How to Choose a Country to Move To: Language, Tax, Passport, and Other Criteria

Choosing a country to relocate to comes down to three core criteria — language and mindset, the tax regime for new residents, and how fast you can get a new passport — plus secondary factors like cost of living, climate, and access to education and capital.

In short

• The three main criteria for choosing a country are language, tax, and how fast you can get a passport — everything else is secondary.
• Tax holidays for new residents are temporary: 4 years in the UK, 5 years in Spain, and Portugal has scrapped its version.
• Exit tax requires valuing assets at fair market value at the start of residency, not at the moment you leave.
• A 5-year naturalization timeline (France, Germany, UK) usually means only the right to apply, not the passport itself.
• A high cost of living isn’t always a downside: in New York and London, high prices are offset by high incomes.

The three main criteria: language, tax, passport

Out of roughly ten basic criteria for choosing a country to move to, three are considered primary: language, tax, and passport. The other factors — education, climate, access to capital — matter too, but these three set the structure of the decision and determine whether a country is even a viable option in the first place.

Language comes first not only on its own merits but as the foundation for everything else: it’s what children will be taught in at school, what people will use to socialize, and what daily life will run on. Even education, which looks like a separate criterion, ultimately comes down to language — a child will still have to study in the local language unless the family can afford private school.

Tax ranks second after language. It’s a decision that’s cheaper to lock in upfront: planning a new tax residency in advance is far simpler than dealing with the consequences after the fact.

The third criterion is the passport — more precisely, the speed and conditions of getting there: how easy it is to obtain the first residence permit, renew it, how transparent the process is, and the timeline to permanent residency. This is a question people rarely thought about before, but it has become especially significant in recent years.

Language and mindset: why this is criterion #1

Fluency in a language doesn’t make someone part of a new culture — the limiting factor isn’t language, it’s mindset. Even with fluent German or French, an adult who didn’t go through local kindergarten and school doesn’t absorb how local people actually think: values and behavioral logic are shaped by the environment of childhood, not by vocabulary.

Fluency in a language doesn’t make someone part of a new culture — the limiting factor isn’t language, it’s mindset.

It works differently for children. A child who goes through kindergarten, elementary, and secondary school in the new country grows up on the same wavelength as their peers and absorbs the local mindset naturally — through the environment, not through language lessons.

English alone isn’t enough for this: if a family chooses an expensive British-style private school, the child may barely interact with the local environment at all, even while living in, say, France, Spain, or Portugal. Integrating into that environment still requires learning the local language.

The choice of language track also affects higher education later on. A German, Spanish, or French track opens access to state-funded European universities that are, in terms of quality, on par with — and sometimes ahead of — expensive private universities in the UK and the US. Strong technical and liberal-arts universities exist not only in English-speaking countries but also in Germany, France, and Spain.

Education: private schools, public universities, and budget savings

A private British school costs roughly $10,000-$20,000 a year per child as a baseline track, which can climb to $60,000 for a more advanced program. Money alone doesn’t fully solve the integration problem: even with a paid private school, a child still has to live in France, Spain, or Portugal — and therefore still has to pick up the local language and environment.

Private higher education costs even more than private schooling. The alternative is to follow a German, Spanish, or French language track and gain access to state-funded higher education, which is subsidized by the government and matches — or sometimes exceeds — the quality of expensive private universities in the UK and the US. With this choice, a family can save, by some estimates, hundreds of thousands of dollars — roughly the gap in tuition costs between a subsidized European track and private universities in English-speaking countries.

Strong universities are unevenly distributed across countries:

• Germany, France, Spain — retain serious state universities;
• The EU as a whole — strong technology, engineering, and liberal-arts universities;
• The UK — business education with a focus on finance and creative industries;
• The US — leadership in finance, business, and tech fields, with MIT as the undisputed world leader in engineering and technical disciplines.

Connection with a strong university can begin long before admission. In Boston, high schools and middle schools are directly linked to universities in Massachusetts, including MIT and institutions affiliated with it — giving students technical and engineering-minded thinking from a young age. MIT itself runs summer programs for middle and high school students, shaping future applicants well before they apply.

