Things to Consider Before Moving to a Different Country

Visas, Taxes, Pensions…..and Divorce laws.

If you’re reading this, you’ve probably considered moving to a different country. But..before you board that First Class flight and head towards your new life, let’s explore a couple of topics you should consider.

Visas, Taxes, Pensions…..and Divorce laws.

*Note that I'm not a legal expert. My expertise comes from countless hours spent in busy immigration offices in various foreign countries, dealing with bureaucracy, and interacting with diverse expats who have shared their experiences with the authorities.

Visas

Unlike Western countries, many foreign nations are quite selective about who they allow to enter. For example, Mexico recently raised its income requirements. For many prospecting digital nomads and self-employed people, the requirements might be difficult to prove. At the end of the day, you wouldn't argue with a nightclub bouncer whose job is to keep out troublemakers; you'd follow the rules or go elsewhere.

Long-term stays in foreign countries generally fall into four main visa categories:

Working or Business Visas

These visas permit you to work or conduct business legally in another country. Unless you're independently wealthy or plan to move to a less regulated, developing nation where rules can be bent, you'll likely need one of these visas. Remember that different countries have various requirements for working visas, such as educational qualifications or a job offer in advance. Many people who pursue this path are typically recruited in their home countries, with their employers helping with the visa application process. In some cases, you might even be able to sponsor your visa, especially if you're an entrepreneur. Medical tests are often part of the visa application process.

The validity of these visas can range from one to five years, typically requiring renewal. Renewal often involves demonstrating that you still have a job or business to justify your stay in another country. It's essential to stay out of trouble, like unpaid taxes or legal issues, as these can result in being kicked out of the country.

Permanent Residency and Citizenship

If you spend a considerable amount of time in another country, you might become eligible to apply for permanent residency or even citizenship. Permanent residency usually offers a more favorable option but typically requires you to be a temporary resident for a specific period. I have seen anywhere from 2-5 years depending on the country. If you're planning to stay long-term, pursuing permanent residency is a practical choice, although the specific requirements can vary significantly from one country to another. Citizenship streamlines the visa renewal process, but it's crucial to approach it carefully. Some countries do not permit dual citizenship, so you may need to give up your previous citizenship before obtaining a new passport. This decision can affect your benefits in your home country, like Medicare, pensions, and the right to residency. Additionally, consider how it might affect your children's eligibility for your previous nationality.

Spouse Visa
Marrying a foreign national often allows you to live in their country by default, typically offering a convenient and stable visa that doesn't require the paperwork and doesn't carry the risk of arbitrary deportation. However, spouse visas are associated with potential risks, especially in countries where divorce could lead to eviction. In some places, the duration of your marriage or having local children can determine whether you can stay.

Tourist Visa/Permits

In some countries, you can stay almost indefinitely by renewing tourist visas. While this approach may work in some locations, it can be cumbersome in others, requiring a bi-annual "visa run" to a third country since renewing within the host country is not allowed. Some nations don't allow visa renewals, so it's crucial to research and understand the regulations in advance. Some countries are stringent about not allowing unemployed visitors to extend their stay if it could be better used by a local or a more productive foreign national. In some cases, people initially secure a tourist visa, find a job while they're there, and then switch to a working visa. However, this practice is not universally accepted.
Unfortunately…Visa runs are slowly getting phased out as countries upgrade their systems. Some countries can track when you come in and out of the country and deny visas based on that. In Mexico’s case, the 180 visa is at the discretion of the visa official. Sometimes, you might get 180 days, sometimes, they might give you 2 weeks.

Regardless of the visa path you choose, It’s up to you to stay informed about changing regulations.

Tax

Taxes are one of life's two unavoidable certainties (for most), and they must be paid somewhere. It's essential to consider Double Tax Agreements that prevent you from paying income tax in both your host country and your home country. Ensure that you thoroughly examine these details before starting work abroad.
If you are American, you have to file taxes whether you have income or not.

Also be aware of tax advantages. Many Americans can use the Foreign Earned Income Exclusion Act And or the Foreign housing exclusion.

Pensions

If you've been contributing to a pension system in your home country, you likely expect to access those funds in your retirement. However, many countries stipulate that you must reside in the country for a substantial part of the year to receive your pension. Also, be aware that pension legislation can change rapidly, and options for transferring pension funds to your new country of residence may be available.

As for investments like 401(k)s and superannuation, you might assume that the government shouldn't impose any conditions on your own funds. However, trusting your finances to the government may carry risks. At present, your investments remain untouched, but in the future, as societal dynamics change, the government's stance might change too.

..Divorce Law

Plenty of people are interested in moving abroad to escape unfavorable family laws and build traditional families in more supportive environments. If this is your goal, it's essential to recognize that "foreign law" doesn't always mean "fair law." Many jurisdictions have divorce laws similar to those in California, which can be surprising. Therefore, thorough research of local laws and their interpretation is crucial when planning to marry and establish a family abroad. Even if divorce isn't part of your plan, unjust laws can disrupt healthy relationships and create family conflicts. If these laws disproportionately affect men, you can choose a different location or embrace the risk, but it's essential to make an informed decision.

At the end of the day, it’s up to you to do your due diligence before moving to another country

If Mexico is in your cards, I would also recommend checking out Outbound Mexico - They are real lawyers that CAN provide you with more detailed information.

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