What is ​​the difference between domicile and residence and can it affect expat investing?

Many investors, and expats more generally, are confused by domicile and residency.

This might seem like such a boring topic, but it can affect capital gains and inheritance taxes.

This article will explain the differences between residency and domicile and answer some frequently asked questions (FAQs).

The article will also discuss new issues for “digital nomads” and tackle how you can invest in a tax advantageous manner as an expat.

Is domicile important?

It is. It can determine taxes from your income tax, to inheritance and capital gains taxes.

It can also affect inheritance tax planning.

What does domicile mean?

The country you are domiciled in, is the place where you have your permanent home, or have a big connection with.

When you are born , you are usually assigned your parents domicile. If your parents were not married, you are typically given the same domicile as your mother, although this depends on each situation.

Even when you move abroad, your domicile doesn’t usually change, unless you take specific action to change it.

What is deemed domicile?

For British expats who emigrate, there is such a thing as deemed domicile. This can impact your inheritance taxes when you die.

Deemed domicile means that even if you are not domiciled in the UK according to HMRC law, you can be treated as domiciled in the UK at the time of transfer in two situations.

Namely, you were domiciled in the UK within 3 years immediately before the transfer or you were tax resident in the UK in at least 17 of the last 20 tax years, before making the transfer.

How about non-doms in the UK?

There are about 4-5m non-UK domiciles living in the UK, which can bring tax benefits.

However, in recent times, the UK Government has made significant changes to non-com status, after a populist backlash.

The number of wealthy UK residents who pay no UK tax on their offshore earnings has hit record lows.

There are many reasons for this, including political worries around Brexit, and the relatively new “non dom” levy.

This is charged at 30,000-60,000GBP a year, in return for no tax on overseas income.

What is residency?

Your tax residency is the country you are supposed to pay tax to. It is a misconnection that if you spend less than 183 days a tax year, you are automatically considered tax non-resident.

Many tax authorities, like HRMC in the UK, have residency tests like the one below, available online;


It is always important to remember that rules about residency, including what defines ties, can always change.

So how would you summarize residency vs domicile?

Domicile means a legal residency where a person intends to make it their permanent home.

Residency is a more temporary thing in many cases. People can move with their expats job every 2-3 years, and change their residency in the process, without changing their domicile.

What is the difference between ordinary and multiple residencies?

To be an “ordinary resident” , the country has to be your ordinary home. You spend the majority of your time here and don’t take long trips home.

As an example, let’s say you are a British person living in the UK, but you take 2 holidays per year. You are an ordinary resident of the UK.

It is possible to be resident in two countries or more, although it can lead to tax issues.

Can people legally reduce their taxes by changing their residency?

Yes. If you get a job offer in Saudi Arabia, Kuwait or a country with 0% income tax, you are of course not taxed on your income unless you are American.

Americans are taxed on overseas income, even if they haven’t lived in the US for years.

There are also contactless countries that only tax locally sourced income. Singapore, Hong Kong, Malaysia and around 40 other countries fall into this category.

How about for digital nomads?

Many young nomads have this ideal life, where they are working on the beach from their laptop, moving from country to country.

Indeed, that is possible, and becoming easier, but that doesn’t mean you don’t have to be careful with your tax residency.

It is a misconception that you can just move from country to country, never spending more than 90 days a year in that place, and that means you automatically pay 0% tax worldwide.

Many people think that the “183 day rule” is simple. In fact, due to the rise of digital workers, many courts are asking expats to prove their residency.

There was a ruling in Australia, where an expat had to pay more tax, as he couldn’t prove where he paid his taxes, as he didn’t have a tax identification number (TIN) due the frequency of his movements.

Going forward, it will be safer for nomads to have at least one tax base, so you can answer the question “where do you pay your taxes” if it comes up.

I have personally seen a few nomads I know, have 2-3 years of “tax free income”, only to be stung by an unexpected tax bill.

Can you buy residency if you are a digital nomad or entrepreneur?

Countless countries do have residency programs, where you can get residency in return for making real estate and other investments, as outlined in the article at the bottom.

Some of these programs also offer citizenship, as well as residency.

Can this affect bank accounts and investments?

Yes, it can. Almost all financial institutions now, ask for TINs when opening up banks and brokerage accounts, although some will accept your old TIN, if you have just moved to a new country.

What tends to be the most tax-advantageous investments for expats and nomads then?

For Americans, it can depend on several factors, as outlined in more detail here.

For British and many other expats, tax-efficient portfolio bonds have numerous tax benefits.

How can you lower your risks of unexpected tax bills?

In general, having expat banking and investments, lowers your risks of tax bills.

The reason is simple. If you are from country A, and live in country B, but keep your investments in country C, there are clear demarcations there.

In other words, if you are a British person living in Thailand, but your investments are held in Singapore or British Overseas Territory, you are keeping less ties to back home compared to if you send back substantial amounts of money every month.

In comparison, if you send money home to the UK every month, have 3 properties and 2 investment accounts held in onshore UK and so on, you are keeping a lot of ties to your home country.

