Permanent Residence vs. Citizenship vs. Visa vs. Tax Residence: What High-Net-Worth Individuals Should Know Before Moving Abroad

Moving abroad, overseas permanent residence, a second passport, golden visas, tax residence...

*Amounts and rules are as of October 2026. This article is an English version of our Japanese guide, adapted for foreign residents of Japan and international investors.

In recent years, high-net-worth individuals, business owners and investors in Japan have been coming across these terms more and more often. Rather than concentrating their lives, assets and family futures in Japan alone, many want to keep options open abroad as well. When thinking about a future move, children's education, asset protection, inheritance, business expansion or tax planning, the idea of "having a second base abroad" has become a more realistic topic than before.

However, the first stumbling block for people who start considering a move abroad is often the difference between these terms.

"If I obtain permanent residence, do I become a national of that country?"
"What is the difference between a golden visa and citizenship?"
"If I live abroad, will I stop paying tax in Japan?"
"If I get a visa, can I work and keep living there freely?"

These concepts may look similar, but they are completely different, both legally and in practice. For high-net-worth individuals in particular, moving abroad is not just a change of address; it can affect nationality, tax, asset management, family, inheritance and business succession. Understanding the basic terms correctly from the outset is the first step toward a relocation strategy that does not fail.

1. What is a visa?

The first concept to understand is the "visa".

A visa is generally a kind of prior permission or recommendation that a foreign national needs in order to enter a country. Having a visa, however, does not guarantee entry. Japan's Ministry of Foreign Affairs also explains that a visa is one of the requirements for landing and does not guarantee entry. In addition, a visa and a status of residence are two different things.

In the context of moving abroad, the word "visa" is used quite broadly. Depending on the country, there are many types, such as tourist visas, student visas, work visas, investor visas, retirement visas and digital nomad visas.

Still, a visa is essentially closer to "permission to enter a country or stay there for a certain period". The type of visa determines how long you can stay, whether you can work, whether you can bring your family, whether it can be renewed, and whether it can lead to permanent residence in the future.

For example, a short-term tourist visa generally does not allow you to work in the country. On the other hand, an investor visa or entrepreneur visa may allow a long-term stay on the condition of a certain investment or business activity. Schemes known as golden visas are also, in most cases, a type of "residence permit conditional on investment".

In other words, a visa is the entrance to moving abroad, but on its own it does not mean "the right to live there for life" or "the right to become a national of that country".

2. What is permanent residence?

Next is "permanent residence".

Permanent residence generally refers to the right of a foreign national to keep living in a country on a long-term, stable basis. The name and content of the scheme vary by country, but in many cases it offers more freedom in terms of length of stay and permitted activities than an ordinary visa.

Taking Japan's system as an example, a foreign national granted permission for permanent residence stays in Japan with the status of residence of "Permanent Resident", and a characteristic of this status is that neither the permitted activities nor the period of stay are restricted. Japan's Guidelines for Permission for Permanent Residence also list requirements such as good conduct, having sufficient assets or skills to make an independent living, and the person's permanent residence being found to be in the interests of Japan.

Permanent residence in other countries follows a similar idea; it is best understood as "a strong residence status for living in that country for a long time".

However, permanent residence is not the same as citizenship. Holding permanent residence does not entitle you to that country's passport. Permanent residents often have no right to vote, and in some countries permanent residence can be lost if you leave the country for a certain period. It may also be revoked because of a criminal record or changes to the scheme.

For high-net-worth individuals considering a move abroad, permanent residence is a very realistic option, because it may allow you to hold the right to stay abroad long term while keeping your current nationality.

For example, residence and permanent residence schemes in Portugal, Greece, Panama and other countries may suit people who "want the option of living abroad while keeping their current nationality".

3. What is citizenship?

Citizenship is an even stronger right than permanent residence.

Acquiring citizenship means, in principle, becoming a national of that country. With citizenship you may be able to obtain that country's passport and may be granted broader rights than with permanent residence, such as the right to vote, the right of residence, the right to work, social security and the ability to pass citizenship on to your family.

At the same time, acquiring citizenship carries very significant legal consequences. Japanese nationals in particular need to think carefully about this point.

For Japanese nationals: Japan's Ministry of Justice explains that a Japanese national who voluntarily acquires a foreign nationality automatically loses Japanese nationality under Article 11(1) of the Nationality Act (explained in detail in countries that allow dual citizenship and Japan's Nationality Act). In other words, when a Japanese national acquires a foreign nationality, for example through a citizenship-by-investment program, the relationship with Japanese nationality becomes a major issue.

It is dangerous to think only that "I can have a second passport" or "foreign citizenship is convenient" without understanding this point.

Citizenship is certainly a powerful option. Some countries have schemes under which citizenship can be pursued in a relatively short time. Vanuatu, for example, is known for its citizenship program through investment or donation.

However, Japanese nationals must always weigh "the benefits of acquiring citizenship" together with "the possibility of losing Japanese nationality". For this reason, it is important not to aim for citizenship alone from the start, but to compare it with permanent residence, long-term residence rights, investor visas and other options.

4. What is tax residence?

The concept most often misunderstood when moving abroad is "tax residence".

