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Tourist Visa Can You Invest on a Tourist Visa? (Additional Math Question)

Discussion in 'Passports and Visas' started by Rye83, Mar 16, 2019.

  1. Rye83

    Rye83 with pastrami Secured Account Highly Rated Poster SC Connoisseur Veteran Army

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    Can tourists purchase government and corporate bonds? If so, what happens when those bonds mature and you collect your interest (income)? Isn't making money in the Philippines a no-no for tourists? Or does income from interest differ from income earned through labor in the eyes of the law/immigration?

    If tourists can't do this is there a visa available to those with money to invest in these types of things?

    Additional Math Question:
    (Hypothetical question here: don't start scoping my place out or plotting some kidnapping scheme. You would end up disappointed. Numbers were simplified to make the math easier.)

    Say I had an extra P10M sitting around to throw at Philippine government bills/bonds. If the interest is 6% per annum for a 3 month bill would the math look something like this:
    P10,000,000 * 0.06 / 12 * 3 = P150,000 / quarter
    P150,000 / 3 = P50,000 / month

    That being; every 3 months at maturity the interest would come out to P150,000 (or P50,000 per month averaged out)?

    Additional SRRV Question:
    Would the income earned through interest on Philippines bonds count towards the Certificate of Retirement Benefits income requirement ($800.oo for single applicants)?

    Additional Additional SRRV Question:
    Do Government/Corporate bonds count towards the Visa Bank Deposit requirement ($50,000 for my age bracket).

    Basically, could government/corporate bonds hit two birds with one stone for the PRA?
     
  2. Solid_Pan

    Solid_Pan DI Junior Member Blood Donor

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    As a holder of the SRRV, of course you can invest in philippine bonds, but:
    - the earned interests do not count as an retirement-pension as defined by PRA.
    - it also does not count as a VISA deposit. This deposit has to stay in one ( or more, think about the deposit insurance) account(s), not in a stock portfolio.
    - as far as I know it is subject to 20% withholding tax, your bank will know that.

    I do not know if it is additionally subject to income tax.
     
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    Last edited: Mar 17, 2019 at 7:38 AM
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    Rye83

    Rye83 with pastrami Secured Account Highly Rated Poster SC Connoisseur Veteran Army

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    Sounds like the SRRV just isn't going to be for me then. I may try for this SIRV visa. Seems like the requirements are much easier to meet.
     
  4. TheDude

    TheDude DI Forum Patron Highly Rated Poster

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    Would a retirement visa be worth tying up funds into Phil-Bills rather than something with a potentially higher return? For example, the S&P500 has historically returned higher than this.
     
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    Rye83

    Rye83 with pastrami Secured Account Highly Rated Poster SC Connoisseur Veteran Army

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    The SIRV is not a retirement visa, it is a permanent resident visa for investing at least $75k into Philippine publicly traded companies. It is an investment visa. I think it may be a good fit for my lifestyle. The requirements seem pretty relaxed compared to many other visas (there seems to be just one rule: keep $75k invested).

    No they haven't. The Philippines pretty much stays on par with the US:
    DOWvsPSEi.png
    I don't think there is much of a risk of the PSEi crashing...at least from looking at historical data. It is down 5% for 2019...I know it isn't recommended to try to time the markets but, it is very tempting.

    I already have significant investments in the US markets and would continue to invest the majority of my income (around 75%+ of it) into my retirement and investment accounts in addition to the Philippine market (maybe throw around 10% of my income into that). I certainly wouldn't be throwing all my eggs, or even a significant portion of them, into one poorly made and held together 3rd world basket.
     
  6. TheDude

    TheDude DI Forum Patron Highly Rated Poster

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    I see. What's the greatest benefit of the visa options you are looking at? Which benefit really sells it for you, aside from the free Duterte bobble-head?

    I was referring to this quote...

    Historical return of S&P500 has been more than 6%. I don't know how the Philippines stock market compares. If you're going much lower than what you could easily get elsewhere then you might end up paying even more than a tourist visa.
     
  7. Notmyrealname

    Notmyrealname DI Forum Patron Highly Rated Poster Showcase Reviewer

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    No comment!
     
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    Rye83

    Rye83 with pastrami Secured Account Highly Rated Poster SC Connoisseur Veteran Army

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    Answered this in the other thread: No marriage required. No work/employer required. No retirement income required. No luck required. No locking money up in a bank forever. No renewal every 2 months. No requirement to leave after a certain amount of time.

    Tourist visas are for tourists. They are not meant to stay long term. The rules could change at any time for them. The same could be true of any other visa but I believe, historically, the tourist visa have seen the largest change since I first came to the Philippines. Currently those changes have mainly been for the benefit of the tourist but it could go the other way just as quickly. (Look at what Thailand recently did to keep expats from the lower social and economic brackets out. Eventually the Philippines is going to get tired of those trailer-park expats and do something similar and change the rules to attract more affluent expats.)

    As for the S&P vs government/corporate bonds, here is how I feel there is a difference: Things like S&P focus on long term capital growth. Also, if you hold a stock for less than a year I believe you are penalized with some pretty hefty fees/taxes. The learning curve for investing in individual stocks is also quite steep. I see bonds as a far less risky and challenging endeavor. Government securities are much easier to get a grasp on and they mature (pay out) in much shorter periods. I see these as being more income focused.

    Please note I am no expert on this type of stuff. I could be completely wrong in my views here. I'm not trying or have any expectations to become a billionaire with any of this stuff. I'm just trying to build up a decent amount of passive income so I can retire early while maintaining a very healthy savings account.
     
  9. TheDude

    TheDude DI Forum Patron Highly Rated Poster

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    I guess it depends on what you are looking at. You can buy, sell and trade stocks all day long through Robinhood, which is free or nearly free. Funds which track the S&P500 (check out Vanguard and Wealthfront for options) are great options for risk and learning curve. At your age, you want all the return you can get to be sure it's going to last through an early retirement.

    I'm at a crossroads of decisions myself. I had a good run here and I'm looking at a reboot. At the least I'm likely to move back to the motherland at some point this year. That all depends on similar visa questions and other possibilities. In general, I don't see the point in getting anchored here through visa, investment, house, etc. If they change the visa laws, then there's a load of other places to check out. If it flies, f***s or floats, then rent, don't buy. Go ahead and add visas and and all other considerations in this thread to that list.

    Not trying to bag on your decisions. I have been pondering similar since recent turns of events.
     
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    Rye83

    Rye83 with pastrami Secured Account Highly Rated Poster SC Connoisseur Veteran Army

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    It is "free" to trade on their platform....you can get yourself in trouble with the IRS if you don't know what you are doing though. There are a lot of laws surrounding trading. It isn't anything to really worry about when you are trading a couple hundred or thousand bucks, the IRS probably wouldn't even notice you, or if they did they wouldn't think it is worth to come after you. However, start trading $100k/year....yeah, the IRS is going to dedicate some time to you.

    One of the companies I use is Wealthfront. They do a pretty decent job of explaining how everything works.

    One of the perks I see with the investment visa is that I can up and leave if things go south. Just have to call the investment firm and tell them to sell everything and wire to my bank account then I throw up the deuces. IMO, the SIRV is just a hassle free tourist visa for people with money to invest.
    I will never purchase/buy land (that I can't own), motorcycles could be driven into the ocean if a seller with cash couldn't be found quickly.

    How long have you been in the Philippines now?
     
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    Last edited: Mar 18, 2019 at 1:22 PM
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