5 Easiest States to Establish Residency In

5 Easiest States to Establish Residency In

In a world where mobility is increasingly valued, the concept of residency takes on new dimensions, especially for digital nomads and expatriates. That's right, all citizens (including expats) technically have a state of residence. Residency is more than just a place to live; it's a legal designation with significant implications for one's finances, taxes, and legal standing.

For digital nomads and expatriates, the benefits of establishing residency in a particular state can be massive. Some states offer substantial financial incentives, such as the absence of personal income tax, which can significantly reduce tax liabilities and boost your take-home income by 5-20%. Other states may appeal more for their lifestyle benefits, offering a supportive community for nomads.

Navigating the complexities of establishing residency is increasingly important for those embracing a location-independent lifestyle. This guide explores the five most nomad-friendly states, outlining the unique advantages each one presents for digital nomads and expats.

South Dakota vs Florida vs Texas vs Nevada vs Wyoming Domicile

#1 Florida

Florida Domicile benefits and requirements

Florida, the Sunshine State, emerges as a top choice for digital nomads and expatriates looking to establish residency in the United States. 

The state's allure is a combination of financial benefits, legal advantages, healthcare options, and strategic location to create an attractive package for those living a mobile lifestyle. Not to mention the myriad discounts available to Florida residents (e.g., cheaper cruises, Disney world tickets, and much more). 

One of Florida's most appealing features is its lack of state income tax, which can lead to substantial savings. Furthermore, the state's legal system is designed to protect assets and ensure privacy, offering peace of mind and financial benefits.

Ease of establishing domicile 

Establishing domicile in Florida

Setting up legal residency in Florida is relatively simple. The process generally involves securing a permanent address in the state, registering to vote, and acquiring a driver's license (often in that order). Of course, there is also the practice of severing ties with your previous state.

Healthcare and insurance options 

Florida provides a range of health insurance plans compliant with the Affordable Care Act (ACA), offering more flexibility and choice than many other states favored by nomads.

Strategic location

For those who frequently travel to the East Coast or Europe, Florida's geographical positioning is the most ideal of the tax-free states. The state is home to several international airports, making travel convenient and accessible.

Vehicle Registration

Out of states with no state income tax, Florida is one of three states where you can register your vehicle without having to drive it all the way to the state. Other states, like Texas, require an annual in-state vehicle inspection.

Similarly, Nevada (in most counties, including Clark County – home of Las Vegas) requires an annual in-state smog check on your vehicle. If you don’t plan on visiting the state that frequently, this can end up being an incredible inconvenience. If you do own a vehicle, you can chalk this up to major points in Florida’s direction. 

Downsides

Unlike South Dakota, Florida requires a residential address to get a driver’s license or register a vehicle. This means you can’t use a simple mailbox address but must use an office, house, apartment, or RV park instead. 

Fortunately, SavvyNomad can provide you with a residential and mailing address for a small monthly fee.

Comparative advantage

When weighed against other popular states like Texas and South Dakota, Florida distinguishes itself with its blend of tax benefits, ease of residency establishment, vehicle-friendliness, and geographical convenience.

Florida Residency information

#2 South Dakota

South Dakota Domicile benefits and requirements

South Dakota has gained recognition as an ideal domicile state for digital nomads, thanks to its simple residency requirements and favorable tax policies. These features combine to create an environment that is both financially and logistically appealing for those living a nomadic lifestyle. However, some recent controversial policies by the state legislature have made this state increasingly less popular for full-time RVers nomads. 

Financial benefits

The state is attractive from a financial standpoint, offering no state income tax, property tax, or inheritance tax. This tax-friendly environment is a significant draw for nomads who aim to maximize their savings.

Nomad-friendly residency requirements

Steps to become South Dakota resident

South Dakota's residency requirements are particularly accommodating for nomads. The state allows individuals to establish residency without the need for prolonged physical presence. In fact, the only requirement is that you must spend one night in South Dakota every five years. 

Ease of vehicle registration and insurance

South Dakota is also advantageous for nomads who own vehicles or RVs, offering low costs for vehicle registration and insurance. South Dakota has even easier vehicle registration than Florida.

In both cases, you do not need to drive the vehicle to the state physically. However, while Florida does require that you be present in the state to register the vehicle in person, for South Dakota, the entire process can be taken care of online and through the mail.

Procedural simplicity

The process of establishing a domicile in South Dakota is very straightforward. It involves obtaining a physical address within the state (which can be a personal mailbox), acquiring a driver’s license, and registering any vehicles, all of which can be completed with minimal hassle.

Comparative advantages

Compared to other popular states like Florida and Texas, South Dakota has a unique combination of tax benefits, ease of establishing domicile, and robust privacy laws.

Unlike Florida, you do not need a residential address to get a license or to register a vehicle; instead, you can use a personal mailbox address for all of these purposes. These features collectively make it a highly appealing option for the digital nomad community.

Downsides

South Dakota recently passed policies that prevent residents without a residential address (for example, residents with only a personal mailbox) from voting. This means that rent an apartment, house, or long-term RV spot within the state.

In addition, the state has also changed its policy regarding payroll taxes, deciding that a personal mailbox address cannot be used for payroll purposes (specifically, unemployment taxes).

