Qualifying for the Financier / "Rentista" Visa

When I applied for the rentista visa, I was told by the folks over at ARCA that it was the easiest and quickest visa to obtain. Here's a question by a reader regarding this visa and my answer:

Reader's Question

You mention the rentista visa. Which state did you incorporate? Nevada? Do you then have the corporation wire the $1k per month to your account in an Argentine bank? Was that the basis of your obtaining a Rentista Visa? Also, am I correct in assuming the income has to be passive (like rental income, investments or simply money your US corp makes that doesn't require your actual labor)? Thanks.

About the Rentista Visa

First off, it doesn't matter what state you are incorporated in. It doesn't matter what form of business you're using either. You could have an S-corp, C-corp, LLC, partnership, whatever. The only thing you need to get a rentista visa is a letter from a CPA that simply says you have income over $1000 per month from investments.

In this case, as the shareholder of a business, your business is your investment. The income has to be dividends or distributions of profit, however. It can't be salary. For those of us that own our own business, it really doesn't matter much. You can tell your accountant how you want to be paid -- either in salary, distributions or a mix of the two.

At first you might think this precludes income that requires your labor, but that's not the case. Let's suppose you're a consultant who earns $60/hr. Instead of having your clients pay you personally, have them issue a check to your company. From your company, then pay yourself distributions of profit of over $1000 USD per month. That allows you to take income that would have been associated with labor (which doesn't qualify for the rentista visa) and turn it into business profits, which most certainly do qualify.

U.S. Tax Consequences

If you plan on applying for the expatriate tax exemption, make sure you only take the minimum amount of profit this way. Business profits don't qualify for expatriate tax relief -- only salary does. Talk to your accountant, but the best setup is probably to take a little bit of your income as profits to keep your rentista status and take the rest as salary so that you can get it exempted under the expatriate tax rules.