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Issue 17

Winter 2018-19

GLOBAL INVESTMENT IMMIGRATION SUMMIT 2018

GRAND OPENING AND SPEECH BY

Raveena Tandon

US, Canada, UK, Portugal, Cyprus, Malta, the Caribbean, and more… www.citizenshipinvestment.org

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Private Banking Wealth Management Portfolio Services Card Programmes Citizenship Services


CONTENTS Winter 2018-19 City focus

Bangalore..................................................................................................... 06

Abu Dhabi................................................................................................... 12

Features

Additional citizenship increases your career prospects.............................. 08 Reaping the rewards of responsible investment migration......................... 10 10 reasons why high-net-worth Indians should consider citizenship by investment.............................................................................................. 14 Second citizenship: the gateway to a better education for your children.... 15 Which countries have the highest taxes on high incomes?........................ 18

General economic and investment profile of Bulgaria................................ 24 Considering the new Opportunity Zone Program for your EB-5 Project.... 72 As demand for the US EB-5 visa continues to rise in India, distinctions are made with China............................................................... 75 The critical role of regional centers in the EB-5 industry........................... 78

Country spotlights

Antigua and Barbuda................................................................................... 28 Sponsored by

Canada......................................................................................................... 32 Cyprus......................................................................................................... 35 The Commonwealth of Dominica............................................................... 38

Grenada....................................................................................................... 42 Malta........................................................................................................... 45

Montenegro................................................................................................. 50

New Zealand............................................................................................... 54

Portugal....................................................................................................... 56 St Kitts......................................................................................................... 62 St Lucia........................................................................................................ 68 USA............................................................................................................. 72 Vanuatu....................................................................................................... 84

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Publisher’s note:

SAM HUSSAIN

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elcome to the winter edition of Citizenship by Investment – your resource for citizenship and residency options. You may be reading this in Bangalore, at the latest of the ongoing series of Global Investment Immigration Summits for 2018, organised by BLS Global, taking place on the 20th to 21st October, Sheraton Grand Bangalore Hotel. We are delighted to have Bollywood celebrity Raveena Tandon to give the event a grand opening and opening speech, which will be followed by two full days where top industry figures will discuss hot topics including global migration for ICT professionals and highly-skilled Indians, and how second citizenship could be the gateway to a better education for your children. Experts will discuss the current state of projects in the Caribbean, the Golden Visa Programmes in Greece and Portugal, and the special USA panel will look at the changing face of EB-5 and its impact on Indian investors. One key factor for Indian migration relies on a higher quality of education. We will, therefore, be holding the Global Education Fair 2018 alongside the Global Investment Immigration Summit Bangalore to provide a fast and easy way for HNW families and students to understand the various steps required to be able to study abroad by giving direct access to world-class institutions and experts from across the globe. If you’ve missed out or can’t make it to Bangalore, perhaps we will see you at the Residency & Citizenship Expo, on the 1st to the 3rd November in the Abu Dhabi National Exhibition Centre. If you would simply like more details, please check events. citizenshipinvestment.org for future events you might like to become involved with, or email marketing@blsmedia.co.uk. In this edition we focus on the benefits of second citizenship, from many different angles. John Hanafin of NGE looks at how you can secure a better education for your children – with emphasis on some of the most popular choices – the US, UK, Ireland and Cyprus, and Investment Migration Insider provide the statistics that proves the current and growing popularity of second passport among UHNWIs. We look through more statistics in the Financial Times/ Professional Wealth Management 2018 CBI Index, and how an additional citizenship can even increase your career prospects. For further information and all the latest updates please visit our website at citizenshipinvestment.org, or follow us on Twitter @CitizenByInvest. Thank you for reading – we hope you enjoy this issue of Citizenship by Investment, and that you find it useful and informative. Citizenship By Investment

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FEATURES: INTRODUCTION In this issue of Citizenship by Investment we focus yet again on the main debates and concerns around investment citizenship and immigration across the world. As always, there are our usual features and country spotlights focusing on some of the major investment hubs. Filipe Espinha looks at the benefits of the Golden Visa Programme in Portugal and CISC explores the options for anyone interested in the various provincial schemes in Canada – the British Columbia Investor Programs, the Quebec Immigrant Investor Program and the Ontario Corporate Stream. Tiago Camara of PTGoldenVisa.com also indicates the importance of obtaining a European Residence Permit Card as a back-up plan for investors and their families, and Leila Calic of Resido Montenegro looks at the potential for living and investing in Montenegro given the planned launch of that country’s newly announced citizenship by investment programme. This time we’ve especially focused on the benefits of second citizenship. John Hanafin, CEO at NGE, argues that investing in a new passport is the gateway to securing a better education for your children - in particular the opportunities available through the four second citizenship programmes in the US, UK, Ireland and Cyprus. Investment Migration Insider point to the increasing trend for second citizenships, exposed by

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Knight Frank’s 2018 Global Wealth Report, that over a third of ultra-high-net-worth individuals (UHNWIs) hold a second passport, with another third planning to get one. In their regular Caribbean Spotlight slot, CS Global Partners point out another report – the Financial Times/Professional Wealth Management 2018 CBI Index – which states that best second citizenship programme is from Dominica, while Andres Gutierrez explains how having an additional citizenship can even increase your career prospects. Elsewhere in the magazine, we break down which countries have the highest taxes on high incomes, Prashant Ajmera provides ten good reasons why high-net-worth Indians should consider citizenship by investment – surely a must see for all our Bangalore readers, and we look at why Antigua and Barbuda is fast becoming the CIP jurisdiction of choice. IMIDaily also give us handy history lesson in infographic form on the growth of the industry over the years. High-net-worth individuals often have complex risk profiles and exposures when it comes to insurance requirements, and Laferla Insurance Agency of Malta talks us through the complexities of that. Michael Tan, founder and CEO of GK Immigration Services, explains the Development Support Program offered by Pan Oceanic Limited Vanuatu, and also for this issue the InvestBulgaria

Agency have provided a general economic and investment profile of Bulgaria. In our US section, CMB Regional Centers give an in-depth critique of the critical role of regional centers in the EB-5 industry, and Clem Turner of Chiesa Shahinian & Giantomasi considers the new Opportunity Zone Program for those seeking additional capital for their EB-5 projects. Mona Shah, Esq and Hermione Krumm, Esq also discuss the distinctions that are made being with China as demand for the US EB-5 visa continues to rise in India. Henley & Partners give us two detailed articles this time - on the movement of the investment migration industry along the lifecycle curve, by Daniel Huber, and on reaping the rewards of responsible investment migration by Marco Gantenbein, from Henley & Partners Dubai. We also have included a couple of City Focus guides to Bangalore and Abu Dhabi, which will be home to our unique BLS events in October and November. For all the latest information on those please visit events. citizenshipinvestment.org. We hope you find this Winter issue of Citizenship by Investment interesting. You will be able to find these articles, and more, on our website at citizenshipinvestment.org, or follow us on Twitter @CitizenByInvest.


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Middle-Eastern, North-African and Persian Gulf readership, giving advertisers an opportunity to reach largelycovers untouched The EB-5this Gateway many market. different topics related to trade and investment in the US. This unique publication presents information regarding the EB-5 program that caters to a CBI is an ultimate guide for Arab looking to invest for residency/citizenship purposes. Middle-Eastern, North-African andHNWIs Persian Gulf readership, giving advertisers an opportunity With an editorial focus on finance and investment, real estate, issues that face HNWI’s to reach this largely untouched market. relocating, legislation around citizenship/residency and dedicated country spotlights among much CBI magazine become ultimate guide for for residency/citizenship Global Citizens looking to invest CBI is more, an ultimate guide forhas Arab HNWIsthe looking to invest purposes. for citizenship purposes. With an editorial focus on finance and investment, real estate, issues that face HNWI’s relocating, legislation around citizenship/residency and dedicated country spotlights among much more, CBI magazine has become the ultimate guide for Global Citizens looking to invest for citizenship purposes.

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CITY FOCUS: BANGALORE

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engaluru (also known by its anglicised name, Bangalore) is the capital city of the southern Indian state of Karnataka, and is the seventh largest city in India. It is sited 949 metres above sea level, on top of a ridge on the Mysore plateau. Bangalore is 998km from Mumbai and 562km from Hyderabad. The climate of Bangalore is moderate and pleasant. Summers are mild (April-June) and winters are cool (October-February). The city experiences southwestern monsoon rains in June-August. It is traditionally known as the Garden City because of its climate and the many beautiful gardens and parks, and it combines this with a sophisticated cultural nightlife. The present-day city was founded in the 16th century, and gained prominence in the 18th century when it became an important fort city. In 1831, the British made it the regional administrative centre and the city has continued as the hub for local government ever since. In the mid-1980s, multinational information technology companies began to start setting up offices in Bangalore. Texas Instruments was the first such company to set up shop, in 1985. Starting then and continuing all through the IT boom in the 1990s, hundreds of IT companies were established in the city, earning Bangalore the nickname of the Silicon Valley of India. These foreign investments made use of large pools of expertise and talent, cementing relationships between East and West over the following years. The software industry remains among the largest in the country and still drives 6

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a very big chunk of the city’s economy. Estimates of the city’s GDP are around US$110 billion, and it has been ranked as either fourth- or fifth-most productive metro area of India. Indian technological organisations ISRO, Infosys, Wipro and HAL are headquartered in the city, and it is the second fastest-growing major metropolis in India. It is home to many educational and research institutions, such as the Indian Institute of Science (IISc), the Indian Institute of Management (IIMB), the National Institute of Fashion Technology, the National Institute of Design, the National Law School of India University (NLSIU) and the National Institute of Mental Health and Neurosciences (NIMHANS). It is also the location of numerous state-owned aerospace and defence organisations, such as Bharat Electronics, Hindustan Aeronautics and National Aerospace Laboratories. The city also houses the Kannada film industry (sometimes referred to as Sandalwood), producing more than 150 films each year.

Biotechnology is a recent but rapidly expanding industry in the city, and Bangalore accounts for roughly half the number of biotech companies in India. There is also a concerted effort to grow the city as an important financial centre. Despite having undergone a drastic change from its traditional roots, it is more than just the country’s IT hub. Contemporary, modernised and fast growing, Bangalore is home to several large multinational corporations and sports a vibrant cosmopolitan setup. Bangalore has a population of approximately 13 million, including the nation’s highest concentration of young people, and is the fastest growing Indian metropolis behind New Delhi. It is South India’s most lively city, a melting point of ethnic and cultural backgrounds. Nearly every one speaks at least some English. With shopping districts, parks, pubs, theatre, cafes, art galleries, palaces, Bangalore is buzzing with activity – but are are still hints of its more sedate imperial history, with tree lined avenues with quaint sounding names like Richmond Town and Victoria Layout. There are plenty of historical and cultural highlights to visit in Bangalore. The most popular tourist spots are crowded with foreign and local travellers at most times of the year. These include the Bangalore


Palace, the Attara Kacheri (High Court), St. Mary’s Basilica, Tipu’s Palace, the ISKCON (International Society for Krishna Consciousness) Temple, the Gavi Gangadhareshwara Temple, the Bull Temple and the Jamia Masjid Mosque – and are testament to Bangalore’s religious and cultural diversity. The Vidhana Soudha is an imposing edifice housing the State Legislature and the Secretariat of Karnataka, and is one of the best known landmarks in Bangalore. Lalbagh Gardens is a 1km2 park, home to India’s largest collection of rare tropical and subtropical plants, as well as many centuries-old trees. It contains one of Kempegowda’s watch towers, a surreal lawn surrounded by Snow White and The Seven Dwarfs, an ornamental clock, a beautiful lake, a topiary park, a charming wooden bandstand and a glasshouse modelled on London’s Crystal Palace. Cubbon Park provides Bangaloreans with over 1.2km2 of sprawling greenery in the heart of the city. The park houses the State Library, an impressive, red Gothic structure, and is dotted with fountains, statues, flowering trees and shady groves. Appropriately, as Bangalore is a high-tech hub, there is an industrial and technological museum and an aviation museum, as well as institutions dedicated to the fine arts such as the National Gallery of Modern Art and Karnataka Chitrakala Parishath (one of the premier fine art institutions in the country with activities covering dance performances, folk theatre, photography exhibitions, puppet shows and musical recitals). There is also the Government Museum, one of the oldest museums in the country, which houses an large collection of archaeological items such as stone carvings, pottery, paintings, coins, sculptures and inscriptions. The State of Karnataka generally has flourished dramatically as a tourist destination over recent times. The region has many magnificent destinations with a 300km coastline, several splendid heritage towns, lush forests and diverse wildlife and serene hill stations – all, of course, in great contrast to the fast growing metropolis of Bangalore. Karnataka attracts tourists from all over India and overseas all year long. One of Karnataka’s most popular tourist destinations, Kodagu (also known as Coorg) recently (2014) was voted as India’s Favourite Emerging Destination.

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ADDITIONAL CITIZENSHIP INCREASES YOUR CAREER PROSPECTS by ANDRES GUTIERREZ, CS Global Partners

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he verdict is in: the world’s GDP is forecast to slow down in 2019 by 0.2% YoY, according to the Organisation for Economic Cooperation and Development (OECD), a leading economic thinktank. With tighter trade restrictions, Brexit uncertainty, exacerbating trade negotiations, rising financing rates, and hyperinflation of several currencies, it comes as no surprise that global growth is predicted to continue deflating in 2020. What this means for businesses that operate in local, unstable currencies but indebted in US dollars, for example, is that they might be forced to make cutbacks, such as increasing staff turnover or reducing their hiring rates. Valuable employees, especially at high-earning senior level, may be prioritised against a number of factors, including increased, cost-effective mobility that facilitates trade and business connections. World economic growth is traditionally powered by the United States, Europe, and certain Asia-Pacific nations such as Japan, Singapore, and Australia. International, short-stay visa-free treaties illustrate this, with Germany, Italy, Spain, several Scandinavian countries, and the United States consistently benefitting from travel rights to the highest number of destinations. Despite the BRICS balloon fizzling out against the backdrop of high postrecession expectations, the business world continues expanding its epicentres beyond the advanced economies, with emerging markets and developing economies becoming increasingly attractive for international investors. Eventually, as smart businesspersons have learnt, this raises the question of employees’ ease of international mobility. As nationals of the world’s superpowers rarely need to worry about visa travel arrangements, employers must now be aware of the security concerns posed by the nationalities of executives from offices in developing countries. For these reasons, companies welcome individuals who have the luxury of holding dual citizenship. They understand the importance of efficient and effective solutions to ensure the smooth transfer of employees as they travel for work, and so the prospect of sponsoring executives with a second citizenship has become more common. If ancestry or marriage are unavailable routes to a desired secondary citizenship, globalminded individuals turn to citizenship by investment (CBI). As people become more aware of the investor immigration industry, especially with the development of more programmes in nations across the world, there will be a need for trusted advisors, like CS Global Partners, to provide expert information about why a certain programme may be right for them, or whether some may not be quite what they seem. Because demand increases 8

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and supply follows, and it is, after all, a complex legal process, greater regulation and transparency in how the industry works will be key. The older programmes will stand out as success stories and continue to set the pace and standards for new entrants. St Kitts and Nevis has unrivalled experience as the cradle of CBI, with the grand success of the six-month Hurricane Relief Fund option reinforcing its status as the Platinum Standard of the industry. Its successor – the Sustainable Growth Fund – is said to be the faster and more affordable route to St Kitts and Nevis’ citizenship, with fees starting at US$150,000 per main applicant. Meanwhile, Dominica enters the third quarter of 2018 as the world’s best CBI


programme, as ranked in the Financial Times’ PWM CBI Index. Dominica’s affordable investment rates of US$100,000 for a single applicant, available through the Economic Diversification Fund option, give it a competitive advantage. According to the same independent report, the Caribbean programmes fill the top five positions of all 13 active CBI jurisdictions.

Soon enough, it will not be a matter of simply wanting a second citizenship. Instead, one may want a third or fourth to meet one’s ever-changing business and family needs. The question will shift from what citizenship to how many one may be needing in the foreseeable future.

International companies require globallyminded executives with high mobility that can lead, shape and transform the future. Ultimately, the longevity of the abovementioned programmes in such a complex market prevails, bringing businesspeople and sponsoring companies the reassurance that they look for when investing in an alternative citizenship. Citizenship By Investment

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REAPING THE REWARDS OF RESPONSIBLE INVESTMENT MIGRATION

by MARCO GANTENBEIN IMCM, Managing Partner Dubai and Head of Middle East, Henley & Partners

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rowth in the investment migration industry is continuing apace. The number of residence- and citizenshipby-investment programmes has been increasing steadily in recent decades, from just a handful programmes in the 1980s and 1990s to over 60 active programmes today, with more set to launch in the near future. In the grand scheme of things, residenceby-investment (RBI) programmes vastly outnumber citizenship-by-investment (CBI) programmes, which is good news for citizens of nations such as China and India, whose governments prohibit the holding of dual nationality. Individuals from these countries have an abundance of options to choose from in the residence space, and many of the benefits of CBI apply to RBI, too. The ‘golden child’ of the RBI industry is arguably the Thailand Elite Residence Programme, which celebrated recordhigh application numbers this year. The programme was initiated by the Royal Thai Government for the purpose of incentivising wealthy global citizens, families, investors, and entrepreneurs to spend more time in Thailand and take advantage of the country’s beneficial tax regime and affordable yet exceptionally high standard of living. The programme’s popularity among European and Asian nationals in particular has grown tremendously since its inception. The programme offers successful applicants a multiple-entry visa, allowing them to visit and reside in Thailand for a period of between five and 20 years, at a one-time cost of between THB 500,000 (approximately US$16,000) and THB 2.14m (approximately US$68,000), depending on the option chosen. It also offers exclusive access to a range of VIP services, 10 Citizenship By Investment

including airport and customs assistance, lounge and concierge access, and personalised support with business and legal matters. In the citizenship space, 2018 has seen the emergence of two new programmes in Europe, with Moldova and Montenegro launching CBI offerings in the second half of the year. While not yet EU members, both these countries offer their citizens travel freedom throughout the Schengen Area as well as access to Russia. The Moldova Citizenship-by-Investment programme, whose pricing structure is highly competitive, also offers citizenship in what analysts at IBM have called “the newest emerging investment destination”. Moldova was named the “most improved Eurasian economy” on the World Economic Forum’s 2017–2018 Global Competitiveness Index.

