Renouncing U.S. citizenship in the 1990s was a lengthy, bureaucratic process that some early expatriates undertook to escape both tax obligations and restrictive export controls on cryptographic software. One such individual left the United States in 1994, settled in Anguilla, and built a career that leveraged the island’s offshore status.
Motivation for Renunciation
- Tax avoidance – Reading about Caribbean tax havens while in college highlighted the potential savings from living outside U.S. tax jurisdiction.
- Regulatory freedom – At the time, cryptographic software was subject to the International Traffic in Arms Regulations (ITAR). Exporting encryption tools from the U.S. could be treated as an arms‑export violation, limiting the ability to sell globally.
- Business strategy – The interviewee planned to develop internet payment systems that required unrestricted distribution of cryptographic code; shedding U.S. citizenship removed a legal barrier to that plan.
Choosing Anguilla
After evaluating several Caribbean islands—Antigua, Montserrat, Nevis, St. Kitts, and St. Martin—the interviewee selected Anguilla because:
- It offered a modest cost of living (the first rented house cost $470 per month with ocean views).
- English was widely spoken and the time zone was convenient for U.S. contacts.
- The island hosted an offshore industry that facilitated tax‑friendly structures.
Early Work in Anguilla
With limited capital, the expatriate generated income through:
- An email‑forwarding service.
- Building websites for local clients.
These activities provided enough cash flow to sustain a modest lifestyle while testing the feasibility of a permanent move.
Renunciation Process
- Initial departure: 1994.
- Application for renunciation: Submitted in 1997; approval arrived in 1998.
- The U.S. consular office in Barbados repeatedly required new forms, forcing multiple trips.
- A New York Times article highlighted the difficulty of the process, prompting the embassy to finally accept a signed form sent by mail.
Citizenship Complications
- The interviewee purchased a “Moses Beck” passport for $5,000 from an online vendor; the document listed a false birthplace and altered name.
- After marrying an Anguillian, he obtained Anguillian citizenship, which later enabled British Overseas Territories citizenship.
- The U.S. State Department would not process a renunciation without proof of another nationality, but did not question the dubious passport details.
The .ai Domain Enterprise
Anguilla’s country‑code top‑level domain (ccTLD) .ai became a lucrative asset:
| Item | Detail |
|---|---|
| Initial role | Admin and technical contact for the .ai registry, offering free registrations to local entities. |
| Transition | Government later transferred administration to a Taiwanese company, which failed; the interviewee resumed control and commercialized the domain. |
| Pricing | $140 for a two‑year registration (no lower‑priced alternatives). |
| Revenue | Approximately $4 million per month for the Anguillan government (2022). |
| Projected growth | Expected to exceed $6 million per month after renewal cycles in 2023‑2024, representing up to two‑thirds of the island’s $12 million‑per‑month budget. |
Tax Environment
- Historically, Anguilla imposed no income tax, no sales tax, and no property tax.
- In 2009 a temporary “interim stabilization levy” (later renamed the “universal levy”) was introduced to fund government operations, costing roughly $7 million per year.
- The levy primarily affects low‑wage workers (e.g., domestic staff earning $6 hour⁻¹), while tourists pay high nightly rates.
- Political pressure ahead of upcoming elections may lead to the levy’s removal, given the substantial revenue from the .ai domain.
Lifestyle Benefits
- Commutes of six minutes with no traffic.
- Ability to travel back to the United States using the questionable passport for a single visa application; the process required three days of waiting.
- Occasional visits to the U.S. every one to two years, with no ongoing tax or regulatory obligations.
Advice for Prospective Expatriates
- Start with minimal assets. Renouncing with little wealth reduces the likelihood of the U.S. government attempting to seize or tax assets.
- Secure a second nationality before filing the renunciation to satisfy consular requirements.
- Ensure compliance with all paperwork and retain documentation to avoid delays similar to the repeated form requests experienced in Barbados.
Early adopters like this Anguillan expatriate demonstrate that, despite bureaucratic hurdles, it is possible to exit U.S. citizenship, avoid certain taxes and regulations, and build profitable ventures in jurisdictions with favorable tax regimes.
