Residency and Taxes in Europe: Why You Shouldn’t Worry…

I recently had the privilege of presenting my ideas on global diversification to International Living’s Fast Track Europe conference in Portugal… although airline problems meant I had to do so virtually. (Thanks, AV team!)

I was quite disappointed not being able to be there in person. International Living conferences are a two-way street for me. I tell people how I think they should approach critical issues like residency, citizenship, investment, and so on.

But more importantly, people tell me in person what they’re experiencing as US expats.

Those experiences shape my message to potential expats in my Global Citizen service.

Nevertheless, I did listen carefully to many of the roundtable discussions and the questions from the audience.

Two things jumped out at me that I want to share today…

First, the European residency “scene” is changing rapidly.

One by one, countries are abolishing residency by real estate investment—Spain is the most recent country to announce it will get rid of its “Golden Visa”—and replacing it with an emphasis on other investments or independent means visas.

“Independent means” can mean income from a job outside the country or passive income from retirement or investments.

Countries are doing this because the economic benefits of a long-term full-time resident bringing money into the country regularly are much better than a one-off investment in real estate.

That has implications if you’re looking to become a resident of a European country…

The main one is financial. Gaining residency through property purchase means you must have a big chunk of cash to make the purchase.

But getting residency via “independent means” only requires showing a regular monthly income stream from remote work or passive sources (like retirement income)… It could be much easier for you.

Anyone looking to diversify themselves physically to Europe needs to understand the financial requirements and arrange their affairs to meet them.

If you want to move to Europe and don’t address this until near the end of the process, you can be disappointed.

For example, I have spoken to several people in my Global Citizen consultation service whose anticipated monthly income is just below what will be needed to get residency.

If they’d paid attention to the requirements earlier (like you can, starting now), they might have been able to make additional income-generating investments to get them over the line.

The second real-life lesson from the conference is the importance of understanding your tax situation in Europe… and not getting put off by the initial numbers.

In my experience, far too many potential expats focus too much on tax rates and ignore the potential benefits of living in a society with a government well-funded to provide quality public services.

I made this point in this space last week, but hearing people at the conference repeat this point based on their own experience reinforces it…

Several people who spoke in the roundtable sessions or from the floor pointed out that the low cost of healthcare, food, utilities, and even accommodation far outweighed the additional tax some of them must pay to a European government.

They’re still saving on their cost of living overall…

And you’ll never pay taxes twice—because you’ll get a credit for whatever you’ve already paid to the IRS.

Together, all this feedback from the conference confirms something I’ve been thinking for some time.

If your goal is to find a home outside the US, the earlier you start, the better.

And the better informed you are, the more successful you’ll be.

That’s precisely why I’m ramping up my Global Citizen consultation service, which gives you the straight info you need to make informed decisions about your next global adventure…