Transcription
Chances are you could benefit from having a back pocket residence permit. I coined this term years ago as a residence permit where you don't have to move to that country, but you can simply keep the permit in your back pocket and whenever you may need to go for lower taxes or more personal freedom or to escape the chaos where you're from, it's sitting there and waiting for you. And today I'm going to share with you seven of the best backpocket residence permits.
If you'd like help creating your own bespoke residence and citizenship strategy to lower your taxes, protect your family, and have more freedom, go to nomadcist.com/apply.
Let's start in Asia with one of the best known affordable residence permits called the Thai Elite or now Thai privilege card where for 650,000 Thai bot or about $20,000, you get a five-year residence permit. You can buy one with a longer timeline. You can add members of your family. The price goes up with each. But essentially, you're paying a fee just to have access to Thailand. Whether your passport doesn't allow you to go or for most of us who do have access to go to Thailand, you can't really go in and out of Thailand all the time on a tourist visa. They have become one of the first countries in Southeast Asia to be more strict. And so, they want you to buy uh this privilege card, which often comes with other benefits, whether it's airport pickups or golf outings. You don't have to live there, but it could be a place that you go on a on a vacation every year and you spend some time. And I think that's really important because you want to get comfortable with your backpocket residence permit. You don't want it to be a totally foreign place you've ever been because then no matter how bad things get where you live, you probably won't move there. So, Thai privilege card, spend $20,000, get five years. You can check in every once in a while just to make sure you're comfortable with the place.
Also in Southeast Asia, the much lesser known Indonesian Golden Visa. So $129,000 bank deposit. So less than half what Thailand requires. You're going to deposit that into one of the government banks. So you can't go to any bank. You have to go to one of the more state government banks and you put that money in and basically as long as you keep that money there, you're going to get a multi-year residence permit. You can live in Indonesia whenever you want. That includes Bali. Many people look at Bali as being separate from Indonesia, but it is part of Indonesia. And you don't have to live there. You can come when you want. So use that golden visa to go and spend time in Bali, spend time in other islands, spend time in the big city of Jakarta looking at investment opportunities, but you don't have to be there. And whenever you want to go, uh, it's sitting there waiting for you as long as you keep that money in the bank.
One thing I like about these backpocket residence permits by investment is it's a sort of forced asset diversification and asset protection. So if you're going to Thailand, you're going to gain exposure to the Thai bot. Historically, one of the more stable currencies in Asia and now you've got assets outside of your home country. You've got diversification where you're not all in one currency, not all in one country waiting for someone to come and grab it. Same thing in Indonesia, the rupia, one of the worst performing currencies there. uh but you're getting access potentially for a long long time to be able to go there whenever you want. In the case of Thailand, very tax-friendly country. So when the taxes get to you where you live, you can move to Thailand and potentially save quite a bit of money in taxes.
Elsewhere in the world, Europe's a popular place right now. You've got golden visas in Europe. We've talked about this extensively. One of the ones that I think doesn't get enough attention is Greece where you can invest €400,000 in property in lesser areas. So outside of the big islands, outside of Athens, you have to go to one of the up-and-coming places. It could be a good backpocket home to have a beautiful, you know, Greek villas. uh many that cost much more than €400,000, but you can get a small villa, maybe a beautiful apartment on one of the smaller islands, and that could be your escape from craziness happening in the rest of the world without having to go to the ends of the earth. You can also put that money into a bank deposit. And so again, if you have cash, why not just have cash somewhere else? Let's say you've got a pile of cash in your country. Just move part of it over here. And by the way, by doing that, you can get multiple backpocket residence permits because all you're doing is moving cash. Maybe you've got to go there for one trip or two trips. In some cases, you don't have to ever go there. um, and so you're basically keeping the same amount of cash on your balance sheet, but now you've got something extra, and that's called a residence permit. For the one-time fee of having someone like Nomad Capitalist help you set up that residence permit, advising you about the tax benefits if you ever were to move there, uh, that's not a bad deal to have to have your cash distributed and therefore protected. And oh, by the way, if you're holding dollars right now, uh, the dollar is down against most currencies this year. A lot of analysts think it will go down further. So, you would potentially have currency appreciation in some of these other currencies if they continue to rise against your dollars.
