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Sam Barsoumian elected to leave Canada when the Canadian Customs and Revenue Agency bumped the capital gains tax to 75% and denied investors the right to offset losses from unlike income.  He has lived in Guadalajara area of Mexico for seven years.  Barsoumian still has a sense of adventure and is now looking forward to a change in his environment by moving his residency to yet another country. Additional Resources Residency Abroad  Tax Havens  CCRA and Taxes

Unlike US citizens who are forever doomed to file annual taxes, Canadian citizens can elect to become non-residents and forever bid Canada Customs and Revenue Agency (formerly Revenue Canada) farewell. Non-residency will be of particular interest to that segment of the Canadian population who wish to shelter future wealth accruing from capital gains taxes.  By taking residency in just about any country other than the US, capital gains and interest generated outside of Canada ceases to attract any tax whatsoever. Depending on the type of instruments generating accrued interest, some countries, such as Venezuela and the US, do not even tax

Apart from the tax advantages, taking up residency in other countries allows Canadians to live in a climate of their own choosing and experience a better quality of life for comparatively the same amount of Canadian living expenses. In many cases the cost of living is far less depending on their choice of country and spending habits.

For example, a Canadian in Vancouver spending $2000 CDN per month in after-tax-dollars can easily find superb living conditions in a high cost city like Guadalajara, Mexico, for $600 per month.  The non-resident Canadian in Guadalajara will pay $350 per month for a live-in maid, can obtain first class medical insurance for $150 per month, have a low utilities bill of $60 per month which will include telephone service, and spend no more than $400 per month for food.  In the picturesque city of Oaxaca in southern Mexico or Merida in the Yucatan, the cost of living drops dramatically.  Other countries in Central America, with the exception of Costa Rica, provide similar cost comparisons.  Panama is very comparative.

The procedure whereby non-residency is established is fairly simple when one knows what Canada Customs and Revenue Agency considers relevant in granting the status of non -residency.  First, it is important to file the NR-7 form, which can be downloaded, from their site.  It is very important to do a formal disposition of all Canadian assets, or a deemed disposition if that is more practical, and pay all the taxes thereon at the nominal rate.  The person applying for non-resident Canadian status must also no longer own residential property in Canada, own no medical insurance in Canada, have no telephone service in his or her name in Canada, nor leave behind a wife or child minor.  A divorce decree will satisfy the bureaucrats.

Rental or commercial real estate can be held provided that they are leased to parties who are at arm’s length.  Taxes on Canadian based rental income will have to be paid on a quarterly basis.  Canadian stocks can be also held, but will attract no capital gains taxes upon sale.  Dividends, however, will continue to attract a withholding tax at varying percentages depending on the country of residency.
 

It is crucial to demonstrate to Canada Customs and Revenue Agency that one has a residence in another country. This can be achieved by presenting them with a lease agreement or title of ownership, a telephone number, a bank account, medical insurance, and a residency permit from the issuing country. Canadians who elect to become non-residents can easily obtain residency in other countries by satisfying some fairly simple requirements.  The FM-3, which allows annual renewable residency in Mexico, can be had from any Mexican

Consulate.  The Consulate will require a medical exam, proof of income in the amount of $1000 USD, and a report from the RCMP. Other countries have similar rules.  In Honduras the proof of income is only $500, and in Panama the amount is the same.  In Argentina, the amount is $2000 USD, the same as in Spain.  Asian countries like Malaysia, Indonesia, and Thailand have amounts ranging from a low of $500 to a high of $1000 USD.

Becoming a non-resident will only suit a finite element of the Canadian population, those desirous of sheltering wealth and fearless to live in a different culture.