A tried-and-tested model For high-net-worth individuals (HNWIs), the benefits of alternative residence and citizenship are manifold, but they generally involve a combination of increased travel freedom and improved safety and security. An additional passport or residence permit affords holders access to all the benefits enjoyed by other citizens or residents of the state in question (education, health care, working rights, and so on). In times of political unrest, civil war, and terrorism, or in other delicate political situations, citizenship or residence in another country can quite literally save a person’s life, providing an exit route and a safe haven. In the case of citizenship, it also eliminates a great deal of the inconvenience and waiting time surrounding visa applications and passport renewal or replacement processes. It goes without saying, however, that the investment migration industry could not exist or sustain itself if it were attractive only for

the benefits it offered investors. It is widely acknowledged that foreign direct investment (FDI) is the lifeblood of economic growth for developing and recovering smaller economies around the world. As established forms of FDI, residence- and citizenship-by-investment bring a tapestry of benefits to nations with programmes in place. Malta is a good case in point. The Malta Individual Investor Programme has emerged as a model CBI programme in the years since its launch in 2014, and the Malta Residence Visa Programme is also gaining traction among HNWIs seeking EU residence. Over the 12 months leading up to 30 June 2017, total revenues from the programme (including property purchases, rent, investments, and contributions) exceeded €394.1m, according to the Maltese government. These revenues helped the country reverse a decades-long fiscal deficit trend, resulting in a surplus of 3.9% of GDP – the highest percentage of any EU member. The European Commission forecasted that Malta would have the highest GDP growth rate in the EU in 2018, and the country is on track for this outcome. The country also boasts one of the lowest unemployment rates in the EU. However, it is not only in Malta that the benefits of the industry have been felt. In a recent article published by the BBC, economist João Luís Correia Duque unequivocally endorsed Portugal’s popular RBI programme as an economic success: “[W]hile only a tiny number of new businesses were created [through the programme], foreign investors have paid Portuguese property owners ‘millions of euros’ that have probably been reinvested domestically, creating thousands of jobs, or saving existing businesses from the brink.” Overall, inflows resulting from the


frequently rejects applicants who do not satisfy its citizenship criteria. Of the 377 submitted applications submitted between 1 June 2016 and 30 July 2017, for instance, 83 were either rejected or withdrawn, up from the 52 rejections recorded during the same period in the previous year. This constitutes a rejection rate of close to 25%. The new Moldova Citizenship-by-Investment programme will have a similar four-tier process in place, and indeed this level of rigour and selectiveness is fast becoming the industry norm.

Portugal Golden Residence Permit Programme have injected some €3.5 billion into the economy, driving its turnaround after a period of severe recession. In Greece, the Permanent Residence Permit programme has raised over €1.5 billion and has halted a nine-year decline in real estate prices, with investors now flocking to the country by way of the programme. Even more dramatically, figures coming out of Cyprus indicate that, in 2016, the FDI received through the country’s CBI programme was the difference between recovery from the 2013 sovereign debt crisis and what would otherwise have been an economic contraction that year. Further afield, in the Caribbean, inflows from St Kitts and Nevis’s pioneer CBI programme experienced a surge in 2010, which led to programme revenues growing from less than 1% of GDP in 2008 to 25% by 2014. The robust inflows that resulted from the programme “have supported economic recovery, improved key macro-economic balances and boosted bank liquidity”, according to the International Monetary Fund. They have also benefited real estate and tourism developments and fueled a pick-up in construction. In short, evidence for the inbound benefits of RBI and CBI is conclusive and growing. In addition to their direct economic contributions, HNWIs who immigrate via RBI or CBI – or who contribute as part of a diaspora – bring new talent into the host country, “increasing the size of the population likely to innovate or have skills complementary to innovation, such as entrepreneurship”, to quote a research paper by the Organisation for Economic Cooperation and Development (OECD).

RBI programmes have the potential for misuse by unsavory individuals looking to mask or hide their illicit activities, but the investment migration industry in fact maintains some of the most stringent anti-money laundering regulations and know-your-client procedures of any industry in the world. Nonetheless, concerns remain. In February 2018, the OECD issued a consultation paper outlining suspicions that RBI programmes in particular were being used to circumvent the Common Reporting Standard (CRS). In the coming months, the European Commission will present a draft paper to the European Parliament on the safety of the CBI programmes in the region. Thus, as global demand for alternative citizenship and residence increases and as nations continue to launch new programmes to meet this demand, they do so in a climate of rising scrutiny and regulation, as well as increasingly high expectations surrounding due diligence procedures. This is undoubtedly a positive development for the credible players within the industry, whose credibility and reliability will only be underscored as the industry consolidates and high-risk fringe agents are pushed out. Currently, the most well-oiled CBI machine is that of Malta, where a four-tier due diligence process – overseen by an independent legal entity (Identity Malta) and implemented in collaboration with the International Criminal Court – sets the standard for background checks. Thus, it is no surprise that Malta

As the situation currently stands, Peter Vincent, of BORDERPOL, has estimated that 99% of the individuals admitted citizenship through CBI programmes globally are legitimate, and the figures in the residence sector are no doubt equally high. The 1% of illegitimate cases tends to encompass individuals who had clear backgrounds when they applied to the programme in question but who went on to use their second passport for questionable purposes. While the possibility of ill-intentioned individuals slipping through the net will always be present, this risk is being significantly mitigated by the industry’s leaders through their emphasis on uncompromising due diligence, effective regulation, and wellimplemented policy frameworks. With increased expansion comes increased responsibility, especially when there are cowboy-type operators in the market. For all that, as investment migration gains prominence, the diagnostic signs look good for the industry, not least due to the establishment of the independent Investment Migration Council, which ensures that there is a common code of ethics and common compliance standards in place among members. The IMC espouses transparency, thought leadership, and self-regulation and is the key industry spokesperson and public mediator. Ultimately, when properly executed, RBI and CBI are highly desirable, profitable, and socially beneficial forms of investment. The main players in investment migration make a strenuous effort to ensure that thorough background checks and due diligence processes are always applied to applicants looking to acquire alternative residence or citizenship. If these processes continue to be applied and improved, the future of the industry looks bright, for global citizens and host nations alike.

Route to a safer future These impressive results are often overshadowed by concerns regarding security, just as the macro-economic benefits of global migration as a whole tend to be overlooked on similar grounds. As with any law or policy that pertains to cross-border investment, CBI and Citizenship By Investment 11


CITY FOCUS: ABU DHABI

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eaning ‘Land of the Gazelle’ in Arabic, Abu Dhabi was founded when a young antelope led a wandering tribe to fresh water, on an island with no more than 300 palm huts, a few coral buildings and the Ruler’s fort. This simple island settlement has since been transformed into the modern, cosmopolitan city of Abu Dhabi and the high-rise capital of the United Arab Emirates, with a population of 1.8 million (Est 2016), Today the city is the country’s centre of politics and industry, culture and commerce. Abu Dhabi accounts for about two-thirds of the roughly $400 billion UAE economy. Abu Dhabi is the second most populous city of the United Arab Emirates (after Dubai), and also capital of the Emirate of Abu Dhabi, the largest of the UAE’s seven emirates. Abu Dhabi lies on a T-shaped island jutting into the Persian (Arabian) Gulf. Its focus on oil exports and commerce is reflected by the skyline’s modern towers and shopping megacentres such as Abu Dhabi and Marina malls. Beneath white-marble domes, the vast Sheikh Zayed Grand Mosque features an immense Persian carpet, crystal chandeliers and capacity for 41,000 worshippers. The Corniche is a local landmark, with an impressive eight kilometres of manicured waterfront that includes children’s play areas, separate cycle and pedestrian pathways, cafés 12 Citizenship By Investment

and restaurants, and the Corniche Beach - a lifeguarded beach park. Beachgoers relax on the stunning Saadiyat and Yas public beaches or for a spot of luxury they can book a day in the uber-luxurious Saadiyat Beach Club. Visitors can enjoy water activities such as wake-boarding, surfing and parasailing, or cruising in a traditional pearling boat, kayaking through natural mangrove forests, upping the pace for a speedboat tour, diving, snorkelling or swimming. The city is now home to the annual Formula 1 Etihad Airways Abu Dhabi Grand Prix. There are plenty of opportunities for tax-free shopping, from luxurious and ultra-modern malls with the latest brands, to small, souk-like shops where you can buy traditional perfumes, handicrafts, spices and carpets. This is still a recognisably Arab city, modern, but one that has been well planned, with several major building projects on neighbouring islands such as Yas, Al Maryah and Saadiyat. Abu Dhabi is also developing into a leading global arts and cultural hub, with the creation of a diverse array of world class museums and international cultural venues in the capital’s Saadiyat Cultural District. A flurry of new openings will include the Louvre Abu Dhabi, Zayed National Museum and Guggenheim Abu Dhabi – placing the art-world’s stamp of approval on the city and showcasing

its history, heritage, modernity and contemporary appeal. Existing museums such as Al Ain Museum and the Delma Museum allow visitors to journey into the UAE’s proud national history, offering a glimpse into the inspirational values of the UAE’s founding father, Sheikh Zayed bin Sultan Al Nahyan, as well as the nation’s rich history, culture and heritage. Al Ain Palace Museum, Al Jahili Fort and Qasr Al Muwaji in Al Ain also offer insights into the historical buildings of the United Arab Emirates, having been preserved, maintained and renovated into museums. From the 1950s, when large oil deposits were discovered, petrochemicals became hugely important for the region. From 1971, the late Sheikh Zayed, ruler of Abu Dhabi and the first President of the UAE, managed the development of the Emirates and directed oil revenues into healthcare, education and infrastructure. Dependence on oil, a large expatriate workforce, and growing inflation pressures are significant long-term challenges however. Low oil prices have prompted the UAE to take steps to reduce its social spending, including eliminating fuel subsidies. The UAE’s strategic plan for the next few years focuses on economic diversification and


creating more job opportunities for nationals through improved education and increased private sector employment. Progress in economic diversification has strengthened the resilience of the economy. Diversification remains a priority of the UAE’s Vision 2021 and Abu Dhabi Economic Vision 2030 as the drive to reduce dependence on oil revenues gathers pace. The strategy is to increase investment in industrial and other export-oriented sectors, including heavy industry, transport, petrochemicals, tourism, information technology, telecommunications, renewable energy, aviation and space, and oil and gas services. Much has already been achieved in these fields, especially in satellite and telecommunications, the aviation sector and in renewable energy. The UAE’s economy is the most closely integrated into the global economic system of all the Arab economies and successful efforts continue to enhance its business friendly environment, both to facilitate trade and attract new foreign direct investment. The UAE is increasingly attractive as a popular venue for the relocation of the world’s high-net-worth individuals (HNWIs). With no taxes on individuals, straightforward administrative procedures and low processing costs, political stability, excellent accessibility, good healthcare, a sound education system and sunny weather throughout the year, the UAE is a very attractive option for many investors. One of the most liberal trade regimes in the Gulf attracts capital from across the region. The UAE’s large hydrocarbon wealth gives it one of the highest GDP per capita in the world and Abu Dhabi owns the majority of these resources – 95% of the oil and 92% of gas. Infrastructure in the UAE is extremely well developed and spending continues to make further improvements to meet the exacting demands of citizens. Education and healthcare, tourist facilities, electricity and water generation, telecommunications, ports and airports continue to receive a major injection of capital. The UAE is investing $58 billion on roads and bridges alone, including projects underway and in the planning stage. The UAE’s sovereign wealth funds (SWFs), which are designed to secure and maintain the future welfare of Emirati citizens, boast assets worth in excess of $733 billion: Abu Dhabi Investment Authority (Adia) is the second richest SWF in the world, investing in a wide range of assets, from equities and fixed-income securities to infrastructure. Abu Dhabi has a newly named financial district in Abu Dhabi Global Market (ADGM) Square on Al Maryah Island. As an international financial centre for local, regional and international institutions and home to more than 40 global blue chip companies. Sowwah Square is the commercial epicentre of Al Maryah Island. Citizenship By Investment 13


10

REASONS WHY HIGH-NET-WORTH INDIANS SHOULD CONSIDER CITIZENSHIP BY INVESTMENT

There are many reasons why high-net-worth individuals and businessmen would want to invest abroad. Residency and citizenship by investment is a powerful tool that allows these individuals to achieve several personal objectives, including the following:

1

CHILDREN’S EDUCATION

Several studies show that Asian parents give top priority to their children’s education and are particularly keen that they study abroad. However, the cost of education is very high in many foreign countries. Alternatively, if the parents obtain residency and citizenship in these countries by investing the required amount, their children can avail the following benefits: • Reduce fees for university education. • Easy on-campus recruitment and no discrimination regarding the child being a foreign student. • Possible to work during and after study period in the adopted country and no need to look for sponsors for work or immigrant visa. • Children can start their own business without any problem, including a start-up.

2

QUALITY OF LIFE

High-net-worth individuals in India and other Asian countries now have sizeable assets and disposable incomes. Hence foreign travel and pleasure trips abroad have become a frequent occurrence. After having travelled abroad, they aspire to achieve the quality of life lived by people in more developed countries. For this, they are ready to invest and live abroad, although they continue to maintain their business operations and family ties in their home countries. In India, the new liberalised foreign exchange policy allows HNWIs to purchase their own real estate in countries they wish to live in or visit frequently.

14 Citizenship By Investment

3

EXPANSION OF BUSINESS

4

NRI (NON-RESIDENT INDIAN) STATUS

By Prashant Ajmera - Advocate https://ajmeralaw.com/

Even though India is an economic powerhouse and Western countries are keen to develop trading ties with India, many Indian businessmen face hindrances in travelling abroad for business and/or establishing a new business in foreign countries. Residency or citizenship by investment can enable these businessmen to travel hassle-free in and out of India to their preferred destinations for business expansion, collaborations, forming alliances, or bringing in new technology to India and vice-versa.

Investing in foreign countries facilitates businessmen in obtaining NRI status. They can avail of many tax exempted benefits associated with NRI status. This is also beneficial to the Indian economy as NRIs reinvest in Indian businesses, remit foreign currency, and bring in new business ideas and opportunities.

5

VISA-FREE TRAVEL AROUND THE WORLD

India who travel abroad frequently for work can obtain citizenship of certain countries (especially Caribbean countries) that do not require physical stay but provide a foreign passport and visa-free travel to more than 130+ countries.

PASSPORT

7

R E T I R I NG ABROAD

Individual s can take advantage programm of this e to retire in a countr choice by y of their making an investmen thus enjo t and ying the b est of both worlds.

8

TAX PLANNING

Investing abroad can assist Indian high-networth individuals in tax planning by virtue of NRI status, investing through legitimate international trusts and the DATT agreement signed by India with many countries around the world.

9

WEALTH MANAGEMENT AND PORTFOLIO DIVERSIFICATION

Investing in developed countries through this programme is a very viable option for wealth management and portfolio diversification for savvy investors and high-net-worth individuals who wish to explore the global stock markets.

6

REUNION WITH FAMILY LIVING ABROAD

Due to the strict visa regimes of many countries, families have split apart. The residency and citizenship by investment programme of many countries allow relatives abroad to make an investment on behalf of their relatives back home (eg. the US EB-5 visa) and enable them to immigrate to a foreign country.

10

POLITICAL REASONS

In today’s world, unrest and uncertainty are perils of daily living. Having a second passport provides a sense of security to ensure the safety and well-being of your loved ones.


SECOND CITIZENSHIP: THE GATEWAY TO A BETTER EDUCATION FOR YOUR CHILDREN By JOHN HANAFIN, CEO at NGE

T

here are many reasons to choose investing in a new passport, or second citizenship, but one you might not have considered – but should, if you’ve got children – is the opportunity to secure a better education. The right education helps your children build their skills, master new languages and make the right connections – so they can forge a more successful future. But the standard of education varies massively from country-to-country, and becoming an international student isn’t always possible. And even when it is, it’s often prohibitively expensive and relies on children living alone, usually far from home, without their support system, rules or customs. Plus students often face visa issues as soon as they graduate, so they can’t take advantage of the opportunities open to their peers. That’s where second citizenship comes in. Let’s now take a look at the four second citizenship programmes you’ll want to consider if levelling the playing field and securing a brighter future for your children is your priority.

#1 – THE US EB-5 IMMIGRANT INVESTOR PROGRAM The US has two residency-by-investment programmes, the EB-5 Immigrant Investor Program and the E-2 Treaty Investors Programme. For education, your best bet is the EB-5 – a US Green Card.

What do you get? The EB-5 Immigrant Investor Program grants you an immigration visa, which means you can live, work and study in the US permanently.

The EB-5 Immigrant Investor Program grants you an immigration visa, which means you can live, work and study in the US permanently. That means your children can attend US schools, colleges and universities – and you can be there to support them.

for government-sponsored financial aid for education, if needed. It can also represent a significant cost saving, because Green Card holders are eligible for ‘resident tuition’ – with fees often three-to-four times lower than international fees. It also means your children can stay and work in the US after their education, instead of hitting prospective visa blocks.

Why choose a US education? Seven of the top 10 world universities are in the US. Some 20.4 million students attending American colleges or universities in late 2017. High enrolment figures translate into high attainment rates, with some four million degrees awarded. Correlating to that, young adults with a master’s degree earn a median $60,000 – not a bad start in life. US-educated students go on to become respected leaders in every field, from law to pharmaceuticals to business.

How much does it cost? From $500,000 into a new commercial enterprise in a target employment area, or $1,000,000 elsewhere. This investment includes your spouse and any dependent children under 21.

How long does it take? Applications usually take between 20 and 26 months, so admittedly this isn’t a quick fix.

What’s the process? First you get a two-year conditional residency permit for you and your family. After these two years, you apply to have the conditions removed – which happens when you prove you’ve met and maintained your initial investment and created at least 10 full-time jobs. Then you and your family are permanent US residents. You can then apply for second citizenship through naturalisation after five years which, if granted, means you’re a fullyfledged US citizen.

#2 – THE INVESTUK EDUCATION BOND InvestUK Education Bond is specifically designed for those seeking a UK education.

What do you get? The InvestUK Education Bond helps international students finance their UK education while also gaining permanent UK residency. While normal international students only gain a Tier 4 Student Visa, this programme grants you a Tier 1 Investor Visa which means you can apply for permanent

residence in the UK after five years. The end result is that your children can not only study in the UK, but can stay indefinitely after they graduate as they begin building their lives.

Why choose a UK education? The UK has one of the best global education systems, and offers a world of opportunity post-education too. In 2016-17, more than 2.3 million students were in higher education institutions in the UK – over 300,000 from non-EU countries. Nearly 85% of students were happy with their course, and had plenty of opportunities to grow. Which then translates into 90% of graduates finding work or enrolling in further study within six months of graduating. Students from the UK dominate diverse fields across the world: an education here really does open doors.

How much does it cost? The InvestUK Education Bond ‘costs’ £2m plus £50,000 fees, but you get a 4% base interest return as an ‘income’ which pays tuition fees, plus your £2m back after you liquidate your investments.

How long does it take? From starting the process to receiving your Tier 1 Investor Visa, you’re looking at around a month. Your first 4% returns come soon after.

What’s the process? There are two options in how you split your investment: • Allocate £1m into UK government bonds and £1m into higher-yielding secured bonds. • Allocate all £2m into higher-yielding secured bonds, to generate maximum returns of £80,000 annually. Other than that, the process is straightforward and an advisor can guide you easily through the steps.

#3 – THE IRISH IMMIGRATION INVESTMENT PROGRAMME The Irish Immigrant Investor Programme gives the double whammy of better education and better business opportunities. The recent addition of the “IDLF” – the Irish Diaspora Loan Fund – has also made the country popular with high-net-worth investors and has helped to enhance the reputation of Ireland as a modern, powerful and globalised economy. Citizenship By Investment 15


The Irish Immigrant Investor Programme gives the double whammy of better education and better business opportunities. The IDLF serves as a more affordable method of investment in the country through an asset-secured manner. The fact that the IDLF is an approved loan origination fund also means that the moneys received via the IDLF are fed into the investment and development or the Irish hospitality industry through secured loans.

What do you get? You get ‘Stamp 4’ Irish residency, so you can work, study or start a business in Ireland. You needn’t live here permanently, so long as you visit Ireland once annually. So, your children could study here and you could pop over once a year and you can all maintain your permanent residency status. You will be a Permanent Resident of the Common Travel Area, which is an open borders area comprising the United Kingdom, Ireland, Northern Ireland, the Isle of Man and the Channel Islands. To apply for an Irish passport, you will be required to show “reckonable residency” for a period of five years.

