[Ted Baumann]

Glen, you are most welcome to sign up for my consultation service at Global Citizen, part of International Living. I can help you plan for everything that you mentioned in your post.

Here’s the link: https://secured.globalcitizenliving.com/journey/120SZTCC3/1

[Ted Baumann]

Could you be more specific? There are bilateral treaties regarding taxes, Social Security, and for some European countries, for extended stays for US, Canadian, and other citizens.

[Ted Baumann]

If you’re referring to the MM2H Visa in Malaysia, I’m afraid there are no exceptions. My understanding is that the country offers different tiers of visa depending on income and savings. I’m not aware that there are any exceptions unfortunately.

[Ted Baumann]

In both countries, the only way to get a passport is by acquiring citizenship, which requires living in those countries for a continuous period. Thr spouse can’t get citizenship ifhe/she isn’t living there.

In Lithuania, if the spouse of a citizen lives in the country for seven years as a permanent resident they are eligible to apply for a passport.Getting permanent residency is more or less the same as it is in the US, with registering your foreign marriage with the Lithuanian government, having a place to live, sufficient funds, and so on.

In Poland, the foreign spouse must first live in the country with a temporary residence permit based on marriage. After that, the spouse can apply for permanent residence. The spouse must remain on that status for another year. As long as you haven’t been absent for more than 10 months in total over that five year period, the spouse can then apply for citizenship.

One thing that can cause complications in both cases is whether the Lithuanian or Polish citizen was recognized as such at the time of marriage. Lithuanian law doesn’t require that a couple be married for any particular period before they apply for citizenship, but Poland says that you have to be married to a citizen for at least three years. Some Polish officials interpret that as meaning that you have to wait for three years after your spouse became a citizen, whilst others counted from the date of your marriage. But under Polish law, once you’re recognized as a citizen by right of blood, your citizenship is backdated to the time of your birth. The problem is that not all Polish bureaucrats know that!

[Ted Baumann]

Hi there! Ted Baumann here. I’ve actually stayed at the Garden Route Game Lodge myself, it’s really nice. Lovely big fireplaces for the evening meals.

The quickest way to get there from Aghulas would be to take the R319 provincial road north Until you intersect with the N2 highway, Which runs east west. You would make a right turn onto the N2 then go through Swellendam, Heidelberg, and Riversdale, and then you’ll pick up the game lodge a bit further on on the left.

[Ted Baumann]

Hello there. Sorry about the technical difficulties.

Let’s start with the golden visa issue. The type of programs you are referring to have mainly abandoned real estate as an option. But there are plenty of other visa types that will work for you as well. There’s no need for you to start investing little bits into foreign stock markets to get residency abroad.

Of course, if you have money in an IRA, you can convert some of it to a self directed IRA, and to use that to invest in qualifying assets in whatever country you want to live in. As you note, it’s quite difficult to get banking and brokerage facilities in a foreign country unless you have a close connection there, or until you’ve got a residency visa.

If your goal is to retire overseas, then your best bet is to focus on getting a financially independent person’s visa, sometimes called a non-lucrative visa. In all countries, this requires that you demonstrate a regular flow of passive income from pension or investments. As long as you have enough coming in, and you have all the other paperwork in order, that allows you to live in the country indefinitely. And it doesn’t require that you open up a bank account ahead of time.

[Ted Baumann]

Yes, it is true that under most double taxation agreements, public pension money, like Social Security, is typically taxed at the source country, but not in the country of residence. But you would pay tax on private sources of passive income like capital gains, dividends, interest, and rent income.

[Ted Baumann]

Good question–the challenge is that there are different types of passive income, and they are treated differently in different countries. For example, some countries don’t tax Social Security income, but they do tax private pension income. Others only tax dividends. So it’s important to know what type of passive income you are looking at.

Jess is right that the first step is to look at countries that don’t tax foreign source income at all. These are known as pure territorial tax countries.Costa Rica and Panama are two of the most popular.Others include Georgia, Guatemala, Hong Kong, Macau, malaysia, Nicaragua, paraguay, Singapore, Thailand, and The Philippines.

But before you cross Portugal off your list, Make sure you do the numbers first. Remember you won’t be paying a full 45% tax on your income in Portugal, since you’ll get credit for income tax you’ve already paid to the IRS (assuming you’re American). If the marginal rate for your income level is higher in Portugal, then yes, you may owe some additional tax there. But that could be more than offset by a significantly lower cost of living. Most people who moved to Portugal say that even with the extra tax, They are spending less overall because of the savings on food, health care, entertainment, dining out, local transport, and a host of other items that are up to 70 to 80 per cent less than in America.

Ted Baumann
Chief of Global Diversification

[Ted Baumann]

Hi Rocky,

Let’s start with the general issue of taxes on your retirement income.

