How to Move Out of the US Workshop

[JIMSANTOS 0]

Good day,
The importance of maintaining a mailing address in the US varies with your particular needs. It used to be more important in general, but since so many things are handled online now, physical mail has become less important. However, there are still some things that require a mailing address.
For example, do you plan on returning to the US from time to time and renting a car? If so, you will have to keep your US Drivers License, which in most states requires a physical address to renew. Your credit cards may also require a US mailing address, and so on.
Some expats use the address of family or friends to collect their mail, and there are also virtual mailbox services that can send you a scan of the envelope, then either open and scan the contents, shred, forward to another address, hold for pickup, etc. A Google search of "virtual mailbox" will give you several from which to choose.

Jim Santos
International Living Roving Correspondent
Currently in San Miguel de Allende, Mexico

[JIMSANTOS 0]

Good day,
You've described exactly what my wife Rita and I are doing now. Although we did live in Ecuador for 6 years with a residency visa, we are now exploring the world just by traveling on our passports, and staying from a few weeks to a few months. Most countries will let you stay up to three months on a US passport. Costa Rica and Mexico allow up to 6 months, and Albania an entire year. It will get trickier for us later this year when we go to Europe, as we will have to deal with the Schengen Area rules. Rather than finding it tiring, so far at least we have found it to be exhilarating.
As for residency visa rules, they do vary from country to country, and some do require that you stay in your adopted country for a certain period of time. Ecuador for example at the time required that we not leave the country for more than a total of three months the first two years. Panama and Mexico are two examples where the requirements are less strict.
Jim Santos
International Living Roving Correspondent
Currently in San Miguel de Allende, Mexico

[JIMSANTOS 0]

You said it - it varies from country to country. I can tell you that when we lived in Ecuador, we were able to skip having to take a driving class by showing our US driver's licenses. However, we still had to take a multiple choice written test (in Spanish), hearing test, eye test, and coordination test in order to qualify. I think you will find most countries will accept your US license as proof you know how to drive, but expect the tests to all be in the native language. Which isn't really a bad thing - it is important that you be able to read and understand the street signs, for example.
Jim Santos
International Living Roving Correspondent
Currently in San Miguel de Allende, Mexico

[LMCGLOTHIN435]

I want to move to Portugal but the amount of paperwork is overwhelming! Can you suggest how I would go about getting legal assistance that I could hire to assist in dealing with application for visa, etc.

[TETODEB]

what is the tax rate of countries like france and Italy , if you devide to live more than 6 months and one day.
Could they have access to your Assets back in the U S ?.

thank you

[BSMONTY]

We are a senior couple with medicare and live abroad for several months each year. What medical insurance do we need for evacuation in case of a serious illness, and where can we purchase. We stay in the Dom Rep.

[LISABOOTHE]

I just want to thank everyone for sharing their experiences and information!

[DJLESTER]

What's the best way to get in touch with Ted?

[BRANDI.SCHUTTE]

I have been looking at this site a lot.. I want to invest and move, however I always get vegue information. How do I get someone to interact with me and help me put these plans into action..

[IL Moderator]

Hi @WAHBYBEKKA We’ve checked in with Ted Baumann, our Global Diversification Expert, to get an answer to your questions. This was his response,

Let’s address the Social Security issue first. You are entitled to Social Security benefits whether you remain a US citizen or not. You earned them, and they are legally yours, your citizenship status makes no difference.

Expatriation depends on your financial status. If you have significant net worth, you could face an “exit tax” calculated on the value of your global assets at the time of your expatriation. But if your net worth is less than $2 million, or if your annual taxable income for the 5 years before you expatriate was less than $190,000, you should not be liable for an exit tax.

Once you are expatriated, you will not be liable for US income tax on current earned income received outside the United States, I.E. wages consultancy or freelance income, or business income. But any retirement or other passive income like rents, interests, the proceeds from stock sales and other income from US sources will continue to be subject to tax.

