This article will go over, a 2021 version of some of the best places that are open to lower your taxes as a residence.
As we have seen over the last year many workers have the ability to work anywhere in the world as many countries, with lower taxes and lower costs of living I have seen people moving to these countries.
Cambodia
Cambodia is an interesting place to live in, I should know, I lived there for about a year in the past! It is still possible to get a business visa at the airport, extend it and get a work permit via companies without actually working for a local company.
It used to be possible to just extend your business visa forever, but immigration and visa agents are now giving the advice that you need to pay for a work permit if you want to further extend a visa.
The total yearly costs can be $400-$800 a year, which makes Cambodia one of the cheapest and easiest ways to get a second residency. In other words, with money and the right paperwork, anything is still possible and meets the legal requirements.
Tax and cost of living are relatively low, but rising sharply. The main reasons for this are strong economic growth and huge foreign direct investment from countries such as China.
In my opinion, currently, it is a good time to consider Cambodia as an option if you like it there.
Singapore
I know what you are thinking, `Singapore isn’t cheap or tax-free`. That is true. There is a personal income tax of up to 20% and corporate taxes. That may be much lower than Sweden or Australia, but it isn’t close to 0%.
However, for high net wealth individuals who have $4m or more to invest, you can enjoy a 0% tax on foreign income. This means that many high-net-worth individuals are using Singapore as a low-tax base, in which to earn their overseas income.
Hong Kong used to have a similar scheme, but that has now closed. It is possible to set up a business in Hong Kong, but this puts you inside Hong Kong’s tax system.
Panama
One of the most popular “no tax” options. Panama has a Friendly Nations Visa program. If you deposit $5,000 in a Panama-based bank and establish a company, you can get a near-instant second residency. If you just want a residency, rather than citizenship, you can just spend a few days a year to keep that status.
Many other countries require you to spend 6 months or longer, to keep residency, so this is an excellent benefit.
Nicaragua
Like Cambodia, Nicaragua is a developing country that won’t be for everybody. It does have a low cost of living and getting a residency is easy. In general, you just need to show an income of $750 a month, although you do need to live there for 6 months or more per year.
Malaysia
Few people in the West understand what a gem Malaysia is. Malaysia is `Singapore-like` in many ways. It has great English and infrastructure, for a fraction of the price of Singapore.
The same is true of its residency program. The My Second Home or MM2H program is an extremely easy way to gain a second residency. If you are 50 or over, you need to depositt $35,000 into a Malaysian bank or purchase real estate.
If you are under 50 years old, you need to show proof of $2,300 of monthly income and deposit $70,000 into a bank account or purchase real estate.
The biggest negative? You won’t be able to touch the money for 10 years.
Macao
Macao often gets overlooked in favour of Hong Kong and other nearby cities. such as Shenzhen. In the shadows of Hong Kong, few consider this gambling-hub, as a candidate for the second residency.
For $375,000, you can obtain residency and the tax rate is 0%. As Macao is a Special Economic Region of China, however, you will never realistically get a second passport.
Costa Rica
Costa Rica has long been a favourite of American and Canadian retirees for decades, due to the lifestyle and proximity to home.
Proof of $2,500 of monthly income is required to obtain Costa Rican residency.
Georgia
Speaking about overlooked countries, few people speak about Georgia. It is one country in `emerging Europe` which has improved a lot in recent years. Considered by few people, this makes it a great option for those that want a unique experience at a great price.
There is no tax on foreign income, you can get a 360-day tourist visa on arrival and anybody can open a Georgian company or buy real estate to obtain residency.
Estonia
Estonia is one of an increasing number of European countries, which has competitive tax rates.
They have a flat tax and e-residency system. The e-residency system isn’t a path to citizenship or living there.
The Bahamas
People who reside in the tax-free islands of the Bahamas pay zero tax on worldwide income.
The government fee for temporary residency is $1,000, although if you want to settle for longer, you may need to purchase $250,000 in real estate.
Cyprus
Cyprus is known for its great lifestyle, efficiency, and excellent English levels. Many people come to Cyprus as they want residency to lead to citizenship and second passports. The cost of getting citizenship isn’t cheap though.
The citizenship by investment program in Cyprus requires a €2 million investment in local property, government bonds, or bank deposits and you need to maintain a €500,000 home to keep your passport.
Like countless countries, however, Cyprus has been known to “move the goalposts” when it comes to these matters.
Latvia
The costs of residency in Latvia are typically just over €500,000 if you include the processing fee. The Latvian program isn’t the cheapest, but it is one of the more convenient.
You don’t need to be physically in Latvia – apart from needing to spend 1 day a year to maintain your residency.
Montenegro
If you are interested in getting residency through real estate, Montenegro has one of the cheaper options. There are no investment minimums, and many apartments are cheap, often in the $25,000-$75,000 range.
Going down the real estate route for residency does makes you ineligible for citizenship though.
United Arab Emirates (UAE)
In a location ideally situated between Europe and the Far East, Dubai is a popular expat hub, with Abu Dhabi also maintaining a large number of expats. As you may imagine, getting residency through investment isn’t always cheap in the UAE.
People who make 10 million AED investments can get residency if they invest in an investment fund or establish a company. You can also purchase a property if it is residential property (commercial properties are not eligible).
The value must be AED 1million or more. It allows for 2-year visas, whereas the 10m investments allow for 10-year visas. As AED 1 million is about $272,000 on current exchange rates, UAE citizenship isn’t as ultra-expensive as you may have thought.
Even though Dubai is significantly more liberal than countless other Middle Eastern countries, the lifestyle is still relatively conservative, especially during Ramadan.
This isn’t for everybody, and so should be considered carefully.
Thailand
Thailand is one of the more established retirement locations in South East Asia. The Thai Government allows so-called `Elite Visas` for wealthy foreign citizens. The cost of the visa starts at around $3,000 a year,
However, often the fee needs to be paid upfront, in other words over $15,000 for 5 years visa. 20 years costs $65,000.
Thailand has a reasonable cost of living, but isn’t low tax,
Portugal
Portugal’s Golden Visa Program used to be considered one of the best programs in the world but has been getting some bad press recently.
It is still possible to invest 280,000 Euros into Portuguese property and qualify. However, getting approval is taking longer than before, and the tax rules are changing.
The benefits are the Portuguese lifestyle – if you wish to stay in Portugal that is. If you don’t wish to stay in Portugal, the residency permit means you only have to spend 1-2 weeks a year in the country.
Various other EU countries if you are married to an EU citizen
Free movement is a bit of a myth – many countries do enforce rules surrounding working in another country. Besides, having the ability to move freely, doesn’t mean a residency with a tax identification number.
What is true, however, is that many British, German and Nordic entrepreneurs are considering Bulgaria, Romania, Hungary and other Eastern European countries.
Getting a residency permit for fellow EU, or even merely non-EU European countries are much easier than for most countries outside of Europe. Let’s also not forget if you are married to an EU citizen, one of you can declare residency and sometimes bring the other without needing to invest.
Portugal even recognizes partnerships that aren’t based on marriage, which opens up the doors if one of you is an EU citizenship. The video below compares Bulgaria and Georgia for second residencies and the relative benefits of EU residency:
What is the meaning of country of residency?
Your country of residence means the country where you are living or have significant ties to.
The definition varies from country to country. It is a misconception to assume that the “183 days of the year rule” is applicable in all situations. Some countries consider you to be a resident even if you only spend a few weeks of the year on the ground.
