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Andrew Henderson

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Andrew Henderson wrote the #1 best-selling book that redefines life as a diversified,
global citizen in the 21st century… and how you can join the movement.

Global Citizen

What I learned by getting rejected for EU residency

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Dateline: Belgrade, Serbia

I got rejected, and I want to tell you about it. (More on that in a moment.)

I decided to extend my stay in Belgrade for a few days in order to do some more research on numerous flag planting opportunities here, and to fly down to Montenegro to handle more research there and pick up a debit card for a new bank account.

The Balkans are one of the world’s best kept secrets. While Serbia and Montenegro are not suitable for planting all of your flags, procedures here are relatively straightforward.

Want to be a resident? The process isn’t that difficult, and you only need to spend 91 days per year here.

Want to open a bank account? Also not difficult. While banks in Serbia in particular aren’t very remote friendly, they’re also not strung up in red tape. Banks in Montenegro are a bit better.

I often refer to Serbia, Montenegro, Georgia, and other countries as examples of European countries doing things the right way. I’m not going to argue that any of these countries are perfect, but they’ve eliminated a lot of bureaucracy and imperiousness for one simple reason: they have little other choice if they want to succeed.

For example, new businesses in both Serbia and in Montenegro can start operating with just one euro of paid up capital. Heck, here in Serbia, you don’t even need to infuse your company with that high amount of cash for five years after forming. In Montenegro, the administrative cost to start a business is practically nothing.

On the other hand, many countries in the European Union feel they do have a choice, and have become impossible to deal with.

Even EU citizens are having trouble within Europe, as British newspapers recently reported than more than one in four EU citizens living in the UK were denied the chance to get residency.

Sadly, much of western Europe is a disaster to do business in. Setting up a company can be a painstaking process. Opening a business bank account often requires multiple visits. Changing something as simple as the registered agent on your company can require three different stamps and seals.

It’s bureaucracy run amok.

While I do maintain residency in Europe, I wanted to conduct an experiment: could I become a resident of a top-tier European Union country that would not only offer me a prestigious way to live in the Schengen Area, but also to possibly obtain one of the best passports in the world in several years.

This is the story of my personal failure to get EU residency. I am not going to share the country name because I am appealing their denial, and because quite frankly it doesn’t matter. The process throughout much of the European Union – at least the “rich” countries that people seem to want in to – is rather similar.

Ways to Get EU Residency

If you’ve read this site at all, you know that there are several ways to obtain resident status in the European Union:

1. Make an investment.
This approach is simple: by investing in real estate, or government bonds, or by depositing money in one of Latvia’s crumbling banks, you can obtain second residency almost immediately, with all of the privileges of living in the Schengen Area, but not necessarily the obligation to, or the obligation to pay tax. Portugal is among the most famous with its Golden Visa program, but Spain, Latvia, and other countries have similar programs. The field is shrinking, though; Hungary cancelled its program earlier this year.

2. Start a business.
While not as simple, this approach is also straightforward. As one of my podcast guests recently stated, there will always be countries willing to welcome entrepreneurs who can generate profits and hire local workers. There are too many

3. Prove your wealth.
This option is less straightforward, and there are numerous variations among programs that tend to come and go. Up until recently, Italy allowed folks to deposit a nominal amount of cash in the bank and become resident rather easily (easy by Italian standards, at least). This option, in addition to being unclear, is not so popular any more, so unless you’re already an EU citizen, there aren’t many opportunities. That said, one option to bypass EU residency entirely is to buy an EU passport from Cyprus or Malta.

4. Prove your ancestry.
While most of the focus on having European ancestry is in obtaining citizenship by descent, a few countries like Lithuania offer residency by descent for those who can prove some ties but not enough, or those who would be forced to give up their current citizenship and don’t wish to do so.

My EU Residency Experiment

Sixteen months ago starting last January, I set out to get one of the top-tier second residencies in the EU. Seeing that this was something of an experiment (albeit one I originally hoped would also work out favorably), I decided to start a business.

Getting residency by investment is relatively easy; you invest, they give you a resident card. Not much to experiment with since there are few variables. It’s a binary process.

Now, did I need to start a business in the EU? Not particularly. I was willing to do so, and I immediately started generating a lot of ideas for potential businesses in western Europe, including expanding Nomad Capitalist on the ground, which I decided was ultimately the most straightforward option to present to the government.

The issue at hand was “how big am I willing to make this business?” After all, I’ve worked hard to get my global tax rate down to 1% – a far cry from the 43% I paid in the United States – and I’m not sure that residency in Europe and the shaky potential of a passport years down the road was enough to start paying western tax rates on my entire income again.

So I devised a plan: I would invest in hiring western Europeans to offer consulting services within Europe. I packaged the idea in a nice, government-friendly presentation, and set off on my way.

The first step was to form a company. This required me to be a shareholder, of course, which was annoying because I would have preferred to make the company a subsidiary of Nomad Capitalist which would allow for an easier capital contribution, especially as a US citizen.

However, using corporate shareholders on companies formed for residency is often a bad idea.

