Good morning. This is John Richardson speaking with you from Toronto, Canada. Today is Sunday, November the 3rd, 2024. And my guess this morning is a return guess, but I would say a return guess from the distance path, distant path. So I will introduce him by his Twitter handle, sorry, x.com handle, patience is alpha, P-A-T-I-E-N-C-E-I-S alpha, A-L-P-H-A. And a sentiment that I do agree with, interestingly, he hails from France, came to Canada, where he had permanent residence status, currently has a green card living in the United States. And like many green card holders is contemplating what to do, whether to make a great escape, or whether to become a US citizen, all this stuff. And because he's from France, he does have some interest in the recent news out there that some people, at least in France, are talking about citizenship taxation. So I think this will be a real treat for listeners. We're gonna be going through a lot of interesting stuff. So welcome, how are you today? Good, how are you? Alright, well let's go back to the beginning. So you're born in France, right? I was born in Africa. I was born in Africa. Okay, well there, now we have another thing to add to the story. But you grew up, sir. Correct, correct. Like we're up in France. So tell me about that. How old were you when you came to France? I finally came in France the day I turned five. Yeah, oh my god, the day you turned so that was your fifth, a memorable fifth birthday for you. Exactly. Yeah, we're reborn in Africa. I was born in Morocco. Okay, you're familiar with the Moby Casablanca? Half, halfway I knew about it, but I haven't never watched it. I should watch it. You can find it. Okay. Alright, so when you're five years old, you go to France and where did you go to in France? Some tiny place in Western France, 60,000 people, 65,000 people, not a big city, not a small city. Just to find a place to live. Yeah, totally. And what was the reason for yours? Obviously, you went with your family? Correct. Yeah. And what was the reason? It's actually a pretty funny and pretty complex story. But back and forth, my mom actually went to school in France. Then she went back to Morocco. And then at some point, she was looking at going back to France and she just, you know, took us and bought us to France. And this is how we ended there. We're up in France, obviously, classic French, French public school, everything pretty classic, French universities and all of that. And at what point? I'm not familiar with this. You're not born a French citizen. No, I was not. Why did you become a citizen of France? I became a citizen of France because my mom became a citizen. My naturalization of the parent. So I became a citizen of France around like level 12 years ago. So was it an naturalization or was it automatic? No, it was a naturalization. All right. It's asked, you know, the five years of residence required work, tax returns and all of that. Okay. So naturalization sounds like a sort of an expedited naturalization or something based on residency in France, plus the citizenship of your mother. Is that correct? Yes. And because of the fact that I was a minor, I pretty much had nothing to do with regard to, you know, language tests or civic tests or all of that. All of these like requirements were waived because of the... Did you have to go through a ceremony at all? I actually did not go there. I just, I don't have no recollection of the naturalization of France. And you were a French citizen. Yeah. Like one day my mom gave me like a naturalization certificate and that was it. How cool is that? That was pretty neat. I do remember her like going through, you know, the appointments and all of that, like paperwork, but had no direct implication into the process. Okay. Are you a citizen of Morocco? I was born a citizen of all of Korea. Are you still? Yeah. Okay. That's interesting. Okay. So you've got two citizenships anyway. All right. So you grew up in France and I've talked to you a couple of times over the years. So you're in the IT industry generally, right? Correct. Okay. And so the next stop then I believe is Canada, right? Correct. Now at this point you're married, right? Yes. Okay. So you and your wife are coming to Canada, yes? Yes. And you become a permanent resident of Canada. And apparently as you describe an absolutely record time, how does this happen? So there is actually a small middle step. I came, the first I like came to Canada. So I came as a, I came under a program called Mobili de Francophone, which means a Francophone mobility. That grants work permits to people that speak French. And my work permit was handled in the Canadian considering Paris. So that was, that was this way that I came and started my work for a big tech company in Toronto. And then under that big tech company, I applied for a permanent residency status. At the time I think it's still the case, but I went through a program called Express Entry. And this program is a place. The label exists. They keep running around