Two Best Second Residency Programs
Two Best Second Residency Programs
If you want to create a safe haven offshore or secure residency with an eye towards a second passport, here are the countries you should focus on.
First, let me explain why these are the two best second residency programs.
The first requirement is a country that won’t tax your worldwide income. Many countries tax their residents on their worldwide income. The best countries tax residents on their local source income only and not their foreign source profits.
For example, if you’re a legal resident of Mexico, this country wants to tax your income earned on investments in Switzerland, a business in Panama, and sales of products to the United States and Mexico.
Move that same business to Panama and you’ll only pay tax to Panama on sales within the country. If you’re investment accounts are outside of the country, and you have no local sales (are operating an internet business), then you will pay no taxes to Panama.
If one of the reasons you want a second residency is to reduce your overall tax burden, focus on countries that won’t tax foreign source income. For a complete list, see International Taxation.
Next, focus on countries that get you permanent residency as quickly as possible. This is especially true if you’re looking for an escape hatch or safe spot should you decide to move out of your home country.
For example, the IRS has begun revoking and refusing to renew the passports of Americans who owe the government $50,000 or more. If you don’t have a second passport or permanent residency, losing your passport will force you back to the United States until you pay off the debt. For more on second passports, see Top 6 Reasons Why You Need A Second Passport.
Most countries will give you multiple temporary residency visas during your first 3 years. If you have a problem with your home country or your country or residency during this period, your visa will be cancelled and you’ll be removed from the country.
Selecting a country that gives you permanent residency immediately, or within a few months, is the best way to secure a stable exit plan.
Next, look for countries with low-cost investment programs. Most countries will give you residency if you buy a home or make a large investment. I focus on countries that offer second residency with a minimal investment that doesn’t require maintenance or incur ongoing fees.
Last but not least, select a country that will give you residency with a minimal physical presence requirement. Some countries require you to spend zero time in the country to maintain your residency and others want 6 months a year… they want you to become part of the community, spend money in the country, etc.
If you want to live in your country of residence, then this might not be an issue for you. If you want residency as an exit plan, or to maximize the value of Foreign Earned Income Exclusion then you’ll need a country with no physical presence requirement.
Considering all of the above, here are the two best second residency programs:
- Nicaragua for those willing to put in the time.
- Panama for those who don’t want to live in the country.
Both Nicaragua and Panama offer a simple low-cost investment option, the Reforestation Visa. Invest in trees in either country and you’ll get residency immediately. The investment for Panama is $20,000 and Nicaragua is $35,000.
If you’re willing to put in the time, Nicaragua is the best second residency available in 2019. You get permanent residency immediately and can apply for citizenship after only 2 years. This is the fastest second residency program and residency to passport option available.
This speed comes with a catch. You must spend 6 months a year during your two years of residency in Nicaragua. Once you have your citizenship and a second passport in hand, you can spend as much or as little time in the country as you want.
I should also point out that Nicaragua is open to everyone. No matter what passport you have, you can apply for residency in Nicaragua. The program in Panama is only available to those from the top 50 countries… referred to as “friendly nations.”
If you can’t spend 12 out of 24 months in Nicaragua, go with Panama. This program has no physical presence requirement. Though, I suggest you visit the country once a year to keep up appearances.
Panama will give you temporary visas for 3 years and then you’ll have earned your permanent residency. You can apply for citizenship and a passport after being a resident for 5 years.
For these reasons, I say Nicaragua is the fastest and best second residency and Panama is the easiest second residency available.
Note that this article has been focused on a second residency and not how to buy a second passport. Residency gives you the right to live and work in a particular country. You will “earn” citizenship and a second passport over time. This is very different from giving a country like St. Lucia a pile of cash in exchange for a passport. For more on this, see: What’s the Difference Between Residency and a Second Passport?
I hope you’ve found this article on the two best second residency programs to be helpful. For more information on Nicaragua and Panama, or on how to buy a second passport, please contact us HERE.
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