Discounts, Tax Breaks, And Other Perks Of Retiring Overseas
Nov. 12, 2008
Panama City, Panama
PLUS:
- Dear Would-be Retiree Abroad, These Two Countries Are Vying
Hard For Your Business...
- How Costa Rica Shafted Its Retirees...And Is Considering Doing
It Again...
- The Current Gold Standard Of Foreign Retiree Programs...
- The Sandinistas Are Claiming Victory...But Not Everyone Is
Ready To Go Along With The Idea...
- From The Romantic To The Very Real...Bienvenidos a
Panama City...
AND:
- Window Shopping For Your Ideal Overseas Haven...
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Dear Overseas Opportunity Letter
Reader,
Some countries court foreign
retirees, offering discounts (on
everything from in-country travel to
prescription medicines and closing costs on
property purchase) and tax breaks
(from the right to import household and
personal belongings, even a car, tax-free to
zero tax imposed on pension or
foreign-earned income) to tempt you to take
up formal retiree residence.
Costa
Rica is the best-known example. In the
1980s, this country aggressively solicited
American retirees, even hiring a Madison
Avenue ad agency to brand it as the "world's
top overseas retirement haven."
The
copywriters did their job. Ask any American
about places to retire abroad, and he'll
likely mention Costa Rica.
Costa Rica
is a good case study, not only because it so
successfully attracted so many foreigners to
its borders in retirement...but also because
it then changed its mind. After about a
decade-and-a-half, the Costa Ricans decided
they had enough gringo retirees living in
the hills around San Jose and building homes
along their Pacific coast and abandoned many
benefits of their famed pensionado
program...without grandfathering the
existing pensionados.
Further,
the powers that be in this country are right
now considering more changes; specifically,
they're talking about increasing the
financial requirements for
pensionados from US$1,000 to US$2,000 and
for rentistas
from US$1,000 to US$5,000 a month! If these
proposed changes go through, again, they'll
apply not only to new pensionado and
rentista retirees, but to existing ones,
as well. Again, nobody'd be grandfathered.
Foreign retirees in Costa Rica likely would
move on in big numbers...to, say, Panama,
which has stepped up over the past decade to
fill the market void Costa Rica created by
seemingly abandoning its pensionados.
Right now, Panama's foreign retiree program
is the gold standard. It comes with 50%
discounts off movie, theater, concert, and
sporting events tickets; 25% off in-country
airline tickets; 50% off hotel stays; 15%
off hospital bills; 10% off prescription
medicines; 20% off doctor's consultations;
even 50% off closing costs for home loans.
The point is, as a foreign retiree, you almost couldn't ask for
more.
Recently, the minimum required monthly pension amount was
increased from US$500 to US$1000. Still, this is a great deal. As a
pensionado in Panama, you get discounts on in-country airfares,
dining out, doctor visits, museum entrances, medical costs...
If cost of living is a primary concern for you, Panama is working hard
to get your attention.
Furthermore, it's not trying to put its
fingers in your pie. Your pension and foreign-earned income are
tax-free. Panama attorney
Rainelda Mata-Kelly, long experienced helping foreigners establish
residency, as retirees and otherwise, in this country, is the most
reliable contact we know for more information.
Where else are
they rolling out the welcome mat for foreign retirees?
They
like you in Belize, where, 10 years ago, the government
launched what it calls its
Qualified Retired Persons (QRP) program. The benefits
aren't as far-reaching as those for Panama's pensionado
program, but qualifying can be more straightforward.
Furthermore, you can enjoy all the benefits of being a QRP even if you
spend as little as two weeks a year in Belize. You might decide,
though, that you like the idea of becoming a full-time resident of the
country. Right now, running away to a new life in the Caribbean
doesn't seem like such a bad idea.
You can become a QRP as
young as 45, and, once you've qualified, you're permanently exempt
from any Belize taxes, including income tax, capital gains tax, estate
tax, and import tax on household goods, automobiles, boats, even
airplanes.
The QRP program is under pressure right now. The
original law allowed for up to 20,000 QRP retirees. This cap has been
reached, and, in this country of only 270,000 people, the number of
QRP's is significant.
Should the government continue a program
that generates fee income and bank deposits and that directly and
indirectly creates jobs in the housing and tourism industries...or
should they keep their campaign promise and phase out the QRP
legislation?
One way or another, the particulars of the program
are likely to change. On the one hand, new QRP's, as of some cut-off
date, probably won't enjoy all the current QRP benefits.
On the
other hand, the government has promised that existing QRP's will never
lose any of their perks or privileges. This won't go the way of Costa
Rica's pensionado program, assure the Belizeans.
The decision
as to how to proceed is to be taken up by the National Assembly after
the year-end holidays, meaning you have about two months to act.
Certainly, if you've been considering Belize as a possible foreign
retirement haven, I'd say you want to make your determination one way
or the other sooner rather than later.
And if you haven't yet
thought about Belize, maybe you should. It's a tiny but beautiful and
diverse
Caribbean nation that has a lot going for it—including an
English-speaking population.
Kathleen Peddicord
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TODAY:
All attention was on the U.S. presidential elections last week.
Meantime, Nicaraguans did some voting, too, in city mayoral elections.
The outcomes in both countries are creating a lot of ruckus and a lot
of press...for different reasons. You know about Obama.
Down in
Nicaragua, the FSLN (that is, Sandinista) candidates are
claiming victory. But did they really get more votes? Voting
"irregularities" have been alleged...the FSLN is refusing any
recounts...and the Nicaraguans, fed up with FSLN leadership, are
saying they're not going to take the questionable results lying down.
The private sector and the church are pushing hard for the FSLN to
reconsider its position on double-checking the tallies, as are the EU
and the U.S. If these forces succeed, and President Ortega's party
eventually acquiesces to recount, he'll be reaffirming for the world
his country's commitment to the democratic process.
Stay tuned.
***
From the romantic to the very real. We arrived late last night at
Panama City's Tocumen airport after nearly 24 hours in transit
from Paris Charles de Gaulle.
In Paris...chilly autumn turning
to winter and tiny white lights being strung up and down the
boulevards as the city prepares for the coming holiday season. Here in
Panama...88 degrees at 11 p.m. and a cityscape lit at this hour by the
high-rise towers that have come to define it.
"Do I have school
tomorrow?" asked 8-year-old Jack on the ride into town from the
airport.
"Yes, and mom and dad have work."
Back to
business.
FROM THE MAILBAG:
"I'm wondering if you have considered setting up visits to your
recommended destinations, one after another, such as Mexico,
Nicaragua, Costa Rica, Ecuador, Brazil, Panama, and then back to the
U.S., spending two to three days in each country? I'm looking to make
a move but do not want to be going back and forth to visit each
country you recommend."
-- Jack D., United States
We've offered these multi-destination window-shopping trips in the
past, dear reader, and, yes, we're planning for them again, starting
in 2009. Watch this space.
Meantime, you can register your
early interest (and be on the list for special pre-registration
discounts) here:
CountryTours@LiveandInvestOverseas.com.
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