Articles Related to Residency in colombia

Maybe you've noticed that there are no foreign franchises, including no fast-food franchises, operating here in Belize City. That's a remarkable thing in today's world...until you remember that historically Belize City just hasn't been home to enough population to support a lot of trade. I understand that McDonald's is finally planning to open its first restaurant here. I wish them luck.

Some countries restrict foreign investment in retail activities. A non-Panamanian can't open a shop in Panama, for example, where retail is "protected." Professions such as doctors and lawyers are also restricted to Panamanian citizens.

One way to choose where to locate your business would be based on incentives. Many countries have free trade zones, for example, where you can bring stuff in, process it, and then export it tax-free. Panama has the Colon Free Trade Zone. Belize has several established zones but also allows you to set up your own free trade zone if you want. If you wanted to start some business that needed to be in a particular part of Belize (because of localized supply of materials or labor, for example), you could apply to establish your own free trade zone in that spot. Same in Nicaragua. In fact, if your interest is export—that is, an operation where you're not selling locally but would be creating jobs—you'll find that most countries offer benefits to help.

Another business incentive to consider is residency. Many countries offer residency visas to anyone interested in starting a business, thereby creating jobs, in the country. Colombia, for example, has an attractive and affordable start-a-business, get-a-visa program. The minimum investment requirement is only US$33,300. Panama has a business investor visa, too, but it, by comparison, requires you to invest at least US$160,000 and to employ at least three Panamanians.

Tourism-based businesses are often incentivized, and many countries have government agencies that are specifically focused on developing foreign investment in tourist-related activities—hotels, dive shops, whatever. In Nicaragua, for example, the group is ProNicaragua. The incentives are typically to do with taxes—a ten-year tax exemption, say, giving you a nice window during which you can reinvest proceeds in growing your business without having to skim anything off the top to pay your tax bill.

Kathleen and I left the States years ago to start a business in Waterford, Ireland. Why Waterford? Because that was one of three markets the Irish Development Agency (IDA) was focused on developing. By agreeing to base our business in Waterford, we qualified for both a reduced rate of corporate tax and cash incentives for every Irish employee we hired up to 15.

Those were nice perks, and definitely they were the reasons we chose Waterford. However, we had targeted Ireland based on bigger-picture agendas. We wanted to be in Europe, for personal reasons, and we identified Ireland as a low-cost place to operate the kind of business we intended to operate. Our first years running our publishing business in Ireland, our labor cost was less than half what it would have been in the States.

The easiest kind of business to operate offshore is a one-man (or -woman) virtual show. A consultant or a writer, for example, can run his business from the beach in Panama, the mountains of Argentina, or a country village in France.

If you intend a virtual business that requires staff, then, as with a bricks-and-mortar operation, some places make more sense than others and some places don't make sense at all. We don't recommend starting or basing a business in France, period, unless you just really want to live in France. As a doing-business choice, this country belongs at the bottom of any list (thanks to the cost of doing business, the labor laws, the bureaucracy, and the taxes).

Panama is perhaps the best place in the world to base a virtual business that requires staff. That's why we're in Panama City right now. When we decided to launch the Live and Invest Overseas business seven years ago, we knew we'd have to move from France. We chose to relocate to Panama because of its affordable English-speaking labor force, its business infrastructure (banking, Internet, etc.), and its jurisdictional approach to taxation. Organize your operation correctly, and you can run a business in Panama tax-free.

Once you've decided where to base your offshore business, your next challenge is to develop the infrastructure it will require. Where will you bank? How will you move money around to where it needs to be? How will you process orders? How will you and your staff get paid? The answers to these questions differ depending on what kind of business you want to operate and in what country you decide to base it.

Again, we chose Panama in part because we knew it provides the kind of infrastructure we'd need. Open up a Panama corporation, and you'll be able to open a Panama bank account to support without much trouble.

One key piece of the infrastructure we require for our business in Panama is a merchant account. When we launched the business, we weren't able to get one; however, after a couple of years and a track record, we were finally approved.

What did we do in the meantime? We used PayPal. We worried initially that this might limit our ability to sell. Would our customers find it odd that the only way they could purchase from us was through PayPal? Maybe it reduced our trade some; we'll never know. But it meant we were able to be in business and to build the track record, again, that we needed to be approved eventually for a merchant account.

