A local attorney can detail all the possibilities for you, and, in most cases, I recommend you use a local attorney to process the associated paperwork for the visa you choose to apply for. It's worth the minimal expense, and it saves you the effort of trying to wade through the related red tape in a foreign language. In some cases (again, in Panama, for example), an attorney's help is not only advisable but required. The most important thing about residency visa options for any country is to understand the rules before you get too far into your relocation plans. You don't want to begin house-hunting in a country only to find that you don't qualify for any visa option and won't be able, in fact, to take up residence, at least not legally or full time. In some countries, on the other hand, the options for foreign residency are one of the big advantages for foreign retirees. Right now, Panama's pensionado residency program is the gold standard. Qualify for pensionadoresidency in Panama, and you can bring your household goods and a car into the country duty-free and then, while living in Panama, benefit from discounts on everything from doctor's visits and prescription drugs to domestic airfares and closing costs on real estate. To qualify for Panama pensionado status, you need only show income from a pension (can be a pension from any source, including Social Security) of at least US$1,000 a month. Note, though, that the pensionado visa is but one of more than a dozen visa options available in Panama. This is why, again, you really need the help of a local attorney with experience helping foreigners establish residency to determine which option makes most sense for you. Before you begin to research the particular retiree resident visa options for the countries on your list, be sure you understand the relevant issues and terminology. A visa is a document that allows you to remain within a country's borders for a specified period and, sometimes, with specified restrictions and limitations. A tourist visa is the easiest form of entry into a country, and this is all you'll need for your initial scouting visits. Most Western passport-holders (including Americans) aren't required to apply for tourist visas to most countries. You need only show up. When you arrive at the entry point into the country (typically the international airport), you show your passport, and you're automatically granted a tourist visa and allowed to enter the country. Sometimes you'll be required to fill out a form, and sometimes you'll be asked to pay a fee (of, say, US$5). A tourist visa allows you to stay in a country for 30 to 90 days, depending on the country and the passport you carry. That's why this is all you'll need during the scouting phase of your retire overseas adventure. To stay in a country beyond the 30 to 90 days allowed for by the tourist visa, you'll need a residency visa. When you hold a residency visa or permit for a country, you're a legal resident. You're not a citizen. This is an important distinction, especially for tax purposes. You're not a citizen, and you don't necessarily have the right to work. A work permit is a separate thing. Residency visas come in different forms--temporary and permanent, for example. A temporary visa, as you might guess, gives you the right to remain in the country for a limited time, typically one year. After that time, you must apply for another residency visa. The re-application is usually a formality, but you may be asked to prove again that you meet whatever requirements you were required to meet to obtain the visa in the first place. Depending on the country, after you've renewed your temporary residency visa a certain number of times (three or maybe five, for example), you can be eligible then for permanent residency. It depends on the type of temporary residency visa you started with. In most countries, you'll be required to make a new application to progress from temporary to permanent visa status. Once you've obtained permanent resident status, you're done. You're free to live in the country as long as you like and to come and go as you please. Residency visa requirements aren't onerous, but the paperwork can be a hassle and the process can require several trips to the local immigration office (where the bureaucrats behind the counter aren't going to speak English). This is why I recommend that, for most countries, even if it's not required, you engage an in-country attorney experienced at helping foreigners obtain residency. This isn't rocket science. But it's a process. In another language and in another country, where they do things the way they do things. The systems and protocols don't have to make sense to you, and sometimes they won't. I've found that it's a waste of time and energy to try to understand. You don't need to understand how the residency visa application process works in France. You need only qualify for a visa to remain in the country (if that's your objective). Why drive yourself crazy (and waste your time and money) trying to make heads or tails of French immigration law when you could easily hire a French attorney who has spent years interpreting it? How do you find an in-country attorney to handle your visa paperwork? I suggest you seek referrals from expats already retired in the country. An attorney is one resource you don't want to choose randomly over the Internet. I recommend trying to get at least two referrals from expats who've gone through the residency process. Then follow up to interview each referred attorney, informally, over the phone or perhaps during your first country visit. The #1 resource I know for information on foreign residency, dual citizenship, and second passports is The Passport Book--The Complete Guide to Offshore Residency, Dual Citizenship & Second Passports, written by my longtime personal friend and former Congressman, Robert Bauman. You can read more about Bob's updated 7th Edition of hisPassport Book here (as well as details of a special offerBob's publisher is making available for Live and Invest Overseas readers). Kathleen Peddicord Continue Reading:
Before I detail the purchase terms further, though, I should take a step back to give you some idea what we're talking about. I have seen a lot of beaches. Over the 17 years I've been investing in real estate around the world, I've tromped sandy stretches from Nicaragua to Belize, from Uruguay to Ecuador, from the southern coast of France to Portugal's Algarve, from Morocco to China, from Turkey to Vietnam, from Thailand to Down Under, and on and on. Two years ago, when I set eyes on Los Islotes, on the west coast of Panama's Azuero Peninsula, I knew I'd found something special. This piece of land is about as good as it gets. It's got a kilometer of beachfront that includes two distinct beaches and that is backed by 300 hectares of sloping, hilly terrain that allows for far-reaching views of the Pacific Ocean from nearly any point on the property. Los Islotes also boasts perhaps the best sunsets in all Panama. In fact, this is the only coast in Panama where you can watch the sun set over the ocean. In addition, and of critical importance, Los Islotes is in Panama. Looking at the world map, Panama stands out as one of the top places to be focusing your time, attention, and money right now. You know how bullish I am on Panama in general, so I won't belabor the point now. I'll say only that, the longer I'm here on the ground, the more convinced I am that, when my partners and I committed our attention and resources to this country three years ago, we did a smart thing. Look closely at Panama, and you see a clear path of progress. Pacific coastal property in this country has been developed (and, therefore, has appreciated in value) starting from just outside the capital city and moving westward. The Azuero Peninsula sits directly in this path. When I set out three years ago to find The Next Big Thing In Panama, I focused my search on this peninsula for this reason. The western coast of this Azuero Peninsula, specifically, has two more things going for it. First, as I've mentioned, it's the only place in the country from which you can watch the sun set over the ocean, for it's Panama's only western-facing stretch of coastline. Second, the west coast of the Azuero Peninsula sits in Veraguas Province. Current President Ricardo Martinelli hails from Veraguas. I believe all Panama is going to benefit from Martinelli's time in office, including and especially the folks in Veraguas, his home province. Martinelli is speaking seriously of opening a new international airport in this country, and it is likely that it will be positioned to facilitate access to the Azuero Peninsula. Los Islotes is my project of focus for the coming decade. That's how long it will take to build out the community we've master planned. Specifically, our Los Islotes Master Plan calls for all the usual things you'd expect in a top-of-the-line private beachfront community--a gatehouse, a clubhouse, at least three swimming pools, stables, riding trails, tennis courts, a fitness center...plus underground water and electricity, central waste-water treatment, fiber optic cable for Internet, and 24/7 security. In addition, the plan at Los Islotes also calls for a Spanish colonial-style town with shops, restaurants, apartments, and a central plaza for daily strolling and nightly entertainment. Other areas of the property will be given over to individual homes, low-rise condos, casitas, and town homes, as well as a high-end boutique hotel. Los Islotes is the only development of its kind in this part of Panama. There is little else in the entire country and nothing else in this region to compare. Back to the point of my communication today: financing. As I've explained, the terms of the financing offer my partners and I have conceived are straightforward. You reserve your lot and sign a purchase agreement paying only 20% down. You then pay off the balance of the lot purchase price at 2% a month for 40 months at zero interest. As we're in pre-construction mode, we're currently offering a 20% discount for lots in Phase 1. This means that you can buy an ocean-view lot today paying as little as US$8,800 down. Your interest-free payments would be US$880 a month for 40 months. We haven't yet set the ceiling on the number of lots we'll make available with these financing terms, but, as I'm sure you can understand, we won't be able to extend this 0% interest financing offer indefinitely. If you're interested in joining us at Los Islotes and gaining a foothold in Panama at the same time, this is your best opportunity to do so with a very modest capital requirement. Our Sales Director Lourdes Sanchez is standing by to answer specific questions regarding this limited-time financing opportunity. Lourdes can also detail current lot availability. You can get in touch with Lourdes here. Lief Simon Continue Reading:
Historically, timber has enjoyed the best risk/reward ratio of any investment sector. Depending on whose chart of historical returns you consult, timber as an asset category has produced an annualized ROI in the 12% to 15% range every year since they started keeping records on investment risk versus return. On top of this, timber is the kind of investment I like. It's real and productive. This is more important right now than it's ever been. If you don't have some of your money in this kind of real, productive asset, you should. I was reminded of these facts when a couple of new timber opportunities crossed my desk this week. I'm reviewing these now and will have a report for my Marketwatchmembers shortly. Meantime, here's how a direct timber investment should work. You buy the land. A management company plants trees on it and maintains them for you. They take care of everything--from insect and weed control to thinnings--until harvest time. Come harvest time, the management company organizes the cutting and the sale of the trees. The revenue from the harvest goes to you, as the owner. Here's the best part: You still own the land, meaning you can replant and start the process over for another harvest. I'm over-simplifying things, of course, but the point is that you want to be buying the land. I've seen offers where you buy only the trees and the management company owns the land. Once you harvest the trees, your investment is done...closed out. And I've seen many offers where you buy shares of the operating company that owns and manages the land and the timber. I find this option much less appealing, because you're not buying a real productive asset; you're buying a company. You have no control over the land, the timber, or how the business is operated. The only thing you control is the timing for when you sell your shares. On the other hand, you probably don't want to learn how to grow and manage a forest. That's why I recommend direct ownership of the assets--land and trees--with a management company in place to take care of everything for you. As I said, I'm reviewing two new opportunities for my Marketwatch members, but one opportunity that I've long recommended is teak farms in Panama. A friend, Robert Kroesen, whom I met years ago during my first few scouting trips to this country, has a reforestation company that today owns and manages more than 3,000 hectares of teak plantations (and that is aggressively working to acquire more land). With Robert's help over the past seven or eight years, I've learned a little about this business and have come to appreciate the opportunity tremendously. Robert's company, United Nature, was founded in 1993, meaning he is now getting into full harvest for some of his early plantations. Growth rates have been good in the region of Panama where United Nature has cultivated its plantations, and Robert is positioned now to achieve an excellent return on his initial investment. Robert started United Nature with a single partner as a personal investment undertaking. About 10 years ago, six or seven years after he'd been planting for his own portfolio, Robert began putting together packages for other investors. This had never been his intention, but, when people saw what he was doing and that he had the infrastructure in place to manage the plantations, they came to him asking to invest. Rather than sell those people shares in his company, as other plantation operations in Panama were doing, Robert segregated out specific parcels of land for people to own directly. He continued to manage the plantings, the maintenance, and the harvesting, but each investor was given the opportunity to own his own piece of land and the trees planted on it outright. Each investor with United Nature decides himself when to take the final harvest (though I'd say the sensible thing would be to take Robert's team's advice on this). And each investor can sell his land and/or his trees whenever he wants. There is an active and expanding market of investors looking to buy older plantations. As other investment types become increasingly volatile and uncertain, more and more investors are looking to things like timber for long-term safety. However, many don't want to have to wait the full 17 to 25 years from initial planting to harvest. They're willing to pay a premium to accelerate the exit and the payout. Robert's projected annualized ROIs are in the low teens. This modest statement, though, doesn't do justice to the real opportunity here. Because this is such a long-term proposition, the total return come harvest time can be extraordinary. US$1 can turn into US$13. Yes, I'm invested with Robert. To learn more about investment options with United Nature, go here. Lief Simon P.S. Another benefit to an investment in Robert's teak plantations is that it can bring you a residency visa in Panama. With an US$80,000 investment in a registered reforestation project (United Nature's reforestation plantations qualify), you can arrange permanent residency visas for you and your dependents (that can lead to Panamanian citizenship). Continue Reading:
- Residency And Citizenship In Panama
Nothing substitutes for feet on the ground. You've got to walk the beaches, the pavements, and the hillsides of whatever overseas Shangri-las may be tempting you virtually. Only then can you know if any one of them is the right place for you to spend your time or your money. Readers write every day to say, "I've been reading your letters for months (or years), and I'm convinced I want to make a move. What should I do next?" Come to a conference. That's why we offer them--because they're the logical and the necessary next step. You can do it on your own, and everything can work out great. But it's tougher, and it's less efficient. It takes longer, and it costs more money in the long run. Before you make a move or invest your money in a new country, you need to engage a corps of resources you trust and to build an in-country network of support. You need an attorney, a banker, a tax advisor (if you're an American, you need two--one in the new country and one back in the States), and a residency adviser...you need a shipping agency and an insurance provider...maybe you need to find a real estate agent who won't try to rip you off (in some markets, not an easy thing), a property manager, or an architect... Thinking a little more day-to-day, maybe you're going to need recommendations for doctors, decorators, veterinarians, schools for your children, Internet providers, and cell phone contracts... How do you get the electricity turned on in your new home? And then how do you pay your electric bill each month? How do you find household help, a driver, or a gardener? Where should you shop for appliances, lighting fixtures, and bedclothes? What should you bring with you from home? Should you ship your car? These are only some of the questions you'll need to answer as you prepare to launch a new life in a new place. But what if you're interested not only in reinventing your lifestyle, but also in building a new way to pay for it? What if you want to start a business? Then you've got another long list of questions to find answers for. Again, you can seek out all this information on your own...or you can come join us for a few days in the country where you're focusing your attention. You'll be presented with answers for every question I've suggested here...plus you'll be given every opportunity to ask every question of your own, as well. The responses you receive won't be theoretical. They'll be real-world and born of experience. For every live event we sponsor, we convene our key in-country resources and friends, including the contacts and colleagues we work with personally. In Belize, Panama, France, and Uruguay, for example (the countries where we're holding Live and Invest Overseas Conferences in the next six months), we'll introduce you to the bankers, tax advisers, attorneys, residency experts, insurance providers, and shipping agents we've worked with personally. We understand that every introduction we make at one of our conferences come with a strong personal endorsement. We take this responsibility seriously. In addition to our corps of advisers in each case, we make other invaluable introductions, as well, at all our live events--to people just like you who have already made the move and who are already enjoying new lives in these new places so full of opportunity. These expats in whose footsteps you're considering following are the best possible source of information and advice. They know what you need to know better than anyone. And they join us for our Live and Invest Overseas Conferences in the spirit of community, eager to share their tales (of success and, yes, of struggle). At one of our Live and Invest Overseas Conferences, you meet dozens of people who've made the kind of move you're considering...and you also meet dozens, maybe hundreds of people who are right now just where you are. Thinking, deliberating, considering the options. You learn from them, too, from their stories and from the questions they ask that maybe haven't occurred to you yet. This opportunity to engage one-on-one with so many like-minded souls has always been, for me, the biggest benefit of participating in one of our live, in-country events. After 20 years putting on conferences all over the world, it's the reason I continue to look forward to every one. Each Live and Invest Overseas Conference is a chance to make invaluable connections, to secure resources you can trust, to meet potential new business associates, and, perhaps most important, to make new friends in the place that well could become your new home. New friends...and maybe more. Lief and I met at a conference I hosted in Ireland 13 years ago this month... But that's a story for another day. Kathleen PeddicordP.S. What else this week?
- "It has been nearly four years since I moved from Tucson, Arizona, to Boquete, Panama," writes newPanama Letter Editor Lee Zeltzer.
"Looking back over my experiences, the operative word is 'change'...in Spanish, cambio.
"Panama has changed in the time I've been living here, but more rhelevant to me is the change I've experienced.
"I came to Boquete with my wife to start a new life when our last of four children moved on to university. Within 18 months, my wife had left. For many reasons, she has not returned. Big change..."
