Best Countries for Expats: Residency, Tax and What It Costs

Rebuilt and fact checked, 16 September 2026. This article was first published in April 2017. Its argument has held up. Its numbers have not. The Foreign Earned Income Exclusion quoted here as $102,100 is $132,900 for 2026. Panama residency was described as a $350,000 condo or $20,000 in teak, and neither figure survives: the Friendly Nations route was rewritten in 2021 and the reforestation route now starts at $100,000. Nicaragua was named as one of the countries we recommend, and it is not recommended here. The original also declined to give readers a list at all. This version gives one, with every threshold taken from the source named beside it and checked on 16 September 2026.

Why the famous expat rankings are the wrong tool

Every year a bank or a survey company publishes a list of the best countries for expats, and every year the top of it looks much the same: Switzerland, Singapore, New Zealand, Canada, the Nordics. Comfortable, expensive, and in most cases taxed on worldwide income.

Those lists are not wrong. They are answering a different question. They rank countries by quality of life for a salaried professional whose employer arranges the visa, pays the relocation and files the tax return. If that is you, the rankings are useful and you can stop reading.

If you are moving yourself, they tell you almost nothing, because they never answer the four questions that decide whether the move happens:

• Can you get residency? Not in principle. You personally, on the income or capital you actually have.
• What will you be taxed on? Worldwide income, local income only, or nothing.
• What does it cost to get in, against what it costs to live there? These are different numbers and the first one is rising almost everywhere.
• Can you operate? Bank, get paid, run a business, be understood, get home when you need to.

Ranked on those, the list looks nothing like the famous ones. Here is ours, with what each country actually asks of you.

The eight compared

Country	The usual route in	What it takes	Foreign income taxed?
Panama	Friendly Nations, or reforestation	$200,000, or from $100,000	No, territorial
Uruguay	Residency, then the tax holiday	183 days a year, or about $2m	Holiday, then 12%
Costa Rica	Pensionado or rentista	$1,000 or $2,500 a month	No, territorial
Belize	Qualified Retired Persons	Age 40 and $2,000 a month	No, exempt
Mexico	Temporary residency	About $4,400 a month	Yes, if resident
Portugal	D7 passive income visa	€920 a month plus savings	Yes, since NHR ended
Georgia	Visa free stay, then registration	Very little	Not foreign source
Malaysia	MM2H, restructured	From $150,000 on deposit	No, remitted income exempt

1. Panama, still the answer for most people

Panama has been this publication’s first answer for twenty years and the reasoning has not changed, even though every number in it has.

It taxes territorially. Income earned inside Panama is taxed in Panama. Income earned outside it is not. It uses the US dollar. It has a real banking sector rather than a nameplate one. Residency is available on a published rule rather than at an official’s discretion, and the country sits three hours from Miami.

The Friendly Nations Visa was rewritten in 2021 and now runs on Executive Decrees 197 and 226. Three routes qualify: a property purchase of at least $200,000 registered in the Public Registry, a fixed term bank deposit of at least $200,000 blocked for three years, or a Panamanian employment contract with a work permit and no capital at all. All three now grant two years of provisional residency first, with permanent residency applied for after that.

The reforestation route is the cheaper door and it is the one this article recommended in 2017 at $20,000. That number is long gone. The regular process is $100,000, made up of $90,000 in the project and $10,000 for maintenance, giving two years of provisional residency and then permanent. An express process at $360,000 grants permanent residency directly, in 60 to 180 days. The investment must be held for five years after permanent residency is granted.

Why residency matters more than the ranking tables think. For an American, legal residency abroad opens the bona fide residence test for the Foreign Earned Income Exclusion, which for 2026 excludes up to $132,900 of earned income per qualifying person, and both spouses can claim it separately if both work abroad. The alternative is the physical presence test, which requires 330 days outside the United States in a twelve month period. That is the difference between a life and a countdown, and it is why the residency question outranks the quality-of-life question for anyone actually moving.

