Many Expats have international pension claims. When their retirement age comes near, it seems advisable to beforehand compare the most interesting countries.
A] Tax & Social Security Premiums
Most countries have their own unique Income/Capital Gains/Inheritance Tax and Social Security Regime with specific rates and exemptions.
And with their own network of Double Tax Treaties in order to prevent and/or mitigate double taxation in both the residential country and the country at source.
Therefore is seems advisable to beforehand be aware of all the relevant aspects per country in order to be able to compare all relevant countries.
B] Relevance Of ‘Pension’ Definition
Not all countries accept a pension definition which allows the owner to (partially) keep investing pension capital as of (early) retirement age.
If this is within your Personal Risk Profile and your pension capital is substantial, this aspect can be very relevant.
C] Relevance Of Type Of ‘Pension Pay-Out’
When analysing the post tax situation of Pensions, it is relevant to take into account how possible future countries define ‘Pension Pay-Out’ in National Legislation and within Double Tax Treaties.
We often see that a different type of pay-out can result in a different tax exposure.
D] Cost Of Living
Furthermore it seems advisable to see how much purchasing power each net Euro/Pound/ Dollar/Peseta/Lire has.
This regards the costs of aspects as Housing/Transportation/Energy/Medical Insurance/Food/Clothing/Entertainment.
The differences between countries and even within countries can be very substantial.
E] Personal Aspects
Of course you should also focus on your own personal choice regarding the desirable climate, medical facilities, infrastructure, airports and such.
F] EU Immigration Law
I. EU Policy
The EU measures on legal immigration cover the conditions of entry and residence for certain categories of immigrants. Such as highly qualified workers subject to the EU Blue Card Directive/Students/Researchers. Family reunification and long-term residents are also provided for.
3 Months Period
As an EU citizen, you have the right to move to any EU country to live, work, study, look for a job or retire. You can stay in another EU country for up to 3 months without registering there but you may need to report your presence.
The only requirement is to hold a valid national identity card or passport. If you want to stay longer than 3 months, you may need to register your residence.
In many EU countries, you need to carry an identity card or passport with you at all times. In these countries, you could be fined or temporarily detained if you leave your identity documents at home but you cannot be forced to return to your home country for this reason alone.
5 Years In One EU Country
If you have lived legally in another EU country for a continuous period of 5 years, you automatically acquire the right of permanent residence there.
As an EU national, you can live in any EU country if you have:
- Comprehensive health insurance cover in your host country;
- Sufficient income to live there without needing income support.
Income could come from a pension, if you are a pensioner, or any other source of revenue.
Reporting Your Presence And Registering Your Residence
During the first 3 months of your stay in your new country, as an EU national, you cannot be required to apply for a residence document confirming your right to live there although in some countries you may have to report your presence upon arrival.
After 3 months in your new country, you may be required to register your residence with the relevant authority (often the town hall or local police station), and to be issued with a registration certificate.
You will need a valid identity card or passport and:
- Proof of comprehensive health insurance;
- Proof you can support yourself without needing income support: resources may come from any source.
Can You Be Requested To Leave Or Be Deported?
You may live in the other EU country as long as you continue to meet the conditions for residence. If you no longer do so, the national authorities may require you to leave.
In exceptional cases, your host country can deport you on grounds of public policy or public security but only if it can prove you represent a serious threat.
The deportation decision or the request to leave must be given to you in writing. It must state all the reasons for your deportation and specify how you can appeal and by when.
Permanent Residence
If you have lived legally, meeting the conditions to stay in another EU country, for a continuous period of 5 years you automatically acquire the right of permanent residence there. This means that you can stay in the country as long as you want.
Your continuity of residence is not affected by:
- Temporary absences (less than 6 months per year);
- Longer absences for compulsory military service;
- One absence of 12 consecutive months, for important reasons such as pregnancy and childbirth, serious illness, work, vocational training or a posting to another country.
You can lose your right to permanent residence if you live outside the country for more than 2 consecutive years.
II. Residence Right Affected by Brexit?
Hereby the Questions and Answers on the rights of EU and UK citizens, as outlined in the ‘Withdrawal Agreement`.
On 1 January 2021, the rules for EU citizens living in or moving to the UK will change. The same applies to UK nationals living in or moving to an EU country.
I Have Permanent Residence In The UK/EU Or Will Acquire It During Transition Period
In principle, you and your family members will continue to have permanent residence in your host country. This includes non‑EU family members.
In the UK, you must however apply to the EU settlement scheme to be granted a new residence status. In the EU, check with your host country’s authorities as soon as possible if it is mandatory to apply for a new residence status.
I Reside In The UK/EU But Am Not Yet Entitled To Permanent Residence
In principle, you and your family members will continue to keep your current residence in your host country. This includes non‑EU family members.
In the UK, you must however apply to the EU settlement scheme to be granted a new residence status. In the EU, check with your host country’s authorities as soon as possible if it is mandatory to apply for a new residence status.
I Want To Move To The UK/EU
You and your family members may move to the UK or to an EU country under the current EU rules until 31 December 2020. This includes non‑EU family members.
In the UK, you must then apply to the EU settlement scheme. In the EU, check with your host country’s authorities whether you have to register and if it is mandatory to apply for a new residence status.
I Want To Go To The UK/EU For A Short Stay
Current rules on reporting presence, registering your residence abroad, registering your EU family, registering your non-EU family continue to apply until at least 31 December 2020.
Website
For other Brexit related immigrations questions:
https://www.gov.uk/guidance/new-immigration-system-what-you-need-to-know
III. Finally
As legal immigration aspects are relevant, it is advisable to in time consult your own immigration lawyer about your specific situation. If you do not have such a specialist yet, we can refer to a specialized lawyer within our network.
G] Conclusion
It provides ease of mind to know in time where you will retire.
There is no need to be in the dark about relevant financial and legal aspects.
It will be our pleasure to provide our signature ‘Country Selection Analyses’.