The other big-picture item you need to address is employees. If I had to name just one reason why we chose to build our business in Panama rather than Europe, it'd be employees. Labor laws around the world favor the employee over the employer much more so than they do in the United States, and nowhere is this truer than in France. In the United States, you can operate on a hire-at-will, fire-at-will basis. As one U.S. attorney we used to work with put it, "You can fire someone because you don't like the color of his tie."

Try that in France. You can't fire a guy in France even if you've got video footage of him stealing from you.

Things are a little better for the employer in Panama. We've had to fire several people over the past six years, and, in each case, we were able to do it with minimal wear and tear. Bottom line, you pay them off.

The other thing to know about employees in some countries is that you pay them for 13 months of work every year. In Panama, for example, everybody gets one month of vacation each year...and a "13th-month" bonus equal to one month's pay. You just factor it into your cost of doing business...

Lief Simon

P.S. Today's essay is excerpted from Lief Simon's "Doing Business Offshore" presentation at last week's Global Asset Protection and Wealth Summit, in Belize City.

The complete audio recording of this talk, as well as every other presentation from the two-and-a-half days of this special event, are being edited and bundled to create our new Wealth Building and Diversification Kit.

You can reserve your copy of this everything-you-need-to-know-to-go-offshore bundle here now pre-release for 50% off the regular price. This discount remains in effect through Sunday, Nov. 2 only.

Continue reading: How To Qualify For Residency In Belize

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The important reality to understand is that you're never going to find the "best" deal or the "best" option...because there's no such thing. All you can do is process what's in front of you. Whether you're investing in real estate or deciding on which residency path to take, the options before you today are your best options. If you don't have the time, money, or inclination to act on all of them, as my friend is doing with residency, then, yes, you have to make a choice. But don't become paralyzed trying to figure out which choice qualifies as absolutely the "best."

As for my friend setting up residency in multiple countries where he is also hoping for eventual citizenship, it works for him, but it'd be overkill for most people. I'd say that what my friend is doing amounts to extreme measures.

But you do need to do something. And my point today is that you can't let worry over the "best" something get in your way of doing anything.

We'll spend a lot of time discussing the world's best current residency and citizenship opportunities at my Global Asset Protection and Wealth Summit in Belize next month.

Meantime, here's a short list of today's "best" establish-foreign-residency options to get your thinking started: Belize, Panama, Uruguay, the Dominican Republic, Colombia, and Ireland.

Lief Simon

Airline Requirements For Nonresidents To Hold Return Or Onward Tickets

"Kathleen, since I spend most of my time in Costa Rica as a digital nomad, visiting the United States frequently, I've encountered airlines demanding proof of travel.

"I welcome Lief Simon's comments on this, but the hassle with respect to return or onward ticket requirements can be worse than he described. I believe this rule enforcement is no more than the airlines attempting to squeeze more cash out of the hapless traveler. You're correct in that it has increased in the past few years.

"An international bus ticket will not necessarily be accepted as proof of onward travel within Central America, however. Spirit Airlines forced me to buy a return ticket from Costa Rica when departing the United States for that country, despite my showing a bus ticket for Panama City, Panama. Potential visa runners should be aware of this circumstance. Since then, I've been very careful to show a ticket that returns as least as far as Florida!"

D.C.

***

"Kathleen, I am a retired airline check-in agent. I did that for 40 years. I was dealing with this issue myself in times past and having to get these people back to where they came from if refused.

"No airline is doing this to make money by enforcing the return or onward ticket rule, as Lief Simon said recently. I am surprised that you would even suggest this! It only cheapens your newsletter and reputation.

"If the person had residency, they should not have had to buy a return ticket. So I can't say what transpired as I wasn't there. If check-in was plenty early there should have been a way to explain and sort it all out. If the residency document was proper and unexpired, it should have been enough. Remember it is valid only for the named person. Often a parent is hauling spouses and children thinking theirs is good for everyone else and it's not.

"Yes, it's true. Often the solution is to buy a full-price ticket and then apply for a refund on arrival once clear of immigrations. End result no cost and not that big a deal should one carry credit cards.

