Cigna International Health Insurance

Countries Offer Incentives to Foreign Retirees

By Kathleen Peddicord

Summary: Did you know that some countries court foreign retirees offering discounts on things such as medicines, closing costs when buying property and big tax breaks such as zero tax on foreign-earned income and pension, tax-free imports for household goods -- even cars.

Retiring Abroad - Best Places to Retire

Some countries court foreign retirees, offering discounts (on everything from in-country travel to prescription medicines and closing costs on property purchase) and tax breaks (from the right to import household and personal belongings, even a car, tax-free to zero tax imposed on pension or foreign-earned income) to tempt you to take up formal retiree residence.

Costa Rica is the best-known example. In the 1980s, this country aggressively solicited American retirees, even hiring a Madison Avenue ad agency to brand it as the "world's top overseas retirement haven."

The copywriters did their job. Ask any American about places to retire abroad, and he'll likely mention Costa Rica.

Costa Rica is a good case study, not only because it so successfully attracted so many foreigners to its borders in retirement...but also because it then changed its mind. After about a decade-and-a-half, the Costa Ricans decided they had enough gringo retirees living in the hills around San Jose and building homes along their Pacific coast and abandoned many benefits of their famed pensionado program...without grandfathering the existing pensionados.

Further, the powers that be in this country are right now considering more changes; specifically, they're talking about increasing the financial requirements for pensionados from US$1,000 to US$2,000 and for rentistas from US$1,000 to US$5,000 a month! If these proposed changes go through, again, they'll apply not only to new pensionado and rentista retirees, but to existing ones, as well. Again, nobody'd be grandfathered.

Foreign retirees in Costa Rica likely would move on in big numbers...to, say, Panama, which has stepped up over the past decade to fill the market void Costa Rica created by seemingly abandoning its pensionados.

Right now, Panama's foreign retiree program is the gold standard. It comes with 50% discounts off movie, theater, concert, and sporting events tickets; 25% off in-country airline tickets; 50% off hotel stays; 15% off hospital bills; 10% off prescription medicines; 20% off doctor's consultations; even 50% off closing costs for home loans.

The point is, as a foreign retiree, you almost couldn't ask for more.

Recently, the minimum required monthly pension amount was increased from US$500 to US$1000. Still, this is a great deal. As a pensionado in Panama, you get discounts on in-country airfares, dining out, doctor visits, museum entrances, medical costs...

If cost of living is a primary concern for you, Panama is working hard to get your attention.

Furthermore, it's not trying to put its fingers in your pie. Your pension and foreign-earned income are tax-free. Panama attorney Rainelda Mata-Kelly, long experienced helping foreigners establish residency, as retirees and otherwise, in this country, is the most reliable contact we know for more information.

Where else are they rolling out the welcome mat for foreign retirees?

They like you in Belize, where, 10 years ago, the government launched what it calls its Qualified Retired Persons (QRP) program. The benefits aren't as far-reaching as those for Panama's pensionado program, but qualifying can be more straightforward.

Furthermore, you can enjoy all the benefits of being a QRP even if you spend as little as two weeks a year in Belize. You might decide, though, that you like the idea of becoming a full-time resident of the country. Right now, running away to a new life in the Caribbean doesn't seem like such a bad idea.

You can become a QRP as young as 45, and, once you've qualified, you're permanently exempt from any Belize taxes, including income tax, capital gains tax, estate tax, and import tax on household goods, automobiles, boats, even airplanes.

The QRP program is under pressure right now. The original law allowed for up to 20,000 QRP retirees. This cap has been reached, and, in this country of only 270,000 people, the number of QRP's is significant.

Should the government continue a program that generates fee income and bank deposits and that directly and indirectly creates jobs in the housing and tourism industries...or should they keep their campaign promise and phase out the QRP legislation?

One way or another, the particulars of the program are likely to change. On the one hand, new QRP's, as of some cut-off date, probably won't enjoy all the current QRP benefits.

On the other hand, the government has promised that existing QRP's will never lose any of their perks or privileges. This won't go the way of Costa Rica's pensionado program, assure the Belizeans.

The decision as to how to proceed is to be taken up by the National Assembly after the year-end holidays, meaning you have about two months to act. Certainly, if you've been considering Belize as a possible foreign retirement haven, I'd say you want to make your determination one way or the other sooner rather than later.

And if you haven't yet thought about Belize, maybe you should. It's a tiny but beautiful and diverse Caribbean nation that has a lot going for it—including an English-speaking population.

About the Author

Renowned expert Kathleen Peddicord's newest publication, The Overseas Retirement Letter, is a great tool for those trying to decide where to retire abroad - people seeking lower living costs and better lifestyles.

Cigna International Health Insurance

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Comments about this Article

Maharlika
Dec 31, 2010 02:10

Philippines is offering benefits. See video: http://www.youtube.com/watch?v=GYlsiCBvXyA

guest
Jul 17, 2011 12:15

sadly you give no information about the Dominican Republic. No tax on retirees income or savings. Highly reduced customs tax on your incoming first container load including car. Howerver you must learn some Spanish.

JohnDear
Mar 22, 2015 16:21

I have property in Belize but I was seeking some place with more population. I went to Lake Arenal region of Costa Rica and it seems everything is for sale at a discount. There are gated communities where half are up for grabs. The country has taken aim at the Gringos and is prepared to fire much like the punks on the street that target Gringos as well. If you really want to feel unwelcome as a retiree you can just stay in this country !

First Published: Nov 15, 2008

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