Mark, I've now listened to almost everything I can possibly get my hands on that you have published in online formats. This and other recent content is some of the most powerful material you've ever uploaded.
May you please elaborate more about the use of a US asset management firm as an international client, does that mean that you are not allowed manage your own assets or otherwise it would be recognized as income within Costa Rica? Thank you so much for sharing this process thoroughly, I cannot put a price to how enlightening your content is, it truly broadens my horizon.
Yes if you use a CR Investment broker income from said investments will be tax as income in Costa Rica so use a U.S broker as an international client. That way that income is considered US based income and therefore not tax in CR
Hi mark, Why not Switzerland ? Taxes: In some areas like Zug (20mins from Zürich) you pay almost zero taxes. I pay 20% Weather: You get all four seasons. Hot long summer, cold winter with snow for skiing. Not much wind. Pleasant. City environment: Lots of trees, not a big ugly city look or vibe, perfect for hiking, clean and high quality infrastructure. Market hours: European markets and the American market opens at around 3pm here. Safety: Almost no crime. Crime & dirt is really only a thing in the immigrant/poorer areas in the "large" cities. Culture: Growing expat community of well educated & successful expats. You'll make lots of friends who are like-minded and in similar position. Also, given that Switzerland has so many CFAI students, you can be like Jesus Christ walking amongst believers. Or you can keep it quiet. Swiss people respect privacy once you set it. Health/dental care: Private. Government / citizens: Swiss people were the only people to vote NO to the universal basic income in 2016. In Basel, it's illegal to beg on the streets (You get a job & add value, or leave the country). What else do you want? Travelling: Quick and easy access to the best of Italy, [non-Paris] France, [non-east] Germany, and Austria. Women: Immigrants from all over the world in Zürich and Geneva so there's something for all tastes. Language: You can leave with English. But German and French if you want to blend in.
That's not really true. And he said it himself, tax on consumption is fair. Here, the costs are proportionate to salaries. @@dziubarob I myself save 5K a month (after all costs) as a financial analyst and I live quite well (travel regularly).
Hi Mark, I have some questions, related mainly to the second screen of your video which I found the least explanatory (just out of curiosity to learn more, not even close of doing the same thing myself): Q1: I understand the concept of territorial tax system. But earning some income, this income needs to be taxed somewhere (I guess in some company in Canada) right? So you will still keep paying Canadian corporate tax rate? Or after selling your company you now receive "personal income" (something like royalties from the company that acquired your company) and you can justify that to CR's tax authorities that this income is earned abroad so you neither pay tax for this in Canada nor in Costa Rica? Q2: How much is the tax % for the public healthcare? You mention only 2400 USD/year but probably your strategy is to import just the right amount of money that will only cover the expenses you have in CR but not transfer any extra wealth? And what does qualify as expenses? Q3: What is the capital gains tax in CR? Q4: Did you consider Monaco, Andorra or Switzerland?
A small comment on the "fairness" exercise. One could still boil down the bad deal rejection to economics/money. The argument goes something like this: within the scope of a single decision, accepting an "unfair" outcome might be the most economical (eg, don't waste 2 minutes bargaining for 50c at the market), but across many instances of bargaining, protecting one's reputation as a "hard bargainer" is in fact worth rejecting the occasional bad (but +EV) deal. If one is going to purchase at that market everyday, they should spend some extra resources on protecting their reputation as one who must be treated fairly. People are generally aware of this, whether consciously or not, and so I'd argue the instinctual valuing of fairness is at least partially rooted in economics.
Those who need to hear this the most are unfortunately the ones setting the policies. Increasing welfare policies is such a slippery slope and our hill is getting steeper by the year.
Very interesting analysis series. Thanks for the insight. How would you do it if you were mid-life with kids and owning a local business that's just starting to build wealth? I can't do else but hope things will go back to a certain equilibrium over time here in Canada, but I seemingly am an optimist.