Tax regimes for new residents

From a tax standpoint, countries fall into two groups: those with no taxes at all, and those with temporary preferential regimes for new residents. The first group includes Dubai, Panama, Costa Rica, Ecuador, Paraguay, and a handful of small offshore jurisdictions — such as Nevis, which has neither taxes nor financial information exchange with other countries. But there’s little to do on islands like that, and people rarely stay long.

In the US, Western Europe, and the UK, a progressive scale with high rates is in place, and the main tax burden falls on the middle class — people earning roughly $150,000 to a few tens of millions a year. The very wealthy use loopholes they write into the law themselves, and the very poor are helped by everyone else who pays for them.

To attract wealthy new residents, a number of countries offer temporary exemptions from tax on worldwide income and assets — that is, on what’s earned and held outside the country. The length of the exemption varies: the UK used to offer 15 years, then cut it to 7-8, and now it’s down to 4 years. Spain offers a 5-year exemption, but not to every category of new resident — eligibility typically goes to employees, company directors, and certain entrepreneurs, and the applicant must not have been a Spanish tax resident for the previous 5 years. Portugal used to be considered one of the most attractive jurisdictions for this kind of regime but has since scrapped the benefit. Cyprus still offers something, the UK operates under a ruling, and France has a separate regime for employees transferred to work in the country — it runs for a limited period (up to eight years) and exempts not the entire salary, but only the relocation-related premium.

The catch with all these benefits is that they run out fast: 4-5 years go by quickly. Before the preferential period ends, you need to restructure your asset-holding setup and cash flows in advance — otherwise the country will start taxing what used to be exempt. Sorting out the tax rules needs to happen before the move, not after it.

Exit tax: what to think about in advance

Almost every country levies an exit tax — a tax triggered when you leave tax residency. The logic is simple: on entry, a person declares assets and businesses, and on exit the government wants its share of the accumulated gain in value before letting the taxpayer go. The problem gets worse if the new tax residency is set up outside the European Union — that’s when the real complications with calculations and paperwork start.

Exit tax rules vary in how strict they are. The US system is considered the most complex. France’s and Spain’s rules are described as nearly as convoluted and demanding on the details.

Preparing for exit tax needs to happen in advance, not at the moment you leave residency. The key step is to value assets at the correct fair market value and lock in that valuation at the start of the residency period. Put it off, and leaving residency can end up costing much more: the gap in asset value between entry and exit is often taxed, and without an early valuation on record it can be hard to prove the original cost.

Preparing for exit tax needs to happen in advance, not at the moment you leave residency.

Speed to a passport: how many years you need to live in a country

For citizens of the Russian Federation, the question of how fast they can get a new passport is usually more pressing than for other applicants — after 2022, a topic that used to be pushed to later became one of the top criteria for choosing a country.

Countries fall into three groups by naturalization timeline: some require 10 years of continuous residence, others 8, others 5. An important caveat: 5 years usually doesn’t get you the passport itself, just the grounds to apply for citizenship — the application is then still reviewed.

Standing out on this criterion:

• France, the UK, and Luxembourg (with some caveats) — the most favorable terms among the countries covered.
• Germany — recently passed legislation allowing citizenship after 5 years, and reportedly after 3 years for certain categories of skilled specialists; exactly how that rule will work in practice for the “highly skilled” is still unclear.
• Portugal — used to offer citizenship after 5 years as well, but that program has been shut down.
• Spain and Italy — require 10 years of residence; there are rumors that both countries don’t want to fall behind in the competition for skilled workers and might revise their timelines.

One more thing worth noting: Spain already draws large numbers of migrants due to its relatively low cost of living, which has already driven that cost up — worth factoring in if you’re choosing a country primarily for a fast passport rather than for prices.

Cost of living and income levels: why cheap countries aren’t always a good deal

Cost of living is a criterion with a catch: the same logic applies here as in investing, where high returns mean high risk. The lower the cost of living in a country, the lower, typically, both earning potential and quality of life tend to be. The reverse holds just as reliably: the more expensive rent is in a given place, the higher wages and business opportunities there usually are — otherwise people wouldn’t be drawn there in the first place.

The lower the cost of living in a country, the lower, typically, both earning potential and quality of life tend to be.

Spain is a textbook example of an affordable country that draws migrants precisely because of its low cost of living. But the influx of newcomers has already pushed prices up in Spain more sharply than in some countries that were originally considered pricier.

