7 countries that offer tax breaks to foreign retirees

Lured by the prospect of affordable beachside living, fabulous dining options and mild tropical climates, more and more retirees are choosing to relocate to an international location for their final years.

Of U.S. citizens alone, more than half a million people collect Social Security benefits while living abroad — many choose to live in neighboring countries like Mexico, Costa Ricaand Panama.

While the significantly lower cost of living is a major draw of popular international retirement locations, some countries go above and beyond by also offering tax breaks or special reduction programs for overseas retirees. Most require a guaranteed monthly income, such as social security benefits or a pension, while others also require real estate investments.

The international retirement scenario has changed somewhat during the COVID-19 pandemic, but a number of countries continue to offer tax incentives and discounts. Here are seven of the best.

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1. Panama

Complementing the wonderfully diverse setting of Panama’s ocean and mountains, there is a retirement visa which is often cited as offering the best benefits for retirees anywhere in the world.

The good weather, the superb beaches and the low cost of living are already Panama a natural choice for retirees everywhere. At International lifeit’s recent list of the 10 best international places to retire in 2021, the small Central American nation was ranked second – behind only its neighboring country of Costa Rica.

Add the incentives of the program known as Pensioner Visa, and the attractiveness of Panama is further increased. In the program, retireesor retirees, are entitled to special benefits and discounts that go far beyond the senior discounts offered in other countries.

“Considered one of the best retirement programs in the world, the Panama Pensionado program offers great incentives,” says the Panamanian Embassy. website.

It lists incentives such as: exemption from import taxes for household goods; tax exemption for importing a new car every two years; 25% off utility bills; 25% reduction on plane tickets and 30% on other means of transport; 15% discount on loans made in your name; 1% reduction on residential mortgages for houses used as a personal residence; 20% discount on doctor’s bills and 15% on hospital services if no insurance applies; 15% discount on dental and eye exams; 10% discount on medicines; and 50% on hotels from Monday to Thursday, 30% on weekends.

The program is available to retirees who have lifetime income, from sources such as Social Security or a pension, of $1,000 per month for one person or $1,250 for a couple.

Pro tip: Panama’s Isla Colon was listed as number 8 in International lifeit’s 15 Best Islands to Retire in 2021.

Beach in Portugal.
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As a sunny European option, the Iberian Peninsula country of Portugal is hard to beat. American expats describe the country as perfect for international retirees for a number of reasons, including the temperate climate, a 26% lower cost of living than the US, and amazing food. This is the number 5 choice for places to retire internationally in 2021.

Among the visa choices available to people wishing to move to Portugal are the D7 Passive Income Visa and the Golden Visa. Both offer tax incentives.

A quick internet search will yield many legal resources for dealing with Portugal visas. One of these sites, the Sovereign Groupnote that to apply for the Visa D7applicants must show passive income from a pension, rent, or dividends of at least approximately $9,100 per year (equivalent to the nation’s minimum wage).

Thanks to the visa, expatriates enjoy a number of advantages, including the right to live, work or study in Portugal, visa-free travel throughout the Schengen area from 26 European countries, and the possibility of applying for the status of non-habitual resident tax regime in Portugal, which includes a tax exemption on most foreign income for up to 10 years.

the Golden Visa is available for those wishing to invest in real estate in Portugal. (Amounts vary depending on the route of investment.) The Sovereign Group notes that the Golden Visa, which allows full enjoyment of the rights to live, work and study in Portugal, comes with a tax exemption on worldwide income, as well as on the non-Ordinarily resident tax regime.

Guayaquil Ecuador South America Cityscape Skyline
Franck Camhi / Shutterstock.com

3. Ecuador

Listed in sixth place on International lifeit’s The best places in the world to retire in 2021Ecuador is known as a great place to retire, in part for its diverse landscape that includes 1,200 miles of coastline, one of the highest active volcanoes in the world, and the Galápagos Islands.

Due to its location along the equator, much of Ecuador experiences a tropical climate with warm temperatures, humid conditions, and abundant rainfall. Yet its diverse elevations also offer a range of climatic options.