Why choose an Irish education? The Irish economy is the fastest growing in the Eurozone, and Ireland has been named as the best country in the world for attracting high-value foreign direct investment for six years in a row. Following Brexit, Ireland will be the only English-speaking country in the Eurozone, and it has the youngest population. The Irish Government is fully committed to being part of Europe and invests nearly €800m into research in Ireland’s higher education institutions, so Ireland dominates in many fields. Ireland has the youngest population in Europe with one third under 25 years of age. Students can choose over 5,000 internationally-recognised qualifications and have the pick of career opportunities once they graduate – thanks to Ireland’s status as Europe’s most entrepreneurial country. Which means it’s little surprise that 35,000 students from 160 countries study in Ireland.

How much does it cost? There are four IIP options currently, which range from a €500,000 philanthropic contribution to €2m investment into an Irish listed company.

How long does it take? A very speedy average of three-to-four months for approval. 16 Citizenship By Investment

What’s the process?

How long does it take?

There are four stages – apply, approve, invest and reside. To be eligible for the IIP you must prove you’ve got the funds to invest, and that they’re legitimate. You’ll need a minimum net worth of €2m, and private medical insurance. Then you just need an affidavit of good character. If you’re interested in the Irish IIP, an advisor can guide you through it – the process is straightforward.

Normally only six months, making this an incredibly fast programme – and path to citizenship.

#4 – THE CYPRUS CITIZENSHIP-BYINVESTMENT PROGRAMME

Your overall investment can include up to €500,000 of special government bonds, which you can release after three years. This means the real estate option is most costeffective, at €2m.

The Cypriot citizenship-by-investment programme warrants special attention, because it’s the only of these four that immediately gives you citizenship rather than residency.

What do you get? As a Cypriot citizen, you avoid the bureaucracy of getting a student visa. In particular, you can take however many modules you want – whereas international students can only get a visa for 12 credits per semester. You can also benefit from cheaper education and there are no restrictions on working while you study. This is ideal for students looking for work experience or to pick up a casual job while they study. Then there’s arguably the biggest benefit of Cypriot citizenship – your new Cypriot passport, and the ability to study, live, travel and work anywhere across the EU. Gaining citizenship here is like gaining citizenship to 28 countries – so your children have an abundance of choice around their education. And an abundance of business opportunities after their education too.

What’s the process? First you have to own a Cypriot residence worth at least €500,000. Then you choose to invest an additional €1.5m into real estate (which you can sell after three years) or €2m into business or into Cypriot financial assets.

For international investors with family concerns, nothing is more important than securing the best possible future for your children. These four programmes empower you to do just that, unlocking doors that might otherwise have remained closed. Next Generation Equity specialises in dual citizenship-by-investment and residency-byinvestment programmes around the world. To schedule a no obligation consultation, please call the team on +971 4 457 8260, send an email to enquiry@nge.ae or visit https://nge.ae

Why choose a Cypriot education? Education is one of the country’s standout features. In fact, Cyprus invests more than 7% of GDP on education – second in the EU only to Denmark and Sweden. Education is one of the country’s standout features. In fact, Cyprus invests more than 7% of GDP on education – second in the EU only to Denmark and Sweden. The higher education system is especially popular, with several internationally competitive universities. Around 10,000 international students study in Cyprus. Students can choose a vast number of internationally-recognised qualifications – and Cyprus is especially known for the strength of its MA programmes.

How much does it cost? The program is based around a €2m investment into real estate or listed funds, but the majority of this can be sold after a 36-month holding period (after which, a new citizen is required to continue to own a residence on the island with a book value of €500,000).

JOHN HANAFIN, CEO AT NGE With 25 years of experience in the company formation industry, John Hanafin is well known in the UAE and beyond as a specialist in corporate services, and shares a passion for helping others establish and grow their own businesses across the UAE and wider region. John joined Virtugroup in 2017 after spending 12 years with The Sovereign Group as their Global Sales Director, and two years as CEO of Arton Capital.


THIRD OF UHNWIS HOLD SECOND PASSPORT, ANOTHER THIRD PLAN TO BUY ONE, WEALTH REPORT FINDS in a CIP; large swaths of the economic elites in South America hold Spanish passports, usually acquired by rights of descent.

of ultra-high-net-worth individuals (UHNWIs) – defined as those with a net worth in excess of US$30m – have already obtained a second passport, according to Knight Frank’s 2018 Global Wealth Report.

Tremendous potential, tempered by reputational risk

34%

A further 29% of respondents to the report’s Attitudes Survey said they planned to purchase a citizenship, while 21% said they were considering permanent emigration.

Post-Soviet Passport Pursuit The survey further found that rates of second citizenship acquisition varied widely by region. CITIZENSHIP SCHEMES While 24% of Asian and North American, Only the best regulation is acceptable 28% of African, 26% of Australasian, and 31% of European UHNWIs held more than Citizenship and residency by investment programmes one citizenship, a full 39% of Middle Eastern, are big currently,and theaindustry is worth 41% ofbusiness: Latin American, whopping 58% an estimated US$2 billion each year. However, of ultra-wealthy individuals in Russia/CIS it is beginning to draw and criticism. held at least twoconcern passports.

Some take issue with the very notion of nationality

The comparatively lower rates of dual/ multiple citizenships among Asians is most their new country based on price or “features” such likely explained by the prohibitions on such as ease of travel, purchasing passports “off the shelf” in countries like China (home to a big chunk and, aside from buying a property or handing over a of the region’s UHNWIs), coupled with the fixed sum investment, making little real contribution relatively “good” passports already available to the host country. to nationals of Japan, South Korea, Taiwan, Concern is also growing that the acquisition of a and Hong Kong (home to most of the rest of new nationality may be a vehicle to avoid FATCA, the the regions ultra-rich). as a commodity, with prospective customers choosing

CRS and various other international efforts to stem

Wealthy Latin-Americans, the otherithand, tax evasion. If this idea gatherson momentum, could hold second passports very high rate, but potentially create problemsat forathe countries involved.

not necessarilythere because they’ve participated Furthermore, is the fear of terrorists being

found to have travelled on a new passport before committing an atrocity. It is not hard to imagine

Growth in demand for to accept “purchased” passports, restricting their use citizenships acquired or denying access to those who bear them. through investment has Clearly, there is great – and growing – demand. As the market matures, it would therefore be resulted in “a biddingappropriate for governments to adopt stringent criteria in order war, as more countries to guard against such passports being acquired for improper or criminal purposes. seeking new sources of revenue try to encourage Joseph A Field foreign direct investment Partner, Withersworldwide in return for citizenship,” Revenues must be spent responsibly notes the report. how this could lead to governments being reluctant

For microstates with small economies, the benefits of citizenship and residency by investment programmes can be substantial. In certain Caribbean islands, programme revenues account for up to a third of GDP. The potential profitability of the channel has led

Growth in demand for citizenships acquired through investment has resulted in “a bidding war, as more countries seeking new sources of revenue try to encourage foreign direct investment in return for citizenship,” notes the report, referring to what investment migration industry observers have termed, alternately, the “price war” and “race to the bottom” among Caribbean citizenship by investment programmes. The report prognosticates that “as the industry matures, it will provide a major source of future revenue for countries that Only as strong as their weakest link lack alternative exports,” but that reputation risks related to the selling of citizenships Global families – and their businesses – today span were also on the rise.

The global perspective on prime property and investment

THE WEALTH REPORT 2018

by INVESTMENT MIGRATION INSIDER IMIDaily.com

Wealth migration 2018 12th Edition

TRADING PLACES UHNWI citizenship trends

ABOVE AVERAGE VALUE

countries and even continents. Acquiring alternative

The report features residence or also citizenship is acommentary means of participating from figures from the world in andseveral movinginfluential through this interconnected investment migration industry. with greater ease, and we expect that the value of this kind of mobility access will only increase as the Joseph A Field,and a partner at Withers

tendency towards isolationist, immigration-hostile Worldwide, indicated authorities were

ALREADY HOLDING A SECOND PASSPORT OR DUAL NATIONALITY CONSIDERING A SECOND PASSPORT OR DUAL NATIONALITY CONSIDERING EMIGRATING PERMANENTLY

policies becomes more prominent worldwide. increasingly concerned that residence and

AFRICA

19%

27%

28%

link, and most appealing are those with the most could bethe used for tax evasion purposes and

ASIA

19%

26%

24%

AUSTRALASIA

6%

12%

26%

of due diligence and are free of corruption. These are countries involved”.

EUROPE

19%

20%

31%

the ones that draw credible, wealthy, and talented

LATIN AMERICA

30%

45%

41%

MIDDLE EAST

19%

35%

39%

NORTH AMERICA

10%

16%

24%

RUSSIA & CIS

45%

50%

58%

GLOBAL AVERAGE

21%

29%

34%

Programmes only as strong as their weakest citizenship by are investment programmes

stringent in place. The momentum, only programmes said thatprocesses “if this idea gathers worth considering are those thatproblems uphold highfor standards it could potentially create the

Dr. Kristin Surak, a regular feature at RCBI-industry conferences worldwide, entrepreneurial expertise to a country, enriching its pointed out that citizenship by investment social and economic capital. programmes brought “substantial” economic benefits to microstates.

individuals with valuable business networks and

Dr Christian Kälin “In certain Caribbean islands, programme Group Chairman, Henley & Partners

revenues account for up to a third of GDP. The potential profitability of the channel has led to investment migration policies spreading, allowing small economies to formalise and scale up previous informal offerings of residency and citizenship,” said Surak. “Programmes are only as strong as their weakest link,” said Dr. Christian Kälin, chairman and CEO of Henley & Partners, “and the most appealing are those with the most stringent processes in place. The only programmes worth considering are those that uphold high standards of due diligence and are free of corruption. These are the ones that draw credible, wealthy, and talented

SOURCE: THE WEALTH REPORT ATTITUDES SURVEY 2018, KNIGHT FRANK

individuals with valuable business networks and entrepreneurial expertise to a country, enriching its social and economic capital.” Read the full report at www.knightfrank. com/resources/wealthreport2018/thewealth-report-2018.pdf

Citizenship By Investment 17


WHICH COUNTRIES HAVE THE HIGHEST TAXES ON HIGH INCOMES? by AMY FONTINELLE

W

hich are the countries with the top tax rates on high incomes, and why does it matter? Some people believe that placing high tax rates on the wealthy helps to redistribute income throughout society, thereby increasing equality and ensuring that the less well-off have decent housing, healthcare and enough to eat. Others believe that high taxes on wealthy individuals discourage them from working and investing as much as they might at lower tax rates and that this could result in reduction of these two activities that benefit society by leading to advances in technology, medicine and other areas that improve living standards for everyone.

Five countries with the top tax rates on high incomes Regardless of which theory resonates with you, there’s no question that tax rates affect the wealthy’s decisions about where and how to live, work and invest, including their activities in the countries with the top marginal tax rates on individuals. The rates shown here include both personal income taxes and employee social security contributions, based on the latest Organisation for Economic Co-operation and Development (OECD) data. We then break down how various taxes are assessed on the wealthy in each country.

Portugal: 61.3% Portugal’s national government taxes employment income, and business and professional income, at progressive rates of up to 48% and investment income, real estate income and increases in net worth and pensions at a flat rate of 28%. Employees pay social security taxes of 11%, and employers pay another 23.75%. In 2016 Portugal levied an additional 3.5% tax on income above the minimum wage. Real estate is taxed at the municipal level in the form of property taxes and transfer taxes. If you sell your primary residence in Portugal, your gains are tax exempt if you use the proceeds to buy another permanent residence in Portugal or another state belonging to the European Union. Portugal allows deductions for health and education expenses, and provides personal tax credits based on the number of family members. Spouses, descendants and ancestors do not have to pay taxes on gifts and inheritances, but there is a 10% tax on other recipients. Portugal does not assess a net wealth or net worth tax. 18 Citizenship By Investment

Slovenia: 61.1% Slovenia’s national government taxes employment income, business income, income from basic agriculture and forestry, income from rents and royalties, income from capital (dividends, interest and capital gains) and other income. The highest progressive tax rate is 50%. Employees pay social security taxes of 22.1% on gross income, and employers kick in 16.1%. Income from capital, certain business activities and rental property is taxed in separate buckets and at sometimesdifferent rates from all other sources of income. Capital gains are taxed at 25%, but the longer the holding period, the lower the rate. After holding the investment for five years, the rate drops by 10%, then by another 5% for each five years thereafter. By holding an investment for 20 years, an individual can avoid paying capital gains tax on that investment altogether. Portugal provides an income tax allowance for individuals, with additional allowances for being disabled or having dependents. Property owners pay taxes in certain areas based on several factors. Slovenia levies inheritance and gift taxes at progressive rates based on the property’s worth and the recipient’s relationship with the deceased or the donor. There is no net wealth or net worth tax.

Belgium: 58.4% Belgium levies both national and regional income taxes on its residents. Individuals pay

taxes on movable and immovable property, professional income and miscellaneous income. The highest progressive tax rate is 50%, which may be increased further by communal surcharges of 0% to 9%. The social security tax rate on employees is 13.07% of gross income. Individual capital gains from shares categorised as professional income are typically taxed at the ordinary individual income tax rate, but most capital gains from


acquisition is taxed at 10% or 12.5%; there are also annual property taxes. Inheritance taxes apply even to spouses, legal cohabitants and descendants; the rate can be as high as 30% for these beneficiaries. Unrelated beneficiaries and distant relatives may pay inheritance taxes as high as 80%. There is no net wealth or net worth tax.

Finland: 57.5% In Finland the tax authorities fill out residents’ tax returns for them. The country categorises all individual income in one of two ways: Earned income is subject to national, municipal and social security taxes; it is also subject to church taxes for members of one of Finland’s two national churches. National income tax has progressive rates as high as 31.5%; the first €16,900 euros is exempt from national income tax but not from municipal income tax, church tax or social security tax.

insurance contributions of 6.15%, plus 1.60% for unemployment insurance, as well as 1.58% for health insurance premiums if their annual income is €14,000 or higher. Finland allows deductions to earned income for work-related expenses, such as commuting costs, professional literature, tools and equipment and certain travel expenses. It also allows deductions to capital income, such as home mortgage interest. Real property is taxed at 0.41% to 6.0% at the municipal level, depending on location and property type. There is also a 4% property transfer tax. Inheritance taxes depend on the relationship between the deceased and the inheritor but can be as high as 33%. There is no net wealth or net worth tax.

Sweden: 57.0% Sweden’s national government taxes business income, employment income (which has a top progressive rate of 57%) and capital income (a category that includes capital gains, dividends and interest, taxed at 30%). Employers contribute 31.42% of their employees’ wages to social security. There are personal allowances against income, and deductions are available for the costs of acquiring or maintaining income, workrelated travel expenses and increases in living expenses from work-related travel or the maintenance of more than one home. There are also tax deductions for housekeeping and home-maintenance expenses. In real estate transactions the purchaser pays a real estate stamp duty of 1.5% on the property’s market or transfer value; there are also municipal property taxes. Sweden has no inheritance or estate tax and no net worth or net wealth tax.

Top tax rates in other OECD countries The top tax rates are quite high in a number of other OECD countries as well. Coming in with honourable mentions at six through ten are Japan (56.2%), Denmark (55.8%), France (55.0%), the Netherlands (52.1%) and Ireland (51.0%). The United States is a distant 17 on the list, with a rate of 48.6%.

The bottom line individuals not engaged in business activities are not taxed. Belgium allows tax deductions for business expenses, social contributions and alimony payments. The country also provides a personal allowance based on whether the taxpayer is single, has dependent children and so on. Tax credits are available for charitable donations, certain life insurance policies, pension plan contributions, real estate investments and other items. Depending on the region, real estate

Municipal taxes are also applied progressively and max out at 22.5%, and the church tax is 1% to 2.2%. Income from capital has two tax rates: 30% on income up to €30,000 and 34% on income exceeding that amount. Transfers of Finnish securities incur a 1.6% tax. After deducting the pension income allowance, pension income exceeding €47,000 is subject to a 5.85% surtax. Finnish workers have withheld from their gross pay pension

For individuals who earn high incomes from working or investing in Portugal, Slovenia, Belgium, Finland or Sweden, the tax rate percentage on income exceeding a certain threshold can reach into the high 50s and low 60s. Individual taxes on income and investments, plus mandatory contributions to social security, create these high rates. In some countries and situations the wealthy also pay significant taxes on real estate and inherited wealth. Depending on which economist or politician you ask, these high tax rates are either a significant help to the country as a whole or a hindrance to its economic progress. Citizenship By Investment 19


presents presents presents presents

a History of a History of a History of a History of a History of a History of Citizenship by Investment a History of a History of a History of a History of Citizenship by Investment Citizenship by Investment a History of a History of Citizenship by Investment Citizenship by Investment Citizenship by Investment presents presents presents

A brief account of the rise of Citizenship by Investment programmes in modern times A brief account of the rise of Citizenship by Investment programmes in modern times A brief account of the rise of Citizenship by Investment programmes in modern times A brief account of the rise of Citizenship by Investment programmes in modern times A brief account of the rise of Citizenship by Investment programmes in modern times A brief account of the rise of Citizenship by Investment programmes in modern times

1984 1984 1984 1984 1984 1984

A brief account of the rise of Citizenship by Investment programmes in modern times Saint Kitts & Nevis Citizenship by Investment Saint Kitts & Nevis Programme opens Saint Kitts & Nevis Saint Kitts & Nevis Citizenship by Investment Citizenship by Investment Citizenship by Investment Programme opens The first of its kind, Saint Kitts Programme opens Programme opens & Nevis opens the CIP just Saint Kitts & Nevis The first of its kind, Saint Kitts Saint Kitts & Nevis one year after gaining Citizenship by Investment The first of its kind, Saint Kitts & Nevis opens the CIP just The first of its kind, Saint Kitts Citizenship by Investment independence. For the next Programme opens & Nevis opens the CIP just Saint Kitts & Nevis one year after gaining & Nevis opens the CIP just 20 years, the programme lays Programme opens one year after gaining Citizenship by Investment independence. For the next one year after gaining virtually dormant, only issuing The first of its kind, Saint Kitts independence. For the next Programme opens 20 years, the programme lays independence. For the next The first of its kind, Saint Kitts a few hundred passports. & Nevis opens the CIP just 20 years, the programme lays virtually dormant, only issuing 20 years, the programme lays & Nevis opens the CIP just one year after gaining virtually dormant, only issuing The first of its kind, Saint Kitts a few hundred passports. virtually dormant, only issuing one year after gaining independence. For the next a few hundred passports. & Nevis opens the CIP just a few hundred passports. independence. For the next 20 years, the programme lays one year after gaining 20 years, the programme lays virtually dormant, only issuing independence. For the next virtually dormant, only issuing a few hundred passports. 20 years, the programme lays a few hundred passports. virtually dormant, only issuing a few hundred passports.

Irish Economic Citizenship Programme opens Irish Economic Citizenship Irish Economic Citizenship Irish Economic Citizenship Programme opens Programme opens Programme opens Between 1988 and 1998, Ireland issues approximately Irish Economic Citizenship Between 1988 and 1998, Irish Economic Citizenship 150 passports to applicants Programme opens Between 1988 and 1998, Ireland issues approximately Between 1988 and 1998, Programme opens investing a minimum of £1 Ireland issues approximately Irish Economic Citizenship 150 passports to applicants Ireland issues approximately million in the country for the 150 passports to applicants Programme opens investing a minimum of £1 150 passports to applicants purpose of job creation or job Between 1988 and 1998, investing a minimum of £1 million in the country for the investing a minimum of £1 Between 1988 and 1998, maintenance. Ireland issues approximately million in the country for the purpose of job creation or job million in the country for the Ireland issues approximately 150 passports to applicants purpose of job creation or job Between 1988 and 1998, maintenance. purpose of job creation or job 150 passports to applicants investing a minimum of £1 maintenance. Ireland issues approximately maintenance. investing a minimum of £1 million in the country for the 150 passports to applicants million in the country for the purpose of job creation or job investing a minimum of £1 purpose of job creation or job maintenance. million in the country for the maintenance. purpose of job creation or job Grenada Economic maintenance.

