If you’re trying to determine “What does country of residence mean?” get the quick answer below, followed by important nuances later in the article.
Importantly, you will need to confirm your country of residence anytime you’re looking to establish a new banking relationship.
In fact, your country of residence needs to be confirmed whether you are looking to establish banking relationships offshore, access an international debit card, or simply open a backup account.
As mentioned, we will explain important nuances related to country of residence throughout this article, including how certain countries are perceived.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- What Does Country of Residence Mean?
- Residency vs Nationality
- How Difference Residencies Are Perceived
- Frequently Asked Questions
- Do You Want Help Opening Bank Accounts?
What Does Country of Residence Mean?
Country of residence refers to a country where you have permission to reside. This can include both temporary and permanent residence. However, in the context of banking, country of residence typically refers to country of tax (or fiscal) residence, which means the country where you are obligated to file and pay taxes.
Proof of country of residence is often required for opening a bank account, applying for financing, and other related banking activities, such as requesting a cash advance as an independent contractor.
It’s also required if you’re applying for a mortgage as a foreigner. With that said, if you’re looking to purchase international real estate and want to learn more about financing real estate in Mexico, you can get started right now by accessing our free guide linked here.
Residency vs Nationality
To start, let’s make a clear distinction between residency and nationality.
Nationality
Nationality is your country or countries of citizenship. This is often (though not always) the country where you were born. When it comes to banking, financial institutions will ask whether you have second, third, or more nationalities as well.
Residency
On the other hand, residency relates to countries where you have a right to reside. You do not need to be a citizen of a country to have residency. Though you do need to go through a formal approval process in order to obtain residency in most situations. In banking, residency is most often determined by your country of tax residency, which is the country where you are obligated to file and pay taxes.
How Difference Residencies Are Perceived
Many individuals decide to obtain residency in countries that offer more favorable conditions than their home countries. These favorable conditions can include lower taxes, warmer climates, easier-to-navigate business environments, safer communities, better schools, and more.
That said, not all countries are perceived favorably when it comes to banking. Not surprisingly, those countries that cater to individuals seeking favorable tax conditions are often singled out as high-risk.
For example, individuals obtaining residency in low-tax environments like Malta, Cyprus, UAE, Panama, Cayman Islands, and elsewhere, may find that banks are less accepting of their applications for new bank account opening.
Of course, these individuals still have a wide range of banking options available to them. They just need to know where to look and how to overcome challenges related to their country of residence.
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Frequently Asked Questions
Below are two of the most common questions that we receive from people looking to understand what country of residence means. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
What Does It Mean By Country of Residence?
Country of residence refers to the country where you have the legal right to reside. While this often refers to your home country, it can also refer to a country where you are not a citizen. However, in order to obtain residency in another country, you will need to complete a formal application process with the local government in order to seek approval.
What Do I Put for Country of Residence?
When completing account opening documentation, your bank will ask you to put your country of residence. This typically refers to your country of tax residence, which is the country where you are obligated to file and pay taxes.
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