I’m thoroughly enjoying the story, thank you. I would be interested in understanding your income strategy a bit more. So, REITs pay non-qualified dividends and CR taxes at 30% because there is no tax treaty with the US, does that mean you will have to change your investment strategy to de-emphasize REITS and look toward more tax-efficient strategies? Also, for any retirement accounts you had in Canada (like an IRA in the US), do you lose the tax-benefits by being a CR resident?
I use synthetics for US REITS anyways - so I can continue with that strategy. Synthetics avoid dividends withholdings and everything is just a capital gain. No changes needed fro any Canadian registered accounts. I can withdraw from the TFSA without tax at any time, and the registered accounts would require a tax filing. But at a much lower tax rate since that would be my only CAD income.
when you show the tax calculator and enter $2.5M in self-employment income, is that just a proxy for your short-term capital gain tax exposure? Even though you minimize dividends and use synthetics, is all (or most) the income coming from those short-term gains?@@MarkMeldrum
Hi Mark - perhaps I missed this point along the way, but if your income is not taxed in CR by virtue of it being generated elsewhere (in line with the territorial tax system), is it then not taxed in the jurisdiction it is earned in? Or is this where the residency status becomes key?
Mark, I'm a native Spanish speaker and of your family or you would like some zoom tutoring, I can get paid in Mark Meldrum discount codes instead of actual dollars.
Very interesting video, thanks for laying out your thought process. Careful was not the word I was expecting at the end, looking forward to the final video in the trilogy.
Hi Mark, by the way I'm in GTA and selling agents should only charge 1% if they don't pay for staging. Then seller pays buyer agent 2.5%. Total is 3.5% + HST. Usually buyer gets 1.25% commission rebate from buyer agent. So round trip is 3.95%(including tax) - 1.25% = 2.7% agent fee. But land transfer tax is doubled in Toronto haha. Your local agent might be over charging you (but check niagara market, GTA is more competitive)
Thanks for the great content, Mark! Have you considered using corporate structures to optimize your taxes? If yes, what’s your take compared to moving out of the country?
Did you gave up your Canadian citizenship? I am asking because there is also risk that Canada may move to tax system based on residency and citizenship exactly like what the United States currently has. US citizens are taxed on their worldwide income even if they like completely outside. Yes, there are certain exemptions on active income ( wages) but there is none on passive income and in some cases passive income earned outside the US are taxed severely ( PFIC). Also, if someone wants to give up the citizenship, there is exit tax of 40% if net worth exceeds certain limits ( around 2.4M) Why I can see Canada moving to similar system is because, there are so many immigrants are only in Canada for the passport. Once they get the passport, they are out.
The only thing I am worried about living in so called territorial tax countries with very low GDP per capita is how strong is judicial system and what's the risk of being wealth robbed by some corrupt politician or other legal power?
I wonder how much income you need to make annually in Canadian dollars to make this move worth it? Anything over 200K annually? Clearly, Mark earns significantly more. But I wonder if there's a minimum threshold of income where moving to CR begins to make sense in a tax and cost of living perspective
are there any consultants/lawyers who are specialized in supporting foreign people who want to move from US/CAD to other countries or how have you figured out these regional tax characteristics? how did you find these specialists? have you had in mind any European countries?
I hear pretty much everything you upload or you are featured in any interview. When relocating to some unknown place, how would you socialize or what will be your social life there? How do you cope up with this issue?
I was very surprised how cheap Uber was in Costa Rica. In Boston it costs $50 to get across town, but in CR you can go 15 miles for a few dollars. Night and day difference.
in one previous video, you mentionned that you want to stay about a year and then move on to Europe or Asia, is it still the case? sounds a lot to me to buy a house every year
Mark, if you were a citizen of the United States would you keep your citizenship or naturalize to a lower-tax country? With a 1% percentile (400K) income in the United States, allowing good tax planning, you can target a 24% marginal federal income tax bracket - a 19% effective income tax rate. The overall effective total tax is around 27%. This includes Federal income, state income, property, sales, and FICA (our pension and medical tax). There's a large variety of weather by region. Costs for housing are around $150 for builder's grade nationally. Utilities are very stable. There are very convenient services. Safety is somewhat weak, from an international point of view. There are issues with crime. Health care is phenomenal, if you can afford it. It has the best capital market in the world.