The catch. Panama has no central bank and no deposit insurance scheme, so the money you bank there sits behind the bank’s own balance sheet and the regulator, and nothing else. Opening an account normally requires at least one trip in person.

2. Uruguay, and the door that narrowed this January

Uruguay is the quiet one: stable, institutionally serious, middle class, and until recently the most generous tax holiday in the hemisphere for someone bringing money in.

That changed on 1 January 2026 under Ley 20.446, the national budget for 2025 to 2029, and most of what you will read elsewhere still describes the old rules. The real estate threshold for the tax holiday went from about $590,000 to about $2 million. The 60 day presence route was abolished. What remains is 183 days a year of physical presence with no investment at all, the $2 million property route, or $100,000 a year into an innovation fund for eleven consecutive years.

The holiday itself still runs for the year of acquisition plus ten more, then five years at 6%. Foreign capital income and gains outside the holiday are now taxed at a flat 12%, where they were previously exempt. Anyone already holding the exemption is grandfathered on the old terms.

The catch. 183 days a year is a real commitment, and the alternative is now a two million dollar one. Uruguay has moved from the accessible column to the serious money column, and it did so eight months ago.

3. Costa Rica, the lowest income bar on this list

Costa Rica remains the easiest of the Latin American options for someone with a modest, reliable income rather than capital.

Pensionado requires at least $1,000 a month of guaranteed pension income from a government, employer, social security or fixed income retirement plan. Rentista requires unearned income of more than $2,500 a month shown to be stable for two years, which in practice is usually evidenced by depositing $60,000 to be released at $2,500 a month. Inversionista requires at least $200,000 in property, shares, negotiable instruments or an approved productive project.

Costa Rica taxes territorially, so income earned outside the country is not taxed there.

The catch. The entry bar is low and the cost of living is not. Costa Rica is the most expensive country in Central America, and the $1,000 a month that gets you residency will not get you the life the brochures show.

4. Belize, English speaking and genuinely cheap to enter

Belize is the only country on this list where English is the official language, which removes a whole category of friction from banking, property and paperwork. It is also a Commonwealth common law jurisdiction, which matters more than people expect when something goes wrong.

The Qualified Retired Persons programme opens at age 40, not 65, and requires $2,000 a month from a pension or annuity generated outside Belize. Holders receive permanent exemption from Belizean income, capital gains and estate taxes, and specifically pay no tax on income received from outside Belize.

The catch, and it is a real one. A QRP holder may not take employment in Belize. Voluntary work and business investment are permitted, and dependants may work, but the programme is built for someone whose income arrives from elsewhere. If you intend to earn locally, this is the wrong route.

5. Mexico, no longer the cheap easy option

Mexico still has the best combination of proximity, infrastructure, culture and established foreign community of anywhere in the Americas. What it no longer has is a low bar.

The financial criteria are pegged to Mexican minimum wage multiples and they have climbed with it. For 2026, temporary residency is typically granted on a regular income of about US$4,400 a month, or a maintained savings and investment balance of about US$74,000 over twelve months. Permanent residency asks about US$7,400 a month or about US$298,000. You qualify on one route or the other, not a combination of both.

Read that against Costa Rica’s $2,500 rentista and Belize’s $2,000 QRP and the ranking inverts: Mexico now asks nearly twice what its neighbours do.

The catch. Consulates apply these criteria individually and at their own exchange rates, so two people with identical finances can get different answers in different cities. And a Mexican tax resident is taxed on worldwide income, which is the opposite of the territorial treatment in Panama, Costa Rica and Belize.

6. Portugal, where the tax story ended

Portugal has the cheapest entry threshold on this list and it belongs here for that reason alone. The D7 passive income visa asks for regular passive income of at least €920 a month for a single applicant, plus €11,040 held in a Portuguese bank account. A spouse adds 50% to both figures and each child under 18 adds 30%, so a couple needs €1,380 a month and €16,560 saved.