Are changes likely in the future?

The last 5 years have been a period of change, with FATCA, CRS and various new laws coming into play.

There is no reason to believe the next 10 years will be any different, which is why it is important to work with somebody who is on top of changes.

What are your contact details?

My email address is [email protected]

Further reading

For people interested in second residencies, the following article might be interesting;

Robo advisors for expats; are they a good idea?

This article will discuss a hot topic; robo advisors and investment apps. It will discuss some misconceptions and answer some frequently asked questions.

It will end with some exciting news, on a new forthcoming expat investment app.

What are robo advisors?

Robo advisors are financial advisors that provide advice online, often with minimum human interaction.

Often they are using technology based on mathematical rules or algorithms, to come up with investment strategies and decisions.

However, there are several misconnections about robo advisors. The first misconception, is that human interactive is always zero.

Often times, advisors and companies are using robo advisors to automate some parts of the process, but are still insisting on human interaction.

For example, several firms have stopped using asset managers they have previously used, and instead are using AI, which is using algorithms, to help come up with investment strategies or to lower costs for the clients.

In other words, in this model, the technology and advisory company are working in tandem with one another, to reduce the costs for the clients, and speed up processes.

Are robo-advisors always cheaper?

One of the misconceptions about robo-advisors is that they are always cheaper.

It is true that many charge a low fee, often 0.50% per annum as an example, but asset management costs also apply.

A robo advisor that picks expensive mutual funds, with high total expense ratios, can actually be quite expensive, indirectly.

What are the pros of robo-advisors?

Study after study, has shown that DIY investors get bad average returns. The main reason for this is emotional; so many investors panic when markets are going down and get too excited when they are going up.

A robot doesn’t have emotions, so is making decisions based on more objective criteria.

The robo-advisors are also good at building questionnaires, and making portfolios according to your risk tolerance.

Used in conjunction with an advisor, moreover, and you can potentially have the best of both worlds; the personal touch and reduced costs.

What are the cons of using the technology?

The main negatives about the technology, is they tend to be good for investing, and less focused on your overall financial planning situation.

In other words, the technology doesn’t help with getting out of debt, building up an emergency fund or anything specific, which goes beyond investment and retirement advice.

In addition to that, the technology doesn’t give always give personalized advice. If you are an expat, who is planning on moving to 3-5 countries in the next 20 years, or you have a very specific situation, the technology isn’t yet up to speed with such complexity.

That is one reason why higher-net-wealth individuals prefer an advisor, who also utilizes the technology, but doesn’t rely completely on it.

In addition to that, many people like to have a personal relationship with an advisor, so prefer at least reasonable amounts of advisor interaction, even if that is just done by phone and email.

Many robo-advisors will try to stock pick. Essentially this means buying thousands of stocks, to find winners.

There is no conclusive evidence, as of yet, that robo advisors can beat the S&P and other index funds long-term, using this approach.

What they can do effective, is rebalance yearly and as you age. As an example, if your risk tolerance suggests you should have 20% in bonds and 80% in stocks, but stocks outperform bonds for the year, many of the robo advisors can rebalance to maintain the 80%-20% balance.

Can robo-advisors always help with the “behavior gap”?

No. If markets are going crazy, either up or down, it is unlikely that a Robo-advisor will have the same affect as a human telling you not to do something stupid.

We all know how to get fit, but many see the benefits of using a personal trainer to get fit, nertheless.

Likewise in investing, an investment expert can act as a check and balance, to ensure you don’t do stupid things with your money.

Ever been in a situation where you have heard about a “hot investment opportunity” at a dinner party?

I am sure, in that instance, speaking to a human advisor about whether the “hot investment” is a good idea, is more effective than a robot.

How about more specifically for expats?

The more complex your financial situation, and the more money you have, the less gaps the technology can fill.

However, for smaller clients and expats with more straight forward financial planning needs, the technology can be an excellent.

This doesn’t mean the technology can’t be used for higher net wealth clients, merely that human interaction will still need to be relied upon extensively.

Are there tax implications?

The tax implications are no different to if you invest yourself, or if you have a traditional advisor.

How much tax is due, depends on your country of residency, how often the securities are traded and many other things.

Where are robo advisors gaining the most traction?

In general, robo advisors are gaining more traction in the lower ends of the market.

The high-net-wealth market, and even niece’s like the expat market, still wants a lot of human interaction, but still appreciate any moves to make the process more efficient and digital.

However, for younger investors and those without account minimums, robots advisors are becoming increasingly popular.

In markets like the US, UK, Singapore and several others, many advisors have high account minimums, often $250,000+ for advice.

This is one of the reasons for the increasing popularity of robo advisors amongst the younger generation, and investors without such account minimums.

Where are robo advisors available?

They are available worldwide but have gained traction in some of the more developed markets, such as the UK, US, Singapore and Hong Kong.

They have, in recent times, been gaining traction in several emerging markets as well.

Are there any expat specific apps and investment platforms?

There are countless robo-advisers, and especially apps, which are tailored for the expat market.

