# What EU Countries Offer Temproary Residence Permits



## mriksman

I am an Australian, and work abroad (Egypt). I'd like to base myself in Europe - legally. UK is out, I only seem eligible for a visitor visa, and cannot technically live there for extended periods through successive visits.

I hear that a lot of EU countries offer short term residency permits, as long as I do not seek work/healthcare etc. These can be extended, and at some point I could obtain permanent residency.

What countries offer these temporary 1 year extendible residency permits? What are some of the requirements in obtaining them in each country? 

Thanks,
Mike


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## BBCWatcher

Italy offers elective residency and would be geographically convenient. Head over to the Italy forum to find out more about that type of visa. You cannot work in Italy, and you must have sufficient non-employment pension, rental, interest, or other income to qualify.

Latvia, Spain, Portugal, and Ireland (in order of affordability) offer residency if you're willing to buy a home of a certain minimum value reportedly starting as low as 71,500 euro. Same thing: work in the country is not permitted.

Cyprus is outright selling citizenship now. Reportedly a 3+ million euro investment in Cyprus will get you that particular EU citizenship with all its rights and privileges.


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## mriksman

I want to set up a 'permanent residence' in the sense that Australia will no longer tax me.

As such, any country in the EU area, that has low tax rates OR has 'benefits' for expatriates (like the remittance laws in UK and Ireland) would be oh help.

Ireland allows residence who are non-domiciled to only pay tax on monies remitted to Ireland. In essence, I could keep my pay in an offshore account, and only pay tax on the money I bring in.


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## BBCWatcher

Latvia looks pretty good then. Buy a house for €71,200+ in a rural area (double that in a city), live in it for 5+ years, learn the Latvian language well enough within that half decade, then apply for an EC Long Term Residence Permit which lets you move and work almost anywhere in the EU (except the U.K. and Denmark). Cost of living is low, and the tax treatment looks favorable (though check that). On edit: Not so sure about the tax treatment. If you can swing the steep minimum home purchase requirement then maybe Ireland is your best bet.

There are no nonstop flights to Egypt. Also, you may have to demonstrate sufficient physical presence in Latvia for 5+ years to get the EC Long Term Residence Permit if that's your goal.


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## mriksman

I'm finding a LOT of countries offer temporary residence permits which are renewable. 

Now it's just a matter of finding a country with low tax, or one that has a good tax treaty with Egypt.

I'm reluctant to jump straight in to a consultant; the last one wanted to charge $1000, and she said she would write me up a letter saying how to set my tax up in the UK to handle double-taxation and domicile etc. Didn't care I'd be living there illegally on a visitor visa...


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## BBCWatcher

Bulgaria looks pretty good at quick glance. Minimum home purchase is around €306,000, and the income tax rate is low. Be sure to check social insurance taxes.


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## Bevdeforges

I'd be a little bit careful with this plan. The OECD and most European countries are trying to crack down on tax evasion, particularly with regard to offshore banking and investment arrangements. Things are likely to tighten up in the next few years and then you'd be back to square one again.

There are also different conditions in different countries for establishing "tax residence" - which it sounds like you're after. The rule of thumb is that you should be physically present in the country for 183 days in the tax year (usually, but not always, a calendar year), but you should consult the laws of the country you're interested in. France, for example, has three criteria for establishing tax residence and none of them mention the 183 day rule at all.

The other factor you need to investigate is which countries require you to declare your worldwide income, and which will only ask you to report your income from domestic sources. Quite a few countries these days go the worldwide income route. There is also the matter of more and more countries requiring disclosure of offshore (or any "foreign") accounts.

Most countries seem to offer a renewable one-year residence permit, however before you can get a residence permit, you'll have to get a visa to enter the country with the intent to establish residence. Do check on those requirements, because I know some countries (France, for example) require you to give them some sort of "purpose" or "reason" for your move, and they can deny you a visa if they don't feel your reason for coming to the country is adequate or if your documents don't support the reason you gave. 

Do your homework on this one carefully.
Cheers,
Bev


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## mriksman

Thanks. I'm looking at the double tax treties (DTA), and the OECD model. 

Most DTA's have the following for income;
Subject to the provisions of Articles 16, 18 and 19, salaries, wages and other
similar remuneration derived by a resident of a Contracting State in respect of an employment
shall be taxable only in that State unless the employment is exercised in the other
Contracting State. If the employment is so exercised, such remuneration as is derived
therefrom may be taxed in that other State.

From this, I gather that - you will ALWAYS be taxed in your country of residence, and you MAY be taxed in the source country (depending on if they use the exemption or credit method).


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## mriksman

Wait... except in the DTA, Article 23 describes the exemption method;
Article 23 A
EXEMPTION METHOD
1. Where a resident of a Contracting State derives income or owns capital which, in
accordance with the provisions of this Convention, may be taxed in the other Contracting
State, the first-mentioned State shall, subject to the provisions of paragraphs 2 and 3,
exempt such income or capital from tax.

