The benefits of having a second residency in Latin America
An open, welcoming environment
Culturally speaking, Latin America is one of the most open and welcoming regions in the world, and fitting in is easier than just about anywhere else. Once you’re settled in, you’ll find that the local population are generally extremely receptive towards outsiders, and will invite them to take part in their everyday routines and celebrations. This makes for a good opportunity to get to know the local culture better, from an optimal vantage point and with the best guides possible. Crucially, Latin America doesn’t present much of a language barrier either – most North Americans and Europeans have some experience with Spanish, which is the most-spoken language in the region. And even a complete beginner can learn rudimentary Spanish (or Brazilian Portuguese) in no time at all. Spanish is worth learning even if you are not planning to stay in Latin America indefinitely – over 572 million people speak it worldwide, including 477 million native speakers, which makes it fourth only to Mandarin Chinese, English and Hindi in terms of global languages. Furthermore, Latin America’s five time zones overlap roughly with those in North America, and the continent boasts a wide range of international routes to Europe and North America, so home will never feel too far away…
Political stability
Many people around the world struggle with political instability in their home country, which can have severe knock-on consequences for the local the economy, safety, and overall quality of life. This makes dual residency in Latin America doubly attractive, as an alternative to constant turmoil and a safe space for your loved ones in case of emergency. Latin America is still part of the third world but is relatively stable compared to other parts of the world, and crime is not a major issue outside of most major cities.
Access to improved healthcare and education
Dual residents can also take advantage of improved healthcare in their second home. Latin American countries typically have accessible, affordable healthcare systems, and some have even become well-known tourist destinations in recent years, for Westerners seeking out specific treatments or procedures ranging from dentistry to plastic surgery. The same principle applies to education, with many parents deciding to pursue dual residency in Latin America in search of improved schooling for their children. The education system in the region has improved greatly since the turn of the century, and foreign residents also have the option to send their children to any one of a number of excellent international schools.
Reduced cost of living
If you can rely on existing earnings, savings or a pension from overseas, then the exchange rate in Latin America will ensure a much lower cost of living, and higher quality of life for dual residents, than most other parts of the world. And even if this isn’t the case, the cost of living in Latin America is demonstrably lower than in most parts of Europe and North America. Residents can live comfortably for as little as $1,000 to $1,500 per month, with living expenses dropping still further outside of major cities. Local food is cheap, delicious and abundant, transportation is dependable and inexpensive, and all the necessary amenities are readily available. Increasingly, Latin America is a land of plenty, which dual residents can have full access to at relatively little expense.
Tax benefits
Dual residency is also useful for anyone considering how best to declare their taxes. Some Latin American states, like Paraguay, are territorial taxation countries, which means that its residents (including dual residents) are only taxed on income which they earn within the country. It follows that any income from abroad – i.e. from a previously established business, savings or pensions – are exempt from income tax. This is practically unheard of elsewhere in the world, and indeed is practically the opposite of the taxation system in the United States, which taxes the income of its citizens in whatever country they are earning it. So with the right financial guidance, dual residency in Latin America will pay for itself several times over in terms of taxed income alone.
Access to new business opportunities
Just as individuals often seek out dual residency to benefit from reduced cost of living, foreign entrepreneurs are flocking to Latin America to take advantage of the fertile business environment, encouraged by countless government initiatives seeking to attract investment to the region. By GDP, the five largest economies in Latin America are Brazil, Mexico, Argentina, Colombia and Chile, and all of these countries are set to experience positive growth in the coming years, having withstood the short-term economic effects of the COVID-19 pandemic. This is especially true of areas which have proven adaptable to the online world, such as professional services, IT and communications, risk management, and network marketing. For most dual resident professionals, working in Latin America requires some kind of permit, but due to a regional shortage of “skilled” workers, these are usually easy to obtain, opening up a whole continent’s worth of opportunities.
Nature and the environment
Last but not least, Latin America is a fantastic place to live. It is also a genuine paradise for nature lovers – a huge, fascinating region which contains virtually every kind of natural phenomenon, from glaciers to tropical rainforests, from waterfalls to deserts and mountain ranges. If you do your research and travel responsibly, you will have access to the full range of natural wonders, in a temperate climate, without ever having to leave the region. Latin America is not exempt from the impact of climate change – the region’s precipitation patterns are shifting, temperatures are rising, and some areas are undergoing changes in the frequency and severity of weather extremes such as heavy rains, with the impacts ranging from melting Andean glaciers to devastating floods and droughts – but it is arguably better placed to mitigate this impact than anywhere else in the world. Home to 40% of the world’s species, over a quarter of the Earth’s forests and the second largest reef on the planet, Latin America is a rare success story in a planet coming to terms with a changing climate and growing demands for food, water and energy. Some Latin American dual residency programmes have even incorporated green initiatives and incentives for applicants – Panama’s “Teak for Residency” course offers affordable residency conditions in exchange for the purchase of a substantial teak parcel, for example.
As we have seen, there are many compelling reasons to seek out dual residency in this dynamic and growing part of the world, even if you’re not planning to reside there permanently or indefinitely. Ultimately, the ideal Latin American dual residency for you will depend upon your own personal circumstances and ambitions, so you should take all of these – as well as the factors listed above – into account when deciding your next move.
One of the most attractive Latin American countries in which to secure dual residency is Paraguay, a small landlocked nation nestled between Brazil, Argentina and Bolivia. Paraguay belongs to the Mercosur trading bloc, facilitating extensive trade agreements in place with several South American countries, and its dual residency rules are among the most relaxed and straightforward in the world. For example, the physical presence requirements for obtaining dual residency are minimal even by regional standards – a short visit of a few days is usually sufficient to kickstart the residency process, and renew it as required. A deposit of $5,000 USD in a Paraguayan bank account, or purchase of an equivalent amount of real estate, is all that is required to be eligible for the programme.
Even though Latin America has some of the most approachable dual residency programs in the world, old-fashioned bureaucracy still prevails, and the application process may stall unexpectedly without the necessary oversight and expertise. For this reason we recommend getting in touch with a dedicated agency to help with the application process. Get in touch with Strategicasa today to find out more about the benefits of dual residency in Latin America, and Paraguay in particular, today!