Mark Abouzeid always dreamed of retiring in Italy, where he'd lived as a child before growing up in America and becoming an investment banker. In 1994, Mr. Abouzeid quit banking, started a dot-com venture and, a year after that, moved his wife and two children from Florida to Italy. By 1991, he was living in a century-old villa in a medieval Tuscan town, consulting to other dot-coms, trading in real estate and making olive oil from his own trees.
For Americans attracted by the promise of living in another culture -- or simply bored with life in the U.S. -- overseas entrepreneurship can allow them to earn a living in another country while avoiding work-visa rules that make regular employment difficult.
Many succeed, to some degree at least. According to the Internal Revenue Service, in 2004 more than 15,600 individual tax returns reported foreign-earned business or professional income.
Most expatriate entrepreneurs fly under the radar, running home-based businesses that escape official notice.
"It's the ultimate daydream," says Robin Pascoe, a North Vancouver, British Columbia, author and publisher of books about expatriates. "Pick a country you want to live in and find something to do that will support a lifestyle."
Entrepreneurs who start overseas lifestyle businesses tend to be middle-aged people who have been successful in their careers, according to Ms. Pascoe. They typically start service businesses, such as inns or English-language tutoring, although Internet retailing has recently become another option.
Beyond neighboring nations such as Canada and Mexico, and alluring European countries, the Central American country of Belize has been a hot spot for expats recently, Ms. Pascoe says.
Obstacles to making it as an expat entrepreneur include language, loneliness, bureaucracy, corruption and business practices that are sometimes incomprehensible to an American.
"It always depends on the country," Ms. Pascoe says. Some are "desperate for foreign investment in U.S. dollars. Others will be suspicious of whether you're taking business away from locals."
Many expats start businesses that cater to other expats. Jill Lengri grew up in Los Angeles and spent nine years in France before moving to Mexico City with her husband, a French pharmaceutical executive, in 2003. Ms. Lengri is starting a Web portal for expat women with partner Andrea Martins, another trailing spouse, as they are sometimes called. The two opted for entrepreneurship because they wanted flexibility to care for children, portability for the inevitable day when one or both spouses were transferred, and the opportunity to earn money without a work visa.
In getting the site up and running, the partners have encountered the same hurdles entrepreneurs find in any country, Ms. Lengri says. But they added complexity when by choosing to set up an offshore corporation run through an Australian trust that will allow them to keep the business going when one or both left Mexico. "It just happened that we were in Mexico," says Ms. Lengri. "We could have been in Zimbabwe."
Even if an expat entrepreneur succeeds in with an under-the-radar Web business, other kinds of local regulations can trip them up.
Mr. Abouzeid says a divorce forced him to sell his villa and convey to his former spouse the online travel business they'd started. The divorce process exacted a considerable toll, thanks to Italian law requiring a three-year legal separation that itself took over a year to arrange.
Today, he mostly works as a free-lance photographer for real-estate and travel publications. Although he earned far more as an investment banker, he doesn't miss the long hours or the glittering lifestyle of his former career.
"All the things I used to buy to distract myself are no longer necessary," he says. "I walk outside the door, I have a view that Michelangelo painted. I have a restaurant down the street that cooks some of the best truffle pasta in the world."
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