The benefits of expat-specific platforms is that they are more likely to follow you if you move countries.

In comparison, many platforms have been known to close down accounts, if clients move countries. This can not only be inconvenient but can lead to unexpected tax bills.

Do you use robo-advisors and investment apps?

I do have an agreement with a few robo-advisory technology firms to start trailing the technology. That doesn’t mean I am not involved in the investments, however. The technology merely facilities the process.

In the coming months, I will be developing an expat investing app, which ismobilefriendlyy, and available to most people, with the exception of people living in the United States.

There will be a range of investment options and would be suitable for monthly and lump sum investors.

The less labour-intensive nature of the app, will make it suitable for investors who can’t meet my current account minimums.

At first, the app will only be available in English, but that could change in the future.

What are your contact details?

[email protected] and I am also available on a range of apps.

Does reputation matter? Why companies with bad reputations can still grow, and politicians can get re-elected.

What does Berlusconi’s and Trump’s election victories have in common with companies that can continue to grow, despite numerous scandals?

Can you remember the name of the company that had an emissions scandal 1-2 years ago?

No, neither can I. I can just remember they were a German company, and a Japanese company had a similar “scandal” in recent years.

The point being, scandals come today, and are gone tomorrow. That reminds me of a conversation I had with a client a few days ago.

He agreed I could share his story online, as he thinks it is one of the best business lessons that can be given.

He is about 63 years old. His business partner is decades younger. They run a digital marketing agency.

To cut a long story short, one of their clients complained about a year ago. Not just to them, but to forums, the traditional media and the new media.

The younger guy (his business partner) was furious. How dare he complain, when we have proof, via email correspondence, that his complaint is not valid?

My client, who has seen it all before, just told him to chill out. “It will all be forgotten in 1-2 weeks”.

Not satisfied, his business partner was furiously reporting the client’s posts to Facebook, going to the office of one online expat magazine to get the story taken down and even arguing with some forum members who took the side of the complainer.

He wasted 2-3 days doing this. About a week later, they had a drink together. “I think you are right. Everybody has forgotten about it”.

1-2 months later, sales and revenues were higher than ever! Nobody gave a damn about who was right or wrong. They enjoyed the gossip, but that is all

Today, probably nobody even remembers the “scandal”, even though he was worried about it at the time.

It reminds me of one of my favorite Winston Churchill quotes, which the vast majority of my network above the age of 60 agree with;

I know countless people who don’t try business ideas, because they assume that they will be judged by the market.

A new Youtube video which is a bit risqué and sarcastic? Who could take us seriously after that?

Not mentioning our professional qualifications on LinkedIn, or how many years experience we have? Who would want to deal with us?

Doing something crude, like wearing company branded y-fronts with slogans about “big investment returns”? What sort of people would take us seriously after that?

Well actually, nobody gives a damn. People want credibility, but they aren’t taking you as seriously as you probably think.

So try ideas, and don’t worry about failing with some of them. Nobody is probably watching you too carefully in any case.

How to invest in real estate online and without being a landlord?

Countless investors are interested in real estate, without the extra hassle of finding tenants, paying taxes and maintaining the place. 

Others want access to real estate, but don’t have $200,000+ to invest. What can these investors do?

This article will discuss some options and answers some frequently asked questions, and also look at options for expats who want to invest in direct property but are struggling to get a mortgage.  

I will also leave my contact details at the end of the article, for anybody interested in investing in real estate online and without the time hassles of being a landlord.

What are the main options besides direct property? 

This article will discuss three of the main options for gaining exposure to property without extra hassles; REITS, property funds and loan notes. 

What are real estate investment trusts (REITS)?

REITS are real estate companies that invest in income producing property such as hospitals.

Many REITs have performed well, over long periods of time, especially the more diverisifed ones.

An $100,000 investment in a Vanguard REIT index in 1996, would have grown to over $740,000 by the end of 2015, producing a 10.8% annual return, assuming dividends were reinvested.

This is slightly higher than the S&P. REITS come with some of the benefits of physical real estate, without the hassle of finding tenants and the other high costs.

REITS can be both commercial and residential focused, although residential dominates the market.

How to invest in commercial real estate through REITS?

Some REITS, like the aforementioned Vanguard REITS Index, tries to capture the whole market, like an index fund.

Other REITS are focused on specific segments, like commercial real estate, or countries like the UK, Australia or any number of other sectors.

Either way, the process for investing in REITS is simple, because both commercial and residential REITS are usually available on the same investment platforms used for index funds and other forms of investments.

So is the easiest way to invest in REITS within an online investment account?

Yes, in general, the easiest way to invest in REITS is to open up an online brokerage account, which allows you to invest in stocks, bonds and REITS within the same portfolio.

This has the added benefit of allowing you to “rebalance” when one is doing better than the other.

What are property loan notes?

Property Loan Notes are financial instruments that are typically used to raise development capital for  developers.  

These loan notes have been particularly popular with regards to UK property in recent times. 