Citizenship Programme Grenada Economic opens Grenada Economic Grenada Economic Citizenship Programme Citizenship Programme Citizenship Programme opens Despite facing strong political opens opens Grenada Economic opposition, the first Mitchell Despite facing strong political Grenada Economic administration launches what Citizenship Programme Despite facing strong political opposition, the first Mitchell Despite facing strong political Citizenship Programme it calls an "Honorary opens Grenada Economic opposition, the first Mitchell administration launches what opposition, the first Mitchell opens Citizenship Programme", Citizenship Programme administration launches what it calls an "Honorary administration launches what offering citizenships for just Despite facing strong political it calls an "Honorary opens Citizenship Programme", it calls an "Honorary Despite facing strong political $40,000.

opposition, the first Mitchell Citizenship Programme", offering citizenships for just Citizenship Programme", opposition, the first Mitchell administration launches what offering citizenships for just Despite facing strong political $40,000. offering citizenships for just administration launches what it calls an "Honorary $40,000. opposition, the first Mitchell $40,000. it calls an "Honorary Citizenship Programme", administration launches what Citizenship Programme", offering citizenships for just it calls an "Honorary offering citizenships for just $40,000. Citizenship Programme", $40,000. Grenada Economic offering citizenships for just Citizenship Programme $40,000.

Grenada Economic closes Grenada Economic Grenada Economic Citizenship Programme Citizenship Programme Citizenship Programme closes Following the collapse of the closes closes Grenada Economic country's largest offshore Following the collapse of the Grenada Economic bank, concerns about due Citizenship Programme Following the collapse of the country's largest offshore Following the collapse of the Citizenship Programme diligence standards and closes Grenada Economic country's largest offshore bank, concerns about due country's largest offshore closes pressure from the US and Citizenship Programme bank, concerns about due diligence standards and bank, concerns about due Canada, the Grenada ECP is Following the collapse of the diligence standards and closes pressure from the US and diligence standards and Following the collapse of the discontinued.

country's largest offshore pressure from the US and Canada, the Grenada ECP is pressure from the US and country's largest offshore bank, concerns about due Canada, the Grenada ECP is Following the collapse of the discontinued. Canada, the Grenada ECP is bank, concerns about due diligence standards and discontinued. country's largest offshore discontinued. diligence standards and 20 Citizenship By Investment pressure from the US and bank, concerns about due pressure from the US and Canada, the Grenada ECP is diligence standards and Canada, the Grenada ECP is discontinued. pressure from the US and discontinued. Canada, the Grenada ECP is

1988 1988 1988 1988 1988 1988

1996 1996 1996 1996 1996 1996

2001 2001 2001 2001 2001 2001

2006 2006 2006

1985 1985 1985 1985 1985 1985

1993 1993 1993 1993 1993 1993

1998 1998 1998 1998 1998 1998

2002 2002 2002 2002 2002 2002

The Belize Economic Citizenship Investment The Belize Economic Programme Opens The Belize Economic The Belize Economic Citizenship Investment Citizenship Investment The BECIP starts by offering Citizenship Investment Programme Opens Programme Opens citizenship in exchange for a Programme Opens The Belize Economic The BECIP starts by offering US$40,000 investment. The Belize Economic The BECIP starts by offering Citizenship Investment citizenship in exchange for a The BECIP starts by offering Throughout the 1990's the Citizenship Investment citizenship in exchange for a Programme Opens US$40,000 investment. citizenship in exchange for a The Belize Economic program remains the Programme Opens US$40,000 investment. Throughout the 1990's the US$40,000 investment. Citizenship Investment cheapest CIP - by far - in the The BECIP starts by offering Throughout the 1990's the program remains the Throughout the 1990's the The BECIP starts by offering Caribbean. Programme Opens citizenship in exchange for a program remains the cheapest CIP - by far - in the program remains the citizenship in exchange for a US$40,000 investment. cheapest CIP - by far - in the The BECIP starts by offering Caribbean. cheapest CIP - by far - in the US$40,000 investment. Throughout the 1990's the Caribbean. citizenship in exchange for a Caribbean. Throughout the 1990's the program remains the US$40,000 investment. program remains the cheapest CIP - by far - in the Throughout the 1990's the cheapest CIP - by far - in the Caribbean. program remains the Caribbean. cheapest CIP - by far - in the Caribbean.

Dominica Citizenship by Investment Programme Dominica Citizenship by opens Dominica Citizenship by Dominica Citizenship by Investment Programme Investment Programme While initially successful, the Investment Programme opens opens programme essentially grinds opens Dominica Citizenship by While initially successful, the to a halt in the late 90's Dominica Citizenship by Investment Programme While initially successful, the programme essentially grinds While initially successful, the following a series of Investment Programme programme essentially grinds opens to a halt in the late 90's programme essentially grinds Dominica Citizenship by inauspicious events - opens to a halt in the late 90's following a series of to a halt in the late 90's Investment Programme including failed property While initially successful, the following a series of inauspicious events - following a series of opens While initially successful, the developments and loss of programme essentially grinds inauspicious events - including failed property inauspicious events - programme essentially grinds visa-free access to Canada - to a halt in the late 90's including failed property While initially successful, the developments and loss of including failed property to a halt in the late 90's but regains momentum a following a series of developments and loss of programme essentially grinds visa-free access to Canada - developments and loss of following a series of decade later. inauspicious events - visa-free access to Canada - to a halt in the late 90's but regains momentum a visa-free access to Canada - inauspicious events - including failed property but regains momentum a following a series of decade later. but regains momentum a including failed property developments and loss of decade later. inauspicious events - decade later. developments and loss of visa-free access to Canada - including failed property visa-free access to Canada - but regains momentum a developments and loss of but regains momentum a decade later. visa-free access to Canada - decade later. but regains momentum a Irish Economic decade later. Citizenship Programme

Irish Economic Closes Irish Economic Irish Economic Citizenship Programme Citizenship Programme Amid a political controversy Citizenship Programme Closes involving the Minister of Closes Closes Irish Economic Amid a political controversy Foreign Affairs and a group of Irish Economic Amid a political controversy Citizenship Programme involving the Minister of Amid a political controversy Saudi and Pakistani investors, Citizenship Programme involving the Minister of Closes Foreign Affairs and a group of involving the Minister of Irish Economic Ireland abolishes its program Closes Foreign Affairs and a group of Saudi and Pakistani investors, Foreign Affairs and a group of after 10 years of operation. Citizenship Programme Amid a political controversy Saudi and Pakistani investors, Ireland abolishes its program Saudi and Pakistani investors, Amid a political controversy Closes involving the Minister of Ireland abolishes its program after 10 years of operation. Ireland abolishes its program involving the Minister of Foreign Affairs and a group of after 10 years of operation. Amid a political controversy after 10 years of operation. Foreign Affairs and a group of Saudi and Pakistani investors, involving the Minister of Saudi and Pakistani investors, Ireland abolishes its program Foreign Affairs and a group of Ireland abolishes its program after 10 years of operation. Saudi and Pakistani investors, after 10 years of operation. Ireland abolishes its program Belize Economic after 10 years of operation.

Citizenship Investment Belize Economic Programme Closes Belize Economic Belize Economic Citizenship Investment Citizenship Investment Citizenship Investment Programme Closes Following American security Programme Closes concerns in the wake of 9/11, Programme Closes Belize Economic Following American security as well as criticism in relation to Belize Economic Citizenship Investment Following American security concerns in the wake of 9/11, Following American security the program's management, Citizenship Investment Programme Closes concerns in the wake of 9/11, as well as criticism in relation to concerns in the wake of 9/11, Belize Economic Belize suspends the BECIP in Programme Closes as well as criticism in relation to the program's management, as well as criticism in relation to Citizenship Investment March 2002. Following American security the program's management, Belize suspends the BECIP in the program's management, Programme Closes


offering citizenships for just Citizenship Programme", $40,000. offering citizenships for just $40,000.

Citizenship Programme Irish Economic Closes Citizenship Programme Amid a political controversy Closes

2001 2001

Grenada Economic Citizenship Programme Grenada Economic closes Citizenship Programme closes Following the collapse of the

2002 2002

country's largest offshore Following the collapse of the bank, concerns about due country's largest offshore diligence standards and bank, concerns about due pressure from the US and diligence standards and Canada, the Grenada ECP is pressure from the US and discontinued. Canada, the Grenada ECP is discontinued.

involving the Minister of Amid a political controversy Foreign Affairs and a group of involving the Minister of Saudi and Pakistani investors, Foreign Affairs and a group of Ireland abolishes its program Saudi and Pakistani investors, after 10 years of operation. Ireland abolishes its program after 10 years of operation.

Belize Economic Citizenship Investment Belize Economic Programme Closes Citizenship Investment Following American security Programme Closes concerns in the wake of 9/11, Following American security as well as criticism in relation to concerns in the wake of 9/11, the program's management, as well as criticism in relation to Belize suspends the BECIP in the program's management, March 2002. Belize suspends the BECIP in March 2002.

2006 2006 Saint Kitts & Nevis CIP relaunches Saint Kitts & Nevis CIP relaunches

Total number of passports issued under citizenship by Total number of passports investment programs issued under citizenship by investment programs

The Kittitian government revitalizes its program by The Kittitian government introducing a streamlined path revitalizes its program by to citizenship in three months: introducing a streamlined path a choice between a property to citizenship in three months: investment or a donation, a a choice between a property design that goes on to investment or a donation, a become the model for design that goes on to subsequent CIPs. become the model for subsequent CIPs.

16,544 1,476

3,300

1,476 Malta

3,300

Malta

1,923

16,544

1,923 Antigua & Barbuda Cyprus Saint Kitts & Nevis Antigua & Barbuda Cyprus Saint Kitts & Nevis

2011 2011 Cyprus Citizenship by Investment Programme Cyprus Citizenship by opens Investment Programme opens

2013 2013

A critical milestone for the industry is reached as the first A critical milestone for the EU member state introduces a industry is reached as the first CIP. Granting far more EU member state introduces a extensive settlement and CIP. Granting far more travel privileges, Cyprus extensive settlement and enters the market at a pricetravel privileges, Cyprus point an order of magnitude enters the market at a priceabove its Caribbean cousins. point an order of magnitude above its Caribbean cousins.

Grenada reopens under a new name Grenada reopens under a new name Rebranded as the

2014 2014 Malta Individual Investor Programme opens Malta Individual Investor Programme opens With official endorsement from the European With official endorsement Commission, four-tiered due from the European diligence, and more visa-free Commission, four-tiered due access than any other diligence, and more visa-free programme, the Malta IIP access than any other quickly becomes the gold programme, the Malta IIP standard for CIPs. quickly becomes the gold standard for CIPs.

Vanuatu opens first of several Citizenship by Vanuatu opens first of Investment Programmes several Citizenship by Investment Programmes While informal CIPs of a questionable legal basis have While informal CIPs of a existed in various guises in questionable legal basis have Vanuatu since 1990s, the first existed in various guises in formal such program to open Vanuatu since 1990s, the first in Vanuatu is the Capital formal such program to open Investment Immigration Plan

Individual Investor Rebranded as the Programme, the Grenadian Individual Investor CIP is revived. The Programme, the Grenadian programme's second CIP is revived. The iteration has due diligence programme's second practices and prices more iteration has due diligence in line with its Caribbean practices and prices more neighbors. in line with its Caribbean neighbors.

Antigua and Barbuda Citizenship by Investment Antigua and Barbuda Programme opens Citizenship by Investment Programme opens Adopting the model pioneered by Saint Kitts & Adopting the model Nevis seven years earlier, pioneered by Saint Kitts & the Antiguan programme Nevis seven years earlier, quickly takes a big share of the Antiguan programme the Caribbean market and quickly takes a big share of becomes the only CIP with the Caribbean market and visa-free travel to Canada, a becomes the only CIP with privilege it later loses. visa-free travel to Canada, a privilege it later loses.

Applicants to Antigua & Barbuda CIP Applicants to Antigua & Barbuda CIP Chinese Citizenship By Investment 21 All other nationalities Chinese All other nationalities


access than any other from the European diligence, and more visa-free access than any other programme, the Malta IIP Commission, four-tiered due access than any other programme, the Malta IIP quickly becomes the gold diligence, and more visa-free programme, the Malta IIP quickly becomes the gold standard for CIPs. access than any other quickly becomes the gold standard for CIPs. programme, the Malta IIP standard for CIPs. quickly becomes the gold standard for CIPs. Vanuatu opens first of

becomes the only CIP with the Caribbean market and visa-free travel to Canada, a quickly takes a big share of becomes the only CIP with visa-free travel to Canada, a privilege it later loses. the Caribbean market and visa-free travel to Canada, a privilege it later loses. becomes the only CIP with privilege it later loses. visa-free travel to Canada, a privilege it later loses.

Applicants to Antigua & Applicants to Antigua & Applicants to Antigua & Barbuda CIP Barbuda CIP Applicants to Antigua & Barbuda CIP Barbuda CIP

Vanuatu opens first of several Citizenship by Vanuatu opens first of several Citizenship by Investment Programmes several Citizenship by Investment Programmes Vanuatu opens first of Investment Programmes several Citizenship by While informal CIPs of a While informal CIPs of a Investment Programmes questionable legal basis have While informal CIPs of a

questionable legal basis have existed in various guises in questionable legal basis have existed in various guises in Vanuatu since 1990s, the first While informal CIPs of a existed in various guises in Vanuatu since 1990s, the first formal such program to open questionable legal basis have Vanuatu since 1990s, the first formal such program to open in Vanuatu is the Capital existed in various guises in formal such program to open in Vanuatu is the Capital Investment Immigration Plan Vanuatu since 1990s, the first in Vanuatu is the Capital Investment Immigration Plan (CIIP), in 2014. formal such program to open Investment Immigration Plan (CIIP), in 2014. (CIIP), in 2014. in Vanuatu is the Capital Several similar programs Investment Immigration Plan Several similar programs Several similar programs (such as the VERP and the (CIIP), in 2014. (such as the VERP and the REOP) were opened and later REOP) were opened and later closed/replaced. As of August Several similar programs closed/replaced. As of August 2018, Vanuatu has two (such as the VERP and the 2018, Vanuatu has two citizenship by investment REOP) were opened and later citizenship by investment programs: The VCP and the closed/replaced. As of August programs: The VCP and the DSP. 2018, Vanuatu has two DSP. citizenship by investment programs: The VCP and the DSP.

Jordan Citizenship by Jordan Citizenship by Jordan Citizenship by Investment Programme Investment Programme Investment Programme opens opens opens Jordan Citizenship by When Jordan makes a Investment Programme When Jordan makes a When Jordan makes a surprise-announcement in surprise-announcement in opens surprise-announcement in

February 2018 that it has February 2018 that it has February 2018 that it has When Jordan makes a already started accepting already started accepting applications for its CIP - which surprise-announcement in applications for its CIP - which starts at US$1 million, a steep February 2018 that it has starts at US$1 million, a steep price for a passport that already started accepting price for a passport that doesn't have Schengenapplications for its CIP - which doesn't have Schengenaccess - few industry starts at US$1 million, a steep access - few industry observers expect application price for a passport that observers expect application numbers to amount to much. numbers to amount to much. doesn't have SchengenThe program, however, defies numbers to amount to much. The program, however, defies access - few industry expectations by receiving The program, however, defies expectations by receiving observers expect application more than 100 applications in expectations by receiving more than 100 applications in numbers to amount to much. the first six months.. more than 100 applications in the first six months.. The program, however, defies the first six months.. expectations by receiving more than 100 applications in the first six months..

Moldova Citizenship by Moldova Citizenship by Investment Programme Moldova Citizenship by Investment Programme opens Investment Programme opens opens Moldova Citizenship by During the summer of 2018, During the summer of 2018, Investment Programme Moldovan authorities During the summer of 2018, Moldovan authorities opens announce they will be formally Moldovan authorities announce they will be formally opening a CIP in October, with announce they will be formally opening a CIP in October, with During the summer of 2018, a soft launch in August. The opening a CIP in October, with a soft launch in August. The Moldovan authorities price will start at EUR 100,000 a soft launch in August. The price will start at EUR 100,000 announce they will be formally price will start at EUR 100,000 opening a CIP in October, with a soft launch in August. The price will start at EUR 100,000 Montenegro Citizenship by Investment Programme Montenegro Citizenship by Montenegro Citizenship by opens Investment Programme Investment Programme opens Just two weeks after Moldova, opens Montenegro Citizenship by Montenegrin authorities Just two weeks after Moldova, Investment Programme announce that they too will Just two weeks after Moldova, Montenegrin authorities opens open their long-awaited CIP by Montenegrin authorities announce that they too will October. Minimum investment announce that they too will open their long-awaited CIP by Just two weeks after Moldova, requirements will start at EUR open their long-awaited CIP by October. Minimum investment Montenegrin authorities 350,000 October. Minimum investment requirements will start at EUR announce that they too will requirements will start at EUR 350,000 open their long-awaited CIP by 350,000 October. Minimum investment requirements will start at EUR 350,000

In August 2018, there are In August 2018, In August 2018, there are there are 22 Citizenship By Investment In August 2018, there are

Chinese Chinese Chinese All other nationalities All other nationalities All other nationalities Chinese All other nationalities

2016 2016 2016 2018 2018 2018

Saint Lucia Citizenship Saint Lucia Citizenship by Investment by Investment by Investment Programme opens Programme opens Programme opens Saint Lucia Citizenship by Investment The 5th Caribbean state to The 5th Caribbean state to The 5th Caribbean state to Programme opens open a CIP, the Saint Lucian open a CIP, the Saint Lucian open a CIP, the Saint Lucian programme builds on the programme builds on the programme builds on the by now established The 5th Caribbean state to by now established by now established Caribbean template but is open a CIP, the Saint Lucian Caribbean template but is Caribbean template but is the first in the region to programme builds on the the first in the region to the first in the region to include a government bond by now established include a government bond include a government bond investment option. Caribbean template but is investment option. investment option. the first in the region to include a government bond investment option. Turkey Citizenship by Turkey Citizenship by Investment Programme Investment Programme opens

opens Turkey Citizenship by Investment Programme Initially launching with a opens Initially launching with a US$ 1 million real estate

US$ 1 million real estate investment requirement, investment requirement, Turkey later announces investment requirement, Turkey later announces Initially launching with a plans to cut the asking Turkey later announces plans to cut the asking US$ 1 million real estate price to US$300,000 after plans to cut the asking price to US$300,000 after investment requirement, disappointing application price to US$300,000 after disappointing application Turkey later announces volumes. disappointing application volumes. plans to cut the asking volumes. price to US$300,000 after disappointing application Maltese citizens enjoy visa-free access to Maltese citizens enjoy visa-free access to volumes.