There’s also a paradoxical situation that breaks the direct link between prices and earning potential. Tbilisi, Yerevan, Istanbul, Alicante, and Lisbon have all gotten sharply more expensive, even though there’s no real increase in opportunities to earn or build a business there. The cause is panic migration: people moved to places that didn’t require a visa and were expected to be cheap. The influx was so sharp that, in some cases, rent on the French Riviera became cheaper than in Barcelona or Lisbon — an illogical distortion for a region that was already expensive to begin with.

France didn’t get caught up in this wave: it was already considered too expensive, so it saw no mass migration, and there simply wasn’t much room left for prices to rise further there. The situation in the overheated cities is gradually normalizing as people start spreading out from the overloaded regions — but for now those places combine high population density with minimal economic opportunity.

A high cost of living isn’t always bad — the question is whether it’s proportional to income. The average salary of a public-sector employee in New York is around $120,000 a year, which would be a great sum in Europe, but in New York that person is essentially barely making ends meet. At the same time, it’s possible to earn far more there — much like in London, where it’s precisely high earnings that push housing prices up. So cost of living should be assessed not on its own, but together with the income level a given country or city actually allows people to earn.

Climate and access to venture capital: secondary but important factors

Climate is a personal criterion, but for people who depend on sunshine, it can outweigh cost of living and tax regime. Among European locations, four regions tend to stand out on this front: the French Riviera and Barcelona as near-perfect fits, and Bavaria and the Netherlands as more debatable options due to a lack of sunny days. The choice here comes down to personal preference: some people need warm sea, some need a cold ocean, and some don’t care about climate at all.

For entrepreneurs launching a startup, access to venture capital becomes a key secondary criterion. It’s concentrated in a handful of hubs worldwide: in the US, that’s San Francisco and New York; in Europe, London, Paris, Berlin, and Madrid. London, by one estimate cited, accounts for around 80% of all venture money in Europe, which is why investors and startups gravitate there.

Physical presence in a capital market isn’t always required: by one estimate from the source material, up to 90% of a startup’s work can be done remotely from anywhere in the world. Being there in person matters more for the co-founder responsible for raising investment or growing the business in a specific market. If you look at the size and accessibility of the market itself rather than just capital, the UK still comes out on top — as a large, consolidated English-speaking market, unlike the more fragmented domestic market of the EU.

Frequently asked questions

If I’m moving alone, without kids, does language still matter as much?

The article ties the importance of language mainly to absorbing a local mindset and to children’s education: a child picks up the local culture through the environment of kindergarten and school. For an adult without kids, language is still needed for daily life and work, but the pressure of this criterion is lower — the education and integration-through-school angle simply doesn’t apply.

Can I switch tax regimes after moving if it turns out to be unfavorable?

Preferential regimes for new residents run for a fixed period (usually 4-5 years), and before it ends you need to restructure your asset-holding setup and cash flows in advance. It’s best to work through the tax rules and restructure before the move, not after — otherwise the country will start taxing what used to be exempt.

What happens if I don’t lock in an asset valuation at the start of tax residency?

Without an early record of the fair market value of assets at the time you enter residency, it becomes hard to prove their original cost when you leave. As a result, exit tax can end up costing significantly more, since the gap in asset value between entry and exit is often taxed.

Do the 5-10 year naturalization timelines apply equally to every applicant?

No, terms vary by country and category of applicant. In Spain, for example, eligibility for the preferential tax regime for new residents goes mainly to employees, company directors, and certain entrepreneurs, while in Germany the accelerated 3-year naturalization timeline applies only to certain categories of specialists — and exactly how that rule will work in practice is still unclear.

Should I pick a country purely because of its low cost of living?

No: a low cost of living usually also means lower earning potential — the same logic as high-risk investments. On top of that, affordable countries can get sharply more expensive due to an influx of migrants, as happened with Spain, Tbilisi, Yerevan, Istanbul, Alicante, and Lisbon, where prices rose without a matching increase in earning opportunities.

Do I need to be physically based in a city with venture capital to launch a startup?

No, not necessarily: up to 90% of a startup’s work can be done remotely from anywhere in the world. Being physically present in such a hub matters more for the co-founder responsible for raising investment or growing the business in a specific market, not the whole team.