They allow individual investors to invest, sometimes alongside institutional investors, in a development.

These developments can be commercial, or residential property.  Like REITS, loan notes can sometimes be held within a wider stock and bond portfolio.

What are property funds and property index funds/tracker funds?  

There are different types of property fund.  One kind is fairly simple; some funds merely buy many construction and property companies or even merely just try to track the performance of a property index. 

An example of this, would be some funds buy the shares of the top 100-200 property firms in the world.  

Two examples would be the iShares Global Property Securities Equity Index Fund and the Vanguard Australian property Securities Index Fund. 

Some property funds, in comparison, make more direct investments into the real estate. 

Are these kinds of investments usually liquid? 

Property index funds are almost always liquid, and you can take the money when you want.  Most REITS are also liquid.  

In the case of property loan notes, they often have a certain commitment period 2-3 years is a typical commitment period. 

What are the risks?

All kinds of property have certain risks; political, social and otherwise.  One of the bigger risks is the liquidity issue.  

If a fund has too many people redeeming their investment, and too few new investors, they can get suspended.

This has happened with some huge funds, such as The M&G UK Property Income Fund , one of the largest of its kind.

This isn’t a big risk with a property index fund.

How can you invest in real estate for small amounts like 10k?

The easiest ways to gain exposure to real estate for small amounts of money, like 10k, is to have a 10%-15% allocation to something like REITS, within a broader portfolio.  

The reason why this is effective, is many direct investments into REITS or property loan notes, have investment minimums.

In comparison, if you already have 100k-200k in an existing portfolio, it is fairly easy to start small with property investments.

Why don’t you personally invest much into direct real estate?

Many of my readers have asked me why I don’t own property, or at least direct property.

I do have a 10% allocation to REITS in my portfolio, and of course, index funds indirectly gives me access to property and construction related stocks without trying to pick winners.

However, the biggest reasons why I personally don’t invest in (direct) real estate directly is:

  1. The time costs – real estate is less of an investment, and more like running your own business. You can’t rely on capital values most of the time, so need to focus on yield and leverage.  So you have revenues from rent, and sometimes from the capital values once you sell, but you also have costs for taxes, maintenance and so on.  You also have the time costs of being a landlord, especially if you go down the Airbnb route, which means checking in many tenants. 
  2. It isn’t easy to beat markets long-term – beating markets short-term, can and does happen, but over 40-50 years, it isn’t easy.  What has made this situation harder, is that it is getting harder and harder to get 95%-100% mortgages, so leverage is getting harder in most markets. Given the time costs and direct costs of owning property, moreover, beating markets by 0.1% by year isn’t enough to mitigate for the costs 
  3. It is an illiquid asset – unlike REITS or index funds, you can’t easily sell direct real estate. That also makes you vulnerable to tax changes – you can’t simply sell your property if a new radical government comes to power 
  4. There has been a populist backlash – previously one of the biggest positives about property has been that it has been tax advantageous in most countries and you can use real estate investments to get second residencies and even passports.  So many investors could “kill two birds with one stone” by getting an overseas residency and property. That is still possible in some places, but it is much harder than before, with many countries closing schemes or raising requirements.  Likewise, many of the tax advantages of property have been closed down in numerous countries. If we take the UK as an example, the British Government has dramatically increased taxes on second homeowners.
  5. The tax rules and general rules are always changing – it seems with ever budget, brings a new tax or change.  The direction of travel seems to be towards more tax and regulation.
  6. High valuations or high risk – most markets are either very risky or have high valuations. Some of the cheap emerging market opportunities, like in Georgia, are risky. Some of the safer options are overvalued.
  7. REITS have often outperformed direct real estate – the very best markets might have regularly beaten REITS, but most don’t, at least if you calculate the net returns.
  8. The risk – is higher in buying just 1-3 houses, than holding a diversiifed global index or REITs.

For those that do want direct property, how easy is it to get mortgages for expats?

Over the years, it has gotten harder for expats, and indeed foreign buyers, to get mortgages.  

In the UK, Australia and countless European markets, most lenders perceive expats as higher risk than people living locally.

That is because many expats are earning in foreign currency, and are on 2-3 year contracts, or are self-employed. 

So you can get a UK mortgage as a non-resident, but the process is often more time-consuming, and you often have to put down a bigger deposit on day 1, compared to people living locally.

Where can I go for expat mortgages?

Many online websites have expat mortgage calculators, which show that the interest rates are typically higher for expats.

Some of the most famous banks, including HSBC expat, offer buy-to-let mortgages to UK and other expats, but the exchange rates aren’t always competitive.  

This can also be an issue for people living in the UK, and other countries, that have overseas income.

There are countless British people, and indeed foreign-nationals, living in the UK, who have overseas income and are paid in Euros and USD.

Beyond the UK, countless countries such as Australia and especially New Zealand, have put restrictions on overseas property buyers, after a backlash against rising property prices.

What are some of the cheapest property markets right now? 

Some up-and-coming markets include Georgia and Bulgaria, in Europe.  Beyond that, many parts of the UK are increasingly being seen as cheaper than comparative markets.