[IL Moderator]

Hi @JOHNPATRICKUMBRELLO We’ve checked in with Ted Baumann, our Global Diversification Expert, to get an answer to your question. This was his response,

I’m not sure what residency changes you’re referring to other than the increase in the minimum residential investment to qualify for a Greek golden visa. Currently, the property investment requirement ranges from €250,000 to €860,000 depending on the region. On Crete, because it is a large heavily populated island, the minimum value I believe is €800,000. But if you convert a commercial property into residential use, the minimum falls to 250,000 euros. That’s also the case if you restore a building of historical interest.

But there are other ways to become a Greek resident. Greece offers a Financially Independent Persons Visa that allows you to live in the country if you can demonstrate sufficient regular income. It also has a digital nomad visa. So, if the residential investment is too steep, you can take those routes.

[IL Moderator]

Hi @MARKBATH56 We’ve checked in with Ted Baumann, our Global Diversification Expert, to get an answer to your questions. This was his response,

Let’s start with Medicare. Under current law, you are not eligible to receive Medicare coverage or reimbursement for treatment outside the United States, unless it is an emergency during a tourist trip. If you wish to take advantage of Medicare, you must return to the United States.

Not sure what issues you’re referring to regarding investment accounts and banking, but if you become a full-time legal resident of the UK, you should have no problem getting banking facilities there. If you’re referring to the status of your US accounts, many US financial institutions either don’t want or aren’t permitted by law to service nonresident clients, including US Citizen expats. Many people talk about having received exceptions to this or getting around them by maintaining a valid US residential address, but it can be tricky. If your bank doesn’t know you’re living abroad and finds out, they can freeze your accounts without warning. Some banks, on the other hand, are happy to maintain banking facilities for US expats. USAA is probably the best known.

[IL Moderator]

Hi @DPHUDSON1 We’ve checked in with Ted Baumann, our Global Diversification Expert, to get an answer to your question. This was his response,

To begin with, you need to live uninterruptedly in Spain for 10 years to become a Spanish citizen. Unless you are a Spanish resident through a golden visa, which is being abolished, “uninterruptedly” means at least 183 days (about 6 months) a year to keep your visa status. For example, if you live in Spain on non-lucrative visa as a person of independent means, you are expected to be in the country for at least six months of the year. But the issue is subjective; the Spanish authorities may expect a deeper commitment to the country and use time there as evidence.

Nationals from Latin American countries, Andorra, The Philippines, Equatorial Guinea, Portugal, and people of Sephardic Jewish origin can apply for Spanish citizenship after only two years of residency.

[IL Moderator]

Hi @RAEANNG We’ve checked in with Ted Baumann, our Global Diversification Expert, to get an answer to your questions. This was his response,

Every US state has the authority to set its own residency rules. Some are quite liberal, in the sense that all you've got to do is surrender your driver's license and switch your voter's registration to somewhere else, and you are no longer considered a tax resident. Other states investigate whether you have really cut ties to the state, looking for evidence that you might still have a home for your own use there, significant investments there, make regular visits, and so on. The best way to avoid continuing liability for state taxes is to cut as many ties as possible to your previous state, and keep official records of canceling your license, voters' registration, and so on. Another way is to move to a no-tax state before you move overseas, like Florida. Again, a lot depends on the subjective assessment of the tax authorities.

If you are referring to using a US license abroad, most countries will let you drive on your US permit for a specific period, ranging from 90 days to a year, after which you must apply for a local driver's license. Most countries offer the option to convert a US license to a local license without additional testing.

[IL Moderator]

Hi @ZORROZUA We’ve checked in with Ted Baumann, our Global Diversification Expert, to get an answer to your questions. This was his response,

Yes, 401K income is considered passive. Not sure what you mean by strategy to diversify, but essentially, any income that is not the result of current work or business ownership is considered passive and is subject to U.S. tax even if you live abroad. So even if you moved retirement savings into a non-tax advantaged brokerage account, it would still be regarded as passive income.

