Retiring Outside of the United States
The service that I have chosen to discuss is the process of assisting people who are preparing for retirement to do so outside of the United States. What I will essentially be marketing is the countries themselves as a retirement destination for Americans that wish to retire outside of the United States. This service would have a primary location in the United States with satellite offices located in the capital cities of each country. This idea was inspired when I when I came across an article on Costa Rica and how it used to be a destination for retirees. Costa Rica was the first country to make a concerted effort to attract foreign retirees with a program of special benefits. Its pensionado program was responsible for bringing tens of thousands of foreign retirees, mostly Americans, to the country in the 1980s and 1990s. While the pensionado visa is still available in Costa Rica, many of the tax breaks and other special perks it once offerened have been discontinued. Costa Rica has also become expensive, both as a place to live and a place to own a home. For these reasons, while Costa Rica is perhaps the world’s best-known overseas retirement haven, it no longer qualifies as one of the best. This led me to search for countries that would fit the needs of those looking to retire outside of the United States. I am happy to report that I found the three countries of Belize, Panama, and Malaysia which more than fit the requirements.
The first country on the list is Panama, which has picked up where Costa Rica left off. Officially the Republic of Panama it is the southernmost country of Central America. It is situated on the isthmus connecting North and South America. It is bordered by Costa Rica to the west, Colombia to the southeast, the Caribbean to the north, and the Pacific Ocean to the south. The capital is Panama City. The official language of the country is Spanish. Its pensioner program offers some of the deepest retiree discounts available anywhere. Seniors, which are women who are are 55 and older, and men age 60 and older, get up to half off on nearly everything, including movies, motels, doctors’ visits, plane tickets, professional services, and electric bills. To qualify for pensionado status, you must have a regular pension of at least $1,000 per month. This pension can come from Social Security, any government entity, the armed forces, or a private company. The benefits of the Panama pensionado include 50% off entertainment anywhere in the country (movies, theaters, conterts, etc.), 50% off bus, boat, and train fares, 25% off airline tickets, 50% off hotel stays Monday through Thursday, 25% off hotel stays Friday through Sunday, 25% off at sit-down restaurants, 15% off at fast food restaurants, 15% off hospital bills (if no insurance applies), 10% off prescription medications, 20% off medical consultations, 15% off dental and eye exams, 20% off professional and technical services, 50% off closing costs for home loans. In addition, pensionado status entitles you to a one time tax exemption on the imporation of household goods, and a tax exemption every two years on the importation or the in country purchase of a new car. Every bank and most government offices also have a special express line just for retirees.
In Panama the culture is derived from European music, art and traditions that were brought over by the Spanish to Panama. Hegemonic forces have created hybrid forms of this by blending African and Native American culture with European culture. For example, the tamborito is a Spanish dance that was blended with African rhythms, themes and dance moves. Dance is a symbol of the diverse cultures that have coupled in Panama. The local folklore can be experienced through a multitude of festivals, dances and traditions that have been handed down from generation to generation. Local cities host live reggae en español, reggaeton, kompa, jazz, blues, salsa, reggae, and rock music performances. Outside of Panama City, regional festivals take place throughout the year featuring local musicians and dancers. Another example of Panama's blended culture is reflected in the traditional products, such as woodcarvings, ceremonial masks and pottery, as well as in its architecture, cuisine and festivals. In earlier times, baskets were woven for utilitarian uses, but now many villages rely almost exclusively on the baskets they produce for tourists.
An example of undisturbed, unique culture in Panama is that of the Guna who are known for molas. Mola is the Guna word for blouse, but the term mola has come to mean the elaborate embroidered panels that make up the front and back of a Guna woman's blouse. Molas are works of art created by the women of the Kuna tribe. They are several layers of cloth, varying in color, that are loosely stitched together, made using an appliqué process referred to as "reverse appliqué". All of this makes for an interesting country to live in, explore, and learn more about.
