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8 Questions You Must Ask Before Establishing Residency Overseas

26 Oct
establishing residency overseas

8 Questions You Must Ask Before Establishing Residency Overseas

If you haven’t already established residency in another country, I’m writing today to urge you to consider the idea now.

More than ever in our lifetimes, it’s critical that you have a backup plan…

And that plan should include the right to reside full time and indefinitely in another country if and when you decide you want or need to.

If you’re interested in becoming a resident of another country because you actually want 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, you’re looking to establish residency overseas as 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 enjoy 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, Belize, Mexico, Colombia, Ecuador, and Panama stand out as top choices.

Panama, for example, offers more than a dozen residency visa options, including a competitive pensionado option for retirees and a new Golden Visa-type option.

Belize offers two good 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… meaning you’ve got to do your homework.

Here are eight questions to ask about any residency visa you’re considering, to help you make an apples-to-apples comparison of your best choices:

1: 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.
2: 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.
3: 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.
4: 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.
5: 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.
6: Among pensionado visa programs, a key factor is the required minimum monthly income amount. Nicaragua’s is the lowest (at US$600); 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.
7: 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?

Finally, here’s the single most important thing to understand about your options for establishing residency in another country…

Residency options, rules, requirements, restrictions, costs, and procedures change. This year, for example, big-deal changes have been made to Panama’s Friendly Nations visa program… and 2022 will see important changes to Portugal’s Golden Visa program.

When you find a residency visa program that works for you, act on it.

Lief Simon

P.S. With the help of my A-team of offshore colleagues representing the world’s best offshore jurisdictions, I will size up your best current options for establishing residency overseas during my Offshore Wealth Virtual Summit next month.

This will be your chance to get real-time answers to all of your questions to do with all aspects of diversifying your life and your portfolio offshore.

The Early Bird Discount remains in effect, saving you US$200 when you register today.

More details are available here.