6 Tax-Friendly Overseas Havens for Retirees
A new report from the overseas experts at International Living highlights six countries where expats can protect their foreign-earned income and live well for less.
A recent survey conducted by International Living revealed that 78% of respondents are concerned about the financial implications of the next U.S. presidential administration. In response, International Living has identified six tax-friendly countries where expats can shield their foreign-earned income and enjoy a high quality of life.
“You can’t simply up and move abroad to any country that appeals to you—you’ve got to consider factors like the ease with which you can obtain a long-term visa, the accessibility, the local language, the cost of living and, too, the tax implications,” said Jennifer Stevens, Executive Editor at International Living.
“The countries we’ve highlighted in this new report each provide a favorable tax situation for folks who might move there but whose income would remain foreign earned. Also, they offer good-value living, welcoming locals, beautiful surroundings, and established expat communities. In other words, they make for good places to live, even if the tax question isn’t your first concern.”
As political tensions escalate and potential tax increases loom, many expats and retirees are looking for countries that offer both financial security and a peaceful lifestyle. The following six countries fit the bill.
“In uncertain times, protecting your retirement savings is paramount,” Stevens added. “These countries offer excellent opportunities to minimize taxes and secure your financial future while enjoying all the benefits of living abroad.”
For more information, read the full report here: 6 Tax-Friendly Destinations Where You Can Live Well for Less Overseas
1. Panama
Panama offers a territorial tax system, meaning that only income generated within the country is taxed. Retirees and investors with foreign-sourced income can live tax-free, and Panama’s Pensionado Program provides additional benefits such as discounts on healthcare and utilities.
Proximity to the U.S. (about a 3-hour flight from Miami), a strong dollarized economy (Panama adopted the USD over 100 years ago), affordable quality healthcare and low property taxes are other pluses.
Panama ranked No. 4 in IL’s 2024 list of Best Places in the World to Retire.
- Key Benefit: No tax on foreign income, plus deep discounts for retirees.
- Cost of Living: $2,000 to $4,000 per month for a couple.
2. Costa Rica
With no taxes on foreign-earned income and easy residency options through the Pensionado and Rentista programs, Costa Rica remains a favorite for retirees seeking financial security. The country also returned to the top spot in IL’s 2024 list of Best Places in the World to Retire.
People appreciate the stability Costa Rica offers in an increasingly divided world. Lauded as the Switzerland of Central America, Costa Rica abolished its army in 1948, shifting funding toward healthcare and education. It’s internationally recognized for its environmental commitment; a quarter of its land is protected as national parks and wildlife refuges. Additionally, it has recently been operating 98% on renewable energy.
- Key Benefit: Zero taxes on foreign income.
- Cost of Living: $2,000 to $2,500 per month for a couple.
3. Mexico
Mexico’s tax system provides relief for part-time residents, as foreign income is not taxed for those residing less than 183 days a year. Double taxation treaties with several countries ensure expats avoid being taxed twice. English is widely spoken in expat centers and vacation destinations, and U.S. foods, products, sports, and movies are popular and widely available.
Even in major hotspots like the Riviera Maya, you can pick up a brand-new condo in the low $200,000s—lower if you move away from the beach. It’s the same on the other side of the country in beach destinations like Baja or Puerto Vallarta.
Mexico ranked third in IL’s 2024 list of Best Places in the World to Retire.
- Key Benefit: Tax relief for part-time residents and double taxation treaties.
- Cost of Living: $1,500 to $3,000 per month for a couple.
4. Belize
Belize’s Qualified Retired Persons (QRP) Program offers retirees exemption from taxes on foreign-earned income. With no capital gains or inheritance taxes, Belize provides a secure financial environment for expats.
It is also the only Central American country where English is the official language, making it easier for English-speaking retirees to navigate daily life and legal processes. Belize is a short flight from many major U.S. cities, making it easy for retirees to stay connected with family and friends.
Belize ranked 17th in IL’s 2024 list of Best Places in the World to Retire.
- Key Benefit: No taxes on foreign income, capital gains, or inheritance.
- Cost of Living: $1,500 to $3,000 per month for a couple.
NEXT PAGE: Ecuador and Uruguay
5. Ecuador
Ecuador’s Retiree Visa exempts foreign income from taxation, making it a highly appealing destination for retirees who want to safeguard their income.
There are many facets of living in Ecuador that attract expats to take the plunge and relocate here. The climate is one of the most commonly cited factors, especially among Americans who are used to suffering through climatological extremes. In Ecuador, there are no seasons as we know them in the northern hemisphere—no sweltering summers or freezing cold winters. Ecuador was sixth in IL’s 2024 list of Best Places in the World to Retire led by a score of 91 in Cost of Living but dinged by a 56 score in Development/Governance. Another plus? Ecuador uses the U.S. dollar as its currency. It’s easy to rent a comfortable, spacious apartment or house for around $600 a month in many places.
- Key Benefit: No tax on foreign income and low property taxes.
- Cost of Living: $1,500 to $2,500 per month for a couple.
6. Uruguay
Uruguay offers expats a five-year tax holiday on foreign-sourced income, with taxes remaining low even after this period. Known for its political stability, Uruguay provides both financial security and a high standard of living.
A 2024 report by Global Citizen Solutions analyzing the top nations Americans are retiring to ranked Uruguay fourth. The Global Citizen Solutions retirement index looks at eight key indicators across three areas, including healthcare, quality of life, integration ease, community acceptance, economic environments, and security.
Uruguay ranked 14th in IL’s 2024 list of Best Places in the World to Retire.
- Key Benefit: Five-year tax exemption on foreign income.
- Cost of Living: $2,500 to $3,500 per month for a couple.
Read International Living’s full report here: 6 Tax-Friendly Destinations Where You Can Live Well for Less Overseas
SEE ALSO:
• 2024’s 10 Best Places in the World to Retire
• Top 30 Middle-Class Retirement Towns in U.S. 2024
• Top Affluent Cities for Retirees in 2024