@markmeldrum How can some one from INDIA with a CFA and 8 yrs experience with US asset managers in Operations roles move to Costa Rica and make use of this opportunity.
Actually, I feel that when I go back to Canada for February, I will be missing CR. There is a calmness and a peace I feel here as I get more and more to feeling at home.
@@MarkMeldrum CHEERS TO THAT, AND ALL THE BEST, BUT WHY GO BACK IF NOT FOR SENTIMENTAL REASONS, I.E. IS ALWAYS THAT WE WANT THAT WE DON'T HAVE; AND WHAT WE HAVE, WE DON'T APPRECIATE, CASE IN POINT LOCATION, LOCATION, LOCATION, OR THE FACT THAT WE WAIT OUR WHOLE LIFES (MOST OF THEM) FOR RETIREMENT, BUT WHEN RETIREMENT COMES, WE WISH WE COULD WORK AGAIN... I'M ALREADY JEALOUS & I HOPE THAT WE GET PLENTY OF UPDATES ON COSTA RICAN LIFESTYLE, OF COURSE IN A CALCULATED & FINANCIAL, ECONOMIC ANALYSIS KIND OF WAY... I.E. (I BET THAT COSTA RICAN GIRLS ARE HOT! :)
It sounds like Costa Rica is mired in bureaucracy, regulation, and taxes, with the primary benefits coming from lower costs (which themselves stem from the fact that this is a literal third world country). Between the: -humid, hot, foggy weather -awful roads / infrastructure and power outages -crime (which is often under-reported in CR) -cultural differences (see: "tico time") -language barrier, bureaucracy / taxes and regulations / corruption -natural disasters (volcanoes, floods, earthquakes) -lack of amenities and first-world goods (e.g., TVs, Tide, Crest) -bugs ... this move is hard for me to understand Mark, how can you justify moving into a place with all of these awful things to save on taxes? I'm not suggesting you should have stayed in Canada, but Costa Rica seems like an extreme downgrade from the US, parts of Europe, Australia / NZ etc.
Did you watch his previous video in this series? I think its about the trajectory. Lets see if it still a worse place to live in 2-5 years. (not that I even think its worse now)
Mark, I've now listened to almost everything I can possibly get my hands on that you have published in online formats. This and other recent content is some of the most powerful material you've ever uploaded.
So much nut licking
Dr. Mark is showing you a perfect example how to use CFA knowledge to make your life decisions rationally
Mark, I sincerely appreciate you breaking this down. It's not something that you have to do.
May you please elaborate more about the use of a US asset management firm as an international client, does that mean that you are not allowed manage your own assets or otherwise it would be recognized as income within Costa Rica? Thank you so much for sharing this process thoroughly, I cannot put a price to how enlightening your content is, it truly broadens my horizon.
Great question
Yes if you use a CR Investment broker income from said investments will be tax as income in Costa Rica so use a U.S broker as an international client. That way that income is considered US based income and therefore not tax in CR
Mark is such a champ. Enjoying pineapples in his squeaky chair in the tropical paradise next to a beach. Good on you!
Just sent out for some WD-40. Gonna fix that squeaky chair.
You shouldn't, squeaky chair is the brand. @@MarkMeldrum
Thank you so much for sharing these 'Leaving Canada" videos. It is much appreciated! Also, I wish you the best in the future, Cheers!
Hi mark,
Why not Switzerland ?
Taxes: In some areas like Zug (20mins from Zürich) you pay almost zero taxes. I pay 20%
Weather: You get all four seasons. Hot long summer, cold winter with snow for skiing. Not much wind. Pleasant.
City environment: Lots of trees, not a big ugly city look or vibe, perfect for hiking, clean and high quality infrastructure.
Market hours: European markets and the American market opens at around 3pm here.
Safety: Almost no crime. Crime & dirt is really only a thing in the immigrant/poorer areas in the "large" cities.
