No. of Recommendations: 12
This board is both for those that are living abroad, or those that are planning to move abroad, or even those that didn't even put it in their minds that they could be better of moving abroad but might want to consider it.
Quick summary for the style of posting: You don't need to add this info, as Shrewd'm has a culture of strongly respecting privacy (if desired), but often it will be hard for conversations to make much sense unless you mention (1) the country for which you have a passport, and (2) the country where you are wanting to move to (or have moved to). Of course you don't need to mention, but keep in mind how much the situation changes based on both the originating country and the country where you are living abroad.
People live abroad for completely different reasons. They may have had many holidays somewhere, and after becoming familiar with the culture, decided it is more pleasant to be there. Others live somewhere for some excellent work opportunities. Others travel a huge amount and just want a 'home base' somewhere different to where they grew up. Others want some sense of increased freedom, which can be in the eye of the beholder, but really can increased in many situations.
US citizens (those with a US passport) generally have less taxation freedom when living abroad, as you need to keep paying tax to the US Government even when not living in the US. For every other country in the world (and more than 99% by population, including all of Europe, Australia, China, India, Russia, Brazil, and let's call it every country), citizens stop paying tax to their country when living abroad (other than, for the vast majority of cases, tax on rent from real estate in the original country). To avoid this post being a huge article, I'm having to sweep with broad brush strokes to get points across, but this is a pretty close approximation to how the vast majority of the world works. Having a US passport is good if you want to work in the US, but is a financial liability if wanting to live abroad in a country where the taxation is much lower, such Monaco, Hong Kong, Singapore, Russia or many of the East-European regions which can offer low tax and very friendly social company with higher quality lifestyles than we are generally led to believe.
If you move to a country with zero income and capital gains tax such as Monaco, provided you are not from the US, then you really pay no tax, veloce e semplice. If you live in the US, though, you will need to renounce your citizenship to enjoy that freedom that every other country provides, which can be done - and is done by many - but requires another article. The situation is not helped by the fact that countries receiving you often are less loving towards US passport holders as residents, because it is more complicated for the country's administration compared to receiving citizens from elsewhere.
For beginners, some terminology has to be understood to at least to set the larger picture:
1. Living Abroad - we will use this to denote having residency abroad. See below.
2. Residency - this is the place you live. Where you live is independent to the passport you have (though the passport may assist with the residency application depending which country you are moving from and to). In most cases you need to be in your country of residency for at least 6 months a year. With your residency card, you are able to live, study or work in that country, and for most purposes that you care about, being a citizen or a resident doesn't effect your lifestyle. You don't vote as a non-citizen resident, and that is about it.. Non-citizen residents and citizens use the same roads, rent or buy the same apartments, work at the same places, etc, so who cares about the distinction once you have your residency card. (If you are really in some trouble, it is true that your country of citizenship will offer more help, so you may in practice come to view the country for which you have a passport as your 'fall back' plan, even if you never actually return to living there). When you have residency in a country for some number of years, you can usually upgrade to being a citizen there (though some may not even bother, even when having that option, as the residency card may provides them with all the freedom they need).
3. Residency card - this is the card that proves where your residency is (see above). I'll add here that you can have residency in more than one country, but I encourage you to think of residency as only being in one country which is where you spend most of your time (having dual residency creates legitimacy problems so it is better to try to avoid it rather than aiming for it).
4. Citizenship - the country in which you are treated as 'citizen', which is also the country for which you have a passport. For the vast majority of cases, citizenship allows you to vote, and to return there any time - generally immediately and without questions - if you change your mind about where are residing or if, more commonly, you just want a holiday in your country of citizenship.
5. Passport - this is the document merely proves your citizenship. The passport does not prove where your residency is (which is what residency card does).
6. Birth Certificate - this is self explanatory, and if you don't have a copy at home it can always be ordered from the registry (that keeps the records), within the state (or region) within the country where you were born. Often your birth certificate is needed, on top of your passport, when applying for residency abroad.
7. Nationality - in overwhelmingly most cases this is the country where you are born (though it can be granted in some cases), but better to avoid the term and use citizenship instead as in practice one works with passports, which in practice equates to your 'citizenship'. I have never been asked what may nationality is, but many times asked what my citizenship is, and even more commonly my city of birth.
If wanting to live abroad, the first thing you need to do is establish residency in another country - that can be done with 3 broad categories (as requirements from the country you are moving to):
1. Marriage.
2. Applying for a job there, or asking to relocate with your present job if multinational.
3. Using capital.
Those 3 above are the key hurdles, as the other requirements are usually of a bureaucratic nature and readily passed:
4. Obtaining long-term visa, which is only needed if your passport doesn't give you long-term entry to the country where you want to reside. The visa could be a work visa, or even 'residency visa' designed to give you enough time in the country to receive your residency.
5. You may be asked to show your birth certificate.
6. You may be asked to show copy of your recent criminal record being clean, which your national police can issue to you for a small fee.
Regarding the 3rd category above (using capital), which is often the most obvious way for Shrewds given that they are often wealthy or on the path to being wealthy, you can gain residency in many countries by simply buying a property (such as Italy, Russia, Bulgaria, and many others), or holding some your investments with a local bank (such as Monaco, which can be done even without even changing any of the shares that you own, but just switching the broker for some of the capital).
That's just about requirements for residency - you'll also need income. If using 1 or 3 above, you'll need a source of income. If 2.5% of your investment more than covers your costs, you have nothing to worry about. If you can't rely on your capital gains and dividends as income, then you may be fortunate to have a job where you can work from anywhere (such as an accountant, programmer, etc) even if you never realised you can easily re-locate and continue supporting your customers, quite possibly you can. You might be ready to move, and might not even have realised or thought about it, with the general culture around you discouraging you from thinking in such a way owing to what I call 'psychological osmosis'.
I can already see how threads here are going to always be pretty specific, as everything changes depending on *both* your originating country, and the country you have moved / are moving to. That's why I suggested at the start of this post to briefly state where are moving from and where you are moving to.
I look forward to reading about the experience of Shrewds here already living abroad, and perhaps some other Shrewds might be inspired to expand their options. It can be nice to feel the greater sense of independence, adventure and autonomy when living abroad, and all the possibilities, intellectual and emotional perspectives, and cultural inspiration that can arise.
A quick note, that is so obvious that it is easy to forget - you have to really love the country you are moving to, if you are actually going to stay there year after year, and it will usually be a country that you have visited numerous times and like being there more than hour originating country (or else, you know for sure that it is similar to another country you have visited owing to it sharing much the same culture). But if moving abroad, it is no big deal if you give it a go even without full knowledge of what it entails - as even if you end up returning to your country, you'll likely come out ahead anyway from the rich experiences and adventure; and if you end up staying then almost by definition it will have been a great decision.
- Manlobbi