Maltese citizens enjoy visa-free access to

182/227 182/227 182/227 182/227

Maltese citizens enjoy visa-free access to countries and territories countries and territories countries and territories

12* formal CIPs 12* formal CIPs 12* formal CIPs...and several more

countries and territories


In August 2018, there are

12* formal CIPs ...and several more on the drawing board

www.imidaily.com Investment Migration Insider is the leading publication for the residence and citizenship by investment industry. Follow us on Email, Linkedin, Facebook, Twitter, Instagram, RSS or WeChat (in Chinese):

Copyright 2018, Investment Migration Insider ALL RIGHTS RESERVED *While many countries have legal provisions that allow for citizenship by investment - such as Romania, Bulgaria, Croatia, Austria, Cape Verde and GuineaBissau - this infographic refers only to countries that have formally established and marketed programs that have clearly stipulated requirements and lead directly to citizenship.

Citizenship By Investment 23


General economic and investment profile of Bulgaria

DID YOU KNOW THAT BULGARIA?

B

ulgaria ranks third in the world on numbers of historical landmarks, after Italy and Greece. It is rich in unique mineral springs with therapeutic properties. The country is the best outsourcing destination in Europe, according to Cushman & Wakefield’s rating for 2015. Globally, Bulgaria takes third place (Where in the World? Business Process Outsourcing (BPO) & Shared Service Location Index). There are about 50 companies producing components and systems for the global automotive industry. The parts for eight of every ten cars in Europe are produced in Bulgaria. The country is the biggest producer of lavender in the world. For the past three years, the country has managed to surpass France in this, historically the leader in this field. In 2013, Bulgaria also ranked as the largest exporter of sunflower seeds worldwide, with a 17.8% market share of exports in this commodity.

Why should you invest in Bulgaria? 1:

Political and business stability - EU, NATO and WTO member - Currency board - Low budget deficit and government debt

2:

Competitive cost of doing business - 10% corporate and personal tax rates - Competitive cost of labour - Favourable office rents and low cost of utilities

3:

Access to markets - European Union/EFTA - Russia - Turkey/Middle East

4: Educated and skilled workforce - 80,000 students abroad - 25% of population holds a university degree - 46% of population speaks at least one foreign language 5: 24 Citizenship By Investment

Government incentives - Social security benefits - Tax benefits - Vocational education benefits

Attractive opportunities for doing business in Bulgaria 0% corporate tax for investment in areas with high unemployment rate. 10% corporate tax, 10% personal income tax and 20% VAT. - 0.078 €/kWh electricity price for industrial users

- 9.49 €/GJ gas price for industrial users - €50.4 billion GDP for 2017 - €1.3 billion FDI inflow

- 1.6% HICP inflation rate - €261 labour cost

- 2.8% budget deficit

- 3.4% real GDP growth

- 53 universities, colleges and higher schools - 7% of the population holds an engineering degree - 3.37 million labour force

- Industrial rents (in Sofia) from €2.5 (m2/month)

-O  ffice rents (in Sofia) from €12 (m2/month) - Water 1.09 (€/1m3)


Priority sectors:

ELECTRONICS INFORMATION TECHNOLOGY Advantages: • Established traditions and experience in the sector. One of the fastest growing sectors of the economy. The revenues of Bulgarian IT Companies grew by 11%. Over 4,300 students get a degree in IT each year. Bulgarian internet speed is one of the fastest in the world.

Advantages: • Availability of experienced engineers • Qualified assembly workforce at an affordable cost • Easy access to EU, Russian and Middle Eastern markets • More than 75% of the production of electronics manufactured in Bulgaria is exported • Bulgarian universities are working together with the companies in the sector to create qualified workforce.

FOOD AND BEVERAGE The sector: More than 666,000 people work in this sector, which generates 5% of GDP and annual wages of €5,300 per employee. Bulgaria has a lot to offer to agricultural companies and manufacturers of food products. Some facts: • 50% of Bulgaria is agricultural land • agricultural land can be acquired against very favourable conditions • there are excellent conditions for the cultivation of grains, fruits and vegetables • the soil is ecologically clean and fertile • products are high quality and organic

BUSINESS PROCESS OUTSOURCING (BPO) Advantages: • Bulgaria offers qualified and cost-effective workforce and advantageous rents for commercial space • BPO sector generates over €964m revenues • Bulgaria is the best outsourcing destination in Europe • The average BPO company in Bulgaria provides services in more than 25 languages.

MACHINE BUILDING

• there is a ban on genetically modified products

Advantages:

• the nation has long history of agricultural production

• Established traditions and experience in the sector

• there are high standards regarding health protection and the environment

• Continuous growth between 2000 and 2015

• there are no restrictions on foreign investments on agriculture and buying of agricultural plots

• A qualified workforce at affordable price • Easy access to the markets • Networks of technical universities and colleges • Available physical infrastructure.

• there is a large pool of available specialist employees against the lowest costs of labour in Europe • the country has various universities which specialise agriculture and food.

Citizenship By Investment 25


Step 2

• Applying for residence permit

Step 3

• Within 3 years from the date of launching the investment project a certain threshold must be reached

Step 4

• Maintaining the investments above the minimum threshold for certificate

Step 5

CITIZENSHIP THROUGH INVESTMENT CERTIFICATE

• Receiving a certificate for class investment

A person who has received a permanent residence permit on the basis of investment certificate may acquire Bulgarian citizenship without the need to prove a command of the Bulgarian language and without the need to be released from his or her previous citizenship.

• Applying for citizenship

Who

associate or shareholder owning not less than 50 percent of the company capital

1 year after receiving residence permit

proxy of the company or procurator

5 years after receiving residence permit

employee of a key and/or controlling function necessary for the investment purposes

5 years after receiving residence permit

Citizenship

Step 1

When the associate or shareholder has at least one year old permanent residence permit through investment certificate and during the year of the valid permit has maintained the investments made and exploited above the minimum threshold for the grant of Class A investment certificate under the terms and conditions of the Investment Promotion Act, which fact shall be verified by the Ministry of Economy. The foreigner may acquire citizenship through naturalisation without the need to prove a command of the Bulgarian language and without the need to be released from his or her previous citizenship. In this cases the Bulgarian company must not:

RESIDENCE PERMIT THROUGH INVESTMENT CERTIFICATE A long-term residence permit may be granted to a foreign citizen that performs activity for implementing and/ or maintaining an investment which has received a certificate for class А, class B, or priority investment project, where the foreigner shall be: •a  n associate or shareholder having registered shares owning not less than 50% of the registered company capital; •p  roxy of the company or procurator entered in the Commercial Register, or •e  mployed under contracts of employment for the performance of a key and/or controlling function in the scientific research, manufacturing, marketing or other basic activity of the undertaking or another activity necessary for investment purposes. Not later than the third year from the date of launching the investment project activity the threshold requirement for issuing a class B investment certificate under the Investment Promotion Act has to be reached in relation to the investments made and put into effect and/ or the employment created as an average number of listed personnel. The overall number of the persons that may receive a residence permit shall be: 26 Citizenship By Investment

•u  ntil reaching the threshold requirement for issuing class B investment certificate – up to three persons; • after reaching the threshold requirement for issuing class B investment certificate, during the period of maintenance of the investment and job positions – up to eight persons. The Ministry of Economy issues a certificate for compliance with the requirements which shall be used before the agencies for administrative control on foreign persons. The certificate shall be issued following a grounded presentation by the Bulgarian trade company of the necessity for residence of the foreign person in question with respect to the investment implementation and maintenance, and after assuming of an obligation by the company for prompt notification of the Ministry of Economy in case of termination of relations with the physical persons.

INVESTBULGARIA AGENCY 31 Vrabcha Street Sofia 1000, Bulgaria Telephone: (+359 2) 985-5500 Fax: (+359 2) 980-1320 Email: iba@investbg.government.bg Web: www.investbg.government.bg

• be declared in bankruptcy or undergoing a bankruptcy procedure, or have concluded out of court agreements with its creditors; • be undergoing a liquidation procedure; • have monetary obligations to the state or a municipality, established with an act in force issued by a competent authority, save in cases where the obligation has been deferred; • have unpaid remuneration to employees established with a administrative penalty decree in force. The inspection and control of the facts and conditions for citizenship shall be carried out on the basis of annual financial statements and reports on the activities of the company, verified by an auditor registered under the Independent Financial Audit Act, National Revenue Agency and municipalities references, as well as on the basis of other relevant documents.

InvestBulgaria Agency (IBA) is a government institution providing information, contacts and project management support to potential investors. IBA services: • Macroeconomic data on Bulgaria • Data on operational costs • Regional information • Personalised administrative servicing • Legal advice • Liaison with central and local governments • Liaison with branch chambers and NGOs


CITIZENSHIP BY

Investment ACHIEVING

WWW.TRULYBELONG.COM

CS Global Partners is an industry-leading legal advisory firm specialising in citizenship by investment and investor immigration solutions. The firm is comprised of an expert, global team committed to assisting international businesspersons and their families in achieving increased mobility, security, and privacy through second citizenship.

www.csglobalpartners.ae LONDON • ZURICH • HONG KONG • BEIJING • DUBAI • NEW DELHI • WINDHOEK • ST KITTS & NEVIS • SINGAPORE


St Kitts and Nevis is the youngest nation in the Americas, and yet it is famed for its growing tourism industry and international business platforms. Where else can you find four worldclass golf courses overlooking the Caribbean Sea?

P R I M E M I N IST E R O F T HE F E D E RAT IO N OF ST K I TT S A N D N E V IS

“As the pioneer of citizenship by investment, St Kitts and Nevis is committed to the highest level of due diligence and efficiency in the running of its Citizenship by Investment Programme. The reputation of our Programme is matched by the strength of our economic growth and the beauty of our country. In St Kitts and Nevis, we seek to invite only the discerning investor to come to our country.”

WELCOME TO

• Citizenship within 90 days of application submission, or guaranteed approval in 60 days under the Accelerated Application Process • No interview, residence, education, or business experience requirement • Exciting business opportunities in a country with an impressive GDP growth • Visa-free and visa-on-arrival access to over 155 countries and territories worldwide • Life in a country focused on becoming the world’s first fully green economy

CI T I Z ENS H IP BY IN V EST M E N T P R O GRAMME

Learn more on the offcial website: www.ciu.gov.kn


WWW.CI U.G OV. KN

ST KITTS AND NEVIS, PORTRAIT OF A PRESTIGIOUS CITIZENSHIP BY INVESTMENT PROGRAMME The St Kitts and Nevis Programme is the well-established citizenship programme in the world, as it has been running for 34 years. This ensures applicants feel certain of the programme: one that has awarded lifetime citizenship in return for an investment in the future of the nation. Today, St Kitts and Nevis offers the ‘Platinum Standard’ of citizenship, meaning responsiveness, effectiveness, and discretion in all processes. Applicants can benefit from the Accelerated Application Process, an exclusive service that accommodates applicants with fastpaced lifestyles by ensuring that their application, if successful, will be returned to them in 60 days or under (including receipt of passport). There are two main routes to obtain citizenship in St Kitts and Nevis.

OPTION 1: The first is the Sustainable Growth Fund (SGF), the most straightforward, streamlined and fastest path to second citizenship, with an investment threshold of USD 150,000 for a single applicant. The SGF channels resources to priority areas like education, health, climate change and resilience, infrastructure, tourism and culture, and the promotion of indigenous entrepreneurship in St Kitts and Nevis.

OPTION 2: The second option is to invest in a Pre-Approved Real Estate Project, which may include hotel shares, villas, and condominium units. Applicants for citizenship of St Kitts and Nevis wanting to purchase property are required to singlehandedly invest USD 400,000, and are required to hold that property for a minimum of five years to maintain their economic citizenship status. Otherwise investors now have the alternative option to invest into a share scheme paying a minimum of USD 200,000 into a luxury hotel resort. The real estate must be held for a period of seven years to maintain their economic citizenship status. Additional Government fees apply to both real estate options.


P R I M E M IN IST E R O F T HE COM M ON W E A LT H O F D O M IN ICA

Dominica welcomes people around the world to join our global community. Those looking for strong investment opportunities in an international network that stretches well beyond this small Caribbean island are invited to apply for citizenship. A Dominican citizenship is the fast track to opportunity in a country that prides itself on being resilient, courageous and open to new ideas that will tackle global issues, all the while embodying a strong sense of community as a global family.

“We are a nation deeply rooted in community values and a mindset of reciprocity. For this reason, we invite individuals and families from around the world to invest in our country, and in exchange we promise to provide you with citizenship of the Commonwealth of Dominica – a status that comes with a myriad of opportunities aimed to transcend borders in a continually globalising world.”

WELCOME TO

• Untapped business opportunities in a growing economy and stable democracy • Seamless processing leading to citizenship in 3 months from submission of application • No interview, residence, education, or business experience requirement • Visa-free travel to more than 120 countries and territories

C IT IZ E N S HIP BY IN V EST M E N T P R O G RAMME

Learn more on the offcial website: www.cbiu.gov.dm


W WW.CB I U.GOV.DM

D O MI NI CA’ S G LOBA L COMMUNITY, ST R ONG I NV ESTM E NT CHANNELS AND WEALTH OF OPPORTUN IT Y When looking for an option for second citizenship, Dominica ticks all the right boxes. It has a widely respected Citizenship by Investment Programme, with a reputation for integrity. The Programme is known for its efficiency, while continuing to ensure the highest standards of due diligence. For the second consecutive year, the programme has been ranked number one in the world by CBI Index – a comprehensive study into economic citizenship – that was published by the Financial Times’ Professional Wealth Management magazine. Busy investors need not be anxious about having to travel or reside in Dominica, as applications can be submitted abroad through an Authorised Agent. There are two paths to achieve economic citizenship in the Commonwealth of Dominica.

OPTION 1: The first option is the Economic Diversification Fund (EDF), a non-refundable contribution to the country, starting from USD 100,000. This option allows an applicant to play a major role in Dominica’s promising future.

OPTION 2: The second option to obtain Dominican citizenship is to invest in Pre-Approved Real Estate, starting from a minimum investment of USD 200,000. This option provides an investor with the opportunity to become a proud owner of prime real estate. There are a number of high quality projects available for investment with trusted global brands.


WELCOME TO

Saint Lucia CI T I Z ENS H IP BY IN V EST M E N T P RO G RAMME

• Citizenship for life, including the right to work, reside and study in Saint Lucia • No interview or language proficiency requirements • Visa-free travel to over 120 countries and territories • Saint Lucia allows dual citizenship • Ability to include family members on the application • Option to invest in the Saint Lucia National Economic Fund, in a government approved real estate or enterprise project, or interest-free government bonds Learn more on the official website: www.cipsaintlucia.com

When opting to be a citizen of Saint Lucia, we are not just offering citizenship, but rather an identity - our people and our place in the world. It is one thing to have a beautiful country with picturesque landscape but it is also the people that inhabit this land that make the vital difference. Saint Lucia’s motto captures all of our combined treasures - the land, the people, the light.


W WW.CIPSAI NTLUCI A.COM

SAI NT LUCI A , A YOUT HFUL A ND E NE RGETIC C ITIZENSHIP Saint Lucia is a strong option in the Caribbean’s tourism market, and is among the region’s most famous destinations, particularly for honeymooners. The industry is bolstered by direct flights to Europe and the Americas, and numerous visa-free agreements to match demand for overnight stay. The island’s workforce – youthful, energetic, and well-educated – has propelled Saint Lucia into new, less traditional industries, including technology and financial services. There are four paths to achieve economic citizenship in Saint Lucia. OPTION 1: The first option is the National Economic Fund (NEF), a non-refundable contribution to the country, starting from USD 100,000. It is the most efficient option to obtain citizenship. OPTION 2: The second option to obtain the Saint Lucia citizenship is to invest in an Approved Real Estate project starting from USD 300,000. The approved real estate projects fall into two broad categories: high-end branded hotels and resorts, and luxury boutique properties. OPTION 3: Citizenship by investment may also be achieved through the purchase of non-interest-bearing Government bonds for a minimum investment of USD 500,000. These bonds must be registered and remain in the name of the applicant for a five year holding period. OPTION 4: The third option is to invest in an Approved Enterprise Project starting from a minimum investment of USD 3,500,000.


Second Citizenship? MEET with us for a FREE consultation today

Burlington Tower, Business Bay, Dubai, U.A.E. • www.csglobalpartners.ae • +971 (0) 422 61704 LONDON • ZURICH • HONG KONG • BEIJING • DUBAI • NEW DELHI • WINDHOEK • ST KITTS & NEVIS • SINGAPORE


Knowing the Antigua & Barbuda Citizenship business Knowing & BarbudaCitizenship Citizenship business Knowing the Antigua Citizenship business Knowing Knowingthe the theAntigua Antigua Antigua& &Barbuda Barbuda Barbuda Citizenship business business Knowing the Antigua business

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Executive Officer & Director

Above: E. Casroy James - Chairman and Kirthley C.H. Maginley - Chief Executive Officer & Director

Company Overview

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Company Overview

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Financial & Banking Consultants

#51 Church Street and Hard Castle Avenue, #51 Street and Hard Castle Avenue, #51 Church Street and Hard Castle Avenue, #51 Church Street Hard Castle Avenue, #51Church Church Street and Hard Castle Avenue, St. John’s, Antigua St. John’s, Antigua St. John’s, Antigua St. John’s, Antigua Telephone Number OfficeAntigua - (268) 562-8774/5 St. –John’s, Telephone Number – Office - (268) 562-8774/5 Telephone Number – Office -(268) (268) 562-8774/5 Telephone Number 562-8774/5 #51 Church Street and Hard Castle Avenue, Mobile (268) 720-3800/7284 Telephone Number – Office - (268) 562-8774/5 Mobile (268) 720-3800/7284 Mobile (268) 720-3800/7284 Mobile (268) 720-3800/7284 WebsiteMobile – www.jamesandmaginley.com St.(268) John’s,720-3800/7284 Antigua Website – www.jamesandmaginley.com Website – www.jamesandmaginley.com Website – www.jamesandmaginley.com Telephone – Office - (268) 562-8774/5 WebsiteNumber – www.jamesandmaginley.com

Mobile (268) 720-3800/7284 Disclaimer: Banking related services are provided through licensed financial entities whose terms and conditions apply. Website – www.jamesandmaginley.com Disclaimer: Banking related services are provided through licensed financial entities whose terms and conditions will apply. Disclaimer: Banking related services are provided through licensed financial entities whose terms and conditions willwill apply. Disclaimer: Banking related services are provided through licensed financial entities whose terms and conditions will apply.

Disclaimer: Banking related services are provided through licensed financial entities whose terms and conditions will apply.

Citizenship By Investment 27 Disclaimer: Banking related services are provided through licensed financial entities whose terms and conditions will apply.


ANTIGUA AND BARBUDA – FAST BECOMING THE CIP JURISDICTION OF CHOICE

I

n an age of an increasing need for mobility, becoming a global citizen has never been more desirable.

Despite being a relatively new entrant in the alternative citizenship space, Antigua and Barbuda’s Citizenship by Investment Programme (CIP) is already proving very popular with investors. Speedy processing and the quality of real estate offerings, give the programme a serious competitive advantage. The independent Commonwealth state, located in the Eastern Caribbean, is a lush green paradise that boasts 365 white sand beaches with clear, turquoise waters. Home to over 90,000 people, the twin-island nation is considered to be one of the most beautiful places in the world.

Historically, as a result of tourism and real estate, the country has experienced continuous growth in foreign direct investment. However, more recently, financial services, tertiary education and e-commerce have become significant contributors. Bolstered by generous Government incentives, foreign investment has contributed to the rapid development of the economy, resulting in the country having one of the highest GDP per capita in the sub-region.

