A US green card does not cancel your home country citizenship, but it can trigger a home country exit tax the moment you stop being a tax resident there, and it makes you a US tax resident on worldwide income from your first day of permanent residence. Whether you keep your original passport after eventually naturalizing is decided by your own nationality law, which the United States neither controls nor asks about. The expensive surprises in EB-5 tend to be tax and reporting surprises, and most of them are fixable only before you land.
When a home country exit tax bites
An exit tax is a departure charge on gains you have not realized. A country that operates one treats the end of your tax residency as a deemed sale of your assets on the day before you go, then taxes the paper profit even though nothing was actually sold. Canada applies a deemed disposition to most property when a resident leaves. Australia triggers a capital gains event on ceasing residency. Germany taxes unrealized gains on significant corporate shareholdings when the shareholder moves away.
Here is the nuance that saves money. An EB-5 green card by itself does not necessarily end your home tax residency. Plenty of investors keep a house and a tax residence at home for years while the case runs, and the exit tax event fires later, when the tie is finally cut. That timing is controllable, which makes it one of the few genuinely valuable things a cross-border tax adviser does early rather than late.
Get a written answer to one question before you file anything: what event, exactly, triggers the charge in your country?
The United States has an exit tax too, and it catches investors
Section 877A imposes a mark to market expatriation tax on covered expatriates, and the definition reaches long term residents. A long term resident is anyone who held lawful permanent residence in at least 8 of the previous 15 taxable years. Two years of conditional residence count toward that 8, and a calendar year in which you held the card for a single day counts as a full year.
You are covered if net worth reaches $2 million on the date of expatriation, or if average annual net income tax for the five preceding years exceeds an inflation adjusted threshold. Failing to certify five years of tax compliance does it as well. The tax then treats your worldwide assets as sold at fair market value on the day before expatriation, with an inflation adjusted exclusion applied to the gain.
Nobody wires $800,000 into an EB-5 project planning to hand the card back in year nine. People do it anyway, because a parent falls ill or a business demands them home. Year eight is where a cheap decision becomes an expensive one, and it is the reason some families either commit to naturalization or surrender the card well before the eighth year arrives.
Dual citizenship after naturalization
United States law tolerates dual nationality without enthusiasm. Naturalization on Form N-400 requires the Oath of Allegiance, which includes renouncing allegiance to foreign sovereigns, yet the United States does not require you to complete a formal renunciation under the other country's law and does not ask another government to act on it. Requirements and timing are on the USCIS citizenship and naturalization pages.
Your own country decides the rest, and the answers vary wildly. Some states strip citizenship automatically on voluntary naturalization elsewhere. Others allow retention but require a formal application within a deadline measured in months from the naturalization date. Others do not care at all. Get a written opinion from a lawyer qualified in that country rather than relying on the immigration adviser handling your EB-5 file, who is not licensed to answer it.
Permanent residence is a different matter. A green card never forces anyone to give up a passport, and nothing in the EB-5 process requires renunciation of anything. The question only arrives at the naturalization stage, five years later, and some investors deliberately stop at the green card for exactly that reason.
What you must report once you become a US person
- Worldwide income. A permanent resident files the same return as a citizen and reports foreign salary, rent, dividends and capital gains. Foreign tax credits and treaties reduce double taxation; they rarely eliminate it.
- FBAR on FinCEN Form 114. Required if the aggregate high balance of your foreign accounts passes $10,000 at any moment in the calendar year. The threshold is aggregate, so five accounts holding $3,000 each trigger the filing.
- Form 8938 under FATCA. For an unmarried person living in the United States the trigger is $50,000 in specified foreign financial assets on the last day of the year or $75,000 at any point during it. Joint filers and residents abroad get higher thresholds.
- Entity and trust returns. A controlled foreign corporation, a foreign partnership or a foreign trust each brings its own form, and penalties for missing one commonly start at $10,000 per form per year.
Your obligations start on the residency starting date, which for a consular case is the first day you are physically present in the country after admission as a permanent resident, and for an adjustment case is the day Form I-485 is approved. IRS guidance on determining an individual's tax residency status and on the substantial presence test covers how the date is fixed. The account reporting rules themselves sit with FinCEN, which publishes the foreign bank and financial accounts filing requirements.
Expect your home bank to notice. Under the Foreign Account Tax Compliance Act reporting regime, foreign institutions identify and report accounts held by US persons, and some banks in smaller markets simply close accounts rather than carry the compliance burden. Investors are routinely caught off guard when a thirty year banking relationship ends with a form letter.
Military service, inheritance and the passport you keep
Countries with conscription treat emigration and service obligations separately. A young man who leaves before serving can face a blocked passport renewal or an unpleasant conversation on a visit home, and the EB-5 timeline does nothing to resolve it.
Inheritance is the other quiet one. Several civil law systems apply forced heirship rules keyed to nationality or habitual residence, so a change of residence can change who inherits and what the estate pays. Keeping the home passport also usually keeps visa free travel that a green card does not provide, and it protects the ability to own property or run a company in states that restrict foreign ownership. None of this appears in an EB-5 offering document.
Keeping the card once you have it
Permanent residence has to be maintained, and long absences abroad are the classic way EB-5 investors lose it. An absence beyond six months invites questions at the border, and one beyond a year is treated as abandonment unless a reentry permit was obtained on Form I-131 before departure. USCIS spells out the expectations for maintaining permanent residence.
This collides with exit tax planning in a way people miss. Staying tax resident at home to defer a departure charge often means spending time there, and spending time there endangers the green card that cost $800,000. The two clocks run against each other and have to be planned together.
Sequencing the move
Order matters more than any single decision. A gain realized before your US residency starting date is generally outside the US net, which argues for selling appreciated shares early. That same sale may land inside your home country's exit tax net, which argues for selling late. Only one adviser holding both calculations at once can resolve it, and two advisers who never speak to each other will produce a worse answer than either would alone.
Settle these four before the visa interview or the I-485 approval:
- Whether to realize gains on shares and property ahead of the residency starting date.
- What event triggers your home country exit tax, and what it would cost on your present holdings.
- Whether existing trusts and holding companies survive contact with US reporting, and what they cost to maintain afterward.
- Whether you intend to naturalize, and what your nationality law does when you do.
Spending a few thousand dollars on cross-border tax advice before the $800,000 moves is a rounding error against the total cost of the exercise, and it is the highest return money in the entire file. Investors thinking about the later stages should read our page on EB-5 for retirement in the US, families timing a child's education should start with EB-5 and the F-1 student, and anyone keeping substantial business interests at home should look at how EB-5 combines with other visas before committing capital. A qualified EB-5 immigration attorney handles the petition; the tax questions on this page need someone else.