Any resident of a foreign country that meets the IRS criteria for the bona fide residence test. This test classifies any person that lives in any foreign country for the entire tax year as a Bona Fide Foreign Resident. Anyone falling into this category is eligible for the foreign earned income exclusion. Bona Fide Foreign Residents must be either U.S. citizens living abroad or resident aliens of a country with which the U.S. has a valid tax treaty.

Bona Fide Foreign Residence status is not automatically accorded merely by living in a foreign country for one year. A clearly-defined permanent residence must be established in the foreign country before this status can be accorded. However, the taxpayer's domicile, or permanent home must be in the U.S., to which the taxpayer eventually intends to return.