Along with seven other states, Antigua and Barbuda is a member of the Eastern Caribbean Currency Union (ECCU), a development of the Organisation of Eastern Caribbean States (OECS), using the Eastern Caribbean dollar as its currency. The Eastern Caribbean dollar has been pegged to the United States dollar for the last forty years, contributing to long-term financial stability. The Government of Antigua and Barbuda has set a clear goal for the country to become, according to its Prime Minister, the Honourable Gaston Browne, “‘the economic powerhouse’ of the Eastern Caribbean” and sees its CIP as one of the key drivers that will lead to the realisation of this ambition. Launched in 2013, the programme is managed by a dedicated Citizenship by Investment Unit (CIU), a team of professionals responsible for processing applications and for recommending the approval of real estate and business investment options. The ultimate responsibility for the program rests with the Office of the Prime Minister. According to the CIU’s chief executive officer, Mrs. Charmaine Donovan, one of the main factors that contribute to the rapid success of the programme is its highly competent staff. “The Unit is staffed by a team of 17 homegrown and highly competent individuals hailing mainly from the private sector. A number of us are members of professional associations which require us to maintain high ethical standards in the performance of our

QUICK FACTS Capital city: St. John’s Population: 100,963 (Est 2016) GDP growth: 2.0% (Est 2016) Area: 443km2 Government: Parliamentary constitutional monarchy Monarch: HM Queen Elizabeth II Governor-General: Rodney Williams Prime Minister: Gaston Browne Currency: East Caribbean dollar (XCD) Dialling code: 1 268 HDI: 58th Ease of doing business index: 63rd

duties. We are all Antiguans and Barbudans and therefore perform our duties with pride and diligence since any fall out from this programme affects US as it does the rest of the country. We therefore rigorously manage the application process from beginning to end.” In addition to its existing marketing efforts, the Unit is now offering a commission to all authorised representatives/suppliers.

The programme provides three options. 1. Contribution to the National Development Fund (NDF) A. For a single applicant, or a family of 4 or less • US$100,000 contribution Processing fees: US$25,000 B. Family of 5 or more:• US$125,000 Contribution

28 Citizenship By Investment


Processing Fees: US$15,000 for each additional dependent 2. Real estate investments For a single applicant, or a family of 4 or less: • Processing fees: US$50,000 For a family of 5 or more: • Processing Fees: US$15,000 for each additional dependent Until 31st October 2019, Two applications from related parties can make a joint investment, with each applicant investing a minimum of US$200,000 in order to qualify. All processing and due diligence fees remain unchanged. In addition, two or more applicants who have executed a binding sale and purchase agreement may apply jointly for citizenship by investment provided that each applicant contributes the minimum investment of US$400,000. 3. Investment in business The two business investment options are: • Where a person proposes to make an investment in an approved business of at least US$1,500,000 on their own behalf. • At least two persons propose to make a joint investment in such an approved business totalling at least US$5,000,000, and each of those persons individually propose to contribute at least US$400,000 to the joint investment an application or application for Citizenship by Investment may be submitted on his, her or their behalf through an agent. At its meeting of 6th September 2018, the Cabinet of Antigua and Barbuda agreed to the creation of a fourth investment option under the Citizenship by Investment Programme. The University of the West Indies Fund option will be a mechanism for financing UWI’s fourth landed campus.

Features of this option:

Benefits

• Applicants to the Citizenship by Investment Programme who choose this option will be required to make an investment of US$150,000 for a family of four or more (i.e. minimum number of persons per application is four).

• Visa free access to 150 countries, including United Kingdom and Schengen area

• Participation in the option will entitle one member of the family to a one year, tuition only, scholarship at the University of the West Indies. The CIU has afforded new citizens the opportunity to add dependants after approval. There is also a no-HIV test requirement for minors under 11.

• Decision rendered in 60-90 days on most files • No restrictions on dual nationality • Citizenship for life, once residency requirement is met • Straightforward application process, no minimum net worth requirement or previous business experience • No tax on worldwide income, inheritance, capital gains or investment returns

Antigua and Barbuda was the first Caribbean nation to permit investment in approved businesses, an innovation that other jurisdictions are now copying.

• History of a stable currency US$1 = EC$2.70 (XCD) since 1976

In addition to visa-free travel to 150 countries, including the United Kingdom, and the European Union’s Schengen area states, CIP-eligible investors have the right to reside permanently on the islands. The recent elimination of personal income tax makes it even more attractive.

• Well-established legal and regulatory framework, supporting civil and commercial relationships

Applicants must be 18 and above and submit to a rigorous due diligence process. The only residency stipulation is that new citizens spend at least five days on Antigua or Barbuda in the five years following the granting of citizenship. Regarding due diligence and transparency, Donovan says a decision is reached on applicants only after the full analysis is completed.

• Antigua and Barbuda is a stable ‘Westminster’ style democracy

• Well-educated work force, skills and abilities for modern work place • Active and committed member of the International community With its efficient processing, rigorous due diligence, wide choice of investment options and the sheer physical attraction of the islands, the Antigua and Barbuda CIP is fast becoming a jurisdiction of choice. For more information visit www.cip.gov.ag

“All of the Unit’s international partners are involved in the entire process”.

Citizenship By Investment 29


30 Citizenship By Investment


Citizenship By Investment 31


IMPROVING YOUR FUTURE IS OUR FOCUS AND EXPERTISE

CISC

is a Canadian based corporation headquartered in Toronto and with offices in in Saint Lucia and Bahrain. Our mandate is the best investment you can make is in yourself and your family.

CISC is composed of a highly experienced team of global investment professionals, immigration lawyers and relocation specialists. Whatever investment you make, we will guarantee the highest return on your investment whether for obtaining a second passport or real estate investment for tax relief or other. Our clients are both individuals and major corporates with offices globally. Our turnkey solutions mean each case is individually managed by a dedicated team and always prioritised. Efficiency and expediency are what distinguishes CISC from our competitors. The popularity of acquiring second citizenship has grown significantly in recent years and has become one of the main goals for entrepreneurs and many families in the world due to its multiple benefits and advantages. These include visa-free travelling, better tax management, business growth in new locations, safety from political or social conflicts, or simply the search for a better lifestyle. Canada is currently ranked one of the best countries in the world to reside. Both education (KG – G12) and medical are free. Canada has some of the best universities in the world offering students the highest quality of education. Further, Canada is currently experiencing a real estate boom and clients can apply for entry and permanent resident status to Canada through several different investment programs dependent on which province you select. All programs provide entitlement to Canadian citizenship and a Canadian passport.

The Canadian advantage There are many reasons why Canada is the best place to build your business: •S  trong economic growth: Forbes magazine rates Canada as the best country in the G-20 with which to do business. Canada has the strongest fiscal position in the G-7 and among the best fiscal prospects in the G-20. •L  ow taxes and low business costs: Canada offers a low-cost and low-tax environment, so your business can thrive. Canada’s overall tax rate on new business investment is significantly lower than that of other G-7 countries. KPMG ranks Canada as the most tax competitive country in the G-7.  xcellence in research and innovation: Canada offers a winning environment for research •E and innovation, including world-leading research and development (R&D) infrastructure, scientific talent and innovation incentives. Combined federal and provincial credits can return to foreign investors, on average, up to 30% of their R&D investment in Canada. •T  op quality of life: Canada’s top quality of life provides a great backdrop for the success of individuals, families and globally engaged companies. According to the World Bank, in 2011 Canadians enjoyed nearly the highest standard of living in the G-20. Canada is home to a highly educated, flexible and multicultural workforce.

IMMIGRATION INVESTMENT PROGRAM The Canadian Immigration Investment Programs vary depending on the province you select. An investment as small as C$75,000 will gain you entry to certain provinces in Canada. The maximum amount for immigration by investment to Canada is C$1.5m. The entire process can be complete in six months or less. All candidates applying under the Immigration by Investment Programs are automatically permanent residents of Canada and are eligible for Canadian citizenship after approximately two and a half to three years’ time.

Toronto, Ontario 32 Citizenship By Investment

The most attractive provinces for Investor Immigrants are Ontario, Quebec and British Columbia. Investors are able to apply either through investing in real estate or established businesses or by starting their own business under several different Entrepreneur Business Start-Up Programs.


Toronto, Ontario

Ontario Entrepreneur Stream The Ontario Immigrant Nominee Program’s (OINP) Entrepreneur Stream helps individuals from countries outside of Canada to implement a new business idea or buy an existing business in Ontario. It also offers entrepreneurs the opportunity to be nominated for Permanent Resident status once their business has been successfully established in Ontario, which will lead to obtaining Canadian citizenship. You may be eligible for this program if you have a viable business activity that will bring significant economic benefit to Ontario. If approved, you and your business partner (if applicable) may apply for a temporary work permit in order to establish your business. Once your business has been successfully established, you and your business partner (if applicable) may be eligible for nomination by the OINP. You must meet all eligibility criteria in order to apply to the Entrepreneur Stream. If you are applying with a business partner, your business partner must also meet the eligibility criteria. To be eligible, you and your business partner must meet five factors. Experience • At least three years of full-time business experience in the last five years. • Your experience must be as a business owner OR as a senior manager (business management).

Net worth

Job creation

• If your proposed business will be located within the Greater Toronto Area (GTA – includes the City of Toronto, Durham, Halton, York and Peel regions), you must have a minimum net worth of C$1,5m.

• You must create at least two permanent full-time jobs for Canadian citizens/ permanent residents.

• If your proposed business will be located outside of the GTA, you must have a minimum net worth of C$800,000. Proposed business will be in the ICT/ Digital Communications sector (regardless of your proposed business location), you must have a minimum net worth of C$500,000. Personal investment funds • If your proposed business will be located within the GTA, you must make a minimum personal investment of C$1m and have a minimum equity ownership of 33.3%. • If your proposed business will be located outside of the GTA, you must make a minimum personal investment of C$500,000 and have a minimum equity ownership of 33.3%. • If your proposed business will be in the ICT/Digital Communications sector (regardless of where you set up the business), you must make a minimum personal investment of $500,000 CDN and have a minimum equity ownership of 33.3%.

Business-related visit • If you plan to purchase an existing business, you must make at least one business-related visit to Ontario in the last year prior to the date you submitted your EOI. You must meet the minimum requirements for all of these factors to be eligible to apply for the Entrepreneur Stream. If you are applying with a business partner who is also seeking nomination, your partner must also meet all the minimum requirements for each factor.

Ontario Corporate Stream

The Ontario Immigrant Nominee Program’s Corporate Stream helps and supports established international corporations looking to expand into Ontario by investing or buying an existing business. Once the business has been successfully established and meets the obligations of a Performance Agreement, a maximum of five key staff that are essential to the establishment, continued operation, and success of the business can become eligible for nomination for permanent resident status. This program entitles the investor to be a permanent resident in Canada leading to Canadian citizenship. Citizenship By Investment 33


Montreal, Quebec

Quebec Immigrant Investor Program (QIIP) Investor Immigration Canada eligibility Minimum net worth In order to be admitted into the Quebec Investor Program 2018, foreign investors must have a legally obtained minimum net worth of C$1.6m (or its equivalent in a foreign currency), either individually or combined with their spouse or partner. Assets that may be included when calculating net worth include real estate, bank accounts, stocks and bonds, as well as pension funds. Under the Quebec program for investors, inherited assets are classified as legally obtained, however, donation or inheritance money must have been received at least six months prior to launching a QIIP application. As of October 2018, C$1.6m is equivalent to approximately US$1.3m or €1.1m. Risk-free investment Applicants for Canada investor immigration must sign an agreement stating their intention to make a government guaranteed C$800,000 investment in Quebec through a financial intermediary authorised to participate in the QIIP. This prescribed investment in a five-year term note is fully and unconditionally guaranteed by the

OUR PROCESS STEP 1 – CISC assessment for eligibility STEP 2 – Application and document collection

Vancouver, British Columbia

British Columbia Investor Programs Government of Quebec, and in accordance with the provisions of the program, the money is returned in full after five years with 0% interest. Please note: this passive investment does not have to be made until after an applicant is approved in principle for investor immigration to Quebec, so there is no risk of making the investment only to be later refused a Canada investor visa. Financing solution Over the last decade, a significant percentage of the Quebec and Canada Immigrant Investor Program participants have financed their investment in the country. Investors who do not wish to liquidate assets in order to come up with the required C$800,000 can finance the investment through an authorised Canadian financial intermediary for a one-time loan payment of C$220,000 which includes all interest and fees. This means that as of January 2018, the “true cost” of obtaining a Canada investor visa is only around US$175,000 and which entitles the investor to Permanent Resident status in Canada. Also, if the Investor remains in Canada for 1,095 days they will be eligible to apply for Canadian citizenship.

The BC Entrepreneur Program provides an opportunity for qualified individuals and families to move to the Canadian Province of British Columbia and operate their own small business. The program is part of the British Columbia Provincial Nominee Program (BCPNP) and is best suited for experienced business owners and managers who have the financial ability and knowledge to create or improve a Canadian business. The program’s objective is to stimulate economic growth and create jobs in British Columbia. Immigrant entrepreneurs who are selected to participate in the program are given a two-year work permit. While that permit is in effect, an entrepreneur must actively manage his or her business for at least 18 months. Participants who successfully complete all BC business immigration requirements will become provincial nominees, making them and their family members eligible for expedited permanent residence in Canada and Canadian citizenship. It is expected, but not required, that provincial nominees will continue to operate their business while living in British Columbia.

BC Entrepreneur Program 2018

To participate in the British Columbia Investor Program, an entrepreneur must be able to invest at least C$200,000 in a new business or, in some instances, an existing business that the applicant plans to improve. The business must create at least one new job for a Canadian citizen or permanent resident. The registrant must live near the business and manage the business on a daily basis.

STEP 3 – Application and document submission to the concerned province in Canada STEP 4 – Receive approval – Permanent Resident status granted – Citizenship and issuing of Canada passport For further details please contact one of our offices or email us at: info@ciscbh.com

Head office: CISC Toronto 2 Bloor Street East, Toronto Ontario M4W 1A8 +1-647-243-7438 www.ciscbh.com info@ciscbh.com Bahrain +973 3319 6350

34 Citizenship By Investment


COUNTRY SPOTLIGHT

QUICK FACTS Capital city: Nicosia Population: 1,170,125 (Est 2016) GDP growth: 3.9% (Est 2017) Area: 9,251km2 Government: Unitary presidential constitutional republic President: Nicos Anastasiades The President of the House of Representatives: Demetris Syllouris Currency: Euro (€) (EUR) Dialling code: 357 HDI: 33rd Ease of doing business index: 53rd

CYPRUS

C

yprus is an island country situated in the eastern Mediterranean Sea, located south of Turkey, west of Syria and Lebanon, northwest of Israel, north of Egypt and east of Greece. With a sub-tropical climate, it has mild winters and summers that can be extremely warm. With an average temperature along its coast of 24°C, Cyprus has one of the warmest climates in the Mediterranean and as a result it is a popular tourist destination, famed for its beautiful beaches and archaeological sites relating to the cult of Aphrodite, (who legend has it was born in the sea near off Paphos), including ruins of palaces, tombs and mosaicadorned villas. Human habitation on the island dates from around 10,000 BC, and it was settled by Greeks from the late Bronze Age. Cyprus’s strategic location has always meant it was a target for invasion and a centre for trade, a hub for Phoenician, Greek and Roman trade routes to the Middle East, Egypt and Africa. Before independence, Cyprus was ruled by the Ottomans and the British. Its geographical location acts as a bridge between east and west, north and south. It has a long tradition of entrepreneurship and an educated, English-speaking population, moderate local costs, good airline connections and telecommunications.

Economy Cyprus is part of the monetary union, the eurozone and the EU single market. Despite joining the EU as a divided island, the whole of Cyprus is EU territory. Turkish Cypriots have, or are eligible for, EU travel documents and are EU citizens. EU law is suspended in areas where the Cypriot government

(Government of the Republic) does not exercise effective control. It has been an EU member since 1 May 2004 and adopted the Euro on the 1 January 2008, with the consequent travel freedoms that go along with that. Cyprus is currently in the process of joining the Schengen area. Traditionally Greece has been a major export and import partner of Cyprus. In 2007, it accounted for 21.1% of total exports of Cyprus. Over the same period it was responsible for 17.7% of goods and services imported by Cyprus. Some other important partners are UK and Italy. The most important sectors of Cyprus’s economy are wholesale and retail trade, transport, accommodation and food services (26.0%), public administration, defence, education, human health and social work activities (20.3%) and financial and insurance activities (10.8%). Surveys suggest more than 2.831 trillion cubic metres of natural gas reserves lie untapped in the

Leviathan gas field in the Mediterranean between Cyprus and Israel – almost equal to the world’s total annual consumption of natural gas. The trend is the economy over recent years has been to shift from agriculture to light manufacturing and services. The services sector, including tourism, contributes almost 80% to GDP and employs over 70% of the labour force. 2 million tourists visit Cyprus every year, making it the 40th most popular destination in the world. The island has a mature tourism infrastructure, overseen and promoted by the Cyprus Tourism Organisation, a semi-governmental body. Traditionally Greece has been a major export and import partner of Cyprus, amounting to around 21% of the total exports of Cyprus. In terms of imports, 74% come from EU member states (Greece 21%, Germany 17% and Italy 7%), while outside the EU 8% come from China and 4% from South Korea. Cyprus has a large shipping management sector, with roughly 50 companies basing themselves there. It has the tenth-largest registered fleet in the world. Historically, and as an island nation, the country has a long history in merchant shipping, and that is only helped by its central hub location and proximity to the Suez Canal. Starting in the 1990s, Cyprus also became Citizenship By Investment 35


an important hub for investment from the West into Russia and Eastern Europe. More recently, these flows have been directed to Asia, South America and the Middle East. Businesses from outside the EU also use Cyprus as their entry-point for investment into Europe. Business services are the fastest growing sector of the economy, and had overtaken all other sectors in importance. This is aided by work of the Cyprus Investment Promotion Agency (CIPA), the national investment promotion agency, which aims to promote the nation’s investment appeal abroad. It is currently focusing on the energy sector, but it also plays a key role continuing to promote the traditionally important sectors of real estate, shipping and tourism. The Cyprus Securities and Exchange Commission (or CySEC) is the financial regulator in Cyprus. CySEC was launched in 2001, and when the country joined the EU in 2004 CySEC came under, and moved to comply with, general European regulation, giving firms registered in Cyprus access to European markets. Cyprus’s legal system is founded on the principles of English common law and it is therefore familiar to international financiers. Cyprus’s legislation was altered to align with EU law as part of the process of entering the Union. Restrictions on foreign direct investment were removed, permitting 100% foreign ownership in many cases. Foreign portfolio investment in the Cyprus Stock Exchange was also liberalised. A businessfriendly tax system was put in place with a 12.5% corporate tax rate, one of the lowest in the EU. Cyprus has concluded treaties on double taxation with more than 40 countries, and, as a member of the Eurozone, has no exchange restrictions. Non-residents and foreign investors may freely repatriate proceeds from investments in Cyprus.

2012–2013 financial crisis In 2012, following the Greek governmentdebt crisis, the €22 billion exposure of small Cypriot banks to over-leveraged local property companies became critical. 36 Citizenship By Investment

In March 2013, a €10 billion international bailout (or Economic Adjustment Programme for Cyprus) was hurriedly organised by the Troika (the European Commission, the International Monetary Fund, and the European Central Bank) and the Cypriot Government.

finances and booming construction and tourism industries. In the banking sector, healthy growth supported asset values, enhancing borrowers’ repayment capacity and facilitating loan restructuring, which helped banks begin to reduce their stock of non-performing loans.

