# Collecting Residencies ... your experience?



## BMWGuinness

I'm looking to collect multiple Permanent Residencies and Temporary Residencies with as little investment, time and physical relocation as possible. This would not be associated with Tax Residencies, as I would always spend less than 180 days per year at each locaiton.

Right now I'm looking at Argentina, Paraguay, Dominican Republic and Mexico.

I'm focused on Latin America to start but not opposed to other "easy" residencies as well.

What is your experience with collecting residencies and which ones are your favorites?

What have you found are the pros and cons of collecting residencies?


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## Bevdeforges

Be sure that you consider the various countries' laws regarding "tax residence" - not all countries use 183 days as the determining factor and it is very possible to have more than one country where you are considered "tax resident." (Hey, you seem to be from the US - so you are always considered "tax resident" in the US no matter where you live or where you spend your time.)


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## BMWGuinness

Bevdeforges said:


> Be sure that you consider the various countries' laws regarding "tax residence" - not all countries use 183 days as the determining factor and it is very possible to have more than one country where you are considered "tax resident." (Hey, you seem to be from the US - so you are always considered "tax resident" in the US no matter where you live or where you spend your time.)


Yes, exactly! For Paraguay its 120 days! The point of multiple residencies is exactly to claim 1 tax residency (in this case the United States) but always be moving in order to avoid double taxation.


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## Moulard

Generally if you hold a permanent residence visa, you will be considered by local tax law a tax resident of that country.

Tax treaties will have a tie breaker clause that resolves where you are deemed a tax resident - the tie breaker rule varies.. sometimes its where your permanent home is, some times it is where you spend the most time, sometimes it is where the economic centre of your activity occurs.

If you are a wage earner where you perform the work will always have the right to tax your income as by international convention that is where the income is sourced.
The country where you are a tax resident will typically have the right to tax your global income

The reduction in double taxation occurs by treaty where one country gives you tax relief of some form for taxes paid to the other country. 

If there is no tax treaty, then it will be entirely up to domestic law.. and this can result in unavoidable (by legal means at least) double taxation... for example some countries will only offer foreign tax credits if the tax was paid to a country with which they hold a tax treaty.


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## BMWGuinness

Moulard said:


> Generally if you hold a permanent residence visa, you will be considered by local tax law a tax resident of that country.
> 
> Tax treaties will have a tie breaker clause that resolves where you are deemed a tax resident - the tie breaker rule varies.. sometimes its where your permanent home is, some times it is where you spend the most time, sometimes it is where the economic centre of your activity occurs.
> 
> If you are a wage earner where you perform the work will always have the right to tax your income as by international convention that is where the income is sourced.
> The country where you are a tax resident will typically have the right to tax your global income
> 
> The reduction in double taxation occurs by treaty where one country gives you tax relief of some form for taxes paid to the other country.
> 
> If there is no tax treaty, then it will be entirely up to domestic law.. and this can result in unavoidable (by legal means at least) double taxation... for example some countries will only offer foreign tax credits if the tax was paid to a country with which they hold a tax treaty.


In this case I am a digital nomad, so no place where I live will be sourced income. Do you know someone I can speak to about this, since that is possibly a concern with Argentina.


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## Moulard

BMWGuinness said:


> In this case I am a digital nomad, so no place where I live will be sourced income


Depending on how you are structuring what you are doing local tax agencies may have a different view.

If you are remotely working for a foreign employer (dependent personal services) - where you are sitting when you perform the work defines where the income is sourced, not where you are paid.

If you are self employed, contracting or have a business structure it is a bit more complicated - generally business income is sourced where the economic nexus of benefit is located, so as long as you don't have any local clients you may be ok... but given you have been talking about permanent residency, you may have to consider "permanent establishment" and local branch requirements to comply with local tax laws

But this is part-and-parcel of any mini-multi-national business


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## BMWGuinness

Moulard said:


> Depending on how you are structuring what you are doing local tax agencies may have a different view.
> 
> If you are remotely working for a foreign employer (dependent personal services) - where you are sitting when you perform the work defines where the income is sourced, not where you are paid.
> 
> If you are self employed, contracting or have a business structure it is a bit more complicated - generally business income is sourced where the economic nexus of benefit is located, so as long as you don't have any local clients you may be ok... but given you have been talking about permanent residency, you may have to consider "permanent establishment" and local branch requirements to comply with local tax laws
> 
> But this is part-and-parcel of any mini-multi-national business


So the good news is that Paraguay and Mexico is still in.

The bad news is that Argentina is out.

But the interesting news is this:

If visitors are eligible for a 90-day tourist visa on arrival in Argentina, they can already extend that visa for another 90 days, according to Expat Arrivals. But alternatively, instead of extending, travelers can exit the country before their 90 days expire, then re-enter to receive another 90-day visa. This process can be done unlimited times, with neighboring countries like Brazil, Chile, and Uruguay serving as popular options for visa runs. Still, others on tourist visas choose to overstay their visa for however long they want to remain in the country, then pay a fine of 12,500 Argentine pesos (converted to $106 at time of writing). The penalty is the same whether you overstay one day or one year, and the overstayer has no legal repercussions beyond needing to pay the fine before leaving the country.


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## Bevdeforges

Just be aware that a "tourist visa" doesn't give you "residence" within the country. And rarely does it give you the right to work there. So far, only a few countries currently issue "digital nomad" visas - the one I know of is Estonia, so you may want to compare their visa requirements to those of the countries you are currently considering.


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## Harry Moles

The typical digital nomad routine is to park in a country for as long as one can get a tourist visa then move on. In theory, one is not allowed to work while on a tourist visa. In practice, remote work is not easily detected so you'd almost certainly get away with it. In theory, you would owe tax to the country in which you're living while you work remotely. In practice, you are coming and going as a tourist without establishing any sort of tax residency. (Imagine trying to file tax returns in multiple countries each year, possibly in languages other than English, without having settled in any of them long enough to acquire the appropriate identity numbers etc. Clearly it's not possible.)

A few countries now offer digital nomad visas, but those are typically for longer stays (a year or more) and offer an exemption from tax obligations on all foreign-source income. 

If you wanted to be especially sly about it you could use the FEIE to reduce or eliminate your US tax bill, while staying off the radar in the countries you are visiting.

Remaining in one country semi-permanently by doing regular border runs to renew tourist visas does entail the risk of eventually being found out and deemed to have been tax resident while working remotely. I don't know if that's a serious risk, however.


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