There are many reasons why people consider becoming a resident or citizen of another country. For those thinking seriously about moving their main residence abroad, or obtaining citizenship rights in more than one country, there are a series of questions and decisions which are not always easy to answer. Residence and Citizenship Planning analyses these questions, decision and options. It is now an increasingly important and high-profile aspect of private wealth planning.
Today‘s globalized world offers tremendous opportunity to optimize personal and business planning. Diversification of both business and personal affairs through multiple residences or citizenships can deliver increased quality of life; mobility; security; educational options; and improved tax and estate planning capabilities.
There are many different and individual reasons for investing to acquire residence or citizenship in multiple countries. For entrepreneurs, further business opportunities; for international investors, new opportunities to diversify not only their assets but also their lifestyle; and for parents, the ability to provide their children and grandchildren the flexibility and right to live, work, and study in some of the most desired places on earth. Combining these strategies with tax optimization and other benefits, these wealthy individuals and families with a global outlook are becoming a privileged new class of global citizens.
An alternative residence also leads to greater personal flexibility, a better quality of life for investors and their families, access to better education, and a safe haven in times of political instability.
In view of the increasingly aggressive fiscal and regulatory environment in some otherwise reasonably stable, high-tax countries such as Canada, France, Germany, the Netherlands, the UK, the US and others, a move of residence to a country with a milder tax regime is an attractive option for many who feel they have to pay more than their fair share, and who do not like the constant erosion of their privacy.
As a citizen of two or more different states, more planning options are available and you also enjoy more privacy in banking and investment as many reporting and exchange of information agreements are based on (tax) residence. Further, citizenship and a passport from a small, peaceful country can save your life when travelling in times of political unrest, civil war, terrorism, and other difficult situations. Many international and high net worth individuals consider an alternative passport as the best life insurance money can buy.
In recent years, an increasing number of internationally forward-thinking entrepreneurs and investors have specifically acquired one or more additional citizenships to diversify their personal exposure. They realize that not only their investment portfolio, but also their residence and citizenship portfolio, needs to be diversified to reduce risk and to preserve independence.
Which Countries are Available to Choose From?
Currently there are five citizenship-by-investment programs of real interest, two in the Caribbean and three in Europe. There are also residence-by-investment programs around the world that offer different benefits, some including a potential path to citizenship. Here, Henley & Partners, the global leaders in Residence and Citizenship Planning, presents a brief overview of each program.
The Malta Individual Investor Program (IIP), which was designed and implemented by Henley & Partners on behalf of the Government of Malta last year, is the most modern citizenship-by-investment program. The Malta Individual Investor Program is the newest addition to the global citizenship-by-investment portfolio and offers investors the opportunity to gain Maltese, and therefore EU, citizenship. The Malta program includes three parts – a donation, an investment into stocks/bonds, and a property transaction.
Austria is a stable country and boasts a high standard of living. To qualify for citizenship without prior residence, an applicant is required to substantially invest in the Austrian economy, for example in the form of a joint venture or a direct investment in a business creating jobs or generating new export sales.
Cyprus is a member of the European Union and thus by becoming a citizen of this country, you also automatically become an EU citizen. A typical application can be completed in three months. There are eight possible ways for an investor to qualify for naturalization in Cyprus with a real estate investment option being currently the most efficient and stable.
Antigua and Barbuda
Antigua and Barbuda are islands in the Eastern Caribbean. The Antigua and Barbuda Citizenship-by-Investment Program was also designed by Henley & Partners, under a mandate given to the firm by the Government to create a state-of-the-art program. Holders of an Antiguan passport enjoy visa-free travel to 132 countries, including the UK, Canada and the Schengen area.
St Kitts and Nevis
Henley & Partners assisted the Government several years ago to reform the St Kitts and Nevis citizenship-by-investment program which has since become one of the most successful and widely used in the world. St Kitts and Nevis citizens enjoy a passport with very good visa-free travel to 132 countries, including the UK and the Schengen Area.
Belgian law allows foreign nationals to apply for residence through various routes, including the set-up of an international holding structure in Belgium, investment in an existing Belgian company, or investment in a foreign company through a Belgium holding company. A person who is employed by a Belgian company, or a person who sets up or buys a Belgian company, can apply for residence in Belgium. In addition, there are two main economic routes under which a person could qualify for residence, either as a manager or highly skilled employee; or as an entrepreneur or self-employed individual.
There are several ways to become a permanent resident in Canada. Each program has a different set of conditions that should be met and requirements may include education, business experience, age, English/French language ability, funds, and adaptability. It is possible to apply for citizenship after six years of residence.
Hong Kong offers straightforward, efficient residence programs for individuals to obtain residence in order to work, live or study in Hong Kong. There are programs for capital investment, employment permits, training, study permits, and working holidays, among others. Hong Kong is a strategic location and premier gateway for trade and investment to and from mainland China and has the freest economy in the world with limited corporate and personal taxes.
A work permit is required to take up employment in Jersey, and permits are currently available in the following categories: legal, information technology and finance; chefs; entertainers; healthcare; students, dependants, Ministers of Religion, and Youth Mobility Scheme Applicants. An applicant may also obtain a residence permit on the basis of making an investment in Jersey.
The applicant must provide proof of sufficient funds to live in Monaco and proof of accommodation by way of lease or purchase agreement. The applicant may also apply for a business license as Monaco has become a popular place to set up family offices, hedge fund management businesses or branches of overseas companies. Monaco residents are not subject to income tax, capital gains tax, or wealth tax. Inheritance taxes are due by both residents and non-residents but only on assets located in Monaco.
The program gives investors the opportunity to qualify for a Portuguese residence permit by investing in real estate. A Portuguese resident can travel visa-free to all Schengen countries, as well as work, live and study in Portugal. The application process designed by Henley & Partners is fast and efficient and a single process-motivated visit is feasible.
There are defined categories of foreigners who are eligible to apply for permanent residence, which gives entitlement to live and work in Singapore for at least five years. These include professional, technical personnel and skilled workers; employment pass holders; and investors and entrepreneurs. Investors and entrepreneurs applying under the Global Investor Program are required to invest in a new or existing business entity, expansion of an existing business operation or in a venture capital natured fund.
Henley & Partners have responsibility for the design, implementation and international promotion of the Swiss Residence Program, a private program based on Swiss immigration and tax regulations. In Switzerland, non-EU/EFTA citizens may obtain a residence permit as gainfully employed persons, as pensioners with close ties to Switzerland, or as financially independent persons who are not gainfully occupied in Switzerland and who pay considerable annual taxes. There are also permits for students, trainees and patients.
The UK has recently revised its immigration rules to attract investors, entrepreneurs and people of talent. The Investor category is aimed at attracting high net worth individuals to make an investment in the UK. Henley & Partners have regular involvement in the consultation process with the Home Office and UK Border Agency regarding the Tier 1 (Investor) category.
The EB-5 Program was created to stimulate the US economy through job creation and capital investments from foreign investors that wish to obtain permanent residence in the US. The two options, the Basic Program and the Regional Center Pilot Program, both require the investor to make a capital investment in a new commercial enterprise located in the US. The new commercial enterprise must create at least 10 full-time jobs for qualified US workers within two years of the grant of conditional permanent residence.