There is a lot of threads about how to build wealth.
This one should be about how to make the most value of the existing portfolio, once you retired. So , we look for the perfect country.
A couple of criteria…
tax free or very low tax on wealth, dividends and interest
cost of living
quality of life (weather, nature, doctors, restaurants, etc.)
In no particular order i think about 3 different options…
UAE.
Tax free and only requires 5 days of residency per year. So you are free to travel most of the year with little taxes. Is rather on the costly side in terms of cost though.
Thailand
Also tax free income from outside the country. Do retirees pay income tax? | ThaiEmbassy.com
Affordable cost of living. Very nice weather…
Language and distance to Europe a downside for me.
italy
Apparently only 7% tax on income outside of italy. New Italian tax regime for retired people abroad
Maybe somebody can onfirm this.
Seems a very attractive offer, close to CH.
Probably one of the most loved countries in Europe
I see a risk that they change legislation, as the EU is putting pressure on such shemes…
Greece has zero taxes on UCITS ETF capital gains or dividends and I think just 5% tax on other dividends, food is god-tier, but the infrastructure is patchy, society is ass backward, gets very hot in the summer, political basket case, healthcare is in trouble, and real estate is not cheap at all in the major cities. So if you don’t have enough money to shield yourself from the environment it’s not a great option.
Portugal is also expensive, my Portuguese friends tell me. Dunno how attractive Poland, Czech Rep., Hungary are, they are good countries (with sketchy politics) but that probably means they’re not cheap. I hear Estonia, Lithuania are good countries as well.
I’d personally look at the Balkans, don’t want to be outside of Europe as I have zero connection to other regions.
First of all: tax alone is no reason to leave, I paid more in a tax-free country than I pay in Switzerland. The reason are U.S. dividends, my main source of income. If there is no double tax treaty you pay 30% withholding tax. In Switzerland you pay the higher of 15% or your Swiss tax rate. For tax reasons Switzerland actually is an immigration country.
I prefer to live somewhere where I can relate to the culture and speak the language. Fortunately when I was young I did travel a lot and learned quiet some languages. I list some countries from memory, please do your own research:
Costa Rica: no treaty, used to have no tax but announced an expat tax. A bit complicated to get a residence permission which then is limited to two years. Almost impossible to get nationality except when marrying a local. Not cheap. Peaceful people with low crime rate.
Panama: low tax for expats. Currency is USD, only coins are used in local currency, Balboa.
Paraguay: no tax for expats, easy to get residence permission and nationality. Very cheap country with big water reserves. High crime rate.
Some caribbean islands like Antigua-Barbuda. No tax, easy to get nationality (buying real estate), very expensive.
quickly looked up the countires mentioned regarding taxes. please correct if any other opinions
Malta… Tax Advantages: Foreign income remitted to Malta is taxed at a flat rate of 15% with the retired individuals being the main beneficiaries from this measure. However, any profits arising from a capital asset located overseas are not subject to tax in Malta, a factor that makes the country popular with pensioners with investments.
Portugal
A special tax rate of 20% applicable to income derived from “high value-added activities.”
Tax exemption on foreign-source income, provided it is already taxed in the source country. Switzerland has a Double Taxation Agreement (DTA) with Portugal, which covers most types of income.
A flat tax rate of 10% on pensions from a foreign source, as opposed to the standard progressive rate of up to 48%.
Greece
After spending more than 183 days in Greece, expats become tax residents in the country. The good news is that retirees coming from other countries will only pay an annual instalment of 7% on their foreign income for 15 years.
That’s true (Greek here), Greece has put in place a number of substantial tax advantages for people returning, the question some of us have is whether it’ll last.
Yes, it’s clearly not the most tax-friendly canton. It’s not the most favorable country either, but I love this country and feel very comfortable here.
At the moment, my girlfriend’s parents are retired and they live in Valais, where they can enjoy their family and friends (they travel all over Valais and the other cantons where their friends are). They also travel a lot abroad, so they’re out of Switzerland half of the time.
The advantage of living in the Valais for them is that they love nature (especially hiking) and winter sports (lots of different resorts close to where they live).
Taxes aren’t too high in the Valais, and when it comes down to it, they don’t spend a lot of money traveling to countries like South America and Asia (mostly backpacking).