"Making judgment on your experience and thinking that it should be the same for everyone else shows a lack of understanding. Had you been looking ragged, with backpack, long hair, and unbathed, believe me you would have been asked left and right. Airlines though are not to make those judgments, the immigrations officers do.

"There are people freeloading or living without proper docs all over the world. Many of them are Americans. And they do get deported far more than you would ever believe. You just don't see it as you have already grabbed your bag and gone. They are still in a holding room as you're on your way to the hotel and often much longer!"

M.W.
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Rainfall is great in Medellin (66 inches versus 35 inches in Cuenca), but the average sunny day is just a bit higher in Medellin. 

The city with the "perfect weather" for you will be a matter of your own taste.

Establishing residency is fairly easy in both Colombia and Ecuador, with low thresholds for visa qualification in both countries. In Colombia, the pensioner's visa requires an income of a little less than US$1,000 per month, while in Ecuador the level is even lower, at US$800 monthly. For an investor-type visa, Colombia's options start at around US$34,000 for a one-year temporary visa, while Ecuador requires US$25,000 for full, permanent residency.

So Ecuador has lower thresholds for permanent residency, both for the investor and the retiree.

Colombia's visa, however, is quicker and easier to obtain, with fewer required documents. Also, Ecuador imposes restrictions on being out of the country during your first two years of residency, while Colombia has no such restrictions. 

The cultural scene in Medellin is remarkably similar to that in Cuenca. This is surprising because Cuenca has around 600,000 people in its metro area, while Medellin has about 4 million. In both cities, you can enjoy orchestra, theater, art openings, museums, and a generally sophisticated cultural scene. You'll pay a fee for most of these in Medellin, while in Cuenca they're usually free. 

The infrastructure is good in both cities. You'll enjoy drinkable water, reliable broadband Internet, and dependable electricity, water, and phone service. 

Also, both cities are very walkable, and both have excellent and cheap public transit systems. If you decide to drive, you'll find traffic jams equally maddening in both cities. 

Real estate costs are cheap in both cities by Latin American standards. I prepared a survey recently that compared costs in Medellin, Montevideo (Uruguay), Fortaleza (Brazil), and Panama City. For comparable properties and areas, prices in Medellin's El Poblado are the lowest on a per-square-meter basis.

But Cuenca's prices are lower. 

A nice, two-bedroom apartment in Cuenca might cost around US$80,000...while that same apartment in a comparable neighborhood of Medellin would cost more than US$120,000. You can find Cuenca-style pricing in Medellin but not in the best neighborhoods. 

For the lifestyle you'll enjoy in Medellin, the real estate is a tremendous bargain. And the same is true in Cuenca; for the lifestyle it offers, it, too, is a tremendous bargain.

But the lifestyle in one is nothing like the lifestyle in the other, which brings us to the ways these cities differ. (As Medellin is such a large and diverse city, I'll focus on its El Poblado neighborhood for my comparisons.)

Medellin's El Poblado offers a modern, upscale ambiance. It has elegant shopping, spotless infrastructure, glistening new buildings, and more fine-dining that you can imagine. New luxury brick high-rises look down from lush, wooded hillsides. Tall trees line the well-maintained streets. And El Poblado is only one of many desirable areas in this city.

On the other hand, Cuenca is one of the Americas' premier Spanish-colonial cities and a UNESCO World Heritage Site. The old cathedral was built in 1557, the historic architecture is well preserved, and the streets are cobblestoned. You'll even see evidence of the Inca occupation from the early 1500s. Yet just outside the historic center, Cuenca also offers new, modern high-rises. So you could live in a modern home, yet have the historic center within walking distance. 

El Poblado is a First World environment; you'll be hard-pressed to find a U.S. city that can beat it. Cuenca is part of a developing country with some Third World characteristics like poor sidewalk and building maintenance. 

Access to the States is easier from Medellin than from Cuenca. Medellin has daily nonstops to Miami, while you'll need to connect (and possibly spend the night) in Guayaquil or Quito when traveling to and from Cuenca. This adds a day to the trip, as well as the cost of lodging and taxis. 

The expat community is far smaller in Medellin than in Cuenca. I can find expats in Medellin—at a local coffee shop or the Irish pub—if I look for them, and a couple of Americans are signed up at my gym. Otherwise, I don't see them around.

