The idea of retiring abroad is an appealing one. With no office tying you down, and the option to spend your days wherever—and however—you please, passing your time in a new country calls to many avid travelers. But once you decide to relocate abroad (and get a sense of what it will take to do so), you’ve got to decide where to go.
While moving abroad can generally be tricky business, a number of countries are more than accommodating to expat retirees. In fact, some offer real incentives, too. Small towns in countries like France, Spain, and Italy, for example, sell off fixer-upper homes for one euro to attract foreign investments; other places are more directly trying to tempt retirees and pensioners looking to relocate, with visas that promise tax cuts, and steep-discount programs that make U.S. dollars go a long way.
The below six countries, across Europe, Southeast Asia, and Latin America, offer some of the best incentives for retirees—promising to make the big move well worth your while.
The official currency of Panama, the balboa, is currently equivalent in value to the U.S. dollar, making deciphering costs easy for Americans keen on retiring here. There are also an estimated 20,000 to 30,000 American expats currently living in Panama—no surprise, since the Panama Pensionado (or Panama Retirement) visa, started in 1987, is one of the best for attracting foreign nationals.
Why? It’s all about the discounts. Think of the Panama Pensionado as the ultimate coupon book. Qualifying applicants for this permanent-residency visa receive import-tax exemptions on household goods up to $10,000 and on a new car every other year, plus substantial discounts on everything from utility bills (25 percent) to dental exams (15 percent) and transportation services (up to 30 percent). The full discounts list, which includes savings on hotel stays, theater performances, and even airline tickets, is available here.
Requirements: Anyone 18 years of age or older can apply for the Panama Pensionado, as long as you have a proven lifetime pension or income of $1,000 per month (it’s an additional $250.00 per month for each dependent). If your monthly pension falls between $750 and $999 you can still qualify by purchasing local property worth at least $100,000. All applications must be submitted in Panama, and through a Panamanian lawyer.
If you have money to invest, Greece may be the retirement spot for you. Since 2013, this European country has offered its Greece Golden Visa, granting five-year permanent residency to anyone investing approximately $301,892 or more in local real estate. After five years you can then renew your residency (as long as you’re still invested in local property), and you can apply for citizenship after seven.
To make things more enticing, Greece’s Ministry of Finance recently proposed a seven-percent flat tax for any foreign nationals willing to transfer their tax residence (meaning the place where you’re legally required to pay taxes) here. This means that any pensions, rental income, and other transferable investments will stay at a seven-percent tax rate for up to 10 years. With tax brackets in the U.S. typically ranging from 10 to 37 percent, it’s a steal.
Requirements: There’s no requirement to invest in local real estate to take advantage of the tax rate, nor are you expected to permanently reside in Greece. Still, the overall goal is to bring in foreign dollars, so government officials hope you’ll spend accordingly. Anyone interested in utilizing Greece’s flat tax can take advantage, no matter their age. To qualify for a tax transfer, however, you can’t have paid taxes in Greece over any of the last five years. Also, the country or nation where you’re transferring your tax residence from must already have a tax agreement with Greece; the U.S. income tax treaty with Greece qualifies, and means you’re won’t be paying taxes twice.
Although it doesn’t lead to permanent residency or citizenship, the alluring Malaysia My Second Home (MM2H) program is a great way to enjoy the benefits of retiring abroad without actually having to retire. MM2H visa holders ages 50 and older can still work part time, as long as the work you’re doing isn’t taking employment from a Malaysian national. For instance, retirees with knowledge of English literature can lecture at a university, or an expat professor with specialized skills can work up to 20 hours a week.
Successful applicants receive a 10-year, multiple-entry visa that is renewable, plus a tax-exemption on all the money brought with you. Expats can also purchase property in Malaysia, as long as local state authorities approve the purchase first. A minimum price of $242,395 is typically required, though it’s often lower for MMH2 visa holders in select states, like Penang. There’s also no inheritance tax in Malaysia, which makes it easier to pass along assets to your descendants.
Requirements: Applicants 50 years old and over must first prove a holding of liquid assets (this can include cash, bonds, stocks, etc.) totaling at least $84,839, and a regular monthly pension of $2,500. Once approved, you’re expected to put at least $36,360 of those assets into a Malaysian bank account. After one year, you can withdraw a third of your local savings for necessities like medical bills or buying a car. Anyone 50 and under can apply for the MMH2 as well, though your assets must be at least $121,198, with $72,719 of that going into a Malaysian bank account upon approval. All applicants, regardless of age, must have a Malaysian sponsor (which can be a registered MM2H agent), and health care insurance that’s valid in Malaysia.
Portugal is known for its Golden Visa, which uses tax perks to attract foreign nationals. In this case, any expats who invest in a Portugal property of $422,705 or more (on January 1, 2022, the sum increases to $603,865 or more) will receive a two-year residency permit for themselves and their immediate family. It also includes a tax-exemption on most foreign income—including pensions, dividends, and real estate investments—for up to 10 years. You can renew the visa every two years, as long as you spend at least two weeks in the country during that time span.
Another great option for both retirees and semi-retirees is Portugal’s D7 Passive Income Visa. This popular residency program includes the option to become a non-habitual resident (and reap the aforementioned tax benefit), as well as the ability to actually work while there, whether it’s living life as a digital nomad or being employed at a Portuguese-run business. It even allows access to the country’s extensive healthcare system. The visa is valid for two years, and then can be renewed for three more. Five years in, you can apply for permanent citizenship.
Requirements: There are no age restrictions for the D7 visa, though you must demonstrate an annual passive income of at least $9,194 (plus $4,345 per adult, and $2,606 per dependent), which is equal to the country’s current minimum wage, to apply. To qualify for the Golden Visa, you can’t have paid taxes in Portugal over any of the last five years.
Along with its volcanoes, freshwater lakes, and rainforests brimming with wildlife, Nicaragua lures foreign retirees with a bevy of financial incentives. These include the ability for retirees to import up to $20,000 of household goods (such as furniture, clothing, etc.) and a car up to $25,000 in value, duty-free. Another motivator: All foreign income is tax-free.
The advantages of Nicaragua’s Pensionado Residency program, which is renewable after five years, don’t end there. Once you receive a residency card, which grants retiree status (it takes up to 6 months once you’ve submitted your application), you can open a local bank account, use credit to shop, and even get a local phone plan. For those looking to build a home, retirees can also purchase up to $50,000 of construction materials tax-free.
Requirements: Foreign nationals can retire in Nicaragua at the age of 45 as long as they have a permanent passive income of $600 per month (plus $150 per month for each dependent). You’re also required to spend at least 6 months (which can be non-consecutive) per year within the country to keep residency status.
By Laura Kiniry www.cntraveler.com
