Moving abroad can be an exciting chapter for many Americans—whether you’re seeking a better lifestyle, remote work freedom, or a lower cost of living. But one of the most important questions to ask when relocating overseas is: Where should I move that will be welcoming, practical, and financially smart?
For US citizens, the right destination isn’t just about sunshine or scenery. It’s also about choosing an expat-friendly country—one that supports a smooth transition and doesn’t create unnecessary tax headaches.
What Makes a Country Expat-Friendly?
Before diving into the list, here are the key factors that make a country expat-friendly for Americans:
- English-friendly environment or broad use of English
- Straightforward visa or residency options
- Access to quality healthcare
- Affordable cost of living
- Thriving U.S. expat communities
- Favorable tax treatment or tax treaties with the US
- Ease of international banking and financial access
1. Portugal – Sunny Climate and Tax-Friendly
Portugal remains a top destination for American expats, thanks to its mild climate, reasonable cost of living, and welcoming culture. Cities like Lisbon and Porto offer a relaxed lifestyle, excellent healthcare, and a growing community of US citizens abroad.
While the original Non-Habitual Resident (NHR) tax regime is now closed to new applicants, those who enrolled before the deadline can still enjoy reduced tax rates on certain foreign income for up to 10 years. Portugal has introduced a new, more limited version of the regime (NHR 2.0), targeting specific skilled professionals.
Why it’s appealing to US expats:
• English is widely spoken in major cities
• Favorable tax regime for qualifying individuals
• Safe, clean, and high-quality healthcare
• Thriving American expat community
2. Costa Rica – Easy Residency and a Laid-Back Lifestyle
Costa Rica is known for its natural beauty, political stability, and relaxed pace of life. Americans moving here often appreciate the country’s pensionado and rentista residency programs, which make it relatively easy to stay long term.
From a tax standpoint, Costa Rica only taxes locally sourced income, which means foreign-earned income (like remote work) may not be taxed locally. However, US citizens must still report worldwide income to the IRS.
Why expats love it:
- Territorial tax system (foreign income is generally not taxed)
- Low cost of living in many areas
- Easy access to residency
- Popular with American retirees and remote workers
3. Mexico – Proximity to the US and Cost Savings
Mexico is one of the top destinations for Americans moving abroad. With its close proximity to the US, affordable healthcare, and vibrant culture, it’s a practical choice for digital nomads, retirees, and families.
Americans living in Mexico for over 183 days a year may be considered tax residents and subject to Mexican tax on global income, but there is a US-Mexico tax treaty that helps prevent double taxation. You may also qualify for the Foreign Earned Income Exclusion (FEIE) when filing your U.S. tax return.
Why it’s expat-friendly:
- Inexpensive cost of living
- Strong expat communities in cities like San Miguel de Allende and Mérida
- Access to quality healthcare and housing
- Easy to travel back to the US
4. Panama – Tax-Friendly for Expats and Easy Residency
Panama has a territorial tax system, which means foreign income is not taxed locally. That’s a huge plus for Americans earning remotely or with passive income from abroad. The country also has a Friendly Nations Visa, making it relatively easy for US citizens to obtain legal residency.
For tax-conscious expats, Panama checks all the boxes: great infrastructure, US-style banking, and no tax on foreign income.
Why move here:
- No tax on foreign income
- Stable government and economy
- English is commonly spoken in urban areas
5. United Arab Emirates (UAE) – High Salaries and No Income Tax
If your goal is to reduce your US tax bill, then moving to a no-tax country like the UAE can be a strategic choice. The UAE, including Dubai and Abu Dhabi, has no personal income tax and offers high salaries for professionals in finance, tech, and consulting.
While you still have to report income to the IRS, you may be able to reduce or eliminate your US tax liability using the Foreign Earned Income Exclusion and foreign housing exclusion.
Why US expats consider it:
- Zero personal income tax
- Modern infrastructure and safety
- High-paying job market
- International schools and expat services
6. Thailand – Low Cost of Living and Digital Nomad Appeal
Thailand remains a favorite among digital nomads and retirees due to its affordability and tropical lifestyle. While long-term visas can be complex, Thailand now offers the Long-Term Resident Visa (LTR) for high-income earners and retirees.
Thailand generally taxes only Thailand-sourced income, although remittances into the country can become taxable if not handled carefully. Americans can still use the Foreign Earned Income Exclusion to reduce US tax liability.
Why it’s expat-friendly:
- Very low cost of living
- Strong infrastructure in cities like Bangkok and Chiang Mai
- Popular digital nomad and retiree destination
- Welcoming visa policies for remote workers and retirees
7. Georgia (the Country) – Visa-Free Stays and Low Taxes
Americans can stay in Georgia visa-free for up to one year, making it a flexible destination for long-term travelers and remote workers. The country offers a flat income tax of 20%, but self-employed individuals under the “small business” regime may pay as little as 1%.
There’s no tax treaty with the US, but foreign tax credits and exclusions can still reduce your US tax bill. Georgia is a growing hub for digital nomads and entrepreneurs.
Why it’s expat-friendly:
- No visa needed for one-year stays
- Low tax rates for self-employed professionals
- Rapidly growing international community
- Affordable living with modern amenities
8. Spain – Culture and Digital Nomad Options
Spain now has a Digital Nomad Visa, allowing remote workers to live in the country legally while working for non-Spanish employers. Americans can also apply for long-term non-lucrative visas if they have passive income.
Spain taxes residents on worldwide income, but Americans can offset some of that liability with the US-Spain tax treaty. Social security totalization agreements also prevent dual contributions.
Why it’s expat-friendly:
- Excellent public transportation and healthcare
- Large expat communities in Madrid, Barcelona, and Valencia
- New digital nomad visa with favorable terms
- Warm climate and rich cultural heritage
Don’t Forget: US Taxes Still Apply Abroad
Even if you move to a tax-free or low-tax country, you are still required to file US tax returns annually. The US is one of the few countries that taxes based on citizenship, not residency.
This means Americans abroad must:
- File Form 1040 every year
- Report foreign bank accounts (FBAR – FinCEN Form 114)
- Possibly file FATCA Form 8938
- Pay US taxes on foreign income unless eligible for exclusions or credits
When choosing a country to move to, it’s not just about lifestyle or cost of living. Understanding the tax implications is critical, especially for Americans who must continue filing with the IRS no matter where they live.
The countries listed above are expat-friendly for Americans not only because they welcome foreigners, but because they offer real tax and residency benefits that make living overseas more affordable and practical.
Before you book your one-way flight, speak with a US expat tax expert and make sure you understand the financial implications of your move abroad.