PLUS: From Global Real Estate Investing Guru Lief Simon: Years ago, I knew of a development project in New Zealand where the developer offered investors a guaranteed yieldfrom the rental of their units for the first three years of operation of 12%. Development sold out quickly. After three years of operation, the 12% yield the investors had been enjoying plummeted to around 5%. That was all market rental rates at the time could generate on the original amount of the investment. Meantime, other rental properties in the same market were yielding more--around 8%. In other words, not only had the yield fallen for the investors who'd bought into the guarantee, but the capital value of their units was less than they'd been led to believe (and than they'd paid). Bottom line, the investors had overpaid for their units by enough to allow the developer to be able to return them the 12% per year yield he'd guaranteed. He'd paid them back with their own money. Several months ago, a consulting client wrote to ask me about a development project he was considering investing in. The developer was offering a guaranteed yield, in this case of 19%! My client is neither stupid nor naïve. He'd done his due diligence. What he had discovered was that the management company the developer had put in place had negotiated a contract with a travel agency that guaranteed to fill 80% of the rooms with their tour groups. He'd run the numbers, and the guaranteed yield panned out, as did a comparative analysis of purchase prices for comparable units in that market. My client invested. After he bought, unit prices increased, and the guaranteed yield was reduced for new investors, signs that the developer hadn't padded the original unit prices to be able to pay the yield he was guaranteeing first investors. So how can you tell when a guaranteed yield is a sweet, risk-reduced opportunity...and when it's a scam?
"I came to Boquete with my wife to start a new life when our last of four children moved on to university. Within 18 months, my wife had left. For many reasons, she has not returned. Big change.
"Before she left, we'd purchased a small piece of property with a marginally livable house above Boquete. Compared with our suburban life in Tuscon, where we lived in a much larger home, this, too, was a massive change.
"The move from dry heat to wet...more change.
"The move from suburban to rural...change.
"The shift from 33 years of marriage to living alone...change.
"The only course in which I earned a 'D' in college was Spanish. Now I am learning to speak Spanish to survive. Change.
"Without the need for discovering religion, I have been reborn. What a nice change.
"During my university days, I was considered a student activist, very political and aware. During my years raising a family, I was totally focused on earning and surviving. Now, at this phase of my life, I have learned to accept what I cannot change. On a micro level, I have had some influence, but it's nothing that will have a long-term impact. Years ago I shook off the illusion that any of us in the polity, the masses, shaven or not, can alter the grand scheme of things on this planet.
"Stripped of the need to change the world and largely free of the rewarding shackles of raising four children, I've discovered in Panama my opportunity for personal change. It is not that I, or you, could not experience this kind of change 'back home.' It's just easier when everything around you, every element of your life, is different. You learn quickly that you must change or leave.
"And this is my point. Unless you are willing to undergo a grand transformation, this part of the world is not the place for you. It is different here in Panama. If you are set in your ways, a driven type A personality, and cannot adjust to the idea of nothing working as you anticipate, visit for a holiday and then go back home.
"I can live comfortably here on my Social Security income. Back in Tucson, that check might have covered my utility bills. But there are trade-offs. In retiring to Panama or another place with a low cost of living, you can live a lifestyle that you could not afford in the States, for example. But you're going to need to make adjustments.
"If you are considering retirement in Latin America, the first and best piece of advice I would give you would be to learn Spanish. You will never really integrate into the culture without the language. Without that change, you are limiting your experience to a small English-speaking community. Make the change, though, and you will discover that the wonderful people here will welcome you.
"Sell your car, sell your stuff, come here to start a new life, and be ready to live longer and happier. Learn a new culture, learn a new language, learn to cook with seasonal ingredients, learn to dance the Salsa, try the good local rum, eat sancocho...
"Dr. Andrew Weil has written about how, as we age, we need to keep our brains growing to avoid dementia. Not a problem moving to a new place like Panama. You can try something new every day.
"My life in Panama has been one big change after another. My children and friends back in the States say I look and act younger today than I did four years ago when I left.
"It hasn't always been easy, but I've enjoyed the changes Panama has brought me, and I plan to keep changing and growing.
"Perhaps it could be a good change for you, also. But only you can make that call.
"If you know you cannot change, do yourself a favor. Try Green Valley or Sun City instead. Don't come to Panama. You will hate it here."
Kathleen PeddicordContinue Reading:
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