Friday, resident go-offshore expert Lief Simon introduced you to the best places worldwide to establish residency to cut your tax bill… even to zero.
However, as Lief pointed out, reducing your tax liability shouldn’t be the driving factor when deciding where to launch a new life overseas.
That is, if you’re considering living or retiring overseas, shop destinations on the basis of their appeal for you personally… not their approach to taxation.
Then, after you’ve identified where in the world you think you’d most like to settle, look closely at that destination in the context of the factors most important to the retiree. Yes, taxes would be on this list but at the bottom. In most cases, a move overseas is a tax-neutral event in retirement. It’s when you’re working or running a business and earning income that the potential tax advantages of one jurisdiction over another come into play.
If you’re looking to retire overseas, what factors matter more?
Cost of living, of course. Plus the weather… health care and health insurance options…
And residency.
Not every country welcomes foreign residents or retirees full-time. Some countries, on the other hand, not only welcome full-time foreign residents, but they compete for their attention, offering special benefits and discounts for foreigners, usually foreign retirees, who qualify, in what are typically referred to as retirement programs (referred to as pensionado programs in Spanish-speaking countries).
Here’s an overview of the most appealing and retiree-friendly residency programs in the world today…
#1 Belize: The QRP Visa
Minimum Income Requirement (for one applicant): US$2,000 per month
Qualified Retired Persons (QRPs) are easily able to obtain permanent residency in Belize. In many ways, this program is the most efficient route to foreign residency anywhere in the Americas. This visa is available to anyone over the age of 45, and it grants a host of incentives designed to encourage foreigners to come and bring their money.
3#2 Panama: The Pensionado Visa
Minimum Income Requirement (for one applicant): US$1,000 per month
Considered the Gold Standard of retiree visas, Panama’s pensionado program is by far its most popular residency option and one of the most generous in the world. The program has drawn thousands of retirees to Panama to take advantage of the tax status and discounts. To reap these benefits, you don’t need to invest a cent up front; you need only receive a pension or an annuity that meets the requirements.
#3 Nicaragua: The Pensionado Visa
Minimum Income Requirement (for one applicant): US$600 per month
In 2010, Nicaragua launched a competitive pensionado program that rivals that of its neighbors. You can qualify for pensionado residency status (and all accompanying benefits) in this country with an income of as little as US$600 per month. That’s the lowest qualifying income for a pensionado visa in the world.
#4 Malaysia: The MM2H Visa
Minimum Income Requirement (for one applicant): US$2,350 per month
The Malaysian government makes it surprisingly easy to live long-term in this hard-to-resist Shangri-la with an incentive-packed residency visa called Malaysia My Second Home (MM2H). Unlike other countries in Southeast Asia, Malaysia actively encourages foreign residents to relocate here. Excellent incentives are available, if you qualify for the MM2H program. About 12,000 foreign residents are already participating and enjoying the benefits.
#5 Malta: The Global Residence Program
Minimum Income Requirement (for one applicant): No specific figure
While there’s no pensioner visa here, Malta does offer what they call a Global Residence Program for non-EU citizens, and it’s the best deal in Europe. You can qualify by either renting or buying real estate—a notable point, this is the only country in the EU that will grant you residency for simply renting a house. The process is also quick—residency should be obtained within three months of applying.
#6 Colombia: The Pensionado Visa
Minimum Income Requirement (for one applicant): US$800 per month
The process for residency is fairly simple and straightforward, with a low-income requirement. Colombia also offers residency with the least amount of red tape. My colleagues with this visa report that it’s possible to apply and get the permanent residency visa issued in just one hour.
The lawful income requirement is three times the minimum wage, which has been less than US$1,000 for several years now, thanks to the strength of the U.S. dollar versus the Colombian peso.
#7 Dominican Republic: The Pensionado Visa
Minimum Income Requirement (for one applicant): US$1,500 per month
Residency in the Dominican Republic is easy, and the country embraces and even incentivizes foreign residents and investors. Residents can apply for loans and import household goods and a car tax-free.
#8 Honduras: The Pensionado Visa
Minimum Income Requirement (for one applicant): US$1,500 per month
You’ll need to prepare application documents before arriving in the country, but you can pursue your residency visa while in Honduras as a tourist. Your pension income must be received monthly in the country, received by a national bank. As a resident you’ll be able to own title on up to 3/4 acre of land in your own name or an unlimited amount through a corporation. Residency in Honduras takes about six to nine months to complete.
#9 Argentina: The Pensionado Visa
Minimum Income Requirement (for one applicant): US$2,000 per month
You have to prove your retiree status to apply for the pensioner visa in Argentina, as well as your monthly income, unlike many other countries that only care about the income. The minimum income requirement fluctuates, but is usually around US$2,000. Benefits of being a resident include the ability to open a local bank account and discounts on national airlines. It’s important to note, though, that you must physically be in Argentina for almost the entirety of your first couple of years when applying for residency in the country.
#10 Portugal: The Self-Sufficiency Visa
Minimum Income Requirement (for one applicant): About US$1,500 per month
While Portugal’s retiree residency visa doesn’t compare to the affordability and benefits of the pensioner visas offered in Latin America, this is one of the best programs in Europe. As in other EU countries, pensioners are granted residency once they prove “sufficient income for subsistence.” The minimum wage (which varies according to region) can be taken as a guideline for this amount.
Kathleen Peddicord
