Beyond the 183 Rule: Three Questions You Should Ask Yourself When Choosing a Tax Residency Country

Here we are again, touching upon the never-ending subject of taxes. Tax residency is an appealing concept, especially when it's focused on the right jurisdiction. According to the 183 rule, you become a tax resident in a country after spending over six months in it.

Now, the million-dollar question is “how do I choose the right tax residency country”? What should I think of when making such an important decision?

We understand that choosing a tax residency can be challenging. This is why Mundo has prepared a set of three questions you should ask yourself when choosing the country you will call home for taxation purposes. 

Beyond the 183 Rule: The Importance of Choosing The Right Country for Tax Residency

If you’re going to make this move, better do it right. After all, if you're thinking about this in advance, it's because you are designing a financial strategy, and the last thing you want is for it to backfire.

Now, we'll explore the concept of tax residency beyond the 183 rule by presenting three questions that, in our opinion, will help you get on track.

1-Easiest Countries to Get Residency: What Country Offers the Fastest Path to Legal Residency?

Let's not forget the basics. If you want to be officially a tax resident, you need to have a legal permit to stay in the country for more than six months a year, according to the 183 rule. In simple terms, you need to get residency. With the risk of being obvious, we mention that choosing a country with long residency processes would be detrimental to your financial plan. Moreover, in our days, we can't afford to waste any time.

So, ask yourself “what are the easiest countries to get residency”? Panama is a good example offering at least three excellent programs that cater to different needs. Since the construction of the canal, Panama has received workers from abroad and this tendency has remained. 

Now, the canal is a powerful machine that creates opportunities, facilitates business, and boosts the local economy. This creates a need for a workforce and qualified professionals while attracting international businesses that bring their own people. If you're wondering what are the easiest countries to get residency, Panama is definitely one of them. Luckily the government has set out interesting immigration visas like the Qualified Investor, which provides permanent residency, and also other alternatives, like the Friendly Nations visa, offering temporary permits.

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Easiest Country to Get Citizenship in Europe

Let’s not forget that citizenship also provides a permanent stay permit. What is the easiest country to get citizenship in Europe, the Americas, or Asia? At this point, the most convenient approach is to look for citizenship by investment programs.

What is the easiest country to get citizenship in Europe? Nowadays, it's probably Turkey since programs like Cyprus have been removed and others, like Montenegro, have completed their lifecycle.

Nonetheless, Mundo recommends other options. Antigua and Barbuda, for instance, is an Eastern Caribbean pearl offering an innovative opportunity. One of the government-approved projects consists of investing in premium villa estates. Through this approach, you will be obtaining citizenship and having your own house that you can use for yourself or for rental purposes.

2- What Country Has Territorial Taxation or Lower Taxation Rates If I'm Planning to Work or Do Business Here?

It's important to understand that the 183 rule makes you a tax resident of the country, but this is not always convenient. Do you have a business that brings in millions of dollars? Then you want a tax residency in a territorial taxation country, so all those millions won't be taxed. It's worth noting that this is a totally legal approach.

However, you may want to do business in your residency country or to wire yourself money for expenses, activities that will be taxed since they are conducted domestically. This is why the ideal tax residency country should have at least low personal income taxes and, ideally, low corporate tax rates.

3- What Country Offers a Safe and High-Quality Lifestyle So That I Can Spend Most of My Time Here?

Six months is a lot of time, and you have to spend it here to prove your tax residency. This is why you must choose a place you like, that is, a country with high living standards, premium real estate, good schools and universities, an active social environment, and preferably beautiful nature.

Disclaimer: The Mundo team and the editorial team do not take responsibility for the opinions stated in this article, or for how readers can interpret them. This article is published as a general information piece and should not be taken as financial, migration, or tax advice. Tax and tax residency are complex matters that should be addressed seriously, carefully, and by professionals.

Find The Easiest Countries to Get Residency and Tax Residency with Mundo

Whether you want to look for the easiest countries to get residency or go for the citizenship option, Mundo is here for you. We have ample experience in Panama and Panama residency since a large part of our team is located here.

Contact us and ask about connections with agents offering citizenship by investment in some of the key programs nowadays. We'll be happy to help you find the easiest countries to get residency and set up the structures you need in your journey toward financial freedom.

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