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Visa & Legal6 min read

Maintaining US State Residency and Domicile While Living at Network School

How American NS members can maintain US state residency, manage domicile, and optimize state taxes while living abroad in Malaysia.

The NS Guide
The NS Guide·Last updated
01

Why State Residency Matters

Even while living at Network School, your US state of domicile determines which state taxes you owe, where you vote, ...

Even while living at Network School, your US state of domicile determines which state taxes you owe, where you vote, which driver's license you hold, and where you can access government services. Some states (California, New York) aggressively pursue tax claims on former residents, while others (Texas, Florida, Wyoming, South Dakota, Nevada) have no state income tax at all. Before leaving for NS, establishing domicile in a no-income-tax state can save thousands of dollars annually. This is perfectly legal and widely practiced among digital nomads, but requires deliberate steps to document the change.

02

Establishing Domicile in a Tax-Free State

The most popular choices are Florida, Texas, and South Dakota. To establish domicile, you need a physical address (virtual mailbox services like Traveling Mailbox or Earth Class Mail work), a state driver's license, voter registration, vehicle registration (if applicable), and bank accounts listing the new address. South Dakota is often easiest because it requires the least physical presence — you just need to spend one night in the state and sign an affidavit of domicile. Florida requires a Declaration of Domicile filed with the county recorder. Complete these steps before leaving for NS to create a clear timeline.

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03

Managing Mail and Documents

A virtual mailbox service is essential for maintaining your US address while abroad. Services like Traveling Mailbox, Anytime Mailbox, or iPostal1 receive your physical mail, scan it, and let you view it online. They can also forward packages. Use this address for your bank accounts, credit cards, driver's license, voter registration, and IRS correspondence. Most services cost $10 to $30 per month and include a real street address, not a PO Box. This is important because some institutions reject PO Boxes. Set up automatic forwarding for any mail that arrives at your old address before departing.

04

Maintaining Your US Life Infrastructure

Keep at least two US bank accounts active and funded. Set up online banking and mobile check deposit before leaving. Ensure your credit cards have no foreign transaction fees — the Chase Sapphire, Capital One Venture, and most American Express cards work globally without fees. Renew your driver's license before it expires. Some states allow online renewal while others require in-person visits. File a US Postal Service change of address form to your virtual mailbox. Keep a list of every account tied to your US address and update them all before departure. Many NS members schedule an annual trip home to handle any in-person requirements.

0% state income tax in 9 US states including FL, TX, and SD

Source: Tax Foundation

$126,500 — 2026 Foreign Earned Income Exclusion limit

Source: IRS

Geographic arbitrage is not just about where you live — it is about optimizing every layer of your financial life, including state-level tax exposure.
Tim Ferriss, Author of The 4-Hour Workweek
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Frequently Asked Questions

Can I claim Foreign Earned Income Exclusion without changing my state domicile?

Yes, the FEIE is a federal tax provision and does not depend on your state domicile. However, some states (notably California and New York) may still tax you as a resident even if you claim FEIE at the federal level. Establishing domicile in a no-income-tax state eliminates this issue entirely.

What happens to my health insurance when I move to NS?

If you are on an employer plan, coverage typically continues regardless of location, though network access will be limited to emergency care abroad. If you are self-insured, you can drop your US plan and switch to international coverage like SafetyWing ($45/month). Keep in mind that some states require proof of coverage for domicile maintenance.

How long does it take to establish domicile in a new state?

The process can be completed in 1 to 2 weeks if you plan ahead. South Dakota requires just one overnight stay plus filing paperwork. Florida requires filing a Declaration of Domicile and updating your driver's license. The key is creating a paper trail that shows intent to make the new state your permanent home.

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