Greece also has an even cheaper option, €250,000 if you're going to restore a property. We generally in Greece and other European countries have advised against the bureaucracy of that. Portugal is one country that has had that option uh where you can donate €250,000 euros to a culture uh initiative or you can invest a bit more into one of the investment funds where somebody manages it. They invest in different companies or other things in Portugal that creates jobs and improves the economy and you can keep in both of those European countries a residence permit in your back pocket uh without really having to spend much time there. in Portugal, seven days per year and you can qualify for citizenship. There is talk they might be changing that uh particularly for new applicants. uh but that's all up in the air. They're always talking about some changes in Europe. uh Greece is less likely to lead to citizenship and you would need to spend time there if you wanted that, but you don't really need to spend any time there just to keep the residence permit active. And keep in mind, both of these countries are in the Schengen area. And so, you're certainly authorized to spend as much time as you want in that particular country, but you can also spend a certain amount of time every year just traveling around the Schengen area. And so, if you have a great passport, that means now you've got a higher level of certainty of being led in. You've got the ability to stay there for as long as you want and you can travel around freely. So, Greece and Portugal, two options that are in Europe.
Now, let's talk about the Middle East. the UAE, Dubai, well talked about, not as tax-friendly as it used to be. But here's the thing with these backpocket residences. If you don't live there, you're not going to be in their tax net. So, it's not going to help you having an immigration permit in the UAE, but living in Canada is not going to lower your Canadian taxes until you choose to move to the UAE, but it's also not going to hurt you. And so, people are afraid sometimes to get multiple residence permits, thinking, "Oh, where do I have to pay my taxes?" uh I hold residence and I hold citizenship in countries that they do have taxes, but as long as I don't meet their tax residence criteria, I don't owe them any taxes. The US is really the only country where a green card and certainly citizenship works against you. Some countries offer residence permits that require you to live there uh six months, nine months, what etc to keep renewing it in which case you're generally going to become a tax resident. But a backpocket residence with zero or minimal physical presence requirement is generally not going to affect your taxes for good or for ill.
But the UAE has various golden visa opportunities. Again, moving cash, 2 million Emirate Dirhams, it's about $550,000. You move that into a 2-year term deposit, you get a 10-year golden visa. You don't need to come back. Now you've got a highly tax-efficient, consumer-friendly, lots of things to do country you can go to anytime you want for the next decade. So let's say the kids are uh going into high school this year. You got four years left before you can move. I've heard that from clients many many times. uh yeah, we want to get our plan B now and then my wife and I are moving in four years when the kids graduate. Well, the price of these programs often goes up. I think the UAE, countries like that, countries like Panama, countries like Malaysia are always going to have some way to get in. But, uh, Malaysia substantially increased their prices. Panama got rid of some of the cheapest options. Hong Kong, countries all around the world raised their prices, especially the European Golden Visas. What if you could get a permit now for 10 years, keep it in that back pocket? Let's say something terrible happened where, hey, the kids are still in school, but we got to get the hell out of here now. Well, at least now you know where you're going to go. I believe psychologically knowing where it's going to be, having the having the documents ready, maybe you have a home there or you know where you would stay. That's important to help you get out. But what if you just had the ability in your back pocket to be able to move now, but you also locked in the price that may well go up if you're planning on moving in two, three, four years, especially for something where you're not really losing any money moving 2 million Dirhams into a bank. I think they'll pay you a little under 3%. You know, if you're not earning that money on your current cash, what's the loss other than now you're diversified outside of just one financial system into a country where they said during the GFC we will insure our banks to infinity. I don't believe that's still the case, but that was the sentiment then. So 2 million Dirham golden visa. You can also start a company, but the challenge with the company is you have to visit every 180 days. So what you see with these kind of residence permits is gentlemen, the more you pay, the more you invest, the more flexibility that you get. If you don't go to the UAE with that company residence every 180 days, you've got to file a request and they have to approve it to let you come back. In my opinion, if you have cash, and there's other ways besides just bank deposit, uh you can buy property, you can do other things, but if you can put that money into the UAE, get your 10-year permit.