with the requirements, but yeah, Express Entry, okay. And when I applied for it, so very in mind I had all of my documents where in French, my degrees, my, you know, my marriage certificate, my spouse degrees, my, my language tests, obviously, were like the primary language that I used for my points what was like French. It was like super easy to get the max points out there. And then, what actually happened is that I pushed all of my, all of my profile, I, and the way Express Entry works is you get, you get drows, depending on your points level. I got drone, and then I got asked to submit the PDFs regarding all of the claims that I had, the language tests and all of that. So from the day I submitted the PDFs around the beginning of June, and I got my confirmation of feminist reasons, what they call the COPR, which is essentially the documents you can print out and come back to the country with in like maybe the second week of July, something like that. And I later saw that the reason why I got this processing happening super fast was that if your applications actually in French for a federal program, there's not a lot of workers actually looking into that. It's only happening in Ottawa, and it's only like a subset of the total applications under Express Entry that are actually French. So that's the reason why my process went super fast compared to the other six, seven, eight months application. I might tell other people experienced. Very interesting. And so you're in Canada, and where were you working? Like what city? Toronto. You were in Toronto. Okay, that's interesting. All right. Yeah, that's the reason why it wasn't, it wasn't an immigration process related to the prevents of Quebec in any way shape or form. It was like a federal, it was a French speaking settling outside of Quebec. That's the reason why it goes faster. Okay. All right, and how long did you live in Toronto then? Leave the Year in Health in Toronto. How far does the city live in? Near Temperance, Queen Street, right by the city hall and the Eton Center. All right, so sort of downtown. All right, that's interesting. All right, so you're in Toronto for a year and a half as a permanent resident, and then you moved to the United States city? Yeah, I actually had the chance to move to the headquarters of the company I used to work with in Seattle. Okay. And so I moved to the US under an L1D visa, which is the Interact Company Transfer visa. Sorry, Intercompany, what kind of visa? It's the Intercompany Transfer, when you transfer people from... Is that an L visa? Yes, L1 visa. Okay, all right. All right, so you went there and how did you then get the green card out of that work? Well, one of the things that I tried to emphasize to my management at the time was, hey, I'm leaving a permanent residency status in Canada. I'd like to get something similar in the US so that I don't become tied to a job or tied to something like that. So as soon as I landed, I truly started. You still at this point have the legal status of promise. Yes, at this point, yes. I still have the right to go back to Canada. Right. But I figured if I did not start the green card process, which at the time was like the firm plus the I-140 or something like I-130 plus the adjustment of status. If I did not start that, then I would probably be at a point where I would be at risk of losing my Canadian status while still only in anyone's status in the US. Yeah, yeah. You do a separate podcast on that. Actually, you don't lose the permanent residency status from a legal point of view. What you lose is the ability to get the permanent resident card, okay, which makes it difficult to navigate. But that's a separate topic. I totally mentioned that I could have had both. Kind of, yeah. Actually, yeah. But, you know, that okay. It's all right. So you say could have you put in the past tense. So I infer from that that you actually did relinquish or whatever the phrase is. They actually have a phrase for it. It's either relinquish or renounce. I think it might be renounce. The permanent resident says. I think that's the phrase, isn't it? Correct. Yes, I did because I got my green card status just before COVID. And then COVID hit, borders started to close. And I started to have little to no interest in going back to Canada anyway. And at that point, the days that I spent outside Canada were starting to pile up. And I had like clearly no intention. I also started having kids. I know that. So I literally had no intention. In the US. All right. So we know what that means. We'll talk about that. Okay. So you got say, so where you are now, I'm presuming that, that where your immigration status goes, so goes your wife's immigration status. I'm assuming she's a green card holder as well. Exactly. Yeah. All right. So where you are then is two green card holders living in the United States. Did you know about like the seven year rule and all these things when you got the green card? Yeah, I know about it. But I waited that. And it's like