Achieving residency or citizenship across multiple countries is becoming increasingly important to high-net-worth business people for a range of private and professional reasons. A new trend of global citizen is on the rise, one who benefits from a better quality of life, mobility, security, and education options for their children, as well as improved tax and estate planning opportunities. For many, having the flexibility of choosing where to live, and raising the standard of living for their families in a safe haven during times of political uncertainty is becoming ever more attractive.
The typical investor profile is a wealthy individual, currently living in the Middle East, Asia or Africa. They are looking for ways to improve the prospects for their future generations, normally through real estate investment in countries that provide residency permit cards and even passports.
There are a whole host of reasons that individuals consider Residency by Investment or citizenship programmes. These include individuals who hold passports but cannot freely travel, work or live in different countries, such as citizens of China. Or those facing persecution due to regional conflict – a situation familiar to many from the Middle East, North Africa or North Korea. There are nationals trying to leave countries under a dictatorship, or those looking to access a higher standard of education, social security and health system for their families. Many are seeking improved tax conditions on incomes and pensions, such as citizens of France, Finland or the US. There are also individuals who moved out of their home country at an early age, built their lives overseas but were forced to move out without a specific reason. Sometimes just because they reached retirement age – this can happen in the UAE, Saudi Arabia or Qatar.
Where best to invest?
Europe is home to the most credible and successful Residency by Investment and citizenship programmes. Including the following:
Cyprus: A smooth path to EU citizenship
Cyprus has long established itself as one of the most attractive jurisdictions due to its excellent infrastructure, favourable tax regime and stable, well-regulated business environment. It is therefore one of the most competitive access points into the European markets and a primary relocation destination for high-net-worth individuals. The predominant investment option is the individual investment in residential real estate, where the applicant must have made an investment of at least €2m.
Portugal, Greece and Spain: Golden Visa Residency Permits
Golden Visa programmes target high-profile, non-European investors seeking a back-up plan for their future generations. The advantages of such programmes are unique for investors, allowing them and their families, to freely travel, work, live and study in all Schengen countries. The Golden Visa allows investors to extend the application to direct family members, with no further investment requirements.
In Portugal, the reduced minimum obligatory stay is only seven days on average per year, where in Spain and Greece there are no minimum requirements. This is a great advantage for those not wishing to immediately relocate. In Portugal, the residency programme is also a fast track to citizenship, because after five years, investors have the right to apply for the Portuguese passport. To reach citizenship in Greece and Spain, there is a requirement to live in the country for more than 7 and 10 years respectively, or for more than 183 days per year.
In Portugal, to apply for a Golden Visa through real estate, either personally or through a company, investors are required to conform to one of the following conditions: making an investment valued at least €500,000; or one with more than 30 years construction time and with a value of at least €350,000. Alternatively, Golden Visa applicants can obtain access to the scheme through investment in a Portuguese Investment Fund – www.safeinvestmentfunds.com – with a minimum value of €350,000. This latter option was recently introduced by the Portuguese authorities and has been highly requested by applicants, since it comes free of taxes and is based on the bottom-line investment.
Greece has produced streamlined legislation to create an efficient process by which non-EU residents may obtain a residence permit based on just €250,000 investment in real estate.
The Temporary Residency Permit programme (Golden Visa) in Spain requires a minimum investment of €500,000 in real estate. However, average investment being made by real estate buyers has been around €740,000. The programme was launched in 2013 – it raised almost €3bn and provides growth of 45% year-on-year.