Bailout terms include strong austerity measures and a levy on bank deposits over €100,000, implementation of anti-money laundering measures in Cypriot financial institutions, fiscal moves to help bring down the Cypriot governmental budget deficit, structural reforms to restore competitiveness and fix imbalances, a privatisation programme, and an agreement to split the country’s second largest bank, the Cyprus Popular Bank (also known as Laiki Bank), into a “bad” bank, which would be wound down over time and a “good” bank which would be absorbed by the Bank of Cyprus.

Citizenship by Investment in Cyprus

Following the financial crisis, Cyprus exceeded expectations with its economic recovery. Its economy exited recession in 2015 and continued to grow into 2016. Progress was achieved in all of the key objectives the international lenders had targeted, resulting in the Eurogroup hailing Cyprus as a success story. The Cypriot debt-to-GDP ratio is now expected to fall to 105% in 2020, and is thus considered sustainable for the future. Cyprus does particularly well in international comparisons of trade freedom and monetary freedom. The regulatory framework is relatively transparent and efficient, and the financial sector has stabilised. Strong economic growth in 2017 — the healthiest figures since 2008 — signalled a sustained recovery. GDP expanded 3.9% against a backdrop of growing monetary stability, which fuelled domestic demand. Fixed investment jumped over a quarter in 2017, and private consumption picked up from 2016, underlined by declining unemployment and subdued inflation. Forecasts are for sustained growth in the short term, driven by improved public

Many wish to gain a Cypriot passport. Possession of one is an invaluable asset; with access to as many as 163 countries without a visa and the right to live and work in all EU member states, a Cypriot citizenship has the ability to open many doors. In September 2016, the government lowered the amount that single investors are required to invest in the country. This amount can be invested in real estate, government bonds or through the creation of a business based in the Republic. Furthermore, groups will also no longer have to number five or more investors, and citizenships can be secured for the applicants’ parents alongside their own applications. Since the launch of the Cypriot CBI program, investors have consistently been attracted to Cyprus due to the country’s highly sought after geographical location and Mediterranean climate. The programme is currently the highest listed of any European country in the Arton index of global citizen programmes. News outlets have praised the newly simplified process, as the changes will improve the programme’s accessibility and will further cater for the family of investors. The tweaks to the programme will undoubtedly ensure that the Cypriot citizenship programme will continue to claim the European CBI crown and further increase investors’ interest in the country.

How to qualify – Investment in real estate, land development and infrastructure projects The applicant must have made an investment of at least €2m for the purchase or construction of buildings or for the construction of other land development


projects (residential or commercial developments, developments in the tourism sector) or other infrastructure projects. Investment in land under development is included in this, provided an investment plan for the development of the purchased land will be included in the application.

Purchase or establishment or participation in Cypriot companies or businesses The applicant should have made a purchase or should have participated in companies or organisations established and operating in the Republic of Cyprus with investment costs of at least €2m. The invested funds shall be channelled towards the financing of the investment objectives of these companies exclusively in Cyprus, based on a specific investment plan. The applications shall be evaluated to verify that the companies or organisations have proven physical presence in Cyprus, with significant activity and turnover and employ at least five Cypriot or citizens of EU member-states. The minimum number of employees shall increase if more than one applicant invest simultaneously or almost simultaneously in the same business or company. In addition, the employees of the companies need to have legally and continuously resided in Cyprus during the five years preceding the application submission date.

Investment in alternative investment funds or financial assets of Cypriot companies or organisations The applicant should have bought units of at least €2m from alternative investment funds (AIF) established in the Republic of Cyprus, licensed and supervised by the CySec and whose investments are made exclusively in the Republic of Cyprus, in investments that meet the criteria of this scheme or in areas approved by the Minister of Finance. In order to confirm that the investments that meet the criteria of the current scheme will

be kept for at least three years, the manager or the auditor of the fund shall inform in writing and on an annual basis, the Ministries of Finance and Interior with reference to the value of the initial investment. The purchase of financial assets of Cypriot companies or organisations of at least €2m, such as bonds, bills and securities, issued with the approval of the CySec, by companies that have proven physical presence and substantial economic activity in the Republic of Cyprus, and have as a purpose the financing of the investment plans of these companies or organisations exclusively in Cyprus, based on an investment plan, fall under this criterion. The purchase by an AIF of units of other AIFs is not considered eligible.

Combination of the these investments Applicants may invest in a combination of the above options. The combination of investments must total at least €2m. The applicant may purchase special government bonds of the Republic of Cyprus, up to €500,000, which will be issued by the Public Debt Management Office of the Ministry of Finance, on condition that the investor will retain these bonds for a three year period. The characteristics and the terms of these special bonds will be determined by the General and Special Issue Terms of the Government Bonds of the Republic of Cyprus. Investments in government bonds through the secondary market are not considered eligible.

Latest In May Cyprus’s Council of Ministers announced significant changes to the country’s citizenship by investment programme. The changes include capping the number of naturalisations at 700 a year, changing the programme’s official name, and tightening due diligence and vetting procedures for investors looking to get hold of a European Union passport. Cypriot finance minister Harris Georgiades

said that the new procedures will be “stricter and more credible” and that the number of passports granted under the revised scheme will be capped and additionally foreign agencies will also carry out “exhaustive checks” to ensure the suitability of applicants. Georgiades admitted that there had been “weaknesses” to the previous rules, but he dismissed much of the criticism. “We reject the notion that the Cypriot passport is up for sale. We don’t depend on this scheme but it’s a useful complement to the tools we have to stimulate economic development.” Cyprus introduced the scheme in the wake of a 2013 financial crisis that forced the government to accept a rescue programme from international creditors. Applications have risen sharply since 2014 when 214 main applicants (and 186 dependents) received approvals. Last year, the authorities naturalised 503 main applicants, plus 510 dependents. The government’s Press and Information Office (PIO) announced that the programme will be known officially as the “Cypriot Investment Scheme” and all future applications will be subject to enhanced due diligence, the cost of which will be paid by applicants. The real estate investment holding period of three years will now start from the time a town planning permit is issued. Applicants will have to wait up to six months for their applications to be examined. These amendments followed announcements earlier this year. In March, the government issued new rules regarding who may market the programme and also issued a new code of conduct “with clear provisions to avoid exaggerations and abusive practices”. European Commission spokesman Christian Wigand stated that member states “should use their prerogatives to award citizenship in line with international and EU law and in the spirit of sincere co-operation” with other EU countries. According to some estimates, €4.8 billion has been raised by the programme between 2013 and 2016.

Citizenship By Investment 37


COUNTRY SPOTLIGHT

QUICK FACTS

THE COMMONWEALTH OF DOMINICA

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itting halfway along the Eastern Caribbean archipelago, The Commonwealth of Dominica is located just a few miles from Martinique to the south and Guadeloupe to the North. Dominica’s official name is the ‘Commonwealth of Dominica,’ which is mostly referenced in official communications and to further distinguish the island from the Dominican Republic, its northerly Caribbean sister. Discovery of Dominica is sure to yield a Caribbean experience unlike any other. The climate is tropical and the terrain rugged. Its breathtaking landscape reveals rainforests, rivers and waterfalls. It comes as no surprise that Dominica is affectionately known as “Nature Island”, as citizens of Dominica share their home with many rare species of plants, animals and birds. The rugged terrain offers adventurous visitors the chance to explore canyons, cycle or swing from new heights. For those with a love of nature, Dominica is the perfect birdwatching destination. Additionally, the botanical gardens house the Sisserou Parrot which is named after the country’s national bird, which can only be found on the island. Dominica is known for its spectacular reefs which visitors can explore while diving or snorkelling. Keen divers should certainly visit the signature Champagne Reef. For a less active visitor, there is the always the option to join a boating tour. From a catamaran, visitors can enjoy watching dolphins.

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Looking out onto the Caribbean Sea, the mountainous green slopes are dotted with exotic tropical flowers, banana plantations and coconut trees. The Boiling Lake is the perfect place to soul search and discover yourself as its renowned healing properties are considered legendary. An inclusive island with a rich cultural makeup, Dominica offers a vibrant mix of European and African cultures and serves as the home to the Caribbean’s only remaining population of pre-Columbian Carib Indians. Dominica has the honour of being nominated as one of the happiest places to live on Earth. Simplicity is key here, whether you want to walk barefoot through the pristine shore, wander down any number of green jungle trails or chill out on the beach looking onto the ocean, Dominica is a place where concerns are replaced by an overwhelming sense of peace and oneness. The main exports are agricultural and include coffee, cocoa, bananas, citrus fruits, and tropical fruits. The chief exported manufactured products are rum, timber, and soap. Tourism, which includes a budding eco-tourism industry, is also an important economic driver. Dominica gained national independence on 3rd November 1978. Dominica has since flourished as a democracy which is patterned after the British parliamentary system. The president is the head of state,

Capital city: Roseau Population: 73,543 (Est 2016) GDP growth: 3.9% (Est 2017) Area: 750km2 Government: Unitary parliamentary republic President: Charles Savarin Prime Minister: Roosevelt Skerrit Currency: East Caribbean dollar (XCD) Dialling code: 1 767 HDI: 94th Ease of doing business index: 98th

elected by the House of Assembly for a fiveyear term. The president appoints the prime minister, an elected member of the House of Assembly who commands the support of the majority of its elected members.

Benefits of citizenship in Dominica One of the main benefits of a Dominican citizenship for the potential applicant would be the access it provides. Dominica itself is a safe and enjoyable place to live, with a high quality of life and English is the official language so business transactions should run without language complications. Dominica has a progressive a stable economy and fosters an investor-friendly environment. Citizenship also comes with free movement of capital, dividends and profits made outside of the island and no wealth, gift, inheritance, foreign income, or capital gains tax and no personal income tax for residents. Dominica’s Government has frequent dealings with the private sector and other foreign investors in order to facilitate growth. There are a number of flexible and tailored projects available for the investor, as many international companies are targeting Dominica to develop agricultural opportunities, alternative energy projects, manufacturing concerns, hotel resort developments and even investment in the film industry. The soil is perfect for producing a variety of fruits, produce and


“The Commonwealth of Dominica has the honour of being nominated as one of the happiest places to live on earth.” plants due to its rich volcanic content. The landscape is also a prime candidate for real estate development and there are a number of opportunities to work together with joint venture investments and private landowners. Holders of Dominican passports can use them to travel internationally and benefit from the many visa-free travel regimes the Dominican Government has established with its allies across the globe. Some of the major hubs available to those travelling on a Dominican passport include the United Kingdom, with whom Dominica shares a long history, Singapore, Hong Kong and the European nations of the Schengen Area.

Investment options Dominica offers applicants the option of becoming citizens in return for a qualifying investment, which includes either a donation to Dominica’s Economic Diversification Fund, or the purchase of preapproved real estate.

Economic Diversification Fund The Economic Diversification Fund (EDF) was established through the Citizenship by Investment Programme as one component of a national capital mobilisation portfolio towards an ultimate goal of national development for Dominica. Generated funds are utilised for public and private sector projects where a need is identified. Public sector projects identified for financing under the Programme include (1) building of schools, (2) renovation of the hospital, (3) building of a national sports stadium and (4) promotion of the offshore sector. With respect to private sector projects, Government emphasis is on the tourism, information technology and agricultural sectors. To qualify for citizenship under this investment option, there are four different minimum contribution amounts, based on the number of dependents included in the application, which are as follows:

Real estate

Applicable Fees

To qualify for citizenship of Dominica under the real estate option under the Citizenship by Investment Programme, an applicant must purchase authorised real estate to the minimum value of US$200,000.

The following fees are also payable on application:

Following approval of a real estate investment application, the following government fees are payable: • US$25,000 for single applicant • US$35,000 for main applicant and spouse

1. Single applicant: a non-refundable contribution of US$100,000 is required

• US$35,000 for family up to 4 persons, including the main applicant

2. Main applicant and spouse: a nonrefundable contribution of US$175,000 is required

• US$50,000 for family up to 6 persons, including the main applicant

3. Main applicant with up to three qualifying dependents. A non-refundable contribution of US$200,000 4. Additional qualifying dependants US$25,000

• US$70,000 for family of 7 or more. In order to qualify for citizenship, you must hold authorised real estate for three years from the grant of citizenship. You may only re-sell that real estate under the Citizenship by Investment Programme after five years.

Processing fees

US$1,000 per application

Due diligence fees

Main applicant – US$7,500 Spouse – US$4,000 Dependant aged 16 years or above – US$4,000 (In some cases, an enhanced due diligence may be required, depending on the citizenship the applicant holds and other personal circumstances.)

Other fees • Certificate of Naturalisation Fee – US$250 per person • Expedited Passport Issuance Fee – US$1,200 per person

Citizenship By Investment 39


CARIBBEAN SPOTLIGHT: BEST SECOND CITIZENSHIP IS FROM DOMINICA, SAYS FINANCIAL TIMES / PWM by CS Global Partners

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hile it presents one of the oldest citizenship by investment (CBI) programmes, established in 1993, the Commonwealth of Dominica now occupies the leading position in a growing economic citizenship sector, fuelled by more investors seeking new, international opportunities. The small Caribbean nation’s programme was recently declared, yet again, the world’s best in a special report by the Financial Times subsidiary Professional Wealth Management. Titled the 2018 CBI Index, it is the only comprehensive and independent ranking system that critically analyses and compares the 13 countries currently operating government-legislated CBI programmes around the world. Experts at FT’s PWM awarded Dominica perfect scores in five of the seven “pillars” measured, considered the most important factors from an investor’s perspective, according to independent researcher James

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McKay. Dominica excelled in areas like security and vetting procedures, minimum investment outlay, citizenship timeline, efficiency and undemanding travel or residence requirements. Many agree this island-nation stands out partly thanks to the speed at which it is capable to process applications, with citizenship typically approved in less than three months. Even when the demand is very high, there is a government regulation in place whereby, within three months of submission, the Citizenship by Investment Unit will notify the authorised person on behalf of the main applicant as to whether their application has been approved in principle or not, provided all the documentation and procedures had been fully complied with. Dominica’s CBI investment thresholds start from US$100,000 for a single applicant, which

is the most affordable option on the market. It is available in the form of a contribution to the Economic Diversification Fund (EDF) and offers the opportunity for investors to obtain second citizenship more conveniently and support the country’s economic development in the process. The second pathway to Dominican citizenship is an investment in designated real estate with a value of at least US$200,000. With top hotel brands like Marriott, Hilton, Kempinski, and other luxury resorts developing world-class accommodation for the growing eco-tourism trade, Dominica continues to attract investors able to combine entrepreneurship with practicality. In return, successful applicants benefit from greater international mobility, new business opportunities, security and stability for their families and the chance to belong to a coveted Global Community, which Dominica proudly nurtures. Its citizens can travel


easily to over 120 countries and territories, including business hubs like London, Hong Kong, Singapore and the Schengen Zone. Since Dominican citizenship is for life and can be passed down to future generations, investors can be sure that their family legacy is future-proof. Thanks to the programme’s strong due diligence framework and exemplar reputation, investors can be certain of the integrity and durability of their second citizenship. Despite understandable challenges posed by Hurricane Maria last year, Dr the Honourable Roosevelt Skerrit pledged to make Dominica “the world’s first climate-resilient nation”. The Prime Minister recently stated that his country “showed unfathomable resilience, and a consistent and diligent approach to service, resuming application processing for our citizenship programme within less than a week of the event.”

Transparency of CBI funds usage also sets Dominica apart, with the government offering regular updates on the ways in which investors’ financial contributions are used to improve the lives on the island, such as commissioning 5,000 new homes, creating over 1000 jobs, or funding the National Health Insurance pilot that helps children in critical medical conditions get the necessary treatment. Holders of the Dominican economic citizenship can therefore be proud that their investment goes beyond their own benefit and eventually plays an important part of making their adoptive country a model for resilience, inclusivity and sustainability.

Special Report

A GUIDE TO GLOBAL CITIZENSHIP T H E 2 01 8 C B I IN D E X

To see the full report, visit http://cbiindex.com

in association with

Citizenship By Investment 41


COUNTRY SPOTLIGHT

GRENADA

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he best things in life come in threes, and the tri-island state of Grenada is no exception. Consisting of Grenada, Petite Martinique and Carriacou, the picturesque islands offer plentiful opportunities for both adventure lovers and those seeking rest and relaxation. With its lush, fertile landscapes and award winning white sandy beaches, it has the perfect balance, and visitors may find themselves wishing that they could extend their stay. Renowned for its high exports of nutmeg and mace, Grenada is sometimes dubbed the “Island of Spice”. Grenada is the world’s second largest producer of nutmeg but spices aren’t the only natural bounty that Grenada shares with its guests; cocoa beans, bananas, avocados, cloves and cinnamon are also grown in abundance throughout the islands. Grenada is famed for its unspoilt scenery. The islands are of volcanic origin with extremely rich soil. Its natural beauty remains largely untouched by industrialisation – between the cobalt blues of the ocean and the rich greens of its vegetation, the eye is spoilt for choice. It is the perfect getaway destination for those seeking an adventure, suntans and spas, or a romantic break with a partner. With its white 42 Citizenship By Investment

sand and invitingly clear waters, the Grand Anse beach is recognised as one of the most beautiful in the world. For those who enjoy active adventure, a trek to the cascading waters of the Seven Sisters Falls will lead you through the rainforest. Visitors to the island are likely to encounter some of the friendliest people in the Caribbean, as Grenada is renowned for its hospitable attitude toward both tourists and new citizens. Grenadian culture is expressed through largely creative means: with music, poetry, pageantry, theatre, dance and sports. Other means of socialising come in the form of organised celebrations and festivities, where a great amount of time is dedicated toward cooking. English is the country’s official language, so there should be little trouble acclimatising and integrating into the community. Before the arrival of European explorers, Grenada was inhabited by the indigenous Arawaks and subsequently the Island Caribs. Christopher Columbus sighted Grenada in 1498 on his third voyage of discovery to the Americas, and although labelled the property of the King of Spain this is no evidence to suggest the Spanish ever settled there.

QUICK FACTS Capital city: St. George’s Population: 107,317 (Est 2016) GDP growth: 2.5% (Est 2017) Area: 348.5km2 Government: Unitary parliamentary constitutional monarchy Monarch: HM Queen Elizabeth II Governor-General: Cécile La Grenade Prime Minister: Keith Mitchell Currency: East Caribbean dollar (XCD) Dialling code: 1 473 HDI: 79th Ease of doing business index: 138th


Tourism Grenada has a largely tourism-based, small, open economy, which has shifted from agriculture to service industries. Manufacturing industries in Grenada operate mostly on a small scale, including the production of beverages and other foodstuffs, textiles, and the assembly of electronic components for export. The Grenada Chocolate Company has pioneered the cultivation of organic cocoa, which is also processed into finished bars. The Grenada Chocolate Festival takes place in May. Large-scale tourism is a recent phenomenon, and Grenada is largely undiscovered, unspoilt and full of opportunity. Beach and water-sports tourism is mainly focused in the southwest region around St George, the airport and the coastal strip. Ecotourism is growing in significance. Most small ecofriendly guesthouses are located in the Saint David and Saint John parishes. During the cruise ship season numbers increase greatly. Grenada’s islands feature some of the most diverse terrain in the Caribbean, from crater lakes and verdant rainforests to sun-kissed swaths of beach and unspoiled underwater ecosystems. Almost one quarter of Grenada is preserved as national parks or wildlife sanctuaries. Nature trails criss-cross the terrain, offering visitors and locals the

chance to drink in the spectacular views of mangrove-fringed coastlines and experience the islands’ splendid array of fruits, spices, and tropical plant life. Well-preserved places of interest abound in Grenada. In the lovely capital of St. George’s, scattered between pastel buildings and redtiled roofs reflect the city’s strong Caribbean identity and historic English and French architecture also hints at the culture’s rich past and European influence. Fort George, a garrison that has overlooked the capital’s harbour for more than 300 years, is open to the public for tours. In addition, the Saturday market offers locals and tourists the opportunity to explore local produce, spices and crafts.

