For many, it is the big dream: to enjoy a well-earned pension abroad after work. It is not surprising that more and more people are dreaming of this dream. If you look at the serious conditions in USA, you immediately become aware of it. Old-age poverty, wherever you look. Many pensioners have to “earn a little extra”.
After all, every second pension is less than 800 USD, without including the direct and indirect taxes to be paid. A disaster and a condition for which one can only be ashamed. In this article I do not want to have a basic discussion with you, but I want to show you a real alternative.
A country in which it is still worth living as a pensioner. In which your money is still worth something, in a society that respects old people, in which it is continuously warm and in which you can spend your retirement legally tax-free.
Yes, I know, for you this may sound too nice at first to be true. But if you read this article carefully to the end, then all these things will clear up for you.
I myself live most of the year in the Philippines and have been able to make important local experiences, make valuable contacts and help people emigrate here. So let’s start now and see why the Philippines are so interesting for pensioners and independent entrepreneurs to emigrate. (More about business in the Philippines on Negosyong Pinoy.)
So if you think that you will find beautifully paved streets everywhere, you should look somewhere else again. Nevertheless, one quickly gets used to the prevailing conditions on the spot, and in the end other advantages outweigh, which may not be apparent to most people at all.
For me the decisive point was to leave USA, the mentality of the people. Still today I can remember very well every morning in the bus, with the grim faces. Even if most people here are very poor, they have kept their joy of life. When you are on the road in the Philippines, you are constantly greeted and almost everyone throws a smile at you.
This is also shown by the “Positive Experience Index score”, in which the Philippines are at the top of the list. 4th place in a worldwide comparison!
Alone this small difference changes a lot. And all this paired with a beautiful palm landscape, crystal clear water, pretty women, good food and constant warm weather. If I would summarize the advantages of the Philippines for me, it would be the following:
- The people are ingenious & friendly
- The culture is very strongly tied to ours
- Contact with locals can be easily established (most speak English)
- There’s really good food
- Bureaucracy can easily be avoided
- Depending on where you are, it’s quite save
- It’s a lot cheaper to live here than the US.
- And to give you an idea of the last point, 800 Dollar per month are enough to get along with a complete family.
Of course, there are no upper limits, but most locals live here with far less than 3,000 Dollar a year.
A friend of mine rented this house for just over 60 Dollars a month, with a garden and half furnished:
What is also interesting about the cost of living is the international comparison with other countries. For example, Zurich, Switzerland has a cost index of 128.65, Munich, Germany 73.79 & Quezon City, Philippines 31.66 (July 2018 statistics).
This means for you that you can emigrate with a strong currency (USD, Euro, Swiss Francs) and pay your costs in a weak currency, the Peso. The conclusion is that you will have much more of your money here and a pension of 1,000 euros is a lot of money here.
In your home country you are scratching the poverty line. Here in the Philippines you can get a daily massage, eat, rent a nice house, feed several people and much more!
It is really interesting to mention here that pensioners in the Philippines are legally tax-free. But more about that later.
Visa & permanent residence
It is still important to know how you can stay permanently in the Philippines. In hardly any other Asian country is it so easy to stay permanently. Pensioners & married people receive a permanent residence permit. For married people it is important to marry a Filipina or a Filipino (permanent visa according to §13A). It is therefore not enough to be married to a partner from another country.
If one has no pension and/or no income, then one must deposit a certain amount on a Philippine time deposit account. Between 35 and 49 years, 50,000 USD must be paid in, from 50 years 20,000 USD.
If you have a pension of at least 800 USD per month (as an individual), only 10,000 USD have to be deposited on a fixed deposit account. As a married couple you have to prove 1.000 USD per month.
What can I do as a pensioner and what not?
With a permanent right of residence we get certain rights in the Philippines, which are quite interesting.
We are allowed:
- Take up work
- start a business and employ employees
- attend school
- buy an apartment or a house
We’re not allowed:
- buy a piece of land and finance it with mortgages.
So the SRR visa gives us some advantages, and for some time now the same rights for foreigners as for citizens have been demanded in the Philippines.
Senior Citizens”, i.e. Filipino citizens over 60 years of age, get a lot of advantages and are exempt from VAT. Accordingly “Senior Citizens” get much 20% cheaper. The only problem is that this rule only applies to Filipino citizens. However, there are already many calls to introduce this also for pensioners from abroad who live in the Philippines.
Whether and when this will be introduced remains to be seen! This would make a stay in the island paradise even cheaper. Nevertheless, many shops and restaurants offer a 10% discount, which can also be used by SRRV participants.
Note: In the Philippines you can make contact with locals very quickly. So if you have a Filipino friend or partner who is a Senior Citizen, you could also benefit from the 20% discount.
However, the cost of living in the Philippines is so low that in most cases this regulation does not have to be claimed anyway.
Tax treatment of pensions in the Philippines
Once you have figured out your tax situation and optimized it with a specialist lawyer, it is important to know how the Philippines deals with pensions. After all, if you stay in the island state for 183 days a year, you become liable to tax.
The Philippines has a very interesting tax law, which distinguishes between foreigners and citizens. Citizens of the Philippines have to pay tax on their entire world income, while foreigners are subject to so-called territorial taxation, so that only domestic income has to be taxed.
I have written a detailed article about the different tax systems worldwide and also an article about the Philippines. The official pages of the government advertise the advantages of the SRR visa for pensioners:
Where to emigrate to the Philippines?
Here it all depends on what you want. For many the heat is unbearable, and for me it was very exhausting in the beginning. It sometimes takes a few weeks to get used to it. So if you prefer it cooler, you should go to Baguio. This city is characterized by a cooler climate.
Those who love nature can try the beautiful Palawan or go to Negros, where it is even cheaper. Thus, there is no clear statement. I personally would travel to the Philippines and then explore different islands. At some point you will find the place you like best.
Like anywhere else in the world, you should always be vigilant and not too naive about things. But if you don’t show off with your expensive Rolex, you won’t get any problems.
My experiences are quite positive and I feel safe here, which of course does not apply to all cities and areas. In my opinion, a much greater danger comes from the naivety of the emigrants. Already many have fallen in love here on the islands with a pretty smiling Filipina, which in the end went away with the entire savings.
For example, the Philippines does not allow foreigners to purchase land, and even companies with full legal capacity in the Philippines always have to be 60% Philippine owned. Those who trust in the wrong people can be robbed relatively easily and legally.
That is why I would never do business with a Filipino, even if you know him so well. Rather you should go the legal ways with smart lawyers, so that you always retain full control over your companies or the acquired property.
Conclusion: Offers from questionable websites that would like to help you emigrate or sell you any housing projects with “like-minded people” should always be questioned by you.