Be prepared for the next stage of your life.
Nothing compares to the expat life. While I’m sure we all have pride in our home countries, spending time away is an experience of a lifetime. When moving abroad, you get to dive into a new culture, explore a new environment, and even grow your portfolio. Prior to moving, you’ll want to make a plan. To help you make this plan, here are some questions you’ll need to ask yourself before packing your bags and buying your tickets.
Why am I moving abroad?
Before you choose which country you will move to, you should ask yourself why you are moving.
Some individuals move to save on taxes. By renouncing citizenship, you will no longer be subject to the tax laws of your home country and can enjoy life without the hassle of being taxed on money that you may not even be making in your home country. When expatriating, you may be required to pay an expatriation tax, like in the U.S., but that will be pocket change compared to what you’d be saving over the years. Many European destinations are perfect for wealthier investors who want to live a life with less tax responsibility.
Others want to live a retirement with a lower cost of living and a much more relaxed lifestyle. Many Central American and Latin American nations are much more inexpensive and are beautiful tropical paradises! These are perfect for retiring individuals who don’t want to worry about their finances every step of the way.
By asking yourself why you are making the leap offshore, you are guiding yourself into the next question.
Where will I go?
This is probably the hardest, yet most exciting part of your expat journey. Choosing where you live lets you explore different cultures, try new foods, learn a new language, and more! It can also be the time where you have to ask yourself what is most important to you.
Countries all over the world offer so many wonderful cultural experiences and natural beauty. Others have ideal economic climates, working conditions, or investment opportunities.
As stated above, some are looking to save on their taxes. Some countries create ideal investment environments, so why not spend your life there, as well? Tax havens are legal ways for individuals and corporations from all over the world to reduce their tax responsibilities. They provide banking services to foreign entities, allowing them to save money, and making it more appealing than continuing their financial business in their home countries. For individuals, tax havens can offer lower or no capital gains tax, tax on interest, inheritance, or personal income.
Once you decide where it is you are going, you’ll then begin the process of seeking residency for your country of choice.
How long am I staying?
This question isn’t only integral to your planning in the sense that you will know what to do with your things back home, but it also determines which kind of residency is best for you. Is this your new permanent home? If so, you should be looking at the steps towards citizenship, if your new home offers that. Maybe you’ll only be spending part of the year there. There are different types of residency offered by some nations that can accommodate that.
Each country has their own set of rules for gaining residence. Many simply require you to prove that you can live in the country comfortably on your income. Others require you to make a large investment. Whichever path you’d like to take. Be sure to do your research so you know what steps will be expected of you.
Countries all over the world offer programs that allow individuals to make investments in real estate, the job market, reforestation, and more. In exchange, the investors gain residency and, often times, citizenship. Investors can use this freedom to escape from the high taxes of their hometown, find a retirement haven, or use a second passport to travel the world.
Choosing the right country may involve choosing a country that allows you to easily gain residency through investment. For some, it may be as easy as buying their new home, especially in countries like Portugal that offer a Golden Visa that makes residency in a new country easy.
The length of your stay will also determine whether or not you will want to set up an offshore bank account and what will you do with your life back home.
What about my life back home?
Prior to leaving, you will have to decide what will happen to your life in your current home. This includes your house. Do you sell it? If you don’t plan on moving permanently, will you rent it out or just have a friend or family watch over it while you are away?
You will also need to take care of your at-home banking needs by closing any accounts you don’t want to leave open or those you won’t be able to access from your new home.
Make a list of all the loose ends you might be leaving at home. You don’t want to get to your new home and realize you forgot to take care of some business.
Another aspect of your life you may be overlooking is your tax responsibility. Just because you move away doesn’t mean you’ll be free from paying taxes. Using an advisor, you can ensure you are staying compliant.
Alpen Partners and Expatriation
Together with respected law firms in various regions of the world, Alpen Partners is advising its clients on expatriation issues. In a world of increasing tax pressure and professional mobility, expatriation has become one of the most efficient tools for asset protection and estate planning. Moving abroad can come along with an abundance of benefits that can affect your taxes, your investment portfolio, cost of living, and your lifestyle completely. As the cost of traveling becomes cheaper, the benefits of expatriation for financial reasons is more easily obtained.
Taking the leap and leaving your home country can be a big decision with tons of personal and legal steps. The hassle of navigating the legal process of expatriation can be reduced with the guidance of Alpen Partners. Each step requires assistance, including getting the passport, making sure everything is completed correctly regarding taxes, acquiring work permits, making investments, and more. No matter what expatriation route is chosen, it can be a powerful tactic to allow clients to gain better control of their financial and personal lives.
However you plan on living your life, and how much money you want to be able to spend during your retirement, planning ahead will make sure you get to live the lifestyle you want. There is no such thing as planning and saving too early.