I was also required to appoint a “non-remunerated director” who lived in Europe or could prove ties to Europe. This part was easy, at least after the awkward conversation asking my friend and then-employee to serve in that role.

The company took about a month to setup, which is a far cry from speeds in Hong Kong or the BVI or even Delaware, but not as bad as I expected.

What took quite awhile and caused a lot of frustration was the bank account. While I was only required to visit one time, and the bankers were quite cordial, the list of questions and forms to fill out was daunting, and the time to actually open a simple bank account was about six weeks. Thankfully I had someone handling the documentation for me.

Once the bank account was open, I could apply for residency. That didn’t mean the bank account functioned easily; it took about eight letters before I even got an online banking token, and to this day I still can’t figure it out.

Applying for Residency

I wasn’t required to do any business right away in the same way any other company can sit dormant. My goal was to use the company as a means to live in a hot spot in Europe, one that would surely remain in the good graces of the western world, even if eastern EU countries were eventually kicked out of a crumbling European Union.

Last June, I started the residency process. Admittedly, it was a slow start, as I was traveling a lot last summer and dealing with a lot of issues alongside an ever-growing business. However, my document guy was making sure that the paperwork was filled out and that my ideas were turned into a workable, bureaucrat-friendly business plan.

The entire stack of paperwork was about fifty pages, all of it in a language I do not yet speak (and now, likely will never bother to learn). It was daunting and seemingly repetitive.

The real issue was filing the paperwork and waiting for a response. That was, unsurprisingly, the hardest part.

I remember the week that we sent everything to the immigration authorities to process, because it was the same week I was in Hong Kong. That week in July 2016, I sat down with a good contact of mine whose parents still live in Europe and offered to rent me their guest house for a very reasonable 200 euros per month to serve as my official residence.

While the idea of living in a guest house in someone’s backyard seemed odd for someone discussing Hong Kong tax law over tea and piano music at the Four Seasons, I eventually warmed to the idea as I realized that my travel schedule would still keep me out of Europe for most of the time, and out of my potential country of residence for the vast majority of the time.

Basically, I just need a place to call home in the country and a few employees running the shop while I would check in periodically.

As time passed, something funny started to happen. I started talking to the country’s people and came to like it. They were surprisingly laid back and far less nationalistic than I expected. One guy even said the country was the most unpatriotic country on earth.

For someone who advises “go where you’re treated best”, such a lack of nationalism seemed to be an attractive feature. Maybe I could feel at home in this place after all.

Building my Residency Business Plan

Suddenly, I went back to the drawing board to think of new ways to expand Nomad Capitalist into Europe, dreaming up everything from opening retail offices to offer emerging market real estate to serving as the headquarters of a chain of investor services offices.

As I dreamed, I also waited. And waited. And waited.

From our filing in July, months passed without hearing anything. Then finally, I was summoned for a residency interview. As anyone who has filed for residency in a “serious” country knows, you are required to do everything at the embassy nearest your current country of residence.

That means if you live in the US or are a US citizen or green card holder, you can use the embassy in the United States. However, you would be prohibited from doing so if you were simply visiting the United States.

While countries like Mexico or Malaysia could care less, EU countries are strict about this thing. There was only one problem: the embassy in my country of residence didn’t process immigration applications.

After six months of waiting, I was ready to visit the embassy for my interview… in a country I needed a visa to visit. That visa process was so ridiculous that I literally decided to wait for a pending new citizenship to be issued to me so I could get my new passport and travel there visa-free.

That delayed the process another two months.

Attending My Residency Interview

About eight months after we filed the initial application, I finally visited the consulate. All in all, I can’t complain about the visit. Everyone was very polite to me, even if their hours of operation and small staff made scheduling inconvenient.

As this is Europe we’re talking about, every detail was scrutinized. The consular staff politely but firmly informed me, for example, that my CV needed to include all citizenships and my eye color… two details that were conspicuously missing.

The evening after my first consular visit, I went back to my hotel to type up everything from the replacement CV to a letter explaining why I wanted to live in the country.

During the entire process, I wondered how many starry-eyed immigrants to the United States ended up with some form of buyer’s remorse because it was overhyped. For years, immigrants poured into countries like the United States purely for the opportunity, and those countries accepted them without the need for a CV or a letter explaining their love for the country.

I imagined that my letter expressed the immigration version of that girl you dated because you liked her on paper, but never thought about being more serious with her. I didn’t love the country, at least not yet… I was an economic immigrant who wanted to bring a solid business track record there in exchange for a residence permit.

You know… like every single freaking person who ever passed through Ellis Island. Those immigrants wanted more freedom and greater prosperity. They weren’t in love with American ideals when they arrived because they had no idea what those ideals were.

Anyway, the second day I returned to the embassy with all of my updated documents and a few extra documents from my preparer. The staff consciously reviewed every document before introducing me to the ambassador, with whom I would have my formal interview.

Accompanying the ambassador was a young go-getter who never spoke, but seemed to take copious notes of everything that was said. Occasionally, he would peek up from his notepad to look at me as if seeking clarification on the topic at hand. In other words, he was the European ambassador’s version of Jared Kushner.