In Cuenca, the expat community is big, estimated between 4,000 and 5,000 people. These folks are making a cultural imprint on the city. I'd say that impact is positive. Since the infusion of North Americans to this city, there's been an explosion in the number of nice cafes, restaurants, and book shops, as well as other expat-owned services and businesses. Today in Cuenca, you can find most anything you might be looking for and, normally, an English-speaker to deal with in the process.

But whether an expat community of that size is a positive or a negative for you is a matter of choice. 

The cost of living is higher in El Poblado than in Cuenca, due in part to the exchange rates. Ecuador uses the U.S. dollar, so dollar-holders don't feel the pinch of a weakening currency. Colombia has a strengthening Colombian peso. 

The basics in Medellin (food, entertainment, utilities, public transit, taxes, and HOA fees) cost me about US$1,850 per month. I believe in Cuenca the total cost would be about US$1,250 for the same lifestyle. Many people live for less than that in Cuenca, but I'm using an apples-to-apples comparison from my own experience.

Bottom line, neither city is expensive, but Cuenca is definitely less expensive than Medellin. 

Which is the better retire-overseas choice?

Impossible to say. Manhattan is not inherently better or worse than New Orleans, after all...but it's a lot different. And the same goes for Medellin and Cuenca.

I see Ecuador as a cultural adventure where life is as different as you can get from the United States or Canada, short of moving to Asia. When I retired to Cuenca at age 49, I shunned places like Medellin, Chile, and Uruguay, because they were too much like the States. I wanted something as different, enriching, and exciting as I could get, and Cuenca fit the bill. 

Today, I think of Medellin as a way to reward myself. It's a treat to be here. Medellin is a way to enjoy perfect weather and an elegant lifestyle that I couldn't afford in the United States. When I bought my place in Medellin 10 years after I'd left the States, at the age of 59, it was exactly what I was looking for at that stage. I wanted an elegant, luxury lifestyle at an affordable price, and Medellin fit the bill. 

And that's the real reason that Medellin is now my "ideal retirement spot"...when it used to be Cuenca. 

You've heard a dozen times that the "perfect retirement location" is different for everyone. But there's more to it than that. 

Your "perfect spot" can also change with your taste, your age, and your experience living abroad. And that's really part of the fun.

This living overseas thing is an adventure and a journey of discovery that need never stop.

Lee Harrison

P.S. Could Cuenca, Ecuador, be your dream retirement destination? The only way to find out is to come see for yourself. We're preparing for the launch of our September Live and Invest in Ecuador Conference. Put your name on the list for VIP attendee perks and discounts here.

 

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May 26, 2014

"Kathleen, excellent piece on the elections under way in Colombia. Having lived in Colombia in various cities as a Peace Corps volunteer and staff...married a beautiful Colombian and our son was born there...Colombia is my "patria chica" (homeland), as they say. Please let me know if I can be of any assistance in this beautiful country with the best Spanish spoken in the interior...the best in Latin America!"

--Bob A., Colombia

No presidential candidate received the required 50% or more of the vote in yesterday's elections in Colombia, meaning the two candidates who received the most votes (Zuluaga and Santos) will now compete in a runoff election to take place June 15. We'll keep you posted.

***
"Kathleen, just want to thank you for all the information that I didn't even know I needed. However, my brain is so full that I shall indeed rely on theaudio of the conference you've promised to send. Mainly to convince our children that we have not lost our minds!"

--Denise C.., United States, attendee at last week's Live and Invest in Colombia Conference

 

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First, I think Montevideo is a good choice within Uruguay; the cost of living is lower than in Punta del Este, and I found lifestyle to be richer for a year-round resident. Don't get me wrong; I loved living at the beach. But Montevideo is alive and active every day of the year, while Punta del Este grinds to a halt in the wintertime.

Colombia's Medellin, however, provides a more upscale environment than Montevideo. In my neighborhood of El Poblado, the streets are better kept, the city is cleaner, and everything seems shiny and new. In fact, the lifestyle is higher-end than anywhere I've lived in the United States...which makes Medellin an amazing bargain considering the low cost of living and of property.

On the other hand, I find a cultural richness in Montevideo that I don't feel in Medellin's El Poblado. The Old World European traditions, the predominantly Italian influence, and the friendly people create an experience that I haven't been able to duplicate outside Uruguay. And Montevideo--in fact, Uruguay in general--offers the low-stress environment that comes with a truly non-confrontational culture...something I've found to be unique about Uruguay in the Americas.

