How To Internationalize Your Life and Save On Taxes, Invest in Real Estate, and Plan for Emergencies
Discover the strategic advantages of obtaining residency in foreign countries in our latest video! Whether you're looking to diversify your investments, optimize your tax obligations, or establish a secure plan for emergencies, understanding the process of acquiring international residencies is crucial. We delve into how securing residencies can enhance your investment portfolio, provide significant tax savings, and ensure you have a safe haven during global uncertainties. Join us as we explore the benefits and considerations of setting up home bases abroad, including actionable tips and real-life examples to guide you through this complex landscape. Whether for financial leverage or peace of mind, learn why expanding your horizons could be a wise decision in today’s interconnected world.
Benefits of International Residency
Obtaining residency in foreign countries can provide strategic advantages for individuals looking to diversify their investments, optimize tax obligations, and establish a secure plan for emergencies. By securing residencies in countries with favorable tax regimes, such as the United Arab Emirates or Paraguay, individuals can potentially benefit from significant tax savings compared to high-tax jurisdictions like California.
Furthermore, international residencies can open up new economic opportunities, allowing individuals to invest in real estate and other assets at a lower cost structure than what is typically available in the United States. This can lead to improved lifestyle choices, such as owning a beachfront property in Mexico or enjoying the high level of public safety in cities like Dubai.
The Process of Acquiring International Residencies
The process of obtaining residency in foreign countries can be complex, but understanding the steps involved is crucial for those looking to internationalize their lives. Factors such as the specific requirements of each country, the legal and tax implications, and the logistics of managing multiple residencies must be carefully considered.
Individuals interested in acquiring international residencies are encouraged to seek guidance from experienced professionals, such as the team at AdviseRE, who can provide valuable insights and assistance in navigating the process. By working with international tax experts, individuals can ensure that they are making informed decisions and taking advantage of all the potential benefits that international residency can offer.
Transcript of Video:
Hey everyone, Stephen Morris here with AdviseRE, and today we're going to talk about something a little bit different, although very much related to taxes and real estate. One thing that you may have noticed, especially in our blog and our recent videos, is that we're very big proponents on internationalizing your life. So what does that mean exactly? What does it mean to internationalize your life? A lot of Americans don't really focus on this topic, I’ll be very honest with you. Although we're starting to see a little bit of an uptick, a little bit of an interest. So with that in mind, let's dive into it and let's talk about the details here. Most Americans have one passport and one residency and that's straight to the United States. Let's be clear, the United States passport is fantastic. It can get you into close to 190 plus countries visa free. It allows you to travel to pretty much everywhere in the world and it's generally a very respected, very useful passport to have. So the question is why have more than one particular passport or permanent residency? Is it to become a spy and be like, - Bond, James Bond. - It’s not really for that reason at all. The main reason for this is to have the freedom to travel to multiple places and to establish multiple bases of operations around the world and ultimately also to have backup opportunity. - Yeah, yeah. Okay, that's smart. - Let's recall back a few years ago, US passport holders were not allowed to enter certain countries for a brief period of time. This is problematic, particularly if there's a global emergency or if there's some sort of pressing need to leave the country, then your opportunities to do so under one particular passport may not be allowed. Now that's more for an insurance and that's more for like a backup, worst case scenario. I'm not here to alarm you. But having that option is one great benefit. The next one is your ability or your right to actually live in another country, invest in real estate and take advantage of not only US international tax laws, but favorable tax regimes as well in other countries. So for example, you may have seen us be a big proponent of the United Arab Emirates, which has a very low tax rate and a very favorable business environment, which could be very beneficial to you, especially if you're considering expanding your operations or buying real estate in other countries like the UAE. You might have a very favorable tax outcome. Also on top of that is the fact that most countries won't even allow you to buy their real estate unless you are a permanent resident of their country at the very minimum. - Are you serious? - So having this right to be able to buy this property opens up investment opportunities for you, which normally wouldn't be available to anybody else, right? So you have less competition towards certain asset classes. You might be able to squeeze in and find a niche and make quite a killing in some particular country. Since we're a tax firm primarily, let's talk primarily about the tax benefits. I have an article link below which points to what your tax outcome could be if you don't work in the United States any longer and you completely relocate outside of the US. In the UAE, most likely your tax outcome will be somewhere between 10 to 12% of tax rate. In other countries, for example, that have a territorial tax system like Paraguay, again, the same sort of concept. You might be around 10.5 to 11%. - Wait, what? - Well, number one, we have the foreign earned income exclusion, which will allow you to exclude over $120,000 per year per person. So if married, filing jointly, it would be $240,000 a year. And on top of that, housing costs over a certain amount are also excluded from taxable income. In addition to that, with the right corporate structure, the income earned from your business overseas could have an effective tax rate of around 10.5% as of the time of this video. So that's a very favorable thing. Compare this to California, for example, which would take you somewhere at the top rate of 50%, even 52% once you start factoring in Medicare taxes. In my world, I'd rather pay 10.5% than 52%, but I'm going to leave that investment decision up to you. In terms of other economic opportunities, I've seen clients go out there and be very successful in other countries, which just never seem to be possible for most people in America. I've seen clients go out to the UAE and buy condos in single family homes that generate substantial rental income at a much lower cost structure than, say, Los Angeles or New York. I've seen clients go out to different countries and source labor for much cheaper and much more talented as well. So this could work out very well economically for you in terms of an operating business. There's just a lot of opportunities outside the US that I feel like most people, especially these days in the US, haven't really focused on or haven't opened their eyes to. And that's one of the main reasons why we push this internationalizing your lifestyle concept. The other thing to consider is the fact that your lifestyle might improve, whether you want to have a beachfront property in Mexico, which is substantially cheaper than a beachfront property in Malibu. Or if you wanted to consider public safety, for example, Dubai is probably one of the most safest cities in the world from a public safety perspective. These are other major considerations that you might have that with a permanent residency and ultimately a passport, you can unlock those benefits and move into a country like this to take advantage of them. We actually have a program set up to assist you with getting permanent residency in three countries so far, and we're looking to expand that portfolio out. The first one, of course, is United Arab Emirates. We also assist clients with getting permanent residency in Paraguay. And lastly, Armenia, and we're looking to expand further. If you have any recommendations or curiosity around other countries that you were considering moving to, then feel free to contact us at this email here and we'll be more than happy to talk to you about the tax, real estate environment, and the logistics around getting a residency in that particular country. Thanks so much for joining and look forward to seeing you in the next video.