simply put like it's an opportunity coast kind of thing. I waited that and I figured that I had more earnings potential by switching companies than. Okay, that makes sense. Okay. All right. So you're in the US green card holders. You must be near or past year seven at this point. Almost almost there. They are all here. So five this year is a six next year and then seven. Do you have to do your real decision is whether to cut and run. Okay. Before year seven, I guess the way you describe this, I think this makes sense whether to become a US citizen. Right. Now, right. You're saying a lot of people would think that the thought of becoming a US citizen is absolutely outrageous. But not really from your perspective, right? Not really from the perspective of a green card holder living in the United States. Maybe you could elaborate on that a little bit. Well, that choice, essentially, when that after those seven years, in my in my opinion, the two options kind of resemble the same, except that giving up the green card is way easier. So I'm getting a data to consolidate being at the mercy of the of the calendar and all that. Assuming that of course, assuming that you're not going to hit any of the over the spatriated to me, all of those different things that you have to watch out. So I'm looking at the thing and I'm like, the real benefit to me in terms of naturalization is being able to leave the country as I wish. Yep. And that's why actually pausing on that, that is, in my judgment, the number one people, the reason why people naturalize the citizens. I mean, I see this in Canada all the time, you know, you know, becoming a citizen of them, maybe leaving. And you know, I certainly met countless discussions with, you know, green card holders in the US who said basically the same thing. So I mean, certainly, you know, you're past the year, year seven or year eight or wherever we are on this and or you're going to be there. And then, oddly enough, if you had a high net worth becoming a US citizen would protect you from the exit tax, wouldn't that? Yeah. Yeah. It would, especially that like, there's this, there's this thing where depending on the type of income that you have, so some not as, as, as big of a problem as we might think, especially if you're going to be structured by capital gains, dividends, things like that, that are just easily flown into a 1040 form, right? It's harder if, if, if your goals are, I'm going to, I'm going to move and then I'm going to open a business. I'm going to do XYZ that are going to be more entrepreneurial. Absolutely. Yeah. Let's all elaborate on that a little bit because, you know, when we talk about this US citizenship taxation stuff, and let's also add to this that if you were returned to Europe, I'm guessing there's a good chance it would be free, right? Maybe, maybe, like, you know, aging parents and all of that might, might weigh into the, so, uh, okay, but let's just get this into our discussion right now. If you're a US citizen with US investment income and you maybe want to complete my thought here, yeah. I mean, uh, there's definitely, if you're a US citizen with US based, uh, investment and income, Francis, uh, is a tax heaven for you. That's, I don't know how many listeners are aware of, you know, this special provision in a US-France tax treaty that, you know, basically allows US citizens to live in France and exempt US investment, US source investment income from French tax taxation. I think I've got that it described in this. Um, so there's a point if there's any accidental Americans listening, we're always whining about their US citizenship. Uh, do you realize that, you know, down the road, you could actually leverage your US citizenship, lower taxes in France? That's the thing. If, if I had, if I had, if I had friends, that's where accidental Americans and that we're like just living in France, I would maybe give them, um, an opinion that in some cases, it might actually be better for you to go and embrace your situation of an accident, just because the, the, the kind of things you might open yourself through in terms of taxation, depending on, on other things, it's not just that you might, you might end up in a better situation than your neighbor, which is kind of weird. It's, it's truly incredible, isn't it? It is absolutely unbelievable. Uh, but then, you know, you point it out and you say, well, if you have investment income and you say, I think you use the phrase flows onto a 1040, you know, that's not a really big crop for US citizens living out, but then you started to say, but that's different from trying to run a business, right? Yeah. Which is, of course, pure health, right? You know, et cetera. Okay. All right. So that's interesting. Well, you know, you're, I mean, I've known you for, well, not well, but I've known you for probably, I bet it's five, six years. Yeah. I think so. Yeah. Probably. All right. Well, that's really interesting stuff. Now, all right. So that's, uh, a lot of interesting