World’s Easiest Residency?
We’re updating our guide to foreign residency and second citizenship. I’m reviewing the final chapters, and the new edition will be ready for publication soon.
Meantime, writing a summary of some of the world’s current easiest residency options for an article for this month’s issue of my Simon Letter, I was reminded why Colombia continues to stand out among the competition whenever backup residency alternatives are discussed.
Colleague Lee Harrison has long insisted that Colombia be at the top of the list of easy backup residency options. Lee was able to obtain Colombian residency quickly, efficiently, and without the help (or expense) of an attorney.
The information on the government website related to the process and the required paperwork is clear. More important, as Lee likes to point out, the requirements didn’t change when he met with the government representative to submit his paperwork. The process was indeed as represented online.
In addition, that list of requirements doesn’t include a police background check (at least not yet; our contacts say that this point is being actively discussed by the powers that be). This eliminates the need for an American to get an FBI report, which can be one of the biggest delays for an American trying to establish residency in any country other than Colombia.
While the thresholds for Colombia’s retirement and investment visa options aren’t the lowest on offer anywhere, the amounts are competitive.
How Do I Qualify?
You can qualify for the pensionado visa in Colombia right now with as little as US$765. If you’re not retired and are looking for options for full-time or backup residency as part of your Plan B, you can invest as little as US$26,000 in the country and qualify for an investment residency visa.
The actual numbers are in Colombian pesos and so, to state the obvious, the U.S. dollar values change with the exchange rate. Note as well that the income threshold for the pensionado visa is based on the country’s monthly minimum wage, which increases each year.
This means two things. First, if the idea of residency in Colombia interests you, you should act now, as the cost is only likely to increase.
Second, ideally you should have a bit more in pension income or invest a bit more than the minimums to make sure you continue to meet the peso thresholds at renewal.
Along with competitive thresholds for qualifying, Colombia’s time-in-country requirements for maintaining your residency status are user-friendly. Under the temporary residency options (which the two figures above represent), you need to spend but one day every six months in the country.
By way of comparison, Ecuador offers visa options with similarly low investment and pension thresholds (US$25,000 and US$750, respectively), but, with these visas, you can’t leave the country for more than 90 days in each of the first two years of residency. That takes Ecuador off anyone’s list for a backup plan. Ecuador residency has to be your primary plan.
Upgrading Your Colombian Residency Plan
Bump up your investment in Colombia to US$165,000, and you can qualify for permanent residency status. The time-in-country requirement for this status is only one day every two years.
Easy bureaucracy, easy qualification thresholds, and easy requirements for maintaining the status… Colombia makes for a great option under any circumstances, whether you’re looking for a primary plan or a Plan B.
The diversity of investment options that qualify you for residency is another benefit in Colombia. You have choices that qualify you for residency while also positioning you for good return.
Agriculture is one of my preferred asset classes these days. In Colombia, one of the agricultural plays I like is timber.
One group I know is working on their second plantation in two years. The forestry management company they have partnered with has almost a decade of experience in the region of Colombia where they are planting.
Timber is a fast-growing industry in Colombia (no pun intended), in part because the government has put incentives in place to help spur the creation of more plantations.
Typically, I see annualized timber returns for most projects projected in the 12% to 13% range. The plantation in question is projecting 15.8% when the government incentives are included. The return would be even greater if the residual value of the land and intercropping opportunities was included (which it isn’t). There will be land value as well as revenue from intercropping, but these are difficult to estimate at this point.
The value of the timber is not. The forestry management company has already begun selling harvested timber, so they know what they can get for the trees at maturity.
Not only are the projected returns for this timber project healthy, but the timeline isn’t what you typically see. A teak plantation generally isn’t harvested until the trees are 25 years old at least. Mahogany and cedar fall into the same range as teak. Softwoods are normally harvested after they are a dozen years old.
In the case of this plantation, the harvest time has been set at seven years.
After many years of working in this part of Colombia, the forestry management company has refined their implementation process to feature improved planting methods that spur the trees to grow a bit faster in the early years. This is allowing the management group to harvest the trees in year 7 rather than the initially projected year 12.
The shortened cycle reduces the amount of the final harvest slightly, but the annualized returns remain about the same. It’s one of the benefits of working with a professional outfit.
With a minimum investment of 120 million pesos (about US$42,000 at today’s exchange rate), this timber opportunity easily meets the threshold for investment residency in Colombia. Invest four times the minimum, and you’d be eligible for permanent residency.