Your employer may be unable to use your personal mailbox address as your official address for payroll purposes, making South Dakota residency challenging for some nomads and expats who are W-2 or 1099 employees.

That said, depending on personal circumstances, South Dakota can still be a leading candidate for residency.

South Dakota Domicile vs Florida Domicile
South Dakota Residency information

#3 Texas

Texas Domicile benefits and requirements

Texas has also emerged as a favored domicile for digital nomads, thanks to its economic benefits, brazen reputation, and a residency process that aligns well with the nomadic lifestyle. Here's why:

Tax advantages

The state's lack of state income tax, corporate income tax, and estate or inheritance tax sets Texas up as a financially beneficial choice. These tax incentives are basically a prerequisite to be considered by most nomads and expats.

Ease of establishing domicile 

Establishing domicile in Texas

Setting up residency in Texas is straightforward, involving steps like getting a Texas driver's license, registering to vote, and establishing a permanent address in the state. However, you technically need to be in Texas for 30 days prior to getting a state ID or driver's license – so the documents you bring to the DMV for proof of address should back that up.

Vehicle Registration

This is another hit against Texas. Every vehicle registered in Texas needs to undergo an annual safety inspection. While it is possible to postpone this, it's more paperwork that needs to be completed every year – and postponing your safety inspection for consecutive years is challenging.

Comparative perspective and additional considerations

When compared to other nomad-friendly states like Florida, the biggest downsides include Texas' 30-day residency requirement prior to getting your state ID or license, in conjunction with the difficulties in vehicle registration.

#4 Nevada

Nevada Domicile benefits and requirements

Nevada isn't one of the most common states for digital nomads and expats, but it is nonetheless an appealing one.

Establishing residency

Establishing residency in Nevada

The process for establishing residency in Nevada is straightforward, requiring individuals to acquire a permanent address in the state and obtain a Nevada driver's license or state ID. 

The state's definition of a permanent address is notably flexible, accommodating unconventional options like hotels, as long as you can demonstrate 30 consecutive days of residency. 

This flexibility is particularly advantageous for nomads, as there's no obligation to remain in the state full-time once residency is established.

Tax advantages and asset protection 

Economically, Nevada is on par with the other states listed regarding the absence of state income tax. It also offers strong asset protection, ensuring privacy and confidentiality, and has flexible trust laws. 

Practical considerations 

Nevada shares many benefits with other popular nomad-friendly states but also presents some unique aspects. To establish residency, a longer stay (30 days) in a campground, hotel, or RV park is required, which can end up being pretty pricy.  

Vehicle Registration 

On top of that, Nevada (in most counties and all major cities) requires annual emissions tests for vehicle registration, which can make owning a vehicle a major pain unless you spend considerable time within the state. Also, it's important to be aware that auto insurance rates and vehicle registration fees in Nevada can be higher, particularly for newer vehicles. 

#5 Wyoming

Despite being less popular among individuals compared to businesses, Wyoming is increasingly recognized as an attractive destination for digital nomads and expatriates.

Similar to the other states we’ve discussed, Wyoming's tax regime is highly favorable, with no state income tax and a 0% corporate income tax rate.

Additionally, the state's legal system is entrepreneur-friendly, providing asset protection for private business owners, particularly in the context of LLCs (Limited Liability Companies).

Ease of establishing domicile

Setting up residency in Wyoming can have its challenges, particularly in obtaining a residential street address, which is required for acquiring a driver's license. However, for digital nomads interested in business formation, the state remains an appealing option.

Comparative advantage

Compared to other states popular among digital nomads like Florida, South Dakota, and Texas, Wyoming is much harder to gain residency in while not varying too much when it comes to financial advantages. The challenges related to establishing a street address might make Wyoming a less preferable option. 

FAQ

What is the quickest state to become a resident?

South Dakota and Florida are the quickest and easiest state to establish residency, especially for location-independent workers and nomads. South Dakota allows you to establish domicile with a simple process that requires just a receipt for a one-night stay at an RV park. Additionally, you can register your vehicle by mail without needing an inspection.

Florida also has no minimum required duration to become a resident. The state offers a clear process for declaring domicile, which can be evidenced by obtaining a driver’s license, registering to vote, and demonstrating intent to reside permanently, which can be further supported by filing a Declaration of Domicile form with the clerk of court in your new Florida county.

What is the best state to establish residency for full-time RVers?

The best state for full-time RVers to establish residency is often considered to be South Dakota, Texas, or Florida. These states are popular among RVers due to their favorable tax laws (no state income tax), ease of establishing residency, and RV-friendly policies. However, due to recent policy changes, South Dakota has become increasingly unpopular. Texas also has burdensome annual vehicle safety inspections. This often means that Florida comes out as the crowd favorite.

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Conclusion

Florida and South Dakota stand out as recommended options for establishing residency for digital nomads and expatriates. 

South Dakota, known for its favorable tax regime and minimal residency requirements, is particularly attractive for those living a nomadic lifestyle. However, recent policy changes have made South Dakota less appealing for some potential residents.

Florida, with its no state income tax and a straightforward process for legal domicile, sets itself apart as the most popular among nomads. Its strategic location also makes it ideal for frequent travelers. 

The primary downside, when compared to South Dakota, is the requirement for a residential address. Fortunately, SavvyNomad can provide you with a residential and mailing address in minutes.