The ambassador asked me why I wanted to obtain a residence card, and I explained the business opportunities in front of me and why Europe should play a role. Obviously, I refrained from using terms like “high-tax hellholes” or “communist dump”; not that this country fit into those parameters, but I didn’t want my libertarian streak to show through, and I played it cool.

At some point near the end of the interview, I slipped into some sort of Donald Trump impression when I explained the growth potential of my new European business, then followed it with “and I think you’ll be very proud”.

True to European form, the ambassador was stoic, but I wonder if he took my comment as overly braggadocious or simply “too American”. After all, I wouldn’t imagine that guys used to working at EU headquarters have a particular fondness for Donald Trump.

It was not long after that moment that the ambassador informed me that I would receive a decision within four months, one that would be influenced by my business plan as well as, he firmly stated, his decision.

“Oh, great”, I remember thinking. One unintended Trump impression and I’m sunk. I left the office, but didn’t get far. Within fifteen minutes, the embassy called my assistant to inform her that there was still one document that I needed to provide, and I rushed back to find the embassy closed. The issue was finally resolved several hours later.

Being Rejected for EU Residency

One good thing about much of western Europe – at least the parts that aren’t warm enough for everyone to be lazy and take afternoon siestas – is that they operate on a predictable timeline. When the German embassy says something takes a week, I imagine it takes exactly a week; no more, no less.

In my case, I was pleasantly surprised to receive an email last week explaining that there was a decision reached in my case a mere two months into the four-month process.

Normally, this could be either very good (think: you’re starting the next Facebook, they know everyone wants you, and they don’t want to risk losing you) or very bad (think: you did a low-level Trump impression and the ambassador told everyone you’re an idiot who can’t be trusted).

The email I received last week merely implored that I “return to the embassy immediately”, but provided no further details. As a Nomad, returning to the embassy forthwith was not an immediate option, but I asked my contact to inquire further.

A few days later, the verdict was in: denied.

We’re still seeking full details, but both of us can surmise the potential reasons, any or all of which may apply.

For one, my business isn’t exactly EU friendly. They like their taxes over there.

Secondly, my listing “all of my citizenships” as required on my CV may have worked against me. The ambassador specifically asked “oh, and one day you’ll be our citizen, too?”, a sort of odd invitation that seemed like a trap either way. I politely downplayed the idea, not wanting him to think I was on a passport collecting spree, but then worried that perhaps he was insulted that I wouldn’t want to share a citizenship with him. Oh, well.

Lastly, the most desirable parts of the EU have simply become difficult in general. Unlike here in eastern Europe, they scrutinize everything carefully there, and I suspect they figured I wasn’t giving it my all. If it were an issue of business experience, my CV provided plenty; they must have wanted a bigger business.

Lessons from my Rejection

One lesson I’ve learned is that this rejection is a reminder of the importance of what we do here at Nomad Capitalist. I charge high fees because, unlike any service provider I know, I actually invest years of my life and thousands of dollars at a time of my money to try stuff out and see what works… and what doesn’t.

It’s real-world experience that makes the difference.

Just as importantly, I am reminded of the fact that Europe is on the wrong side of the bell curve when it comes to making things easy. Just changing the registered address of my company took one week and cost 600 euros, so why would I expect the residency process itself to be straightforward?

Like Hong Kong and Singapore, western Europe is trying to be particular about who it excepts. Unlike Hong Kong and Singapore, they are not doing so because they are full and don’t have room for anyone else. They just want to be picky.

This is why the world’s new safe havens, as I call them, are so important. There are countries like Serbia that, while not always a walk in the park, are generally on your side. They want you to come there, even if it’s not full-time and even if you’re not planning on earning millions there. They just want people to help them grow.

Western Europe, on the other hand, has a cornucopia of reasons to keep foreigners out, and I expect with the rise of nationalism this trend will only increase. I’m fortunate to have other residencies, and quite frankly I believe that EU residency and citizenship may become devalued in the coming years from a tax perspective.

I tried to go for the creme de la creme, and I failed. Fortunately, I still enjoy open access to Europe, but my rejection serves as a lesson that going where you’re treated best is so important.

I’m honestly not upset about my rejection because, quite frankly, the prospect of five years of paperwork and mindless compliance with stupid rules would have put me in an early grave. Contrary to Oscar Wilde’s famous quip, I want to go places where I am wanted, and where the process is easy… and nothing in the European Union is easy.

If you plan to obtain EU residency by starting a business, your chances will be better if you shoot for countries in the eastern part. By east, I mean really east; think Romania or Slovenia or Estonia, and skip countries that have become more nationalistic and closed off, like Hungary or Poland or Czechia.

Otherwise, I do see a trend toward non-EU countries being the way to go. Europe is becoming more open to tourists, but less open to immigrants. Perhaps being Montenegrin, with the daily ritual of having coffee overlooking beautiful Kotor Bay, could be a far more simple and rewarding procedure than becoming French or Belgian or Dutch.


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