There's a Foreign Earned Income Exemption which will eliminate the tax payment requirement for most people on wage income, but you'll be taxed on investments/in

There's a Foreign Earned Income Exemption which will eliminate the tax payment requirement for most people on wage income, but you'll be taxed on investments/interest from the first dollar. People with income higher than the FEIE who pay taxes to a high-tax high-service jurisdiction (like Japan) will generally use the foreign tax credit to take care of most of their liability; folks who live in a low-personal-income jurisdiction like Hong Kong and are high-paid get smacked pretty hard. There exists a plethora of compliance problems which are worse than the actual taxation, for example the PFIC regulations which make it non-economic to do standard middle class investment abroad for e.g. a child's education. Advocates for Americans overseas are trying to get the PFIC and FATCA regulations overturned or get safe harbors expanded dramatically, but there exists a feeling in Washington that the only Americans who'd have bank accounts or mutual funds outside the US are "fat cats" (get it?) trying to abuse the tax system rather than pretty typical taxpayers with pretty typical life choices.