history, but I think a lot of interesting twists and turns and perspectives on this, right? So let's now talk, come to the main sort of event here for a second. So, uh, you know, there's been all this noise coming out of France about, you know, they're embracing the concept of citizenship taxation. Now, you know, you would understand this probably better than anybody or almost anybody, uh, and, you know, be able to sort of cut through the, you know, nonsense and the social media and everything to clarify this a little bit. So, tell me what your thought first of all, tell me what it is you think they're talking about. Let's start with that. And then let's get your thoughts on this. So what exactly are they talking about? So the thing that we talked about recently, I'm not news, um, that actually started, um, around 2019, there is a specific committee, uh, that was a sample to look into the field, to look into the feasibility of citizenship based taxation, the way the US does it. And that committee at the time was led by, um, by a congressman named Eric Cockrell, right, who happens to be today's finance committee leader, head of finance committee. So the original, um, the original, uh, the original, uh, investigation ended up, uh, with the following conclusion that because of the, uh, tax trading network that France has, which is pretty extensive, more than 120 tax treaties today. And, um, the fact that those tax treaties, uh, are above the low in terms of, um, of, uh, French law, it is pretty hard to go and, uh, and implement the US based, uh, US style citizenship based. Okay. And now let's take that apart a little bit now. Now, why is that exactly? So the French constitution, the one from 1958 has a specific article that says that treaties are above French law. There's a, there's a specific article in the constitution. That's it. Okay. And so, so French laws are subject to tax treaties. Okay. Exactly. So that would include a tax law. Yes. All right. So what is it about a tax treaty that would make this difficult to implement that? Well, the, the tax treaty has specific criteria that define residence. And the problem is that those, those, those criteria are the pretty usual criteria. Right? The 108 days, the center of vital interests, all of those different criteria, depending on the tax treaty, all, all what is dealt between countries in France and the, and the, and the country. Now we can, uh, install them. So it. All right. So, so in other words, we have a, we have somebody like, you know, Francis and it comes to the United States. And, you know, a present France defines tax rights. I don't know that this is true, but let's assume it is 183 days of residence or something. Okay. And the United States defines it, you know, in a way where you're clearly a resident of the United States because you live there. And so if you had a permanent home in the United States and not in France, then under the treaty, the treaty specifically says that not only are you a, treated as a resident of the US, but you're not a resident of France, right? Something in this vein. Um, but then again, the, the goal of that whole exercise that they had in 2019 is not necessarily to target. That's the conclusion they came to. It's not necessarily to target the existing tax treaty network. Maybe a few of those tax treatments could be renegotiated. They had in mind specifics, namely Belgium, which was renegotiated a couple of years ago last year. And the UAE essentially a few countries where French expatriates tend to go in order to get better tax treatment. That's what they really have in mind. And because of that, the conclusion was we might cover the countries that do not have these tax treaties. So those are easy wins. Yeah. We might target a few countries to renegotiate the tax treaties. And that's essentially what they're, what they're trying to do right now. They're also running into the complication that some of these countries are part of you and capital is free to move within the EU and things like that. So when you look at the proposal that was made by the, remember, it was made by the finance committee, was not made by the assembly. The finance committee drafts amendments, drafts bills, and then accepts them or checks them inside the committee, and then presents them to the assembly, which then folds on them. So the citizenship taxation law that was drafted was at the finance committee level. It was adopted at the finance committee level and it said the following, it started with the following subject to the tax conventions signed by friends and then persons of French nationality who have resided, et cetera, et cetera. So the first few words are subjects to the tax convention signed by friends. I wrote about all pile of countries. Exactly 120 something out of the window. And then what it said, and I guess this is the reason why it kind of was not adopted, is because the wording doesn't mean anything. The wording is complex. It said, I'm going to try to translate that, but it