With the whole “Northern Powerhouse” project, countless people are seeing Manchester, Liverpool and other parts of the North of England, as good options for real estate.

Typically speaking, the North and Midlands have better property yields, than London and the South East. 

How about property tax?

This depends on the country again.    If we tax the UK as an example again, there is a buying tax, called stamp duty.  This ranges from 0% on cheaper houses, through to 12% on houses worth over 1.5M Pounds. 

People who are buying property as a second home, have to pay an additional 3%, meaning an effective rate of 3%-15%.

It isn’t hard to negate this fee, although you can sometimes transfer a property’s deeds as a gift or put it in a will.

In addition to that, any income from property, will also be included towards UK Income Tax.  

Below 11,851GBP a year, you don’t have to pay UK income tax.  Above this threshold, and until 46,350GBP, a 20% rate is applied.

Above 46,350GBP, a 40% rate is applied.  So people with multiple properties in the UK, often face an income tax increase, regardless of where they live, and they also face the hassles of needing to self-assess their own taxes.

Finally, you have capital gains tax. This didn’t used to apply to non-residents, including British expats and foreign buyers, but it now does. 

You are generally taxed at 18%-28%, depending on many factors.  Trusts are taxed at 28%.

The point is, property isn’t always tax advantageous. It can be high-tax, in certain situations, and the rules are complex and ever-changing.

Can you easily reduce your tax bill on direct property?

There are ways you can use deductions to reduce your tax bill. Expenses from insurance and maintenance bills are just two examples of allowable expenses.

These rules are always changing, and indeed the UK Government is currently making changes to the mortgage interest cost element of allowable expenses.

One of the advantages of loan notes and REITS, is that they can be put into more tax efficient structures – sometimes even 0% rate structures. 

This is especially the case for expats, and others, who have access to low or no tax structures, due to their residency.

How about for Americans and Australians?

Americans need to pay tax on overseas income beyond a certain threshold and need to declare any overseas assets, even if the threshold has not been breached.

This is regardless of whether the investment is in direct real estate, REITs or any other kind of investment.

For Australians, expat mortgages are possible to get, but like for Brits, tend to be a bit harder than for local residents.

How about fast growing markets like China and India?

When I first visited Shenzhen in 2007, one of my friends said “real estate seems cheap here”. And he was right, however, the same thing has been said about all countries.

Look at some of the “darlings” of emerging market property in recent years, such as Egypt and Tunisia.

Political and other risks, have affected the property market. That doesn’t mean you should never consider emerging market property, it just means that risk should be managed.

A globally diversified REITS, as an example, is much less risky than buying just one property in an emerging market.

It is also important to note, that many of these markets have already inflated. Real estate yields are very low in India and China, which means that renting is relatively cheaper than buying right now.

That doesn’t mean that China’s property market will automatically collapse this year or in 2020, it just means that risks are relatively high right now.

Can REITS and property notes be used for residency and passports?

Unlike something like government bonds or direct real estate, REITS and property note can’t usually be used to get second residencies and passports.

Do you advise on real estate?

My specialism is portfolios which compromise of stocks, bonds and something REITS and loan notes, as opposed to direct real estate.

My portfolio minimums are $75,000, or currency equivalent, for such services.

I can take clients from everywhere in the world, except those living in the US. American expats are sometimes OK, but investment options can be more limited, due to US tax rules.

However, I do have access to several property companies, if my clients ask for an introduction. 

Typically, they have a specialism, such as expat mortgages and property.  The majority of them are focusing on the UK, Australian, Canadian, US and Hong Kong Markets.

A few do have access to some emerging markets, such as Bulgaria.

What are your content details?

[email protected] and I am also available on a range of apps

18 tax-free​, or low-cost countries, where you can get second residencies

I met a Swedish man a few years ago.  He, on the surface, was doing well. He was earning about $425,000 a year.

However, when you factor in cost of living and tax, he was saving about $60,000 a year. That is better than most people, but he wanted to retire early.

He calculated that he needed about $5M, to live the life of his dreams in retirement. 

$60,000 a year, even adjusted for capital gains, wasn’t going to do that anytime soon, as he didn’t start the process of wealth accumulation soon enough.  

I have met countless entrepreneurs like this before; living in high tax + high cost of living countries.  

As they are stressed with the day job, they often overspend, leaving them with a lower surplus than expected.

Something changed a few years later.  His wife was British, and he spent 2 months in the UK, as his wife’s parents were ill.  

To his surprise, his sales from his business activity didn’t decrease.  They stayed stable. That got him thinking; if my business doesn’t depend on face-to-face communication, why can’t I live in a cheaper country with lower taxes?

Most countries have world-class wifi these days, and business is going online, so why not take advantage of that?

Whilst this option won’t be for everybody, reducing your taxes and cost of living, is an example of how the 80/20 rule can be applied to personal finance.

That aforementioned Swede is now saving and investing about $250,000 a year, with less capital gains tax, due to the fact he is living in a low-cost and tax country.