Culture: Growing expat community of well educated & successful expats. You'll make lots of friends who are like-minded and in similar position. Also, given that Switzerland has so many CFAI students, you can be like Jesus Christ walking amongst believers. Or you can keep it quiet. Swiss people respect privacy once you set it.
Health/dental care: Private.
Government / citizens: Swiss people were the only people to vote NO to the universal basic income in 2016. In Basel, it's illegal to beg on the streets (You get a job & add value, or leave the country). What else do you want?
Travelling: Quick and easy access to the best of Italy, [non-Paris] France, [non-east] Germany, and Austria.
Women: Immigrants from all over the world in Zürich and Geneva so there's something for all tastes.
Language: You can leave with English. But German and French if you want to blend in.
Con: cost of living is amongst the highest in the world
He would be better off in Andorra.
That's not really true. And he said it himself, tax on consumption is fair. Here, the costs are proportionate to salaries. @@dziubarob I myself save 5K a month (after all costs) as a financial analyst and I live quite well (travel regularly).
Hi Mark, I have some questions, related mainly to the second screen of your video which I found the least explanatory (just out of curiosity to learn more, not even close of doing the same thing myself):
Q1: I understand the concept of territorial tax system. But earning some income, this income needs to be taxed somewhere (I guess in some company in Canada) right? So you will still keep paying Canadian corporate tax rate? Or after selling your company you now receive "personal income" (something like royalties from the company that acquired your company) and you can justify that to CR's tax authorities that this income is earned abroad so you neither pay tax for this in Canada nor in Costa Rica?
Q2: How much is the tax % for the public healthcare? You mention only 2400 USD/year but probably your strategy is to import just the right amount of money that will only cover the expenses you have in CR but not transfer any extra wealth? And what does qualify as expenses?
Q3: What is the capital gains tax in CR?
Q4: Did you consider Monaco, Andorra or Switzerland?
A small comment on the "fairness" exercise. One could still boil down the bad deal rejection to economics/money. The argument goes something like this: within the scope of a single decision, accepting an "unfair" outcome might be the most economical (eg, don't waste 2 minutes bargaining for 50c at the market), but across many instances of bargaining, protecting one's reputation as a "hard bargainer" is in fact worth rejecting the occasional bad (but +EV) deal. If one is going to purchase at that market everyday, they should spend some extra resources on protecting their reputation as one who must be treated fairly.
People are generally aware of this, whether consciously or not, and so I'd argue the instinctual valuing of fairness is at least partially rooted in economics.
Canada is truly imploding
Those who need to hear this the most are unfortunately the ones setting the policies. Increasing welfare policies is such a slippery slope and our hill is getting steeper by the year.
Very interesting analysis series. Thanks for the insight.
How would you do it if you were mid-life with kids and owning a local business that's just starting to build wealth? I can't do else but hope things will go back to a certain equilibrium over time here in Canada, but I seemingly am an optimist.
I’m thoroughly enjoying the story, thank you. I would be interested in understanding your income strategy a bit more. So, REITs pay non-qualified dividends and CR taxes at 30% because there is no tax treaty with the US, does that mean you will have to change your investment strategy to de-emphasize REITS and look toward more tax-efficient strategies? Also, for any retirement accounts you had in Canada (like an IRA in the US), do you lose the tax-benefits by being a CR resident?
I use synthetics for US REITS anyways - so I can continue with that strategy. Synthetics avoid dividends withholdings and everything is just a capital gain. No changes needed fro any Canadian registered accounts. I can withdraw from the TFSA without tax at any time, and the registered accounts would require a tax filing. But at a much lower tax rate since that would be my only CAD income.
when you show the tax calculator and enter $2.5M in self-employment income, is that just a proxy for your short-term capital gain tax exposure? Even though you minimize dividends and use synthetics, is all (or most) the income coming from those short-term gains?@@MarkMeldrum
Hi Mark - perhaps I missed this point along the way, but if your income is not taxed in CR by virtue of it being generated elsewhere (in line with the territorial tax system), is it then not taxed in the jurisdiction it is earned in? Or is this where the residency status becomes key?
