Retirement into Asia
In other areas of the business, we have had significant experience in providing advice to individuals working and retiring overseas. In that context, we would offer a few general comments about potential retirement into Asia. This is having regard to our general view that before deciding on a permanent retirement into Asia, or elsewhere, individuals and families should consider spending part of the year overseas as an interim step, or on a regular basis. If you haven't had experience of living overseas on a long-term basis, you won't appreciate how much of a difference there is between being a tourist and a resident.
One of the attractions associated with retirement into Asia has been that offshore income - such as superannuation income streams or investment income - has often not being taxable in Asian countries. We expect this position to change over time, and anyone thinking of retiring into Asia should seek prior tax advice. As we mention elsewhere on the website, it can be more tax effective to remain an Australian tax resident, particularly if relying on superannuation income.
At this point in time, the purchasing of property in Asia remains largely a "cash" proposition, with little or no finance available locally from banks - although occasionally vendor financing is available. The latter tends to be short-term and it will often be reflected in the pricing of the property. The market is however becoming more sophisticated, and we are just beginning to see "quality" fractional ownership schemes focused on retirees.
Our 5 Top Asian Retirement Destinations
This is our subjective view of the top five retirement destinations in Asia. It doesn't present a scientific analysis, but there is a significant amount of both personal and professional experience underlying the assessments and commentary. Given that we are talking long-term retirement destinations, we have adopted a 10 to 20 year horizon.
| Thailand |
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- Relatively low living costs, but likely to rise in real terms as the country develops
- Strong, independent, hospitable local culture which understands but doesn't necessarily adopt western values
- Moving towards a comprehensive (long term) retirement visa system
- Significant number of disparate locations (eg. Bangkok, Phuket, Krabi and Chiang Mai) attractive to retirees
- Limited freehold ownership of local property possible - but no land, just apartments
- Good medical and hospital facilities in Bangkok, Phuket and major urban areas
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- Retirees should not discount language issues outside major urban areas
- Visa and government processes can be bureaucratic, but are improving
- Regular political uncertainty
- Continuing security issues in the southern Muslim provinces
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| Sri Lanka |
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- Low living costs, but likely to rise in real terms as the country develops
- English widely spoken and understood
- Hospitable local culture which shares certain Western underpinnings - including a legal system with a British structure
- Significant number of disparate locations (eg. Colombo, Kandy and Galle) attractive to retirees
- Structured retirement visa programme - "Sri Lanka My Dream Home"
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- Muslim extremist bombings in April 2019 have raised concerns about security and the degree to which radical Muslim ideology has infilitated the traditionally moderate Muslim minority community in Sri Lanka.
- Medical and hospital facilities relatively poor outside Colombo
- Infrastructure and roads, particularly outside major urban areas, are often poorly developed
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| Philippines |
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- Low living costs, but likely to rise in real terms as the country develops but constrained by a very young population profile
- English very widely spoken and understood
- A very hospitable local culture with a very good understanding of Western social norms, but strong societal values
- Structured retirement visa programme - "Special Resident Retiree's Visa"
- Limited freehold ownership of local property possible - but no land, just apartments
- Significant number of disparate locations (eg. Manila, Cebu, Palawan) attractive to retirees
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- Regular political uncertainty, but a strong democratic tradition. Continuing security issues in the southern Muslim provinces (Mindanao)
- Visa and government processes can be slow, bureaucratic and legalistic
- Medical and health facilities good in the major cities (Manila, Cebu, Alabang) but access can be difficult, and facilities are poor in the provinces
- Infrastructure and roads, particularly outside major urban areas, are often poorly developed
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| Vietnam |
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- Low living costs, but likely to rise in real terms as the country develops
- Strong, independent, hospitable local culture which understands but doesn't necessarily adopt western values
- Very good internal security
- Wide range of disparate locations attractive to retirees such as Ho Chi Minh City, Hanoi, Nha Trang and Dalat.
- Outside major cities and tourist towns English is not widely spoken or understood
- New laws allow foreigners with valid visas to own houses and apartments, but not land.
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- There is no formal retirement visa programme; retirees will need to utilise tourist visas and renew them every 3 months. The process is bureaucratic and can vary by Immigration office.
- Medical and health facilities are good in HCMC and Hanoi but facilities are poor in the provinces
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| Malaysia |
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- Relatively low living costs, but housing costs can be expensive relative to other Asian destinations, depending on location
- English widely spoken and understood
- Culturally very diverse, with significant Chinese and Indian populations apart from the dominant Malay population (60%)
- Very good quality medical and health facilities available
- Good infrastructure in major urban environments and generally
- The earliest and most comprehensive retiree visa programme in SE Asia - "Malaysia My Second Home' - providing 10 year visas and the ability to buy property freehold
- Significant number of disparate locations (eg. KL, Penang, Sarawak) attractive to retirees
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- Possible extension of Syariah (Sharia) law outside the Muslim state of Kelantan, and the introduction of "hudud". Less probable given the recent UMNO defeat, but we do not support the retirement to any country that applies "hudud"; whether in principle it is restricted to Muslims, or otherwise.
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The most obvious location missing from the list above is Bali - however, Bali is a part of Indonesia and can not, or should not, be considered in isolation. Indonesia is the world's most populous Muslim nation and, whilst it has a long history of tolerance and moderation, some recent events suggest that a very much less tolerant environment may be developing.
Our basic concern with respect to Sharia law is, apart from the medieval nature of the penalties, that it is not compatible with a separation of powers - judicial, executive and legislative - and religious changes could significantly impact the future property, civil and other rights of non-Muslims. Our view has been reinforced with the announcement of proposed changes to the criminal code which did not proceed but should have any proposed retirees reconsidering any investment in Indonesia and current retirees pondering a withdrawal. Indonesia would appear to be on a tangent, constrained recently by the Covid pandemic, of increasing Muslim ascendancy.
While Bali and Indonesia are likely to remain wonderful tourist destinations, different considerations clearly come into play when choosing between tourist destinations for a few weeks and and long-term retirement destinations for 10 to 20 years.
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