Another country that rolls out the welcome mat for foreign retirees is Belize. About a dozen years ago, the government of this country enacted legislation to allow Qualified Retired Persons (QRPs) to obtain permanent residency in this country. In many ways, this program is the most efficient route to foreign residency anywhere in the Americas. And while the QRP visa allows you full-time residency, you can enjoy the benefits of being a QRP even if you spend as little as four weeks a year in Belize.
Belize’s QRP program not only offers the equivalent of a U.S. green card to foreign residents aged 45 and older, but it also grants a host of other incentives designed to encourage foreigners to come and bring their money. These incentives include a permanent exemption from all Belize taxes, including income tax, capital gains tax, estate tax, and import tax on household goods (up to $15,000), automobiles, boats, even airplanes. The only requirements are that you or your spouse be 45 years of age or older, that you consider yourself to be retired, and that you show that you have at least $2,000 a month in income to support yourself in Belize that is not necessary from a pension, but from any source. In practical terms, the “consider yourself to be retired” requirement means that, as a QRP, you can’t apply for a work visa. This is not to say that you couldn’t start an international, Internet, or even local Belize business as an entrepreneur. You just can’t take on traditional employee work.
Located on the northeastern coast of Central America, Belize is the only country in the area where English is the official language, although Kriol and Spanish are more commonly spoken. Belize is bordered on the north by Mexico, to the south and west by Guatemala and to the east by the Caribbean Sea. Belize has a diverse society, comprising many cultures and languages. It is the only nation in the region with a British colonial heritage, but as a part of the Western Caribbean Zone, it also shares a common heritage with the fellow Anglophone Caribbean countries. In general, Belize is considered to be a Central American and Caribbean nation with strong ties to both the Caribbean and Latin America and is few of the Caribbean Countries that are Continental rather than being an Island. Belize is a member of the Caribbean Community (CARICOM), the Community of Latin American and Caribbean States (CELAC), and Sistema de la Integración Centroamericana (SICA).
The third country to make the retirment destination list is Malaysia. Perhaps the biggest challenge to retiring in Asia, at least if you’re interested in doing so full-time, is obtaining a residency visa. In this part of the world, the best option usually is to retire part-time. Spend part of the year in Thailand, for example, and part of the year back in the States or perhaps in another overseas location such as Panama or Belize.
The exception when it comes to ease of obtaining foreign residency (and enjoying any special benefits as a result of that status) in Asia is Malaysia, which makes it surprisingly easy for foreigners to live here long-term. Its Malaysia My Second Home (MM2H) program offers tax and other incentives. This program is offered without age restrictions. The MM2H multiple-entry visa, good for up to 10 years, allows your spouse, children, and parents to reside in Malaysia along with you and, under certain conditions, even allows you to hold part-time employment or to have a business in the country.
Perhaps the biggest benefit of MM2H status is the tax status it gives you. As an MM2H resident in Malaysia, all your foreign-source income, including pension, interest, and dividend income, as well as foreign-earned income, is exempt from Malaysian taxes. Note, though, that income from employment or a business within Malaysia is taxable. As an MM2H resident, you also can import one automobile duty-free, as long as it was purchased before you made your application for MM2H status, or buy a locally made automobile free of import duty and sales tax. A retiree qualifies for the MM2H program by showing proof of a monthly pension of at least 10,000 ringgit (about $3,200) a month.
Malaysia is a federal constitutional monarchy in Southeast Asia. It consists of thirteen states and three federal territories and has a total landmass of 329,847 square kilometres (127,350 sq mi) separated by the South China Sea into two similarly sized regions, Peninsular Malaysia and Malaysian Borneo. Land borders are shared with Thailand, Indonesia, and Brunei, and maritime borders exist with Singapore, Vietnam, and the Philippines. The capital city is Kuala Lumpur, while Putrajaya is the seat of the federal government.
