Spanish villas are no longer the retirement dream as UAE enters the fray


There was a time when retirement to a hot climate for the average expatriate pensioner meant either Florida or Spain.

But because of the vast number of baby boomers that have started retiring with a vengeance, other destinations are competing for this multibillion market.

For Europeans, especially the British, Spain has led the market for many years but economic uncertainties after the 2008 crash and Spain’s subsequent broken economy have driven many back home. Last year an estimated 100,000 British expatriates left Spain.

So who are the new kids on the block? Which countries are offering the best incentives to attract this monied generation?

To put it very simply, three major factors influence retirement destinations. The first is sunshine, the second a reasonably priced property, and the third a friendly tax regime. The latest contenders are:


Spain’s neighbour was one of the first out of the starting blocks when it comes to alternative retirement destinations. Immediately after the 2008 crash it introduced a very attractive 10-year income tax exemption for foreign residents.

Even the great deal of economic uncertainty it has experienced does not seem to have dented retirees’ enthusiasm for its newly found status as a European tax haven. The only downside appears to be that the 10-year tax holiday only applies to income and there may still be a capital-gains tax liability for certain individuals.

Portugal’s motivation for an all-out effort to attract retirees from Northern Europe is simply to boost its economy. It also has a hidden agenda of trying to attract back its own citizens who emigrated as a result of the economic difficulties a few years ago.

Surprisingly, Portugal is also attracting many French who on retirement become fed up of being taxed to the hilt. As a result, it is the French who are buying up properties in their thousands, making it now the third-largest European expatriate community after Spain and France.

Eastern Mediterannean

Countries in this region are accelerating their entrance into this market. Croatia and even Albania, for example, offer indicative tax rates of between 15 per cent and 20 per cent, along with a lower cost of living, than some of their more developed counterparts. Greece also makes it into this category, as it offers a low living cost. It is, rather ironically, a very popular destination for German retirees.


While the hot European destinations are growing as a result of their own economic woes, Middle East states are attracting the wealthy retirees. According to the Natixis Global Retirement Index, in 2010 the UAE was considered to be the 10th-best country offering for retirees’ quality of life. It is now at number three.

The UAE’s attraction is very straightforward. It has zero income tax, and unlike the European destinations it is in the middle of a massive construction boom. That means it attracts not only rich retirees but the full range of workers.

In spite of its comparatively high cost of living, it seems that Dubai is deservedly earning its nickname of “The New Spain”.

For those considering these destinations, the following can help ensure an effective retirement:

Assurance bonds

As investment vehicles through an insurance company, assurance bonds allow investors to build an investment portfolio in a tax-efficient environment. Due to its structure and offshore nature, approved assurance bonds can be used in a number of countries, including the UK, France, Spain, Italy, Malta, Portugal and Cyprus.

A trust

A trust is a relationship in which one party, known as a trustor, gives another party, the trustee, the right to hold a title to property or assets for the benefit of a third party, the beneficiary. Trusts can be used in a number of overseas countries with many different types depending on your scenario; the value is to protect future generations from paying tax on their inheritance.

Chris Ferguson

About Chris Ferguson

Chris formed Credence to bring credible financial advice to the offshore marketplace. Chris has been in financial services throughout his whole career, with experience in the GCC, United States, United Kingdom and Australia. Chris entered the financial services sector to enable as many people as possible benefit from freedom and choice in life by making good decisions rather than experiencing stress and anxiety over money.