Mark, I'm a native Spanish speaker and of your family or you would like some zoom tutoring, I can get paid in Mark Meldrum discount codes instead of actual dollars.
Very interesting video, thanks for laying out your thought process. Careful was not the word I was expecting at the end, looking forward to the final video in the trilogy.
Now I see why @Robert Kiyosaki says self employed individuals pay 60 percent in tax. Now I see why you moved, did you also pay tax on your company?
Hi Mark, by the way I'm in GTA and selling agents should only charge 1% if they don't pay for staging. Then seller pays buyer agent 2.5%. Total is 3.5% + HST. Usually buyer gets 1.25% commission rebate from buyer agent. So round trip is 3.95%(including tax) - 1.25% = 2.7% agent fee. But land transfer tax is doubled in Toronto haha. Your local agent might be over charging you (but check niagara market, GTA is more competitive)
Thanks for the great content, Mark! Have you considered using corporate structures to optimize your taxes? If yes, what’s your take compared to moving out of the country?
I WONDER If social benifits in developed countries have been taken into account?
Mark, just curious, did you take a look at Puerto Rico? I think federal taxes there are low as well
when you pay 52.5% in tax you need to ask "What do I get for 52.5%?" and the answer better be "Everyting you want"
So Mark here's my question: hablas español? :)
Did you gave up your Canadian citizenship?
I am asking because there is also risk that Canada may move to tax system based on residency and citizenship exactly like what the United States currently has.
US citizens are taxed on their worldwide income even if they like completely outside. Yes, there are certain exemptions on active income ( wages) but there is none on passive income and in some cases passive income earned outside the US are taxed severely ( PFIC). Also, if someone wants to give up the citizenship, there is exit tax of 40% if net worth exceeds certain limits ( around 2.4M)
Why I can see Canada moving to similar system is because, there are so many immigrants are only in Canada for the passport. Once they get the passport, they are out.
Great stuff, Mark! Thank you for sharing!
continue at 19:00
Questrade would allow you to keep your Canadian accounts as well (TFSA, RSP)
The only thing I am worried about living in so called territorial tax countries with very low GDP per capita is how strong is judicial system and what's the risk of being wealth robbed by some corrupt politician or other legal power?
Have you considered the Cyber truck instead of the Denali? 😅
I wonder how much income you need to make annually in Canadian dollars to make this move worth it? Anything over 200K annually? Clearly, Mark earns significantly more. But I wonder if there's a minimum threshold of income where moving to CR begins to make sense in a tax and cost of living perspective
are there any consultants/lawyers who are specialized in supporting foreign people who want to move from US/CAD to other countries or how have you figured out these regional tax characteristics? how did you find these specialists? have you had in mind any European countries?
Great series so far.
Hi Mark, thank you for sharing the video, I think you mentioned Florida in the US, so why not move to Florida? Thanks.
I hear pretty much everything you upload or you are featured in any interview. When relocating to some unknown place, how would you socialize or what will be your social life there? How do you cope up with this issue?
Makes me really sad that I live in Montreal. But If I move to Costa Rica, I must have a very huge portfolio.
Pura vida mark! Have you said where you're living? Beach on the west coast or San Juan?
Thank you so much for explaining the money fairness bit, I moved out 2 years ago and have a hard time explaining it to people this makes it easier
How did you find that mexico and india are best performers, i googled out everything but didn't get it
Is there any value consideration for mental health benefits of a support network in Canada vs CR?
the mountains in panama are nice as well. But the utilities are less reliable out that way. Similar to Costa Rica mountains. Great video
I do believe the latest topic is a tad excessive to explain your migration. But i might migrate to a tax haven country too.
I was very surprised how cheap Uber was in Costa Rica. In Boston it costs $50 to get across town, but in CR you can go 15 miles for a few dollars. Night and day difference.
in one previous video, you mentionned that you want to stay about a year and then move on to Europe or Asia, is it still the case? sounds a lot to me to buy a house every year
Can you own a home in Canada that you could visit periodically?
