Quite a few countries are offering the second residency. It is essential to plan carefully before deciding on one as they are all different, offering different benefits and having different requirements.
First of all, what is your reason for seeking a second residency?
If you would like to reduce your personal taxes, you should seriously consider a second residency. Why? If you currently live in a highly taxed country, you more or less guarantee to lower your tax bill simply by moving out of it. Unless you are an American citizen, it is not so simple as the USA practices worldwide taxation regardless of whether you live in the USA or not. Fortunately, this is an exception to the rule as most countries allow their citizens to leave without the obligation of being taxed.
If you would like to relocate from your current country because you do not like the climate, the government, or both. In that case, you can do so easily by obtaining a residence permit in another country, giving you the right to reside there. It does not mean, however, that you will be a tax resident there. Tax residency depends on many factors, and it varies in requirements from country to country.
For example, by forming a Free Zone company in Dubai, you can obtain a residency visa. After residing in Dubai for 183 days, you are entitled to a tax residency, which is excellent from the tax point of view as Dubai’s taxation is precisely 0%.
A residence permit is easier to obtain than a tax residency. You can get a residence permit in Greece, and you can become a permanent resident there for property investment of €250,000. The permanent residency will give you the right to stay in the country all year round if you so wish but you will become a tax resident. Greek income taxes rise to 45% on incomes over €100K. There is however, a new scheme coming up that will benefit retirees which provides 7% flat tax rate on all foreign income remitted. This could be of considerable interest for those who want to retire in the sun.
Another country worth looking at is Thailand. You can obtain a five-year visa for about US $19K, enabling you to make Thailand your home. Or, if you are planning to stay there much longer, you can obtain a 20-year visa for about US $32K. If you decide to live in Thailand for more than 183 days a year, you can also receive a tax residency there. Thai tax residency has certain advantages, e.g. you can bring your saving or capital free of tax and disadvantages of being taxed on income remitted to Thailand. So, if you live off your capital or savings – this may work for you.
As you can see, one size does not fit all here, and there are many factors to consider. We would be happy to provide more information and advise you.
We offer advice on tax residency schemes.
We offer advice on retirement residency schemes.