One of the biggest mistakes many businesspeople with online/international exposure make, is caring about prestige and status.

Earning $450,000 in New York or London, with $10,000 a month luxury apartments, might sound more prestigious than investing 80% of your income to be retired at age 45 by living in a developing country, but that doesn’t mean it is logical.  

Which countries have no taxes or low taxes, or general low-cost of living, and allow for second residencies?

I have listed numerous options below and I have included developing and developed countries alike;

1.Paraguay 

Many Canadian and Americans are interested in living in South America., but few consider Paraguy.

Paraguay has a great scheme, where for depositing of just over $5,000 into a bank account, you can get instant permanent residency.

For those that want citizenship, it takes 3 years.   Bare in mind though, that bureaucracy and a slow legal system, can complicate the process 

2.  Cambodia 

Cambodia is an interesting place to live in. I should know, I lived there for about a year in the past!

It is still possible to get a business visa in the airport, extend it and get a work permit via companies without actually working for a local company.

It used to be possible to just extend your business visa forever, but immigration and visa agents are now giving the advice that you need to pay for a work permit if you want to further extend a visa.

The total yearly costs can be $400-$800 a year, which makes Cambodia one of the cheapest and easiest ways to get a second residency.

In other words, with money and the right paperwork, anything is still possible and meets the legal requirements.

Tax and cost of living is relatively low, but rising sharply. The main reasons for this are strong economic growth, and huge foreign direct investment from countries such as China.

3. Singapore 

I know what you are thinking….`Singapore isn’t cheap or tax free`. That is true. There is personal income tax of up to 20%, and corporate taxes. That may be much lower than Sweden or Australia, but it isn’t close to 0%.

However, for high net wealth individuals who have $4m or more to invest, you can enjoy 0% tax on foreign income.

This means that many high-net-worth individuals are using Singapore as a low-tax base, in which to earn their overseas income.

Hong Kong used to have a similar scheme, but that has now closed. It is possible to set up a business in Hong Kong, but this puts you inside Hong Kong’s tax system.

4.  Panama 

One of the most popular “no tax” options. Panama has a Friendly Nations Visa program.  If you deposit $5,000 in a Panama-based bank and establish a company, you can get near-instant second residency.  

If you just want a residency, rather than citizenship, you can just spend a few days a year to keep that status.

Many other countries require you to spend 6 months or longer, to keep residency, so this is an excellent benefit.

5. Nicaragua

Like Cambodia, Nicaragua is a a developing country which won’t be for everybody.  It does have a low cost of living and getting residency is easy.  In general you just need to show income of $750 a month, although you do need to live there for 6 months or more per year.

6. Malaysia 

Few people in the West understand what a dem Malaysia is. Malaysia is `Singapore-lite` in many ways.  It has great English and infrastructure, for a fraction of the price of Singapore.

The same is true of its residency program. The My Second Home or MM2H program is an extremely easy way to gain second residency. If you are 50 or over, you need to despot $35,000 into a Malaysian bank or purchase real estate.

If you are under 50 years old, you need to show proof of $2,300 of monthly income and deposit $70,000 into a bank account or purchase real estate.

The biggest negative? You won’t be able to touch the money for 10 years.

7.  Macao 

Macao often gets overlooked, in favour of Hong Kong and other nearby cities. such as Shenzhen.

In the shadows of Hong Kong, few consider this gambling-hub, as a candidate for second residency

For $375,000, you can obtain residency and the tax rate is 0%. As Macao is a Special Economic Region of China, however, you will never realistically get a second passport.

8.  Costa Rica 


Costa Rica has long been a favourite of American and Canadian retirees for decades, due to the lifestyle and proximity to home.

Proof of $2,500 of monthly income is required to obtain Costa Rican residency.  

9. Georgia 

Speaking about overlooked countries, few people speak about Georgia. It is one country in `emerging Europe` which has improved. a lot in recent years.

Considered by few people, this makes it a great option for those that want a unique experience at a great price.

There is no tax on foreign income, you can get a 360-day tourist visa on arrival and anybody can open a Georgian company or buy real estate to obtain residency. 

10. Estonia 

Estonia is one of an increasing number of European countries, which has competitive tax rates.

They have a flat tax and e-residency system. The e-residency system isn’t a path to citizenship or living there.  

11.  The Bahamas

People who reside in the tax free islands of the Bahamas pay zero tax on worldwide income. 

The government fee for temporary residency is $1,000, although if you want to settle for longer, you may need to purchase $250,000 in real estate.  

12. Cyprus 

Cyprus is known for its great lifestyle, efficiency and excellent English levels.  Many people come to Cyprus as they want residency to lead to citizenship and second passports.  The costs of getting citizenship isn’t cheap though.

The citizenship by investment program in Cyprus requires a  €2 million investment in local property, government bonds or bank despots and you need to maintain a €500,000 home to keep your passport.

Like countless countries, however, Cyprus has been known to “move the goalposts” when it comes to these matters.