Which to me sounds like you would be exempt in your resident country?


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## BBCWatcher

Naive question: If you're working (or planning to work) in Egypt, why aren't you living in Egypt? Egypt's top marginal tax rate for residents is 25%, and foreign residents don't pay Egyption tax on non-Egyptian source income. Foreigners don't pay Egyptian social insurance tax.

That's all quite reasonable, especially compared with additional travel and housing costs to maintain an outpost elsewhere.


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## mriksman

Right, so looking at the Netherlands - Egypt DTA;

Article 15. Dependent personal services
1. Subject to the provisions of Articles 16, 18 and 19, salaries, wages and other similar remuneration derived by resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.​
So, I am resident in the Netherlands, and my employment is in Egypt. This says it 'may' be taxed in Egypt. But then further down in article 22 'elimination of double taxation', it has;

1. The Netherlands, when imposing tax on its residents, may include in the basis upon which such taxes are imposed the items of income which, according to the provisions of this Agreement, may be taxed in Egypt.
2. However, where a resident of the Netherlands derives items of income which according to (snip), paragraph 1 of Article 15, (snip) of this Agreement may be taxed in Egypt and are included in the basis referred to in paragraph 1, the Netherlands shall exempt such items of income by allowing a reduction of its tax. This reduction shall be computed in conformity with the provisions of Netherlands law for the avoidance of double taxation. For that purpose the said items of income shall be deemed to be included in the total amount of the items of income which are exempt from Netherlands tax under those provisions.​
Reading this, it sounds like they exempt the income under there provisions of Netherlands law for avoidance of double taxation.


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## mriksman

BBCWatcher said:


> Naive question: If you're working (or planning to work) in Egypt, why aren't you living in Egypt? Egypt's top marginal tax rate for residents is 25%, and foreign residents don't pay Egyption tax on non-Egyptian source income. Foreigners don't pay Egyptian social insurance tax.
> 
> That's all quite reasonable, especially compared with additional travel and housing costs to maintain an outpost elsewhere.


Very true. But I love Europe. It's why I took this job. 

Plus air fares are included in the package.


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## BBCWatcher

OK, but "Europe" is a continent that happens to be closer to Egypt than Australia, but it's not quite a short stroll away. It's also big and diverse.

Which part(s) of Europe do you like? Let's start with that, then figure out the tax part. If you're miserable shuttling back and forth and/or with your 50.1%-of-the-time place of residence, it's really not going to matter what your tax rate is. Also, how much do you have to spend to buy a home? With the possible exception of Italy, there don't seem to be any European residence programs that don't start with "first, buy/invest at least this sum...." (Italy's starts with "first, have investment and/or pension income," but you're not required to buy or to invest any particular sum.)

With respect to the Netherlands, how does an Australian citizen get a residence permit there? I don't see anything obvious.


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## Bevdeforges

You need to look at each country's specific definition of "tax resident." Until you do that, the tax treaties really are nothing but "noise."

In France, for example, if you "exercise a professional activity" in France, you are tax resident there. Do check Egypt's take on tax residence if you plan on continuing to work there.
Cheers,
Bev


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## mriksman

@BBCWatcher
Well, I'd be happy with anywhere in Europe; western is good. 

What is important for me is establishing residence. I can travel on my time off instead of going home to this residence. But I must have proof that I can be resident (whether that is via a permit or whatever), and actually had an abode with my partner. What holidays we take after that won't matter. This is all to facilitate cutting the Australia ties of being a taxable resident. They want to see I have made a permanent residence abroad; not just have been transitory through Europe.

I haven't looked hard enough at the residence requirements of different European countries yet - that's on tomorrow's list! I was wondering what peoples experience is on these forums. Are there any countries that allow residence if you can show you can support yourself? Doesn't Spain?

Yeah, I think you are right with Netherlands - it needed to be based on work or a partner. 

@Bevdeforges
Well, if I get a residence permit, then I will be tax resident of that country. I will not be a tax resident of Egypt, however will obviously pay non-tax resident taxes.

Lets assume I could get residency in Netherlands, then the DTA would appear, under Article 15 and 22, that Egypt would tax me, and Netherlands would not.

But, I'd really like someone else's interpretation on those two articles. It's a lot of heavy jargon!

Thanks!

Mike


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## BBCWatcher

mriksman said:


> Are there any countries that allow residence if you can show you can support yourself? Doesn't Spain?


I don't think so. Not exactly, anyway.

Italy yes, but you have to demonstrate that you have substantial investment and/or pension income without requiring work. Your income from work in Egypt would not be counted toward qualification. Combined investment/pension income of €30,000 per person in your household is the reported bare minimum to qualify.

The other European countries that offer residency programs for foreigners require you to buy a home of a minimum value. (I'm ignoring the non-home investment options because those are typically more expensive.) Rural Latvia opens the bidding at ~€71,500, which is why I was asking how much you have to spend on buying a home. Considering that you have to live somewhere anyway this probably isn't a major hurdle.