Put simply, tax residence is the question of "in which country you are treated as a resident under the tax law". It is a separate concept from nationality and permanent residence.

Japan's National Tax Agency explains that, under the Income Tax Act, a resident is an individual who has a domicile in Japan or who has had a residence in Japan continuously for one year or more up to the present. A "domicile" means the center of a person's life, determined by objective facts such as their home, occupation, location of assets, where their relatives live, and nationality.

In other words, simply removing your resident registration, staying abroad for a few months or obtaining a foreign visa does not necessarily make you a non-resident for Japanese tax purposes straight away.

Tax residence is determined by looking at the circumstances as a whole: where the center of your life is, where your family lives, where your work is based, where your assets are, and how long you stay in each country.

Where a person may be a resident of more than one country, residence may be determined under a tax treaty. The National Tax Agency gives examples of the treaty tie-breaker rules for individuals, which consider, in order, a permanent home, the center of vital interests, the habitual abode and nationality.

For high-net-worth individuals, tax residence is especially important, because moving from Japan to another country while holding certain securities may trigger Japan's exit tax. The National Tax Agency explains that certain residents who, at the time of leaving Japan, own securities, unsettled margin transactions and unsettled derivative transactions worth JPY 100 million or more may be subject to income tax on the unrealized gains on those assets.

Moving abroad is not simply a matter of "going to a low-tax country and you're done". You need to consider the whole picture, including Japanese taxation on departure, the tax system of the destination country, tax treaties, inheritance and gift tax, the place of management of your companies and where your family lives.

5. "The right to live abroad" and "a change in your taxes" are separate issues

As we have seen, moving abroad involves at least four separate issues.

A visa is the entrance to entering and staying in a country.
Permanent residence is a strong residence status for living in that country long term.
Citizenship means becoming a national of that country.
Tax residence is the question of which country treats you as a resident under its tax law.

They are related to one another, but they are not the same thing.

For example, even if you obtain permanent residence abroad, you may still be treated as a resident of Japan for tax purposes if the actual center of your life remains in Japan. Conversely, even without foreign citizenship, you may become a non-resident of Japan if your life has actually moved abroad.

Also, acquiring citizenship does not necessarily mean you must live in that country. Some countries' schemes impose few residence obligations even after citizenship is granted. With permanent residence, on the other hand, some schemes require you to stay in the country for a certain period to keep the right.

It is therefore important to work out first "what you want to achieve", not just "which country's scheme to use".

6. Five questions high-net-worth individuals should ask first

When considering a move abroad or overseas residence rights, we recommend working through the following five questions rather than starting from a country or scheme name.

First, do you really want to live abroad, or do you just want to have options?
The right scheme differs between people who actually want to move and people who want to hold overseas residence rights while continuing to live in Japan.

Second, do you want to keep your current nationality?
For Japanese nationals, acquiring citizenship raises major issues under the Nationality Act. If you want to keep Japanese nationality, it is often more realistic to focus first on permanent residence and residence-right schemes.

Third, what are your tax objectives?
The countries and schemes to consider depend on what you want to optimize: income tax, inheritance tax, corporate tax, exit tax, financial assets, crypto-assets, real estate and so on.

Fourth, is your family involved?
The schemes you need differ greatly depending on whether your spouse and children will move with you, whether you are considering your children's education abroad, and whether you are also looking ahead to inheritance and business succession.

Fifth, over what time frame do you want to achieve this?
The candidate countries change depending on whether you want to create an option within a few months, build up European residence rights over several years, or are also considering citizenship in the future.

7. Choose a scheme by "purpose", not by "country name"

Each relocation scheme has its strengths and weaknesses.

For people who want a base for living or education in Europe, golden visa-type schemes in Portugal, Greece and similar countries may be a good fit. For those who want a base in Latin America or value proximity to the US dollar zone, options such as Panama are worth considering. For those who want to consider citizenship within a short period, citizenship-by-investment programs such as Vanuatu's may also be included in the comparison.

However, which scheme is best depends on your assets, family composition, nationality, tax residence, the location of your business and your future life plans.

What matters is not to think in simple terms such as "moving abroad = tax savings", "citizenship = the strongest option" or "permanent residence = security for life". Every scheme has both benefits and constraints. That is why it is essential to understand the differences between visas, permanent residence, citizenship and tax residence correctly at the very beginning.

Summary

For high-net-worth individuals who have started thinking about moving abroad, the first step is not to choose a particular country's scheme. It is to work out whether what you are looking for is "a visa to enter", "permanent residence for a long-term stay", "citizenship, which means acquiring the nationality itself", or "a change of tax residence".

If you choose a scheme without doing this, you may not get the results you expected, or you may overlook risks relating to your nationality or taxes.

Moving abroad and overseas residence rights can be effective options for high-net-worth individuals. But they are not merely "ways to live abroad"; they are a comprehensive strategy that covers assets, family, nationality, tax and future planning.

Our office supports clients in Japan in comparing and evaluating a range of overseas residence and citizenship schemes, including Vanuatu citizenship, the Portugal Golden Visa, the Greece Golden Visa and Panama permanent residence.

Before seriously considering a move abroad, start by working out which scheme fits your own goals.