The US is effectively the only country in the world that taxes its citizens’ income no matter where they live or where they earn it. In the case of tax advantaged retirement income, it’s going to be subject to normal US taxes no matter where in the world you may live. The main tax break for US citizens living abroad, the Foreign Earned Income Exclusion, only applies to income from current employment or business. Passive income like pensions is not included in the tax break.

On the specific question about Costa Rica, there’s good news: the country does not tax foreign source income, whether active or passive. So, if you live in Costa Rica, you won’t pay tax on your US pension income. However, once you are a resident, you will be liable for a 12.5% contribution to the National Health scheme.

Costa Rica is the exception, not the rule.

Most countries, including Portugal, another favorite destination, do tax foreign passive income, including pensions. But most countries have a tax treaty with the US that prevents double taxation of the same income.

For example, if you lived in Portugal, you would pay Portuguese tax at normal rates on your US source pension income. But any taxes you’ve already paid on that income to the IRS would be deducted from your Portuguese tax obligations.

That doesn’t mean you wouldn’t end up paying tax on your pension; it all depends on what your tax bracket is in Portugal compared to the United States. If your Portuguese tax bracket is higher, you’ll end up paying more tax on your pension than you would if you remained in the US.

That’s why it’s critically important to understand relative tax brackets and tax policies in a country before you decide to move there. The ideal scenario is someplace like Costa Rica that has a fully territorial tax system, i.e., one that doesn’t tax foreign source income at all.

For more details about taxes in Costa Rica, check out our Escape to Costa Rica guidebook.

[Ted Baumann]

Hi Mark,

You are correct. The Cayman Islands is a British Overseas Territory. Although it has control over its residency procedures, it cannot offer citizenship, since that is a prerogative of the British crown.

If I interpret your question correctly, it seems as though you’d like to continue living in the Caymans, but you’d like to acquire a second passport as well. And you’d prefer not to spend too much time in the country that offers that passport to get it.

What you’re looking for is called Citizenship by Investment or CBI. This differs from naturalization in that you get immediate citizenship and eligibility for a passport because of an investment in or donation to the country in question.

There are usually two avenues: you can either donate a fixed sum to a government fund or charity, or you can invest a minimum amount in a real estate or other economic project.

Generally, the real estate investment route is overpriced, and you may find it difficult to liquidate your investment once you’re allowed to do so, which is typically five years after getting citizenship. But making the donation means you won’t see that money again, albeit you will have a second citizenship.

Currently, most countries that offer CBI are in the Caribbean basin. They include Dominica, St Lucia, St Kitts and Nevis, Grenada, and Antigua and Barbuda. CBI through these programs ranges from $100,000 in Dominica to over $450,000 in St Lucia.

Another island country that offers CBI is Vanuatu, an island in the Pacific Ocean. But I would strongly recommend against that one, because it is widely associated with corruption and doesn’t give you much in the way of visa free travel.

In and around Europe, countries that offer CBI or CBI adjacent programs include Turkey, Malta, and Jordan.

The Turkish program is becoming more expensive every year and is currently at around $750,000.

The Maltese program is similar in price but doesn’t result in immediate citizenship. Plus, it requires lengthy residence for the first two years before you’re eligible for a passport. The advantage is that you are then a citizen of an EU country and can live and work anywhere in the Union.

Jordan’s program is also around $750,000, but its passport is also not as widely accepted.

Given that you are already living and working in the Caribbean, I’d suggest you have a look at one of the island programs. But do it soon… These countries are under pressure from the European Union to make their programs more expensive and difficult to access, in order to reduce the threat of undesirable people using their passports to get into the European Union.

You’ll find breakdowns of the various programs in the book written by my father, former Congressman Bob Bauman: The Passport Book.

[Ted Baumann]

Hi Joanne,

Although citizens of EU countries have the right of residence throughout the Union, rules for spousal visas depend on the country you want to live in.

As an Irish national, you have the right to live in Spain. You must establish residency there before you can apply for a spousal visa for your husband. That means finding a place to live, opening a bank account, getting a cell phone contract, and other things that tie you to Spain.

Once you’ve done that, your husband can come to Spain, and on arrival you would declare that he is a family member of an EU citizen resident in Spain. That will give him a one-year renewable residency permit. Once he’s got that, you can apply for a permanent family reunification visa.

This would be quite a bit simpler and less confusing than having him apply for a visa on his own account. If he did that, he would have to make the application from outside Spain, and await the outcome before going there.

It’s likely that Spanish authorities would even notice that he has an EU spouse already living in Spain and tell him simply to join you there and apply for a spousal visa as above.

For more details on how to establish residency in Spain, consider our Escape to Spain guidebook.

[Author]

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