What has ended is the reason most people were going. The Non-Habitual Resident regime is closed to new entrants and its replacement, the IFICI or NHR 2.0, is aimed at qualifying highly skilled professions such as medicine, engineering, IT and executive management. A standard D7 applicant generally does not qualify for it. Foreign pension income is no longer exempt and is taxed under Portugal’s ordinary income brackets.

The catch. A great deal of the Portugal advice still circulating was written when NHR was open, and it is describing a country that no longer exists. Portugal is now a lifestyle and residency decision, not a tax one. It is a very good lifestyle decision.

7. Georgia, the easiest door in the world, with a caveat

Georgia asks less of an arriving foreigner than anywhere else on this list. Citizens of a long list of countries may enter and remain for a year without a visa, which is not residency but functions like it for someone testing a place before committing.

Its famous feature is Small Business Status, which taxes an individual entrepreneur’s turnover at 1% up to 500,000 GEL a year, roughly $180,000, and 3% on the excess above that. Exceed the ceiling for two consecutive years and the status is revoked on the first of January of the third.

The caveat is the part that gets left out. The 1% rate applies only to income treated as Georgian sourced. It is not a 1% rate on your worldwide earnings. Several professions are excluded outright, including legal and notarial services, tax and audit consulting, medical work, architecture, financial services and gambling. It suits an independent software developer or marketer. It does not suit an accountant.

8. Malaysia, which just repriced itself

Malaysia My Second Home appears on almost every best-countries list still in circulation, usually at the old numbers. The programme has been restructured into tiers and the entry price has moved sharply.

The Silver tier now requires a fixed deposit of USD 150,000 and a property purchase of at least RM 600,000, for a five year visa. Gold is USD 500,000 on deposit with RM 1,000,000 in property for fifteen years, and Platinum is USD 1,000,000 with RM 2,000,000 for twenty. A cheaper tier exists for designated special economic and financial zones, from USD 65,000 on deposit, or USD 32,000 for applicants aged 50 and over, with RM 500,000 in property. Applicants under 50 must spend at least 90 days a year in the country, and the property cannot be sold for ten years.

The catch. That ten year lock on the property is the part to weigh. Malaysia is asking you to commit capital you cannot retrieve, in a currency you do not earn, for a decade.

What changed since this article was first written

Rebuilding a nine year old article makes the direction of travel very visible, and it is worth stating plainly because it is the actual news in this list.

• The easy doors are closing. Panama’s cheapest residency route went from $20,000 to $100,000. Uruguay’s went from about $590,000 to about $2 million, in January. Malaysia’s entry tier is now a six figure deposit plus property. Mexico’s income threshold has roughly doubled in a decade.
• The tax stories are ending. Portugal’s NHR is closed. Uruguay now taxes foreign capital income at 12%. The jurisdictions that still offer territorial or exempt treatment, Panama, Costa Rica and Belize, are worth more now than they were, precisely because there are fewer of them.
• Nicaragua was recommended in the 2017 version of this article and is not recommended here. The situation in the country changed materially after 2018 and any list still carrying that recommendation has not been read since.

The practical consequence: if you are working from a list written more than about eighteen months ago, you are planning against numbers that no longer exist. Check the date on anything you read, including this.

On safety, which is the first question everyone asks

Recommend Mexico, Panama, Belize or Colombia and the first response is almost always about safety. It is a fair question and it deserves a better answer than either reassurance or alarm.

National crime statistics are close to useless for this decision, because nobody lives in a national average. Violence in these countries is concentrated, geographically and socially, in a way that national figures flatten completely. The relevant question is not whether a country is safe but whether the specific town, and the specific neighbourhood, is safe, and what the people already living there do differently.

That is answerable, and the answer is usually mundane: established foreign communities exist where they do because those places work. It is also the reason the safest-countries rankings are as unhelpful as the best-countries ones. They are measuring a country when you will be living in a neighbourhood.

