When choosing your place of residency in Latin America, it is crucial to have your long term relocation goals clear. During the past 2 years it is undeniable that the world has abruptly changed. Our habits and day to day life changed and with them the work structure, business focus and social lives. Many individuals and families are now seeking out alternative locations including many countries in Latin America as a place to relocate invest, live and enjoy new experiences. According to the United Nations Conference on Trade and Development’ (UNCTAD) World Investment Report 2022, the Foreign Investment in Latin America & the Caribbean increased by 56% in 2021.
Breathtaking landscapes, welcoming locals and vibrant energy can be found throughout the continent. Latin America is a true special part of the world but it is also very different from country to country. That said, there are certain countries with residency programs offering unique advantages for foreigners looking to acquire residency.
Paraguay, Brazil, Mexico and Argentina Residency are some of the most popular options. But where to start?
The difference between residency and citizenship
Before we start, it is important to take a look at the difference between residency and citizenship.
Residency permits are the permit to reside in the country officially, under certain benefits (i.e open a bank account, access to public education, permit to work). One can acquire either Temporary Residency or Permanent Residency. Despite having an expiration date, a Temporary Residency can lead to a Permanent residency and a Permanent residency permit can lead to Citizenship. This is known as nationalisation.
Finally, Citizenship is defined by the nationality of the individual which can be acquired through many different ways such as birth, naturalisation and even investment. It is also possible in many countries to hold dual or even multiple citizenship. Only a citizen of a country can acquire a passport. Passport holders can benefit from the countries visa-free travel rights and international treaties. There is no expiration date citizenship can passed to down to future generations through descent in Latin America.
Ok, so now let’s discuss, how to find the Residency Program that better suits your goals?
When analysing your options there 4 main points to take into consideration.
1. Is your main goal to reside in the country or acquire citizenship?
Residency and citizenship by investment in Latin America
Latin America as a whole is very welcoming and a tolerant continent when it comes to immigration both past and present. Brazil for example is a real melting pot of cultures with one of the most diverse populations in the world with citizens displaying a mix of Native, European, African and Middle Eastern heritage. On top of this São Paulo, the largest city in Brazil with a population of more than 14 million people has more of Japanese heritage than any other city in the world outside of Japan itself.
Migrants are very welcome throughout the continent with each and every country in Latin America from the spicy tip of Mexico down to the chilly depths of Argentina offering residency programs for foreign investors and retirees. Paraguay, Brazil and Uruguay each offer investors the change to become permanent residents through their residency programs, while Mexico, Colombia, Argentina and Panama initially issue temporary residency permits.
While there are no direct citizenship by investment programs in Latin America, countries in the region have some of the fastest pathways to citizenship by naturalisation in the world. Pathways to citizenship vary from as little as 2 years up to 5 years, depending on the country. In Argentina one can apply for citizenship after 2 years of residency, while in Paraguay and Uruguay one can apply after 3 years. Brazil requires 4 years of permanent residency. However, those marrying a Brazilian national or with a new born Brazilian child can apply for citizenship after just 12 months of living in the country. In Mexico, it is possible to apply for citizenship after 5 years of legal residency.
2. Residency in Latin America: Minimum stay requirements
Another point that must be taken into consideration is the minimum stay requirement that the country requires for residents to renew their Residency Permits.
Some countries such as Argentina and Uruguay, require a minimum stay of 180 days per year, for the Residency permit to be renewed. On the other hand, Paraguay only requires 1 visits to the country each year while Brazil requires a minimum of 30 days stay per annum to maintain residency. All countries however, require at least 6 months per year in the country if one wishes to work their way towards citizenship.
3. Taxation in Latin America
Many international entrepreneurs, digital nomads and global citizens have multiple sources of income. Therefore prior to acquiring residency in a new country, it is crucial to understand the potential Tax implications.
Countries such as Brazil and Argentina with traditional residential based tax systems (and have very high tax rates) tax residents on their worldwide income regardless of its source. Whereas countries like Paraguay and Uruguay have territorial taxation based systems only tax residents on their locally-sourced income. Foreign-sourced income that is NOT remitted to the country is NOT taxed. Chile offers such tax incentives for the first 3 years, while Mexican residents can potentially avoid tax residency in the country if they have a permanent home in another country.
Our local legal partners can advise you correctly on taxation implications when acquiring residency in Latin America.
4. Investment Budget
Finally, the diverse variety of residency programs across Latin America mean there are many different investment opportunities for different kinds of budgets.
Ones nationality, budget and goals will all impact the suitability of their options in Latin America. The Mexican Independent Means pathway, for example, requires a monthly income proof of approximately $3,000. While, Paraguay also offers a popular Proof of Funds (Economic Solvency) option to those with visa-free access to the country. In countries like Brazil one can acquire Temporary Residency by proving a monthly income of U$1,500 from a remote occupation- qualifying as Digital Nomad, popular program among those who wish to enjoy the Brazilian life for 1 year.
The best way to find out the Latin America program that perfectly fits your relocation dreams, is by booking a free consultancy call with one of our specialists.
Once you have your investment and immigration plans defined, Lincoln Global Partners’ specialists will provide a tailor made service for you and guide you through the entire process to ensure everything runs smoothly.
5. Residency in Latin America: Safety Concerns
Especially important for families looking to relocate.
The South of South America is generally the safest part of the continent. Chile is the safest and most well developed country in South America. Uruguay is equally safe. Paraguay is generally safe while Argentina is also relatively safe despite the economic instability. Those interested in Brazil can consider the state of Santa Catarina the one state in the country that can be considered safe by international standards while the touristic towns of Mexico are generally trouble free. When looking for the perfect spot to relocate, it is fundamental to search and analyse indicators such as the Human Development Index (HDI).
On the contrary to common belief, Latin America has continuously evolved within the past 2 decades, improving levels of education, quality of health-care and capital growth by a part of the population. More than that, tourism has been an exciting and important feature of the countries’ Gross Domestic Product (GDP).
Moreover, the crucial step to starting your relocation process to Latin America is to understand which country, within its diversity of culture, laws and Residency programs, will best suit your goals. For this, our team at Lincoln Global Partners is ready to assist you in every step of the way.