[IL Moderator]

Hi @WYLCHILD We’ve checked in with Ted Baumann, our Global Diversification Expert, to get an answer to your questions. This was his response,

I think you are lumping all your offshore residency options under the residential or other investment options for a golden visa. Those are not your only options. Most countries in Europe and Latin America offer independent means visas which are suitable for retirees or independently wealthy people. You just need to prove a sufficient monthly income from passive sources to support yourself, as well as a local address and various other paperwork. There are also digital nomad visas for people who can work remotely from a foreign address.

Another thing to bear in mind is that if you convert some of your retirement savings into a self-directed IRA, you can use those resources to buy property in a foreign country, as long as you don't use it yourself until you retire. That gives you the possibility of getting a residential golden visa with that property, although at this point your options in Europe are limited to Greece, Cyprus, and Malta.

There's no need to invest directly in a country's stock market to get a golden visa, since that's typically not one of the options. Instead, you must invest in approved investment funds or bonds, which are typically not traded on the stock market. For example, Portugal will give you a golden visa if you invest €500,000 in venture capital funds.

Once you have got legal residency in a country, you should have no problem opening a bank account and a brokerage account. Doing so before you become a resident is quite difficult unless you have substantial money to invest, or you do so through an SDIRA, which typically can qualify you for a foreign brokerage account.

[IL Moderator]

Hi @DTAYLOR03NM We’ve checked in with Ted Baumann, our Global Diversification Expert, to get an answer to your question. This was his response,

Portugal is the best option. You can qualify for either permanent residency or citizenship after five years legal residency, and the clock starts ticking from the day you submit your application.

[IL Moderator]

Hi @LARRYHUNTER59 We’ve checked in with Ted Baumann, our Global Diversification Expert, to get an answer to your questions. This was his response,

To get a permit to live more than 90 days at a time in Spain, you need to apply for either a non-lucrative visa, which requires a certain monthly passive income, or a digital nomad visa, which requires a certain amount of income from remote work. Simply having a residence there, either through rental or ownership, doesn’t qualify you for long term residency.

[IL Moderator]

Hi @COURYSTEPHEN We’ve checked in with Ted Baumann, our Global Diversification Expert, to get an answer to your question. This was his response,

Well, I'm not a retirement planning expert, but from a global diversification perspective, there are two things you should keep in mind.

The first Is that once you hit a certain age, you must take distributions from your retirement funds whether you need them or not. That may be more than you need if you’re living abroad, where the cost of living is significantly lower than in the US. When you take an RMD, that counts as global income in the year you take it, which will be taxable both in the US and in Italy. So, it might make sense to put some of your retirement funds into a taxable brokerage or mutual fund account in advance, so you don’t end up with an excessive income and therefore tax burden in retirement.

The second thing to bear in mind is that Roth IRAS are often treated differently by foreign countries than other types of retirement accounts. Some countries give you a steep tax discount on retirement income if you meet certain requirements, like living in small towns in the south of Italy, where the flat tax is 7 per cent. But Roth income doesn’t qualify because it’s not considered retirement income under Italian law. The good news is that there aren’t any RMDs on Roths.

[IL Moderator]

Hi @MNUNAN We’ve checked in with Ted Baumann, our Global Diversification Expert, to get an answer to your question. This was his response,

Well, the only way to do that is to live in a country that doesn't tax those things or gives credit for taxes already paid on those items. You don't say where you're currently living, so I don't know the specific legal framework there.

Some countries don’t tax capital gains, including Belgium, Switzerland, Singapore, and most of the Caribbean islands. Others offer a flat tax rate to retirees, no matter the source of their passive income.

The other option is to move to a country that levies no tax at all on foreign source income of any type, such as Belize, Costa Rica or Panama.