Securing a second residency is a crucial aspect of a strong Plan B.
It gives you another place where you are entitled to live, work, and invest if your home country ever becomes unlivable or undesirable.
For a long time, Panama’s Friendly Nations Visa was a no-brainer for anyone looking to secure an easy second residency.
Citizens of most Western countries could obtain legal residency in Panama by setting up a local company in Panama and depositing around $10,000 into a bank account. Plus, you needed to spend very little time on the ground in Panama in order to maintain the residency status.
This was one of the best deals in foreign residency. Easy, fast, and very flexible. But for years I also warned that Panama’s Friendly Nations Visa is too good to last forever!
Sure enough, last summer, Panama made substantial changes to its Friendly Nations Visa rules which make the program much less attractive.
And this is pretty common— great opportunities seldom last.
Sometimes when a government is looking to attract foreign capital by offering a great tax, residency, or citizenship deal, they often overshoot and make the program TOO good.
Word spreads, and soon the government is inundated with people trying to take advantage of the opportunity.
Eventually the government becomes too overwhelmed with demand, so they change the terms and make the program less attractive.
The same thing happened with Turkey’s Citizenship by Investment (CBI) program. It was recently possible to obtain a Turkish passport by spending just $250,000 on virtually any Turkish property.
You could even rent out the property to generate cash flow on your Turkish property, so you could essentially obtain a Turkish passport for free AND have a nice investment. It was a hell of a deal.
We wrote that the Turkish government would eventually realize their mistake and make changes to the program. And they did. In April, Turkey raised the minimum investment threshold to $400,000. It’s still attractive, but obviously not as compelling as before.
We’ve also said for years how favorable Puerto Rico’s tax incentives are— a 4% corporate rate for qualifying businesses, and 0% capital gains for individual investors.
These incentives still exist. However there have been several bills introduced to Puerto Rico’s legislature that would radically adjust these tax incentives.
And some smaller changes have already been passed. For example, the charitable donation requirement has doubled. And there are requirements to purchase real estate and hire a certain number of people.
Everyone who applied before these changes were made, however, is grandfathered under the old rules.
But Puerto Rico’s tax incentive rules are bound to change again in the future. Or they could be eliminated entirely for new applicants.
Portugal is another example: they government there has started to tighten some of its best paths to residency.
There are plenty of reasons to love Portugal as a Plan B destination; it’s a great place to live beloved by many expats. It’s crypto-friendly, inexpensive, safe, and offers tax breaks to new residents.
And it has been easy for foreigners to become legal residents.
One way to obtain Portuguese residency is the D7 visa for remote workers. This is for people who want to live in Portugal for at least six months each year. Officially, you need to show income of at least €705 per month OR savings of about €8,500.
This is a very attractive residency option, and demand for the D7 visa has skyrocketed accordingly.
And while nothing has changed in the official law, we have received word from our service providers that the government is starting to scrutinize these applications more. They also want to see more income and savings.
To stand a decent chance of being approved, they tell us that applicants should be earning a minimum of €2,000 per month AND show at very least €8,500 of savings deposited into an Portuguese account.
This could create a bizarre chicken-and-egg problem, because we know at least two Portuguese banks which only accept foreign clients after they’ve obtained residency.
So you need a local bank account to obtain residency. But you need residency to open a local bank account. Wonderful.
The second favorable residency option in Portugal is its Golden Visa program.
One way to qualify is to invest in Portuguese real estate. The investment could be as little as €280,000 if you buy an older property that needs renovation in a rural area. If you want something newer in a popular area, the starting price is €500,000.
But because this program has been so popular, property prices in places like Lisbon and Porto have skyrocketed.
Therefore, starting in 2022, the Portuguese government changed the rules so that these coastal regions like Lisbon, Porto, and Algarve no longer qualify for residency under the Golden Visa program.
Obviously, anyone who took advantage of the program several years ago is still grandfathered in under the old rules. But for new applicants, it’s more difficult.
The bottom line is, strike while the iron is hot, or the opportunity may pass.
Countries constantly change their laws and policies which govern residency, citizenship, and tax incentives.
Definitely do not rush into something you don’t understand.
But if it looks like a particular option may work for you, don’t procrastinate. Do the research, and make a conscious decision to either do it or not do it. Because if you wait, the rules will almost certainly change.
You can start, for example, by sending an email to one of the service providers we have vetted for our Sovereign Confidential members.
Our list of contacts to help implement various Plan B strategies is one benefit of our premium services. We also provide detailed reports on every program mentioned in this article.
But we don’t just publish the information and leave it at that.
We always keep track of the options we write about, and update our members when changes inevitably occur.
For example, we send out a Question and Answer report each month, where we answer questions members have about crafting their Plan B, and qualifying for various programs.
We generally start these reports with updates— the June Q and A for example started with two updates on Portugal.
This helps our premium members gain supplemental information on different strategies we have covered in the past. And it also helps them stay up to date on changes.
If you think you could benefit from this type of detailed information, guidance, contacts, and updates, consider joining Sovereign Confidential today.