The pre-conceived notion that many of our clients held about the security and status of their citizenship has irrevocably changed in the last few years. Today, every client consultation starts with a client wanting to make a good investment, while simultaneously resolving future travel, education and business opportunity challenges. During COVID-19, freedom of travel & protection of civil liberties became the biggest driver globally.
Brexit was a well-known catalyst for investment migration. Many investors, both from the UK and EU countries, started investing in second residency to maintain their freedom of movement and rights to be employed or permanently in a second country. More recently, we have seen significant changes in the volume of enquiries from developed western countries with traditionally strong passports. Enquiries out of the US (many for political reasons, increased wealth taxes & Covid travel restrictions), the UK (Covid restrictions & for EU access) and other countries where Covid was poorly dealt with poorly, have skyrocketed.
In the past, many investor migrants hailed from countries with a weak passport, economic instability, civil unrest and sometimes war torn countries. For them, the decision is twofold – where can I invest to secure a better travel document, or where can I invest where I can re-establish my family home and secure better business opportunities? Today, our investors want freedom of movement, better tax dispensation, good civil structures, health care & education. Sometimes it is as simple as being closer to nature, a healthier climate, and a more scenic environment than your home country can offer.
Why is the Portugal golden visa option so popular?
I am often asked “where do most of your clients go” and the answer every year remains Portugal. Portugal is the most diverse & flexible European golden visa program that makes it attractive for multiple types of investors. We would be remiss to focus only on the benefits of the golden visa program structure, and not mention the attractions of Portugal as a destination. Portugal offers a vibrant lifestyle, fantastic climate, good infrastructure & health care, good international schooling and connectivity to the rest of the EU.
The Portugal residency program offers flexible investments options to qualify for residency: Real estate – this has traditionally been the most popular route to obtain a residency permit, as you can make an excellent investment, choose the next family home or invest in commercial or touristic real estate. We have investors looking at the lowest entry level of Euro 280,000, and simultaneously investors relocating to Portugal buying sprawling estates, high end apartments in Lisbon & Caiscais and along the coast. Business investment options – there are multiple routes for entrepreneurs to invest in businesses and create Portuguese jobs. Portugal has become one of the top 5 logistics hubs in the EU. The tourism sector is rapidly expanding and creating jobs, seafood
Companies & global technology businesses are relocating to Portugal, and many digital nomads have made Portugal their new home. Funds – this is the fastest growing category in the Portuguese market. It offers the discerning investor diversification of risk, lower cost than real estate, and zero tax on the yield if you live outside Portugal.
Low stay requirement vs relocating permanently: It is not only the diversity of investment options that makes Portugal a popular destination. It is about the flexibility of the program. You can spend as little as 7 days per year in Portugal, and still qualify to apply for citizenship after 5 years. On the other hand, you and your qualifying family members can permanently relocate and live & work in Portugal if you wish.
Investors globally have always searched for a more favourable personal tax regime. The Non-Habitual tax regime attracts not only retirees, but also any investor who can prove passive income earned outside of Portugal. This includes income earned from dividends, crypto-shares & investment income.
Portugal is of course not every investors’ cup of tea. The questions to ask yourself are “where can I see myself spending more time in the future/where should I invest (ask your GSB adviser!)/where do I want to retire?” The new Malta Permanent Residency Program offers the lowest cost entry point into the EU, where you can include your whole family (adult dependent children) and receive permanent residency (for life). Malta, just like Portugal, offers all family members the ability to work/be employed in the country. It is a predominantly English speaking country, well known as a financial and business hub.
Greece remains one of the biggest golden visa programs globally. It is often cited for the ease of application, 5 year renewable permanent residency, relative low cost of investment (only Euro 250,000 investment into real estate required) and of course the lifestyle & natural beauty. Just like Italy & Spain, Greece has a longer route to citizenship (about 10 years) and requires you to learn the language.
Although significantly more expensive than many residency programs, the Montenegro citizenship program has just been extended for 12 months. If an immediate 2nd passport is important, 9% personal and corporate tax is attractive. If you do not want to learn a second language, Montenegro offers a good alternative to EU residency or Caribbean citizenship programs.
Diversification of your residency and citizenship should be part of your wealth management strategy, global asset allocation & legacy planning. Where will you be ‘stuck’ next time…
Ilana van Huyssteen-Meyer is the Managing Director of Latitude South Africa & Regional Director of RIF Trust in the EMEA. Ilana has been resident in the Middle East since 2005 and spends her time between South Africa, the UAE and the most popular investment migration markets in Europe. Latitude World and RIF Trust are industry leading global citizenship and residency by investment consultancies.