said that you, as a French citizen who lived three out of the last 10 years, and change your taxism to a state that practices a tax rate, more than 50% lower than France in terms of taxation of capital gain. The problem is that wording, the problem is that it doesn't address the fact that there's different type of income rates. It doesn't address the fact that it might be your marginal tax rate, your average tax rate, none of that thing is at rest. So figuring out the 50% level is going to be a lot of, it's going to be contentious, if you ask me. So in any case, that was rejected at the same level. So that's not part of the tax code. And remember, like the person that were in charge of that finance company, we're leaning far left in the French spectrum, whereas the assembly itself was more of a center, center right. So a lot of news was meant about what happens in the finance committee, but what happens in the finance committee is a contest. It's more of a contest of what new ideas can we come up with versus what can pass the assembly level. All right, so I mean, you put it that way and A, it doesn't seem like whatever it is is going anywhere soon, but B, whatever it is, is not even close to what we understand this whole citizenship taxation thing, you know, like the US to be, right? So it's sort of going after a few people who might move to places that most people don't go to, right? Exactly. They are targeting a few people, they are targeting business owners. And that's the reason why they actually passed on that past the old, they came back to the old recipe of the exit tax, which has a forward-looking window of 15 years instead of the two years that we used to have in the macro. So I was going to explain that when you say a forward look for 15 years, was that the exit tax, the current exit tax that was passed looks at French tax residents, ceasing to be resident for tax purposes of French, who will have either a portfolio assets in excess of 800,000 euros, or more than 50% participation in a single company, meaning business owners, is what they're trying to get. That changed their tax residency. For the next 15 years, they are liable for French, I don't know, capital gains tax essentially, under any sale that occur in the 15 years after the difference. It used to be on two on the macro, and really down 50 years. They ran at a longer reach, a longer reach. Exactly. Okay. So it seems to me, okay, there's really well, there's a lot going on here, but it seems to me that the issue of the exited harsher tax is not really related to citizenship taxation. It's not applicable in a way. What is applicable and what was put in place, and that's the funny thing, what is put in place, what was tried to put in place in France, is something that already exists in many European countries. Portugal has a similar tax. They have a list of countries that they deem are tax havens, that have a forbidden go-to list of countries, where they say if you are a Portuguese citizen and you cease to be a Portuguese detective, if you are a Portuguese citizen who happens to be a tax winner and cease to be a tax winner of Portugal, and you change your tax resiliency to a country in that least 20-something country, in there you can find the Antigua in Peru, you can find all of the Caribbean island, then we will continue to tax you for a number of four-seven number years. That's similar to what was proposed in France, but that's already on the book in Portugal. Interesting, interesting. Well, it doesn't sound, I mean I know there's gotten a lot of media hype in that, but it doesn't sound to me like it's going, whatever it is, is that serious and that it's going anywhere soon, would you agree with that? I don't think it's going anywhere for expatriates simply because of that tax trading issue. However, I do believe that things are getting more and more, things are getting harder if you are currently a tax resident of France, meaning that there are things like the exit tax that exist that literally went from two years, doesn't apply to anybody, to 15 years, everybody gets it. Well, I think that's probably true right across the board. It's interesting to me sitting here in Canada that at least there's more discussion that a lot of people leave in Canada. I don't know if they really are not, but last year there's been all this discussion of Canada's departure tax as if this is some kind of a new thing. Of course, it's been around for, you may have filed a departure tax for it. I actually did not file the budget tax. I figured that that was just selling would be simpler, if the word was such a sold. But these laws are definitely in place. Well, it's been really, really interesting. Going back to that point of US citizenship actually being a benefit for certain types of French residents because of that treaty, and maybe we'll save this for another podcast, but as you're one of the few people I know who seems to have an interest in this stuff, just generally. So you're aware of the UK Chancellor