In the end, I think that the future place of retirement should be a place that has meaning for oneself (origin, family, crush of a particular city; as instance for me Wien is one of the most beautiful city I visited) rather than just in purely financial terms. I can’t see myself living in Dubai at all, for example; it’s clearly not a place I’d feel at home in, and given the prices… I’m not sure it’s worth it.
Personally, I think we’re very lucky to live in Switzerland.
Health insurance and services is an issue too in retirement age.
In Switzerland there are protests because of the high costs. But comparing what you get here and in other countries the costs are actually low, especially for older people or people with preconditions.
Out of Switzerland I had a BUPA policy. But I was much younger, they excluded many things and it was more expensive than Krankenkasse in Switzerland. And I think I had a $10’000 deductible.
You don’t find that quality of health services like in Switzerland in many countries and if you do you pay much more. Two of my friends already died in Asia because of poor health services.
I love this thread. I’m doing a recon trip to Montenegro for two weeks this spring to see if it’s potentially a place we’d like to retire to. Seems good;
9% flat taxes
Low cost of living
Easy residence permit through real estate
Easy access to decent skiing
Beaches, nature, etc.
Still feels pretty European
Seems like a fair size of ex-pat style / digital nomad community also. Well this is all based on what I can read, will report back in June!
Yeah, these sort of countries, they won’t stay cheap for long, though…
Most people from the Balkans are really wonderful at the individual level, though many of these countries have serious political/societal issues.
Been saying this for years already and people disagree with me. Probably because they haven’t had the bad luck to need to use Swiss healthcare, then they’d see the CHF2500 deductible go up in smoke in a week (I blew through mine in literally two weeks a few years back), and then it’s all top notch treatment essentially for free. For me healthcare is a serious consideration too.
I think no one has mentioned capital gains tax, which is absent in Switzerland. I haven’t looked at it, but this alone is a strong reason to remain in Switzerland. You can still find nice places with low taxes and cost of living, e.g. Valais, Schwyz, Fribourg.
I’m from Estonia so that’s my likeliest retirement country.
Pros:
cost of living (at least compared to Switzerland), even though it’s getting more expensive
mild climate even after the inevitable effects of climate change
single payer health care system, although I’m not sure how this would work for a foreign retiree. Private healthcare insurance, if needed, costs about 1/10 of what basic healthcare costs in Switzerland
Cons:
nearly half of the year it’s grey, wet and dark. After climate change it might be just dark though
geography, being next to Russia who tends to invade neighboring countries every once in a while
Neither here or there:
There is a capital gains tax at the same rate as the income tax (currently 22%) on shares, but this is only due after the payments out exceed payments made to the ‘Investment Account’ system. So if you have paid in EUR 100,000 to your investment account, capital gains tax will be payable only on the part of payments out in excess of EUR 100,000.
I would actually consider Ticino as my retirement “base”. Love Ascona & Locarno and the whole Lago Maggiore. Lugano too. Lots of sun, lakes, mountains, close to Italy but still in Switzerland. And I love visiting Croatia, Montenegro is also on my travel list.
Tbh anywhere around lake Zurich, Zug or Lucerne would be fine for me, if not for the cloudy winters, and high real estate prices. I think I’m slowly getting too old to leave Europe. Dubai is fine for holidays, but I need some variety in my life, some destinations to visit every weekend, without having to hop on a plane (flying is stressful).
Personally I think retirement should be where you feel home and have life long connections (friends , family etc) Otherwise it would be really lonely (even though a bit better financially) and all the money would mean nothing.
It doesn’t necessarily need to be CH, but if you lived most of your life in CH, it might be tough to have true connections elsewhere
I think people who visit their home countries often (expats) might still be fine in their home countries.
Most probably my HQ will be in Portugal: own a small house, private health insurance (for faster attendance) and minimize the bills to travel regularly. The cost of living has increased drastically and the prices are pretty much the same or higher than France or Germany. If you are well established, life quality is pretty good though. It won’t be an easy decision since my kid is growing up here and there’s always mixed feeling of leaving and not being closer to him. I just want to go where I have peace of mind and good health. “I am tired boss”
Only income generated in Mauritius or transferred to Mauritius is taxed.
Assets or wealth accumulated before becoming a tax resident in Mauritius are treated as capital, not income. So it can be transferred without triggering income tax.
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