Once you get past immigration you'd move on to taxes.


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## mriksman

Greece?
Acquisition Of Visa And Residence Permit In Greece By Financially Independent Persons - Immigration - Greece


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## BBCWatcher

Greece recently amended that law, and there's now a €250,000+ home purchase option. Assuming the financially independent provision didn't change, that's like Italy's program. Again, your income from work in Egypt doesn't count for qualification. You'd need to demonstrate a minimum of €24,000 in annual investment and/or pension income, more with dependents and/or a spouse.

If you can do that, great, but if you can do that you could probably afford a €71,500+ home.


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## Bevdeforges

You say you get your income by working in Egypt? Does that mean that you must physically be present in Egypt to do whatever it is you do to get paid? Because the situation changes completely if you are "telecommuting" or working remotely for an Egyptian employer. 

Depending on how many days a year you are physically in Egypt, that could affect your right to be considered resident in some countries. It's a complicated situation and one you may have to discuss with the appropriate country's tax authority.
Cheers,
Bev


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## mriksman

Physically be there. Pretty much 182.5 days (averaged over two years). 

Obtaining a residence permit automatically makes me a resident of a country, regardless of length of stay. Well, that's what I've been led to believe while reading the Spanish permits.


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## Pazcat

Try asking in the Spanish section of the forum as the guys there know lots of the in's and out's regarding the complicated Spanish admin and tax set up.
A residence permit in Spain is different from being a tax resident as far as I know.


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## mriksman

Okay - just to update you all with my current understanding.

Right to residence, and being a non-taxable resident are different. It is important also to note how a country interprets the word 'domicile'; or at least when it is used to describe residence on some of these Internet sites.

The legal term 'domicile' defines most people with their 'domicile of origin'. For me, that will always be Australia, no matter where I live. I may have a permanent and habitual abode elsewhere, but my domicile will remain in Australia. You can have a 'domicile of choice', but you MUST clearly severe ties with your domicile of origin. See Gaines-Cooper.

For all EU member states, I have the right to residence (even as a non-EEA national) as my EU partner (a British citizen) has the right to residence; as defined by 'Directive 2004/38/EC of 29 April 2004'. Once I have proved our relationship as durable (generally 2 years residing together), I obtain a Residence Card. 

Unfortunately UK ignores this for British citizens, and makes their partners follow through their Visa process for 'families and partners' to enter the country. If you are an EEA national (not British), and have a non-EEA family member, then you can use the form EEA2 (EU1 in Ireland). Note this UK visa is harder to obtain, and has a shorter validity!

Now, once I have a right to residence, I set up a home. My partner now resides there, and I come home when I can (working abroad). Under UK's SRT tests - the Automatic overseas #3 test states I am not tax resident for tax purposes. As my domicile is Australia, I am thus a non-taxable, non-domiciled resident.

Australia deems you to be a tax resident; "whose domicile is in Australia, unless the Commissioner is satisfied that his permanent place of abode is outside Australia". So, now I have a residence permit, and a permanent abode. I should be non-taxable in Australia.

Is any of this making sense?


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## BBCWatcher

No. 

Don't conflate the issues quite yet. Make a short list of the countries where you would like to live. Then move on to the tax implications. It's really not terribly productive to calculate the tax impacts of living in the Netherlands, for example, if you can't clear immigration hurdles.

With respect to living in the EU/EEA based on a relationship to someone with an EU/EEA citizenship, great, but that only ever works if you are cohabitating with that individual. You can't say, "Hey, I know somebody living in the U.K., so I'll live in Belgium." That doesn't cut it.

So, start with the short list of countries where you can either independently get immigration permission for residence or where you will be genuinely cohabitating with an individual with EU/EEA status in a qualified relationship, remove the countries that you wouldn't want to live in, then let's see where you're at.


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## Pazcat

Ooh don't choose Belgium if you can help it. 

Well, I haven't lived in Oz for about 5 years and rightly or wrongly I haven't had to do a thing regarding Aussie tax or satisfying a commissioner, if I had assets or an income from property etc in Australia then I would still be a tax resident regardless of how much time I spent abroad. 
Thankfully I don't though.

But yes I agree that the first thing is to get the list of countries you would like sorted because regardless what EU directives state in theory should happen you will find just about every country has a different set of standards for immigration there.
For instance most of the time you'll find unless you(and your girlfriend as well) can prove sufficient income/savings first you wont get residency.


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## mriksman

Hahah. Well, for now I think I'll keep my partner  So that being said, and it seems it opens more countries up - we'll probably take that path in to Ireland or UK. Ireland might be easier as they'll use the EU Residence Card valid for 5 years.

Apparently we can then move down to the UK, and they'll issue me an EEA Family Permit.

Just need to see if - under UK's SRT, being a non tax resident based on their tests - how will that affect my ability to gain permanent residence in 5 years time...


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