13. Latvia 

The costs of residency in Latvia are typically just over €500,000, if you include the processing fee.  The Latvian program isn’t the cheapest, but it is one of the more convenient.

You don’t need to be physically in Latvia – apart from needing to spend 1 day a year to maintain your residency.  

14. Montenegro

If you are interested in getting residency through real estate, Montenegro has one of the cheaper options.

There are no investment minimums, and many apartments are cheap, often in the $25,000-$75,000 range.

Going down the real estate route for residency, does makes you ineligible for citizenship though.

15.  United Arab Emirates (UAE)

In a location ideally situated between Europe and the Far East, Dubai is a popular expat hub, with Abu Dhabi also maintaining a large number of expats.

As you may imagine, getting residency through investment isn’t always cheap in the UAE.

People who make a AED 10million investment can get residency if they invest in an investment fund or establish a company.

You can also purchase property, if it is a residential property (commercial properties are not eligible).  

The value must be AED 1million or more.  It allows for 2 year visas, whereas the 10m investments allows for 10 year visas. 

As AED 1 million is about $272,000 on current exchange rates, UAE citizenship isn’t as ultra-expensive as you may have thought.  

Even though Dubai is significantly more liberal than countless other Middle Eastern countries, the lifestyle is still relatively conservative, especially during Ramadan.

This isn’t for everybody, and so should be considered carefully.

16. Thailand 

Thailand is one of the more established retirement locations in South East Asia.

The Thai Government allows so called `Elite Visas` for wealthy foreign citizens. The cost of the visa is starts at around $3,000 a year,

However, often the fee needs to be paid upfront, in other words over $15,000 for 5 years visa.  20 years costs $65,000.

Thailand has a reasonable cost of living, but isn’t low tax,

17.  Portugal  

Portugal’s Golden Visa Program used to be considered one of the best programs in the world, but has been getting some bad press recently.

It is still possible to invest 280,000 Euros into Portuguese property and qualify.  However, getting approval is taking longer than before, and the tax rules are changing.  

The benefits are the Portuguese lifestyle – if you wish to stay in Portugal that is. If you don’t wish to stay in Portugal, the residency permit means you only have to spend 1-2 weeks a year in the country.

18.  Various other EU countries if you are married to an EU citizen

Free movement is a bit of a myth – many countries do enforce rules surrounding working in another country.  

Besides, having the ability to move freely, doesn’t mean a residency with a tax identification number. 

What is true, however, is that many British, Germany and Nordic entrepreneurs are considering Bulgaria, Romania, Hungary and other Eastern European countries.

Getting a residency permit for fellow EU, or even merely non-EU European countries, is much easier than for most countries outside of Europe. 

Let’s also not forget if you are married to an EU citizen, one of you can declare residency and sometimes bring the other without needing to invest.

Portugal even recognizes partnerships that aren’t based on marriage, which opens up the doors if one of you is an EU citizenship.  

Frequency asked questions 

Below I will deal with some FAQs.

Do you think these rules will change?

Like everything, rules change.  Residency visas are no different.  It regularly happens where schemes are closed down.

The UK, recently, closed down its residency program. So before seeking a second residency it is always good to check for updated rules.

How about for Americans?

It has to be remembered that getting a second residency doesn’t help Americans avoid US taxes. Renouncing US citizenship is needed in this case, if you want to be a non-US taxpayer.  

Are there any 100% tax free countries in the world?

There are many countries, including many of the ones above, which have no income and capital gains taxes. Most countries do apply some form of tax, however, including sales tax.

Even the United Arab Emirates introduced a new sales tax recently. Moreover, it has to be remembered that many countries with zero, or close to zero taxes, are more expensive than some of the low-tax countries.  

Ask any expat in Qatar or United Arab Emirates what they think about the cost of living, and you will realize that the higher cost of living eats up the tax benefits.

What are the political risks?

Nobody knows what governments will do in the future.  Foreign investors are a great target for populist governments.

Not only that, but priorities change.  When Portugal was reeling from the financial crisis, for example, real estate investments was welcomed.

Things have changed, and things are now taking longer. This is one reason why many entrepreneurs are getting 4-5 residencies and passports – they are using residencies like insurance policies.  

Things may change, so having numerous residencies is lower risk.

What should be considered beyond cost?

The political, social and economic landscape should be considered.  If you are a global business person, personal safety, wifi reliability and political stability are all likely to be of high importance.  

Having traveled to numerous developing countries, and lived in a few, it is a misconception that all are dangerous or inefficient.

Many now have fast and reliable wifi. Many aren’t dangerous. However, the legacy of past political regimes still exists, when it comes to bureaucracy.  

I especially noticed this issue in Eastern Europe, Egypt and other countries which have had leftist regimes in the past.

It isn’t uncommon for small paperwork issues to take months, with numerous trips to immigration.  

Can’t you also get residency in places like Canada, Australia and the US?

Yes you can, however, these are not low-tax and costcountries. Typically, they attract investors who are looking to send their kids through the schooling system, or there is another social reason.