There are several ways to become an Ecuadorian resident, including the Retiree Visa. The visa requires permanent retirement income from a source outside Ecuador of at least $800 per month – usually social security or a pension.

According to International life.

Aerial view of Mykonos, Greece.
Pawel Kazmierczak / Shutterstock.com

4. Greece

If spectacular ancient ruins, sun-drenched islands and some of the world’s most amazing food sounds like an ideal combo, then Greece might be a place to check out for your retirement years.

In addition to its obvious lifestyle charms, Greece offers a path to residency for non-EU residents interested in investing in real estate. In an effort to attract foreign investment, the southern European country offers a Golden Visa which grants five-year residency to those who invest around $298,000 (250,000 euros) in real estate, according to the Golden Visa . website.

In addition, Greece would launch a program that would offer foreign pensioners who transfer their tax residency to Greece an estimated flat tax rate of 7% for 10 years. The Get Golden Visa website note that although there is no retirement visa in Greece, the 7% flat tax would be available to retirees worldwide without real estate investment (although you would need to obtain an appropriate residence permit in Greece) .

Pro tip: The island of Crete, in Greece, obtained the 12 place on International liferecent list of 15 Best Islands in the World to Retire. Among the attributes of Crete are excellent healthcare, varied accommodation options and a warm Mediterranean climate.

A street in Belize.
Aleksandar Todorovic / Shutterstock.com

5. Belize

Incredibly scenic coastline, dense jungles and colorful cities have made Belize a favorite for expats and retirees for decades. Sweetening the Central American country even further as a retirement destination is the country Qualified Retired Persons Program (QRP).

According to International life, the Belize QRP is one of the best retiree programs in the world, providing qualified retirees with tax exemption on all income from sources outside of Belize. The exemption applies whether the income is passive or earned.

To be eligible for the program, expats must be at least 45 years old and do not have to be retired. The program requires a monthly income of at least $2,000 per month or the ability to demonstrate that you have enough savings to transfer $24,000 per year.

In addition to the tax exemption, the QRP program also offers duty exemptions on items for personal use such as a boat, aircraft and vehicle.

Pro tip: Belize’s small island, Caye Caulker, is listed as number 14 on International lifeit’s 15 Best Islands to Retire in 2021 for its stellar scuba diving and snorkeling and laid-back island atmosphere.

San Juan Del Sur Nicaragua Beach Beautiful Sky View
Bryce Jackson / Shutterstock.com


Significant tax benefits are in store for retirees who want to experience the Central American country of Nicaraguaknown for its beautiful beaches, lakes and volcanoes.

Nicaragua’s retirement laws would look like the old pensioner rules that helped attract thousands of expatriates to Costa Rica in the 1980s. Combined with a low cost of living 40% lower than in the United States and rent 75% lower, Nicaragua Resident Pensioners and Pensioners Act can do for an affordable retirement.

To be eligible, expats must be at least 45 years old and have a permanent passive income of at least $600 per month. With this, they are entitled to tax-free importation of household goods worth up to $20,000 and a car worth up to $25,000. Additionally, there is no tax on income earned outside of Nicaragua.

Beautiful turquoise lagoon of Boracay Island, Philippines
Maks Ershov / Shutterstock.com

7. Philippines

More than 7,000 tropical islands, magnificent mountains and bustling cities await you in the Philippinesa Southeast Asian nation that has already attracted more than 200,000 expatriates.

In addition to its natural features, the Philippines is also known for its relatively low cost of living. According to International lifea couple can live well in a rural setting for about $1,140 a month, and for about $2,285 in a big city.

The Philippines’ Special retired resident visa offers a range of benefits for expats aged 50 and over who can deposit $10,000, as well as a monthly pension of $800 for a single or $1,000 for a couple.

The visa entitles retirees to exemption from customs duties and taxes for the import of personal effects; exemption from tourist tax; and tax-exempt pensions and annuities paid in the Philippines.

Pro tip: For U.S. retirees who want to learn more about their rights to collect Social Security benefits while living outside the country, information is available in this PDF.

You want to know more ? No matter where you plan to spend your retirement years, Personal Capital wants to help! Discover their expert financial advice and retirement planning services here.

Eleanor C. William