Hi all. I have been reading various threads, and it is quite clear that "one man's meat is another man's poison".. But hopefully the collective wisdom here can help me find my "meat".
I currently live in an incredibly badly-run country. Pick a type of infrastructure - apart from tax (they are great at collecting tax!) - and it is falling to pieces. It is also becoming harder to work because of various legislative regimes.
So I am looking at moving countries, and effectively taking early/forced retirement. (I do not see myself being able to work in my current, fairly specialized, line of work after I move).
I also need to state early on that I am not a HNWI. I cannot invest hundreds of thousands on a piece of property or the like, just to "buy" a Golden Visa or residency somewhere. I need to go somewhere where cost of living is relatively low, and which will allow me in.
It also has to be a place I would WANT to live - including decent weather (one thing my current country does have is great weather!) So a place like UAE does not appeal - that kind of blistering heat is not my scene. Places with zero centigrade or less winter temperatures are equally not my scene.
Portugal ticks a lot of my boxes FROM WHAT I HAVE READ/ RESEARCHED (I have not yet been there thanks to this stupid worldwide shut-down.)
For the first few years of residency I could fund most of my living expenses from my retirement savings - drawing the max allowed from the retirement funds per year, and paying the 10% tax as per NHR rules - this would be exhausted after around 6 or 7 years because of the max draw-down. Thereafter I would need to live off my investments, and herein lies the next "wrinkle".
Most of my (limited) investments are in the form of US-listed shares. At present, I pay dividend tax (taxed at source by broker), and income tax on the gains I make from trading/holding. Under the Portuguese NHR rules, these gains would be taxed at 28% for the 1st 10 years, as I understand it, and thereafter at normal rates - either way this is more that I currently pay on the gains so ideally I'd like to (legally) reduce this, if possible?
Apart from this, I am also aware that when I die (be it in 2 months or 2 decades), I will be liable for 40% estate duties on the portfolio as a non-US citizen - and that's pretty "ouch".
To overcome this problem, I thought of registering an offshore entity to house the shares.
Incorporating in Panama is one option I have considered, partly because this is another country I could consider living in (at least part of the time, or in future), and having the IBC would also fulfill one of the requirements for the Friendly Nations Visa.
HOWEVER I am confused/concerned about the rules between Portugal and Panama. On the one hand, I understand that Panama is on the blacklist - and would thus incur taxes at 35% - but on the other, Panama and Portugal are supposed to have tax treaties - so which actually applies??
I am open to other suggestions as well, bearing in mind the limitations I have raised above. I know it has been stated in other threads that if you can't afford ~5k a year in taxes then you should not be looking at offshore in the first place, and ideally I do not want spend thousands a year to run a structure if its not going to actually provide a benefit, but if there is a way I can:
- get to live elsewhere AND
- pay less tax while doing so AND
- not lose 40% to the IRS when I die,
I would really like to do so.
I look forward to your comments - thanks in advance.
I currently live in an incredibly badly-run country. Pick a type of infrastructure - apart from tax (they are great at collecting tax!) - and it is falling to pieces. It is also becoming harder to work because of various legislative regimes.
So I am looking at moving countries, and effectively taking early/forced retirement. (I do not see myself being able to work in my current, fairly specialized, line of work after I move).
I also need to state early on that I am not a HNWI. I cannot invest hundreds of thousands on a piece of property or the like, just to "buy" a Golden Visa or residency somewhere. I need to go somewhere where cost of living is relatively low, and which will allow me in.
It also has to be a place I would WANT to live - including decent weather (one thing my current country does have is great weather!) So a place like UAE does not appeal - that kind of blistering heat is not my scene. Places with zero centigrade or less winter temperatures are equally not my scene.
Portugal ticks a lot of my boxes FROM WHAT I HAVE READ/ RESEARCHED (I have not yet been there thanks to this stupid worldwide shut-down.)
For the first few years of residency I could fund most of my living expenses from my retirement savings - drawing the max allowed from the retirement funds per year, and paying the 10% tax as per NHR rules - this would be exhausted after around 6 or 7 years because of the max draw-down. Thereafter I would need to live off my investments, and herein lies the next "wrinkle".
Most of my (limited) investments are in the form of US-listed shares. At present, I pay dividend tax (taxed at source by broker), and income tax on the gains I make from trading/holding. Under the Portuguese NHR rules, these gains would be taxed at 28% for the 1st 10 years, as I understand it, and thereafter at normal rates - either way this is more that I currently pay on the gains so ideally I'd like to (legally) reduce this, if possible?
Apart from this, I am also aware that when I die (be it in 2 months or 2 decades), I will be liable for 40% estate duties on the portfolio as a non-US citizen - and that's pretty "ouch".
To overcome this problem, I thought of registering an offshore entity to house the shares.
Incorporating in Panama is one option I have considered, partly because this is another country I could consider living in (at least part of the time, or in future), and having the IBC would also fulfill one of the requirements for the Friendly Nations Visa.
HOWEVER I am confused/concerned about the rules between Portugal and Panama. On the one hand, I understand that Panama is on the blacklist - and would thus incur taxes at 35% - but on the other, Panama and Portugal are supposed to have tax treaties - so which actually applies??
I am open to other suggestions as well, bearing in mind the limitations I have raised above. I know it has been stated in other threads that if you can't afford ~5k a year in taxes then you should not be looking at offshore in the first place, and ideally I do not want spend thousands a year to run a structure if its not going to actually provide a benefit, but if there is a way I can:
- get to live elsewhere AND
- pay less tax while doing so AND
- not lose 40% to the IRS when I die,
I would really like to do so.
I look forward to your comments - thanks in advance.