For example, many wealthy Chinese investors like the US, Canadian and Australian real estate and schooling system, and want their kids to grow up in a native-English language environment.  

In this case, the decision was therefore not made to reduce costs and taxes. It was more of a social and personal decisions.

For those that are in a similar situation, countless countries offer residency or even citizenship for a price.  

Do you offer residency services?

It isn’t my core business area- my focus is on investments for international business people and others. These investments include lump sum and monthly investments.

On an ad hoc basis, I have helped clients with second residencies, including putting them in contact with the necessary experts.

Are higher interest rates always a good thing?

No. This is a huge misconception. Many people think living in an emerging market is great, because you can get 5%, 10% or even higher interest rates in the bank.

Whilst it is true that the risk is lower if you actually live in that country, many high-interest rate countries also have high inflation and have experienced currency devaluations in recent times..

Take Argentina as a recent example. 20%+ interest rates but a falling currency with massive inflation.

It is far safer to have your assets in a broad-based international bond and stock portfolio.

What are some of the other misconceptions?

Many people assume that residency can automatically lead to citizenship, and that the process is easy and/or never changes.

Beyond that, many entrepreneurs do assume that most developing countries are always dangerous, lacking in infrastructure or hard to live in.

This is the case for some places, but not everywhere. In the last 10 years, I have noticed a huge improvement in infrastructure.

For example, the public transport in Malaysia, in Kuala Lumpur at least, is better than London.

The WIFI in Bulgaria and Hungary, is often better than in some parts of the US, and the list could go on.

A final misconception is that rising GDP always means increasing real estate and stock markets.

Just look at China in recent times – great GDP results but falling Stock Markets. At the same time, the US with just 2%-3% growth, has had an excellent period of rising stock markets.

What are some of the biggest mistakes people make?

When getting a second residence, or indeed passport, many people fall into two extremes; either procrastination or making decisions without thinking through the ramifications.

When going overseas, or indeed getting a second residency, people need to factor in several things.

These could include tax, personal safety, lifestyle and opening up offshore bank accounts to name just a few.

Several people in my network have set up overseas companies, after getting a second residency, without also taking precautions, such as keeping good paperwork and having 2-3 accounts in case 1 is closed down.

That is becoming a bigger threat in the offshore market, for people who are looking for offshore banking + second residencies.

Should people get tax advice?

Getting proper tax advice is often prudent and senisble. The world off second residencies and offshore banking has become more complex, and many governments have updated their tax rules.

To give you just one example, the Australian Government recently ruled that a man was still a resident in Australia, as he wasn’t able to prove his tax residency.

He wrongly believed that staying out of the country for 183 days, automatically made him a tax non-resident.

After the authorities found out that he was regularly sending money home, maintaining a mailing address and indeed residential home, they asked him to prove he is really an expat.

What are your contact details?

[email protected] and I am also available on a range of apps. My main services are financial advice and portfolio management.

I do not provide advice on tax, second residencies and offshore banking, but I have sometimes referred people onto different providers, who have helped.

The tortoise and the hare; breaking industry norms and success.

For quite a few years now, I have been interested by mindset. Why do some people succeed in investing, and indeed business, and others don’t?

Why do some people even with great talents and connections, fail, whilst others succeed?

We have all heard the story as kids. The tortoise vs the hare. Slow and steady vs quick and unsteady.

The moral of the story? What seems too good to be true, often is. Getting gradual success, is often better than quick success.

This is often true. Every overnight success has been years in the making, as Richard Branson once said.

However, stories like this often encourage people to scale back their dreams and assume that great things can’t happen to “people like me”.

This is especially the case if you come from a class-based society, which the UK, where I am from, definitely is.

I have met many fellow Brits, who even think 8% per year investment returns are “too good to be true”, even though the average market returns have often been higher than 8%.

It isn’t just Brits either – countless societies have similar mentalities. When I got my first overseas posting in China, things changed for me.

GDP growth at that time was 10%+ in China. I saw several people’s businesses, local and expat, go from $0 to $500,000 of yearly revenue in one year and more in subsequent years.

Many people would assume that was only possible due to China’s quick development.

However, in recent times, due to the internet, I have seen countless people increase their business and personal revenues, by using new technologies to scale and leverage.

These people have been quick and steady. They have combined the best aspects of the tortoise and the hare.

It sounds unrealsitic to some, but in the real world, I have witnessed more people fail because they are not even trying to win.

They are trying to not lose, because let’s face it, society teaches us that it is “better to be safe than sorry”.

When I first started to produce online content, few people encouraged me. Some of my content even seemed crass to some.

Many asked “why do things like YouTube videos when you could do tried and tested things like going to networking events?.

I didn’t care. I knew that getting attention requires some haters, some risks and some setbacks.

It is the best thing I have ever done and when I meet people in other industries, those that break industry norms, tend to win if they are persistent enough.

Normal actions leads to normal results. Abnormal actions leads to abnormally good results, if done with persistence for years.

So go fast. Break norms and industry rules and you never know where it might take you.

Further reading