The country is multi-ethnic and multi-cultural, which plays a large role in politics. The government system is closely modelled on the Westminster parliamentary system and the legal system is based on English Common Law. The constitution declares Islam the state religion while protecting freedom of religion. The head of state is the King, known as the Yang di-Pertuan Agong. He is an elected monarch chosen from the hereditary rulers of the nine Malay states every five years. The head of government is the Prime Minister.
Malaysia contains the southernmost point of continental Eurasia, Tanjung Piai. Located in the tropics, it is a megadiverse country, with large numbers of endemic animals, fungi and plants. It is a founding member of the Association of Southeast Asian Nations, the East Asia Summit and the Organisation of Islamic Cooperation, and a member of Asia-Pacific Economic Cooperation, the Commonwealth of Nations, and the Non-Aligned Movement.
Malaysia has a multi-ethnic, multicultural, and multilingual society. The original culture of the area stemmed from indigenous tribes that inhabited it, along with the Malays who later moved there. Substantial influence exists from Chinese and Indian culture, dating back to when foreign trade began. Other cultural influences include the Persian, Arabic, and British cultures. Due to the structure of the government, coupled with the social contract theory, there has been minimal cultural assimilation of ethnic minorities.
In 1971, the government created a "National Cultural Policy", defining Malaysian culture. It stated that Malaysian culture must be based on the culture of the indigenous peoples of Malaysia, that it may incorporate suitable elements from other cultures, and that Islam must play a part in it. It also promoted the Malay language above others. This government intervention into culture has caused resentment among non-Malays who feel their cultural freedom was lessened. Both Chinese and Indian associations have submitted memorandums to the government, accusing it of formulating an undemocratic culture policy.
The pros and cons of each country break down as the following for Panama, Belize, and Malaysia.
Panama:
Pros: * This is the hub of the Americas. It's an easy, accessible place to travel to and from. * Best infrastructure in Central America. * A tax haven. * A convenient and tax-efficient place to start a business. * A pensionado program of special benefits for retirees. * A diversity of lifestyles, including big city, Pacific beaches, mountain highlands, and Caribbean isles. * International-standard health care that can be a fraction the cost of comparable care in the U.S.
Cons:
* As developed as Panama is, this is still a third world country. * It’s in the tropics. The weather in Panama City and on the coasts is often hot and sticky. * The country is no longer a banking haven.
Belize:
Pros: * This is a country of independent thinkers where you can make your own way. * The official language is English. * A tax and banking haven. * Land values in some regions including the Cayo are one of the world’s great bargains.
Cons:
* The overall cost-of-living is not super cheap, especially on Ambergris Caye. * Health care facilities are limited.
Malaysia:
Pros: * This is the only country in Asia that makes foreign residency easy. * A diversity of lifestyles. * English is commonly spoken. * International-standard medical care. * Very affordable. * A tax haven. * The Asian lifestyle is very exotic for many North Americans.
Cons:
* You won’t be able to return to North America quickly or often. * This is a third world country.
How I intend for this service to work is to provide information to potential retirees on the various countries represented, but to also assist them in all aspects of their move and retirement. This will include assistance in communicating with the various government agencies, filling out and filing all necessary forms. Ensuring that all proper fees, duties, taxes and other expenses are paid. Arranging guided tours of the prospective countries, with local staff on hand to answer any question that may arise. Preparing the individuals for their move by assisting in the arrangement of language classes, cultural seminars, and informational meetings.
There are various sites that offer information, message boards, forums, etc. about retiring outside of the United States, but I have not come across anyone who offers assistance in actually doing so. There will be an official online site, with advertising and listings on all of the major search engines, (Bing, Google, etc.). I also plan on placing advertising on the various ex-pat sites, as well as AARP, and other retiree information centers. In order to prepare for this type of a service I plan on educating myself on each country as completely as possible, learning the languages, and customs, in addition to spending time in each of them.