of the Exchequer recently ended the nom-dom regime, effective I think April, right? And that's interesting. It certainly doesn't make it more attractive for wealthy people to go to the UK. No question about that. I don't know whether people will leave, but it does strike me that that has got to move a lot of the light being shown on tax treaties and tax residency. If everybody, if they appear a residence-based taxation. My immediate thought on that was, boy, I bet you there may be a lot of US citizens who are going to try to use a residency tiebreaker to claim they're now residents of the UK. Can you see that as a possibility? Isn't that what the old PM did? Isn't that what Rishi Tsunak did for a while? Who? Rishi Tsunak did the old campaign. That's an interesting question. I mean, I've never fully understood. I mean, I know he had a green card, but I think he took that position because of his green card. That may very well be. That may very well be. Well, being the finance minister, which is the reason why. I mean, you know, being the finance minister gives you special privileges. But I'll tell you something interesting about the US-UK tax treaty when it comes to green card holders. Okay, a green card holder, so under US rules, as you know, a green card holder is a tax resident of the US regardless, right? But under the US-UK treaty, green card holder under the treaty is considered to be a tax resident of the US only if they have a permanent home in the US. So, you know, you hear about his fancy estate in California. I mean, that may very well exist. You know, for the reason, right? Yeah, that wouldn't exist to me. I mean, wouldn't that be an incredible story? But that said, I also saw something and there's the effect that he and his wife had given them up. But how could they do that without having taken tax treaty, non-resident treaty tie break for the reasons for many years? So, it's interesting. I mean, it'd be fascinating to know the life and tax times of Richie Suneck and his wife. That did not prevent him from becoming PM. Well, it probably helped him. Yeah, probably. Interesting, interesting. All right, well, there's a bit of great discussion. Anything you like? There's one thing, though, that's sorry to cut you out, but there's one thing that we haven't addressed in regard to those tax treaty positions, especially the French one, is that that does not shield you from any estate tax consideration in France, which is a trap even itself. So, people may have like a really good treatment for income tax purposes, but they really have to be careful about what they do for estate taxes, especially if they're single, because if you're coming as a couple, well, I guess you can always do something when the first spouse dies or something, right? Relocate. But estate tax considerations are something and just mention the exit tax. It's unclear what happens when you have an exit tax rule on the book, but you're also supposed to be granted a tax credit against that. So, it's money waters, at least. I don't believe that the US and France have an estate tax treaty, do they? They do. They do. They do. Regardless of that, it's just a money. They are estate consideration. Not that the big difference between France and the US is the fact that you have forced hardship rules in France, that you do not have in the US. You can just draft a bill and whatever happens happens. France, there's rules for who get there. Yeah. That's interesting. The longer I'm involved, that's the longer I think about it. I think the gold standard for wealth is to have nothing and be happy. That's simpler. I remember many, many years ago in law school, my final semester, I took this course. It was called Taxation of Estates and Trusts. And at the time, I just needed a credit, right? And I had no interest in this whatsoever. I mean, it was just, it was almost nauseating to me to sit there. Okay, and listen to this. But the guy who taught the course was you know, an amusing guy. And the one thing I remember from the course was he said one day, you know, I just can't imagine why anyway, we want to die with anything except debts. You know, it makes no sense. And I think that there's a lot of wisdom in that. Yeah. I don't want that note on that note. Are you striving for poverty? I would like to die with you, you know, that helps a lot. All right. Well, let me, let me close by asking you a question. Okay, possibly setting up a future podcast. In a general sense, do you think there are situations for US citizenship taxation can be a benefit for people? Oh, I can think of many. Really? Many many. Oh, yeah. In addition, so we'll save that for another discussion. Anyway, this has been great. People who want to interact with you or whatever, your x.com handle is Patience's alpha. And, you know, I can say that Patience's alpha has a lot of, a lot of intelligent, he's an intelligent addition to x.com. Lots of interesting comments. All right. Thanks for having me. All right, great discussion. Thanks a lot.