Let's go to Latin America now in Mexico. one of the many countries in that region where you show income. Come on in. You don't have to live here. You can even start the clock ticking on citizenship without living there for the first couple of years. Mexico has a great T or B+ passport. So, let's say you're American and you don't want to be followed around by the IRS for the rest of your life. Maybe you want to give up your citizenship. You could do much worse than Mexico. Maybe you're European or Canadian or Australian. Hey, this place is going the wrong direction. I don't know if I want to give up my passport, but I need a backup plan in case something happens. Mexico, you could do far worse than Mexico. And so, as with so many countries in Latin America, you show the income, you get the residence, you go, and then you basically come back whenever you need to renew it. If you want to potentially go to permanent residence, there's ways to do that, including uh as a pensioner or through uh making investments and then you don't even have to come back as often. So, some of these like the UAE, you can potentially be gone for a long time. Some you got to come back like in the Thailand investor visa, you got to come back one day per year and sit in the office and get your permit renewed and and so some of them are a little bit different, but Mexico, good one to look at.
In Panama, if you're from a country that they deem a friendly nation, there's about four dozen of them. You can form a company and hire yourself, get a 2-year temporary residence, and then come back and apply for permanent residence. Panama does appear to be moving closer towards granting citizenship by naturalization for people who actually live there. So that's not back pocket. But if you ever wanted to move to Panama, unlike a country like the UAE or Indonesia where you're not going to get citizenship, if you ever decided to move to Panama, that time would not be wasted without getting a second passport. You could actually quote count that time towards getting a second passport. And so Americans, most Westerners, you are citizens of friendly nations and you have special privileges. You can form a company, you can hire yourself. If you're not from a friendly nations country, you can also form a company, but you have to hire locals. So you're going to commit more to actually being involved. Now, again, not the worst thing because if you have a company and you're saying, "Hey, I want to hire a few people. I'm paying too much where I live." I don't think Panama is the best offshoring destination. I don't think we've ever had a Panamanian employee work at Nomad Capitalist. But if you're looking to hire some folks overseas, and there could be reasons uh to do that for for business, for tax, or just for diversification, that could be a way. No matter where you're from, you're going to get a residence permit in Panama, and you could just put some of the staff there. If you had to hire that staff anyway somewhere, might as well get a residence permit for it. And so eventually, you can work towards permanent residence. If you have a pension, anyone can do that. So if you're coming with like a social security check, it's easy to get a residence permit. There's also bank deposit and property purchase options up into the six figures. So, if you don't want to bother with starting a company and having to manage that paperwork, even easier is just put money in the bank, put money in the property, and you get that residence permit, and that'll last pretty much indefinitely.
So, those are seven backpocket residences. Again, this is something where you're simply going to get the residence permit and you don't need to maintain it. This is different than independent means visas in some European countries where they want you to be there consistently paying taxes. They're not that flexible. This is designed for someone who wants optionality without obligation. And what I've suggested is you could get multiple of these. You could buy property in Panama, deposit money in a bank in Dubai, invest in a fund in Portugal, uh, and you have multiple residence permits. can spread these all around the world. I would have different places for different objectives and I would get a little bit comfortable with each of them and then whatever happened in my life I would know, hey, we can always move to Thailand if that happens because the reality is I live in these kinds of places. I have a better life than I did in the west. And you can start with these as a plan B and a way to diversify and a way to give yourself a backup plan. But I think over time it's going to become more and more of a plan A if you think it through.
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