Demystifying U.S. Taxes and Business Structures for Americans Abroad with Nicolás Castillo, CPA

Thinking about moving abroad while keeping your U.S. finances in order? In this episode of Passport to Wealth™, host Arielle Tucker, CFP®, EA welcomes Nicolás Castillo, CPA, founder of Rook International CPAs and Advisors, to explore what it really takes to manage complex U.S. tax obligations as an expat especially when living and working in Europe.

With clients across the globe, Nicolás specializes in helping digital nomads, entrepreneurs, and remote employees stay compliant and confident in their cross-border financial lives. From Madrid, Spain where he now lives; he shares practical guidance for those considering the same move.

How Moving Abroad Impacts Your U.S. Tax Responsibilities

One of the biggest myths U.S. citizens believe is that once they move abroad, they’re no longer obligated to file a U.S. tax return. Nicolás quickly debunks this.

“Almost always, an American living outside the U.S. still needs to file a return. The question is whether they’ll owe tax.”

Even with the Foreign Earned Income Exclusion (FEIE) or the Foreign Tax Credit (FTC), many expats mistakenly believe they’re off the IRS radar. But as long as you hold U.S. citizenship, you’re subject to citizenship-based taxation, a system unique to the United States.

Remote Work ≠ International Work Approval

If you're planning to take your remote job overseas, think again. Nicolás and Arielle emphasize that just because your job is remote doesn't mean you can work from any country.

Employers often deny international work requests due to added tax, payroll, and compliance obligations in foreign jurisdictions. Without formal approval, you could expose your employer, and yourself, to costly legal and tax complications.

The Real Cost of Self-Employment Abroad

Running a business as an expat isn't as simple as picking up a laptop and setting up shop overseas. U.S. expats earning even $400 in self-employment income trigger filing requirements, and compliance becomes exponentially more complex.

Nicolás explains that dual reporting requirements, international tax treaties, and social security agreements (or lack thereof) can create major headaches for business owners. For example:

• VAT filing and local tax in Europe
  
• U.S. quarterly estimated tax payments
  
• Penalties of $10,000+ for missed international tax forms

Choosing the Right Business Structure Abroad

Many Americans default to using an S Corporation or setting up a U.S.-based LLC, but those structures often don’t translate well across borders.

“An S corp in Spain or France? That’s a tax disaster,” Nicolás warns.

Instead, expat entrepreneurs need to evaluate local tax laws, residency requirements, and even wealth taxes before choosing a business entity. In some countries like Italy or Portugal, U.S. business structures may be more compatible, but context matters, and a custom strategy is essential.

Spotlight: Spain’s Beckham Law & Digital Nomad Visas

As more Americans move to Spain, Nicolás breaks down the tax incentives available like the Beckham Law, which offers a 24% flat tax on employment income up to €600,000 annually for up to six years.

While this regime is off-limits to most self-employed expats, opportunities still exist, like the lesser-known Mbappé Law in Madrid, which grants tax breaks for those investing in the local economy.

Whether you're exploring the digital nomad visa or considering residency in Spain, Nicolás highlights the importance of nuanced tax planning to avoid surprises.

Expert Advice for New Expats

When asked what advice he’d give to someone preparing to move abroad, Nicolás gets personal:

“Integrate. Learn the language. Do activities that bring you into the community.”

Beyond tax and legal logistics, building a fulfilling life abroad means leaning into the culture, connecting with locals, and intentionally crafting your new identity.

Connect With Our Guest

Nicolás Castillo, CPA is the founder of Rook International CPAs and Advisors, a boutique tax firm focused on global tax strategy for individuals and small businesses. Based in Spain, Nicolás helps Americans navigate foreign income reporting, cross-border tax compliance, and international business structuring.

More About Our Author

Arielle Tucker, CFP®, EA, is the founder of Connected Financial Planning and the host of Passport to Wealth™. As a Certified Financial Planner™ and Enrolled Agent, Arielle specializes in helping U.S. expats simplify their finances while building intentional, global lives.

With firsthand experience navigating cross-border living, tax complexity, and international relocation, Arielle provides thoughtful, personalized guidance for individuals and families living abroad. Whether you're planning a move, managing multi-country income, or just trying to make sense of your financial future, she's here to help you do it with clarity and confidence.

To book a 1:1 Expat Expert Coaching Call with Arielle, click here.