Citizenship of Grenada The Grenada Citizenship by Investment Committee is the main governmentappointed body tasked with the responsibility of overseeing the processing of applications for Grenadian citizenship by investment. The Committee assesses applications in accordance with the Grenada Citizenship by Investment Act, after which recommendations are made to the Minister, who makes the final decision to deny, approve or delay granting Grenadian citizenship.

The Citizenship by Investment Programme came into being in August 2013, when the Grenadian Parliament passed Act No. 15 of 2013 (Grenada Citizenship by Investment Act, 2013). The Act enables persons to acquire permanent residence and citizenship of Grenada by registration following investment in Grenada. Applicants may only make two types of investments to obtain citizenship or permanent residence: 1. They must make a payment into the National Transformation Fund; or 2. They must make a payment towards an approved project in Grenada

The National Transformation Fund (NTF) The National Transformation Fund (NTF) is a Government fund responsible for financing projects that will benefit Grenada’s economy and help its diversification. Applicants who choose this route must make a one-time contribution to the NTF. It is important to note that applicants are not allowed to contribute to the NTF in person, but rather they must use the services of an Authorised Local Agent. Applicants opting for the NTF route must contribute at least US$150,000 to the Fund. The following chart highlights the costs and fees associated with this route. Citizenship By Investment 43


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COUNTRY SPOTLIGHT

QUICK FACTS Capital city: Valletta Population: 431,864 (Est 2018) GDP growth: 6.6% (Est 2017) Area: 316km2 Government: Unitary parliamentary republic President: Marie Louise Coleiro Preca Prime Minister: Joseph Muscat Currency: Euro (€) (EUR) Dialling code: 356 HDI: 33rd Ease of doing business index: 84th

MALTA

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he Republic of Malta is a small, island country in the Mediterranean Sea that lies south of the island of Sicily. Malta is an archipelago, but only the three largest islands of Malta, Gozo and Comino are inhabited. The landscape of the islands is characterised by terraced fields, dry vegetation, rock and limestone. This is due to the long hours of strong sunshine that they receive throughout the summers, which are usually dry and hot. The average annual temperature is around 23°C. It is one of the smallest and most densely populated nations in the world and has two official languages, Maltese and English. Malta’s location in the middle of the Mediterranean has historically given it great strategic importance as a naval base and a crossroads between Europe, North Africa and the Middle East. A succession of powers, including the Phoenicians, Carthaginians, Greeks, Romans, Byzantines, Arabs, Normans, Sicilians, Spanish, Knights of St. John, French, and British have ruled the islands, each adding to the distinctive mix. Malta is particularly known for its connection with the Order of the Knights of St. John, who were given the island by the Spanish king Charles V. They introduced the Italian language to the island, built the city of

Valletta, and developed the cultural and economic links through the region. The islands voluntarily became part of the British Empire in 1800, and the importance of their location greatly increased after the opening of the Suez Canal. During the early years of the Second World War, Malta came under concentrated bombing and naval siege by the Axis powers – so much so that in 1942 King George VI awarded the whole Maltese population the George Cross in recognition of their bravery. A depiction of the medal was then incorporated onto Malta’s national flag.

Politics Malta gained independence from the United Kingdom on the 21 September 1964, and became a republic in 1974. It joined the European Union in 2004 and in 2008 it became part of the eurozone. The parliamentary system is closely modelled on the Westminster system. The parliament is made up of the president, a prime minister and the multi-party House of Representatives. The country is also divided into five regions, with each having its own Regional Committee. The Government of Malta is the executive branch. The Prime Minister is appointed by the President of Malta, with the President

making their decision based on the situation within the Maltese parliament. The House of Representatives consists of 65 members, 5 members of parliament being elected from each of the thirteen electoral districts. The role of the President of Malta is largely ceremonial, and he/she is appointed by the House of Representatives for a five-year term. The Labour Party currently runs the government, the Prime Minister being Joseph Muscat.

Economy Malta is a highly industrialised, high-income, advance service-based economy – with a standard of living slightly above the EU average. It is a member of the European Union and of the eurozone, having formally adopted the euro on 1 January 2008. Malta’s main advantage has always been its central location for trade, and the economy reflects that. Being a small island it has limited natural resources and can only produces around 20% of the food requirements for its relatively large population. The economy therefore is dependent on human resources and foreign trade. Malta’s economy is driven by financial services, tourism, real estate, Igaming and manufacturing, particularly of electronics. Other significant sectors are pharmaceuticals, Citizenship By Investment 45


information technology, and call centres. There is a strong manufacturing sector for products like electronics and pharmaceuticals, and the manufacturing sector has more than 250 foreign-owned, export-oriented enterprises. Film production is another growing industry, bringing in €35 million between 1997 and 2011. The Maltese government introduced financial incentives for filmmakers in 2005, and currently foreign productions can can get up to 27% back on spending incurred. Malta produces almost all its electricity from oil, and energy costs, sometimes seen as the highest in Europe, have become an issue. The government is looking into the potential of solar and wind power and Malta and Tunisia are currently discussing the commercial exploitation of petrochemicals on their shared continental shelf. With entry to the EU, the Maltese Government has pursued a policy of gradual economic liberalisation and privatisation, taking steps to shift the emphasis from reliance on direct government intervention and control to policy regimes that allow a greater role for markets. In 2007 the government sold off its 40% in MaltaPost, completing an ongoing privatisation process. In 2010, Malta privatised telecommunications, postal services, shipyards and shipbuilding. Malta has managed to maintain a relatively low unemployment rate, mainly because of the constant growth and by policies encouraging continuous training for the labour force. Malta ranks high on global inward foreign direct investment comparisons and is among the top twenty countries most likely to sustain economic growth. Malta didn’t suffer in the same way as other jurisdictions during the eurozone

46 Citizenship By Investment

crisis, because of low debt and sound banking. The judiciary, fairly independent and efficient, provides strong protection of property rights. The World Economic Forum’s Global Competitiveness Index 2015-2016 placed Malta amongst the top 20 financial jurisdictions. The financial regulator, the Malta Financial Services Authority (MFSA), is the single regulator for financial services in Malta. It was established in 2002, taking over supervisory functions previously carried out by the Central Bank of Malta, the Malta Stock Exchange and the Malta Financial Services Centre. The Authority is an autonomous public institution and reports to parliament on an annual basis. It aims to attract businesses, especially aircraft and ship registration, banking licences and also fund administrators. A core part of the growth strategy of the island includes aiding service providers to these industries, including fiduciary and trustee business and encouraging EU compliance. The MFSA forms part of the Single Supervisory Mechanism (SSM) within the European Central Bank and participates in the SSM Supervisory Board decision making. Other key bodies are The Central Bank of Malta (Bank Ċentrali ta’ Malta), which has responsibility for monetary policy and the promotion of a sound and efficient financial system, and FinanceMalta, which is the quasi-governmental organisation tasked with promoting Malta as a jurisdiction for finance, banking and insurance. Malta does not have a property tax. Because of pressure from population growth and interest from foreign investors, the property market has been in constant boom, especially in towns like St Julian’s, Sliema and Gzira and around the harbour area.

Tourism Tourism in Malta began to grow from the mid-1960s, fairly consistently to the present day – with some up and downs which were mainly due to rises and falls in the global situation. The advent of low-cost travel has added impetus to this over recent years. In 2017, over 2.2 million tourists visited the island, contributing an estimated 27% to GDP – 307,909 visitors more compared with the preceding year. There are presently four times more tourists visit than there are residents. Tourist arrivals and foreign exchange earnings derived from tourism have steadily increased over the last 30 years. As part of the Schengen Area, EU visitors can travel freely. While Malta cannot unilaterally drop the requirement for nations it makes agreements with to obtain visas to enter the Schengen Area through its border crossing points, it is permitted to offer visa facilitation agreements to some nationalities. The sector is overseen by the Malta Tourism Authority, and the Minister for Tourism, the Environment and Culture. Visitors are attracted by the island’s rich history and culture, and the use of English, but medical tourism has also become popular in recent years, helped by government efforts to market the practice in the UK. The increased numbers of visitors has increasingly stretched resources and put pressure on the existing infrastructure (such as water, waste management, beaches and roads), with overcrowding especially during the summer months. Tourist arrivals increased by 15.7% in 2017, after increasing by 10.2% in 2016. The total contribution of travel and tourism to GDP was €2,425.5m, 26.7% of GDP in 2016, forecast to rise by 5.6% in 2017, and to rise again by 4.5% pa from 2017-2027, to €3,992.9m, or 34.6% of total GDP in 2027.


In 2016, the total contribution of travel and tourism to employment, including jobs indirectly supported by the industry was 27.8% of total employment (49,500 jobs). This was expected to rise by 2.5% in 2017 to 50,500 jobs and rise by 2.7% pa to 66,000 jobs by 2027 (37.3% of total). Visitor exports generated €1,458.0m, 9.9% of total exports in 2016. This was forecast to grow by 7.1% in 2017, and grow by 5.3% pa, from 2017-2027, to €2,616.6m in 2027, or 14.4% of the total. Travel and tourism investment in 2016 was €230.6m, 10.5% of total investment. Again, it was estimated to rise by 3.5% in 2017, and rise by 3.4% pa over the next ten years to €331.8m in 2027, or 11.7% of the total. The United Kingdom and Italy remained Malta’s most important source markets, accounting for 24.7% and 16.0% of total visitors, respectively. Germany and France remained the next most important markets. Malta’s performance compared positively with other countries. According to the World Tourism Barometer, arrivals in Southern and Mediterranean European countries grew by an annual rate of 12.6%, while the global tourism industry registered a 6.7% increase in 2017. Cruise liner passengers, mostly from the UK and the US, are also an important addition, Numbers rose in 2017, reaching 658,203, an increase of 7.0% on 2016.

The future According to the Central Bank, the economy is expected to see 6.8% GDP growth in 2018, falling to 4.8% in 2019 and 4% in 2020. Aside from these, the Central Bank also has said its projections for the government balance were also looking better than first expected, with the debt-to-GDP ratio falling to 44.6% by 2020. Domestic demand is

expected to replace net exports as the main driver of economic growth. The government budget is also forecast to remain in surplus and Malta’s debt-to-GDP should fall below 50% for the first time in more than 20 years.

Citizenship by Investment Introduced at the beginning of 2014, the Malta Individual Investor Programme (IIP) offers high and ultra-high-net-worth individuals worldwide citizenship in a highly respected EU member state. Gaining citizenship in Malta via investment is a simple, quick process which can allow the entire family to immigrate with ease. Citizenship is typically approved after just four months processing time. Family eligibility extends to parents of the applicant and spouse, minor children and unmarried adult children under 27. Descendants gain citizenship automatically.

Eligibility To be eligible for citizenship by investment, applicants must: • Be over 18 • Be in good health • Have a clean criminal record • The main applicant is required to contribute €650,00 to Malta, plus €50,000 for every adult family member and €25,000 for under 18

property agreement for a at least €16,000 p.a. both on five year contracts •A  pplicants are required to invest €150,000 in bonds or shares. The investments must be in stock sanctioned by the Maltese government •A  pplications can be supported by a genuine link to Malta through residence

Things to consider Citizenship by investment entitles the holder to visa free travel to more than 166 countries and gives the right to live, work and study in any country in the European Union. The Maltese tax system is based on domicile and residence, rather than citizenship. Tax is only due on income and capital gains arising in Malta. After a period of five years property can be sold in Malta completely tax free, so long as it was the resident’s sole residence for at least three years. If selling the property before three years of residence a tax of 12% is charged on the selling price. In addition, there are no inheritance or death taxes, no net worth or wealth taxes, no municipal taxes, rates or real estate taxes and no estate duty. With tax benefits such as these, a stable economic climate and banks ranked as some of the most stable in the world, investment in Malta is a sound way to gain citizenship.

• Spouses and children are required to contribute €25,000 each •U  nmarried children between 18 an 25 and dependant parents are required to contribute €50,000 each (these contributions can be made after application approval) • Applicants are required to invest at least €350,000 in property or enter a rental

Citizenship By Investment 47


EXPLORING THE PERSONAL INSURANCE NEEDS OF HIGH-NET-WORTH INDIVIDUALS

H

igh-net-worth individuals often have complex risk profiles and exposures, leading to more elaborate insurance requirements. Whether searching for adequate insurance cover for their assets, legal expenses or life and healthcare insurance, HNWIs and their family offices should always seek the advice of a partner with experience in handling such requirements, to relieve the pressures and demands for technical knowledge that insurance planning carries. Common insurance packages for HNWIs include cover for international real estate, yachts, aircraft, automobiles, travel, health and life insurance.

Property insurance When owning a portfolio of properties, one may not necessarily consider the insurance requirements as quickly as one would look at other issues such as tax implications. However, with the right advice, property owners will be guided to protect themselves against risks which are specific to the region or territory in which their properties are located, including weather and natural risks as well as other issues such as liability towards employees on the premises and high value artworks, collections and other precious items. When insuring several properties, one should consider taking out a single policy covering private collections including fine art, wines, antiques, rare books, previous stones and metals, and other memorabilia. This makes administration easier, especially since a centralised inventory is usually kept by the individual or their family office. Did you know that homes and valuable collections are the most underinsured risks 48 Citizenship By Investment

in personal lines of insurance? The main reason for this is that many individuals do not carry out regular valuations of their property and valuables. It is recommended to have a valuation carried out at least every couple of years, and the updated values should be reflected on the insurance policy to ensure that the property is adequately covered.

Yacht and aircraft insurance Two types of insurance cover that require highly specialised underwriting are yacht and aircraft insurance. As a basis under both types of insurance cover, it usually makes most sense to take out a package for hull, liability, workers’ compensation and personal accident cover for aircraft pilots, yacht captains, and their respective crews. Aviation insurance for aircraft as well as the related liability risk should be tailored to suit not only the aircraft type itself, but also its intended use and area of operation. Is the aircraft used for corporate travel, personal travel or chartered out to third parties? Does the aircraft operate into designated ‘high-risk’ territories? Crew insurance requirements for visa approval in destination countries and other issues can also be pre-empted by an experienced insurance provider. Yacht insurance offered for more luxurious vessels is typically based on ‘all risks’ coverage, which means that the vessel is covered against damage or loss regardless of the cause, save for any standard specific exclusions. A yacht insurance policy should also automatically offer cover on dry land – for example, if a loss occurs while the vessel is dry-docked. Similar to aviation risks, if the yacht is being offered for charter, one must ensure that its insurers have been advised

and that the policy is amended accordingly. Crew must also be adequately insured in line with international maritime requirements, depending on the area of operation.

Travel, health and life insurance Travel insurance aimed at high-net-worth individuals would offer much higher benefit limits than a standard policy. However, monetary limits aside, the most valuable element of a travel insurance policy is the emergency assistance services offered under the policy. It is the response offered by this service that should assist in turning an emergency into a manageable event. A high-end travel insurance policy should offer, amongst other benefits, 24/7 assistance and management of medical emergencies through a vast worldwide network of medical providers and hospitals; security assistance including evacuation in the event of natural disasters, terrorism, civil unrest and even disease outbreaks; security advice before and during a trip if travelling to unstable locations; and assistance with stolen or lost luggage, passports and cash. Although a travel insurance policy will cover medical expenses incurred as an emergency whilst travelling, it will not cover planned treatment for any medical conditions. This is where private health (or medical) insurance comes in. A great private health insurance policy will offer access to the world’s best medical centres and will cover most medical conditions. However, health insurance will generally not cover pre-existing medical conditions, so it is best to start this policy when one is still young and healthy. Children insured under a family plan will be able to take out their own individual cover upon reaching adulthood without medical underwriting, so no pre-existing medical


conditions will be excluded (subject to other general exclusions) since this scenario is treated as a continuation of cover. Life insurance has become a very important component of wealth planning strategies for HNWIs. Life insurance is used to manage issues such as formation of a trust for wealth transfer to the next generation, estate planning, tax planning and even philanthropic donations. When planned correctly, life insurance allows families to finance costs associated with death, without having to liquidate any assets.

Family Office insurance cover Individuals who employ the services of a Family Office may commonly also require indemnity insurance, legal expenses cover, employers’ liability cover (also known as workers’ compensation cover) and directors and officers liability cover. More complex setups may even require even broader insurance products. Each organisation may have vastly different insurance requirements and thus

ongoing consultation with seasoned experts is thoroughly recommended.

Other types of insurance cover The international insurance market has recently seen developments aimed at highnet-worth individuals, with new products emerging to suit the present and future HWNI. Some of these products include kidnap, ransom and extortion insurance; and equine insurance for racehorses and show horses. Other products are also being further developed, such as personal and home security services offered in property insurance packages; and emergency response training services offered to crew on yachts and aircraft. As the demand for such specialised products continues to grow, there is no doubt that existing insurance products will continue to develop and evolve, and insurers will continue to design new products to satisfy the ever-growing needs of high-net-worth individuals.

Laferla Insurance Agency Ltd. is enrolled in Malta under the Insurance Intermediaries Act, 2006, to act as an Insurance Agent for MAPFRE Middlesea plc (MMS). MMS is authorised by the Malta Financial Services Authority (MFSA) to carry on both Long Term and General Business under the Insurance Business Act, 1998. Laferla Holdings Ltd. is an enrolled Tied Insurance Intermediary in Malta under the Insurance Intermediaries Act, 2006 for MAPFRE MSV Life plc (MMSV). MMSV is authorised by the Malta Financial Services Authority (MFSA) to carry on long term business under the Insurance Business Act 1998. Independent consultancy offered by Laferla Services Ltd. All entities are regulated by the MFSA.

THE AUTHORS Maltese brothers Mark Jr and Keith Laferla are secondgeneration owners of the Laferla Insurance Group in Malta, a family business which was founded in 1984. Keith and Mark both hold the ACII qualification by the Chartered Insurance Institute (UK) and have both been awarded the status of Chartered Insurer by the same Institute. They are also both recognised members of the Investment Migration Council (Geneva). Today, Laferla is the leading insurance provider for applicants of the Maltese Citizenship and Residence by Investment programmes – the MIIP and MRVP programmes, providing services to over 1,000 high-net-worth and ultra-high-net-worth individuals and families. With their experience in dealing with such clients, the group also offers independent consultancy for HWNIs and UHNWIs and their family offices internationally. The Laferla brothers – Keith (Left) and Mark Jr (Right)

Contracting the services of an independent consultant will guarantee that you are receiving guidance and advice in your best interest. Contact Mark on mlj@laferla.com.mt and Keith on klaferla@laferla.com.mt for further information.

Citizenship By Investment 49


50 Citizenship By Investment


MONTENEGRO AS A KEY DESTINATION FOR INVESTORS AND A NEW HOME FOR GLOBAL CITIZENS by BOJANA MINIC investment consultant and founder of Lifestyle Montenegro info@lifestylemontenegro.com

T

he tiny Mediterranean country, settled between the borders of other ex Yugoslavia member states, is in a spotlight for a rapid and sustainable growth.

investment climate. Furthermore, for those interested, property tax is between 0.01% - 1% while real estate transfer tax amounts to 3%.

The beautiful blend of stunning mountains and clear sea with a combination of average 240 sunny days per year makes this destination attractive for tourists, investors and global citizens.

Another important factor for choosing Montenegro as a new or second home, are the recent infrastructure developments. