. “You just present plans to the municipality and pay the fees.”

The pool before it was a pool at the Hideaway Hotel in Playa Samara; photo by Doug Ancel

Once construction got underway, Doug stayed on site as much as possible to oversee the work. The builder went over budget, and there were construction delays. But when the Hideaway Hotel opened its doors in 2008, it all seemed worth it. “Local realtors couldn’t believe it,” says Doug. They said, ‘You guys actually opened! So many projects end up unfinished ruins.’”

Their hotel is indeed no ruin; it’s a lovely place with the sort of amenities you really appreciate after having been on the road for while, from the spacious shower to the mini-fridge to blackout curtains for the times you need to adjust to jet lag or turn in early to make a wee-hours flight the next day. A hundred feet from your poolside breakfasts are trees often full of howler monkeys.

Advice on opening a B&B in Costa Rica

I asked Rosy and Doug if they have any advice for opening a B&B or a hotel in Costa Rica.

“Find one that’s been built,” Rosy laughs ruefully, although she also says she feels proud of how well their from-the-ground-up building turned out.

“It takes time to grow a business,” says Doug. “So you need operating reserves to tide you over. We planned not to make any money the first years,” he smiles, “And so far, we’re right on plan.”

But even in the months after I visited, their was an uptick in guests, and the hotel is getting great press in guidebooks and online-when I last looked they were the #2 Samara hotel on Trip Advisor. I have little doubt that the next few years will bring even more visitors and a return on their investment, both in financial and life-satisfaction terms. After all, they dreamed a dream and then, with hard work and imagination, they made it happen. It’s all part of the (somewhat flexible) master plan.

Photo of finished version of the Hideaway Hotel by David W. Smith

A recent study of women working abroad by the European Professional Women’s Network (EPWN) finds that women who moved abroad for their own job are twice as happy with their professional life as those who moved for their partner’s job (81% versus 44%). Women (or men) who move abroad for their partner’s job are often called ‘trailing spouses.’

One out of four women (24%) who followed their partner are either dissatisfied or very dissatisfied with their professional life.

Expat women happiest in their professional lives in France and Belgium
EPWN’s study built on an Expatica survey of expat women working in Europe,  which found that expat women in Belgium and France were the most happy with their professional lives, while women in Germany and the Netherlands were the least satisfied. Still, women had both good and bad things to say about working in all European countries.

“In Brussels, it seems especially hard to become established professionally if you’re not fluent in French and Dutch, which is obviously unlikely if you are a foreigner,” said an expat woman living in Belgium.

“Dutch people are usually polite and nice to you, ”says an expat living in the Netherlands. “But they will rarely invite you to their homes or include you in their circle of friends. My partner’s Dutch, but even with his family, I find them to be too polite, to the extent of being aloof.”

Expat women happiest living in Spain
Seventy-two percent of women polled said they were satisfied or very satisfied with their life abroad. Female expats based in Spain were happiest (81 percent), followed by Belgium (79 percent) and France (79 percent).  Interestingly, last year’s survey results had women in Spain ranked among the lowest in satisfaction.