Whether you prefer the Old World ambiance and tango culture of Montevideo or the upscale beauty of Medellin is a matter of personal choice. But here are a few other things to take into account, as well, if you're deliberating between these two top retirement options.

First, I believe that the cost of living for day-to-day items in these two cities is almost the same. Based on my own spending habits for food and entertainment, I can't see a difference in my routine expenses.

However, you'll spend more on electricity in Montevideo, as you will likely use heat for three months per year and air conditioning for perhaps two months. Montevideo has four seasons (but no ice or snow), while Medellin enjoys moderate temperatures all year (average high of 79°F).

All things considered, I'd say you'll spend less in Medellin than in Montevideo, especially if you live (in Medellin) outside the most expensive and sought-after El Poblado.

Both Montevideo and Medellin are cities where you could live without a car; although it's easier to get around Montevideo on foot than it is El Poblado, as Montevideo's terrain is fairly level and everything's closer at hand.

Both cities also have solid infrastructure, with drinkable tap water, good public transportation, and reliable high-speed internet service available at reasonable prices.

Montevideo and Medellin also both host a significant English-speaking expat community. But in neither case is the English-speaking community large enough to affect the local culture.

One important difference has to do with the cost of real estate, which is significantly higher in Montevideo than in Medellin. Based on my personal experience, a Medellin apartment that sells in El Poblado for US$1,500 per square meter would cost more than US$2,500 per meter in Montevideo, in a comparable neighborhood.

Also, real estate transaction costs are much higher in Montevideo than in Medellin. I paid around 8.2% of the purchase price on the two Uruguayan properties I bought but only 1% on each of two Medellin properties I've purchased.

Real estate trades in U.S. dollars throughout Uruguay, while it trades in Colombian pesos in Colombia. So Uruguay offers exchange-rate stability (with respect to real estate), while Colombia offers the risks and/or rewards of buying in a foreign currency.

In both countries, you have exchange-rate exposure for all other expenses (aside from property purchase). Both the Uruguayan peso and the Colombian peso have risen strongly against the U.S. dollar over the past few years; however, recently the dollar has been gaining ground on both. This is impossible to predict, so I just chalk it up in the “risk” column.

In both countries, I found residency fairly easy to obtain; although Colombian residency is the easiest I've seen in Latin America. I applied and walked out the door with my Colombian visa in just under one hour.

Finally, Montevideo is less convenient to the United States than Medellin. The flight to Montevideo takes over nine hours from Miami, while Medellin is just three hours away.

As we say again and again and again, it comes down to your priorities. If you're seeking to diversify your life outside your home country or looking for a safe haven, I would give Uruguay the edge over Colombia. It's an easier jurisdiction for the movement of money; it has a far more flexible and customer-focused banking system; and it's geographically and economically more removed from North America, which, in the context of "safe haven," is a plus.

On the other hand, if want to be able to visit family, friends, or business ventures in the States regularly, Uruguay's geographic situation would be a negative.

If you're interested in the purchase of real estate, for investment and/or for personal use, I would recommend Medellin over Montevideo. This is where Medellin is the clear winner, not only versus Montevideo but versus almost any other city you could name right now.

Not only are prices significantly lower in Medellin than in Montevideo, but we see in Medellin the potential for continued appreciation of values over the near, mid-, and long terms. And, in Medellin, you also have the potential to generate cash flow from rental income of better than 10% per year net. Medellin is one of the top real estate investment markets in the world today.

Lee Harrison

Editor's Note: The limited VIP attendee spots for our Live and Invest in Colombia Conference taking place in Medellin in May are filling quickly and will be sold out soon. If you'd like to join us to discover firsthand just how much Medellin has to offer, I urge you to get in touch to reserve your VIP place now.

You can read more about the program we've put together for this, our only Colombia event of this year, here.

Or you can register by phone by contacting our Conference Department toll-free from the United States at 1-888-546-5169.

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Kathleen Peddicord

Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 25 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring, and investing overseas in her free e-letter.

Her book, How To Retire Overseas—Everything You Need To Know To Live Well Abroad For Less, was recently released by Penguin Books.

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