Day 08: Step #4, Understanding Your Residency Options

Will You Be Able To Reside Full-Time In Your Overseas Haven Of Choice?

Dear Student,

After you’ve identified where in the world you think you want to settle, the question of foreign residency options is the one you should consider next. The truth is, not every country, including not every country on my list of top recommendations, welcomes foreign residents or retirees full-time.

Some countries on my list, 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 or expats, who qualify, in what are typically referred to as pensionado programs. Panama is at the top of this list right now with the most competitive pensionado program on offer anywhere in the world.

The requirements for qualifying for residency status vary greatly country to country. Furthermore, some countries offer many different options for establishing permanent residency (Panama offers more than a dozen options, for example).

Once you’ve identified where in the world you’re thinking you’d like to relocate (as you’ve done over the past few days), you need to make sure that that country offers a residency option for which you qualify. If it offers more than one that could work for you, which one makes most sense and why?

A local attorney in your country of focus can detail all the possibilities for you, and in most cases I recommend you use a local attorney to process the associated paperwork for the visa you choose to apply for. It’s worth the minimal expense, and it saves you the effort of trying to wade through the related red tape in a foreign language. In some cases (again, in Panama, for example) an attorney’s help is not only advisable but required.

On the day you joined this program, as part of your welcome materials, we sent you a copy of our Next Step Guide, which details the particulars of applying and qualifying for residency in our top havens. Here’s a link to these special reports again:

• All The Ways To Stay–A Residency Visa Primer
• Passport To Freedom–The World’s Top Havens For Residency, Citizenship, And A Second Passport

Now that you have an idea of the country that interests you, you can start your research into available residency options by consulting these guides.

As you now focus on research related to resident visa options for the countries on your list, I want to be sure that you understand the relevant issues and terminology.

A visa is a document that allows you to remain within a country’s borders for a specified period and, sometimes, with specified restrictions and limitations.

A tourist visa is the easiest form of entry into a country, and this is all you’ll need for your initial scouting visits to any country on my list. Most Western passport holders (including Americans) aren’t required to apply for tourist visas to most countries. You need only show up. When you arrive at the entry point into the country (typically the international airport), you show your passport, and you’re automatically granted a tourist visa and allowed entry. Sometimes you’ll be required to fill out a form, and sometimes you’ll be asked to pay a fee (on the order of, say, US$5).

A tourist visa allows you to stay in a country for 30 to 90 days, depending on the country and the passport you carry. That’s why this is all you’ll need during the scouting phase of your overseas-living adventure. To stay in a country beyond the 30 to 90 days allowed for by the tourist visa, you’ll need what’s called a residency visa.

When you hold a residency visa or permit for a country, you’re a legal resident. You’re not a citizen. This is an important distinction, especially for tax purposes. You’re not a citizen, and you don’t necessarily have the right to work. A work permit, again, is a separate thing.

Residency visas come in different forms—temporary and permanent, for example. A temporary visa, as you might guess, gives you the right to remain in the country for a limited time, typically one year. After that time, you must apply for another residency visa. The reapplication is usually a formality, but you may be asked to prove again that you meet whatever requirements you were required to meet to obtain the visa in the first place.

Depending on the country, after you’ve renewed your temporary residency visa a certain number of times (three or maybe five, for example), you can be eligible then for permanent residency. It depends on the type of temporary residency visa you started with.

In most countries, you’ll be required to make a new application to progress from temporary to permanent visa status. Once you’ve obtained permanent resident status, you’re done. You’re free to live in the country as long as you like and to come and go as you please.

Residency visa requirements aren’t onerous, but the paperwork can be a hassle and the process can require several trips to the local immigration office (where the bureaucrats behind the counter aren’t going to speak English). This is why I recommend that, for most countries, even if it’s not required by law, you engage an in-country attorney experienced at helping foreigners obtain residency. The cost is typically modest (maybe up to US$2,000), and you save yourself time, headaches, and missteps. I’ve heard stories from people over the years who’ve tried to apply for foreign residency status in various countries on their own, spent sometimes months battling with the local bureaucrats, resubmitting forms, refiling applications, collecting more and other documents, only ultimately to have their applications denied for reasons they didn’t understand. In the cases where the would-be overseas retiree or expat then enlisted the help of a local attorney to restart the application process, the attorney was able to identify quickly where the mistake had been made the first time around.

This isn’t rocket science. But it’s a process. And it takes place in another language and in another country, where they do things the way they do things. The systems and protocols don’t have to make sense to you, and sometimes they won’t. I’ve found that it’s a waste of time and energy to try to understand. You don’t need to understand how the residency visa application process works in France. You need only qualify for a visa to remain in the country (if that’s your objective). Why drive yourself crazy (and waste your time and money) trying to make heads or tails of French immigration law when you could easily hire a French attorney who has spent years interpreting it?

Generally, to apply for a residency visa, you’ll need a police report from your current country of residency. For Americans, that means an FBI background report. For Canadians, it means a report from the RCMP. In other countries, you should check with the national police on how to obtain the necessary report. You may also be required to undergo a physical exam and to show proof of health insurance that covers you locally.

Most of the countries on my Top Havens list offer a retiree visa (typically, as I said, called a pensionado visa in Spanish-speaking countries). The minimum monthly financial requirements vary by country, ranging from US$400 to US$2,000, sometimes more. In many cases, your Social Security income alone is enough to qualify. Typically, a retiree visa carries tax-exemption benefits, including the ability to bring your household goods, personal belongings, and a car into the country duty-free.

Another residency option that may make sense for you, depending on your personal and financial circumstances, is an investor visa. Most countries try to encourage foreign investment, often by offering tax and other incentives, including sometimes for small investors. Even wealthy countries offer investor residency programs. The United States, for example, offers a variety of investment or job-creation programs that lead to residency status and a visa for foreign citizens. The required investment amounts vary country to country and can include the purchase of real estate or putting funds in a local bank CD.

Another option available in some countries is a person-of-means visa. You qualify by showing that you have sufficient assets to support yourself while residing in the country (and therefore will not be a burden on the state). The cost of living in a country is a guide to the level of assets you’ll have to show to qualify for a person-of-means visa. Typically, you’ll be required to put a minimum of US$100,000 in a local bank (in an interest-bearing account).

Your final residency visa option can be to marry a local. I’ll leave you to sort out the details of this on your own.

How do you find an in-country attorney to handle your visa paperwork? I suggest you seek referrals from expats already living in the country. An attorney is one resource you don’t want to choose randomly over the internet. I recommend trying to get at least two referrals from expats who’ve gone through the residency process, then follow up to interview each referred attorney, informally, over the phone or perhaps during your first country visit. Once you’ve settled on your country of focus and confirmed that the country offers a foreign residency visa option for which you qualify, check our Next Step Guide. If we don’t recommend an attorney there for your country of interest, get in touch. We likely know someone who could help you if and when you decide you want to invest in an attorney’s help for this process.