Tax is only one of the three tests used above. Anyone ranking destinations on tax alone will find the rates and thresholds in our list of low-tax countries for expats.

Frequently asked questions

What is the best country for expats?

There is no single answer, and anyone who gives you one without asking about your income, your citizenship and what you intend to do all day is guessing. Judged on residency, tax treatment, banking and practicality, which are the four things that decide whether a move actually happens, Panama comes first on this list. Judged on lowest entry cost, Portugal’s D7 at €920 a month is the cheapest door here. Judged on lowest income needed for a tax exempt life, Belize’s QRP at $2,000 a month.

Which country is easiest to get residency in?

On money alone, Portugal, at €920 a month of passive income plus €11,040 in a Portuguese account. On money and simplicity together, Belize’s Qualified Retired Persons programme, which opens at age 40 and asks $2,000 a month. Georgia asks least of all, since many nationalities can simply stay for a year without applying for anything, though that is a stay rather than residency.

Which countries do not tax foreign income?

Of the eight here, Panama and Costa Rica tax territorially, meaning income earned outside the country is not taxed there. Belize exempts QRP holders from tax on income received from outside Belize. Georgia does not tax foreign source income for individuals, though its 1% regime applies only to Georgian source turnover. Mexico taxes residents on worldwide income, and Portugal now taxes foreign pensions at ordinary rates. None of this changes what your own country of citizenship requires of you, which for Americans is a return every year regardless of where they live.

Is Panama still the best country for expats?

On the criteria used here, yes, and for the same reasons as in 2017: territorial taxation, the US dollar, a functioning banking sector, published residency rules and three hours to Miami. What has changed is the price. The cheapest realistic route in is now $100,000 through reforestation rather than the $20,000 quoted a decade ago, and the Friendly Nations route is a $200,000 commitment.

What is the cheapest country to live in as an expat?

Cost of entry and cost of living are different questions and this article answers the first. For the second, the countries that come out cheapest globally are rarely the ones anyone actually relocates to. Our separate list of the most affordable countries to live in covers that question.

Are the HSBC and InterNations expat rankings worth reading?

Yes, for what they measure, which is the experience of salaried professionals on company postings. They survey people whose visa, housing and often schooling are arranged by an employer. If that describes your move, they are the better source. If you are arranging it yourself, they are measuring someone else’s life.

Which countries are best for expats in 2026 specifically?

This list is built on residency and tax rules, which change slowly and are checked and dated here. For a year-framed view organised by region, including the Middle East and Asia, see our companion piece on the most appealing places to relocate in 2026.

Sources and dates checked

• Internal Revenue Service, figuring the foreign earned income exclusion, irs.gov. Checked 16 September 2026.
• Esquivel & Asociados, Panama Friendly Nations Visa 2026, updated 5 March 2026. Checked 16 September 2026.
• Kraemer & Kraemer, Panama Reforestation Visa. Checked 16 September 2026.
• IMI Daily, on Uruguay’s Ley 20.446 tax holiday changes effective 1 January 2026. Checked 16 September 2026.
• Costa Rica Guide, residency options in Costa Rica. Checked 16 September 2026.
• Wrobel & Co. Attorneys-at-Law, Belize Qualified Retirement Program. Checked 16 September 2026.
• Mexperience, financial criteria for legal residency in Mexico, updated 11 September 2026. Checked 16 September 2026.
• Global Citizen Solutions, Portugal D7 visa, September 2026 update. Checked 16 September 2026.
• Andersen in Georgia, small business status and the 1% tax regime. Checked 16 September 2026.
• MM2H programme guidance on the 2026 tier structure. Checked 16 September 2026.

This article is general information, not legal, tax or immigration advice. Residency thresholds and tax regimes change without notice and are applied at official discretion. Confirm current requirements with the relevant consulate or a qualified adviser before making any commitment.

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