7 Things To Know Before Becoming Resident Overseas
Panama City, Panama
“First one of these things?”
“Yea. I’ve been watching and reading for about two years and thought I’d finally come see what all this is about for myself. Flew in from Austin yesterday.”
“Austin? That was a quick, easy hop.”
“You bet! Two hours and 2 minutes.”
“My wife thinks I’m insane for coming. That’s why she’s not with me…”
“Ha! Mine, too. I figure it’s for the best. Easier without her here. This way I don’t have to worry that she’s not happy. I can focus on my research…maybe have a little fun on my own.”
“Right…and we won’t have to spend any time shopping…”
–Two gentlemen attendees at Lief Simon’s Global Asset Protection and Wealth Summit in Belize last week, overheard in passing
Dear Live and Invest Overseas Reader,
Why would anyone want to become a legal resident of another country?
That was the starting point for the second in the series of panel discussions that framed Lief Simon’s Global Asset Protection and Wealth Summit in Belize last week. These panel sessions, conceived on the Five Flags approach to global diversification, led off with a look at offshore banking in our post-FATCA age and proceeded next to a discussion of the best, easiest, and most affordable places to establish residency.
Before we got to the nuts-and-bolts of where, how, and how much to establish residency in another country, though, we took a step back to consider a more fundamental question:
Why would anyone want to do this in the first place?
If you’re interested in becoming a resident of another country because you intend to live in that country, both the why and the where are obvious…and the how and the how much aren’t discriminating factors but administrative practicalities to work through.
If, however, establishing residency overseas is part of your “back-up plan,” an escape hatch so that, should things go really sideways in whichever country you currently call home, you could pack up and show up, residency card in your pocket, ready to settle in, then the where is a factor of your personal preferences (where do you like spending time?) weighed against the how and how much particulars.
If you’re looking for a bolt-hole Plan B residency, easy and cheap become important. In this context, Panama and Belize stand out as top choices. Panama offers more than a dozen residency visa options, including a competitive pensionado option for retirees and a “Friends of Panama” visa that can be relevant and appealing for anyone of any age. Belize offers just two choices for how to establish residency in this country—its Qualified Retired Person (QRP) program, which is another competitive retiree visa, and what I refer to as its “just show up” program.
For the latter, you enter the country on a tourist visa then renew that tourist visa every month for a year. At the end of the 12 months, you’re a full-fledged resident. It doesn’t get easier than that, and the only cost is the monthly tourist visa renewal (of US$50 a go for the first six months and US$100 a pop the final six months). You don’t need an attorney, you don’t need to show any minimum income, and you don’t need to make any lump-sum investment. You do, though, need to remain physically present in Belize that entire first year, while you’re renewing your tourist status month-to-month.
Every option has its pluses and its minuses. Here’s a checklist of questions to ask about any residency visa you’re considering, to help you make an apples-to-apples comparison of your best choices:
- Must you use an attorney to process the application? In Panama (where the attorneys made the law), the answer is yes. This adds not insignificantly to the cost. In most countries, an attorney is not required. You can process your application yourself if you’d like. We’ve known many who’ve handled their own residency applications, but we don’t usually recommend it, especially if you aren’t fluent in the local language.
- What are the government and other fees? These can vary from a low of about US$500 (in Colombia) to a high of about US$2,000 (in Belize and Panama). These are ballpark figures. The fees, of course, vary depending on the specific visa you’re applying for.
- What will your attorney charge you if you use one? The attorney fees are on top of the government fees and can double the overall cost of the exercise. Again, though, in most countries, you can keep this cost to zero if you’re up for the adventure of managing the process yourself.
- What are the physical presence requirements? I mentioned that, if you pursue the “just show up” option in Belize, you’ll have to invest a full year living in that country to qualify. In Ecuador, you can’t leave the country for two years after your residency has been granted. Panama wants you to stop by at least once a year after you’ve become a resident, even if only for a day or two. Etc.
- Does the residency you’re considering lead to citizenship? This may or may not be an agenda for you, but, if it is, understand the implications of the visa track you’re pursuing from the start.Pensionado visas typically do not lead to citizenship.
- Among pensionado visa programs, a key factor is the required minimum monthly income amount. Nicaragua’s is the lowest (at US$500); Belize’s is the highest (at US$2,000). Some countries that offer pensionado programs consider only pension or Social Security income. Others (Belize, for example) are willing to look at any reliable income stream. Belize, in fact, doesn’t even need to see a reliable income stream. Just show Belize that you’ve got US$24,000 (US$2,000 per month), and you’ve met the income requirement for the first year.
- Among investor visa programs, the capital requirement is key, as well as where you’re required to put that capital. Must you invest in a bond? A business? A piece of real estate? Or is the lump-sum “investment” really just a gift to the government?
Lief made one overriding point to do with flag #2:
Residency options, rules, requirements, restrictions, costs, and procedures change. When you find a residency visa program that works for you, act on it.
P.S. If you weren’t able to join Lief and his colleagues for last week’s Global Asset Protection and Wealth Summit, don’t worry. You can access all of the intelligence, insights, and recommendations shared over the two-and-a-half days of this first-ever program.
We recorded every presentation, including every one of the Five Flags Panel Discussions, which are being edited and bundled to create Lief’s new Wealth Building and Diversification Kit. This will be available within the next two weeks.