Mark, did you consider using trust structures in low tax territories to lower you taxes?
If you are that wealthy what stops you from crossing the border to get an MRI or anything else that you need?
I like the analysis Sir. 👍
COSTA RICA!!!!!!!!! CAN WE CALL IT RETIREMENT
Mark, if you were a citizen of the United States would you keep your citizenship or naturalize to a lower-tax country?
With a 1% percentile (400K) income in the United States, allowing good tax planning, you can target a 24% marginal federal income tax bracket - a 19% effective income tax rate. The overall effective total tax is around 27%. This includes Federal income, state income, property, sales, and FICA (our pension and medical tax). There's a large variety of weather by region. Costs for housing are around $150 for builder's grade nationally. Utilities are very stable. There are very convenient services. Safety is somewhat weak, from an international point of view. There are issues with crime. Health care is phenomenal, if you can afford it. It has the best capital market in the world.
All is clear!
Amazing video ❤
@markmeldrum How can some one from INDIA with a CFA and 8 yrs experience with US asset managers in Operations roles move to Costa Rica and make use of this opportunity.
Why not Europe ? Cyprus, Malta, Portugal, Estonia
......taxes
He explained why. There are 156 countries in the world, must he name all of them?
THE BEST THING IS THAT IN COSTA RICA, MOST WILL BE THOUGHT ABOUT IS REMINISCING HOW IT WAS IN CANADA. BEST ON A NEW JOURNEY IN THE PARADISE.
Actually, I feel that when I go back to Canada for February, I will be missing CR. There is a calmness and a peace I feel here as I get more and more to feeling at home.
@@MarkMeldrum CHEERS TO THAT, AND ALL THE BEST, BUT WHY GO BACK IF NOT FOR SENTIMENTAL REASONS, I.E. IS ALWAYS THAT WE WANT THAT WE DON'T HAVE; AND WHAT WE HAVE, WE DON'T APPRECIATE, CASE IN POINT LOCATION, LOCATION, LOCATION, OR THE FACT THAT WE WAIT OUR WHOLE LIFES (MOST OF THEM) FOR RETIREMENT, BUT WHEN RETIREMENT COMES, WE WISH WE COULD WORK AGAIN... I'M ALREADY JEALOUS & I HOPE THAT WE GET PLENTY OF UPDATES ON COSTA RICAN LIFESTYLE, OF COURSE IN A CALCULATED & FINANCIAL, ECONOMIC ANALYSIS KIND OF WAY... I.E. (I BET THAT COSTA RICAN GIRLS ARE HOT! :)
@@Analyst2019pro NO EXCLAMATION POINT, NO YELLING, SIR :) !
36:50 Sorry, $46k per year did you mean right? Second q - did you look at Thailand at all?
Correct. 1 USD - 516 colones. www.salaryexpert.com/salary/job/chartered-financial-analyst-cfa/costa-rica
market hours and humidity would cross off thailand
What lawyer would you reccomend to help you with this process? I'm from Canada as well looking to do the same and move to Costa Rica
It sounds like Costa Rica is mired in bureaucracy, regulation, and taxes, with the primary benefits coming from lower costs (which themselves stem from the fact that this is a literal third world country).
Between the:
-humid, hot, foggy weather
-awful roads / infrastructure and power outages
-crime (which is often under-reported in CR)
-cultural differences (see: "tico time")
-language barrier, bureaucracy / taxes and regulations / corruption
-natural disasters (volcanoes, floods, earthquakes)
-lack of amenities and first-world goods (e.g., TVs, Tide, Crest)
-bugs
... this move is hard for me to understand
Mark, how can you justify moving into a place with all of these awful things to save on taxes? I'm not suggesting you should have stayed in Canada, but Costa Rica seems like an extreme downgrade from the US, parts of Europe, Australia / NZ etc.
Did you watch his previous video in this series? I think its about the trajectory. Lets see if it still a worse place to live in 2-5 years. (not that I even think its worse now)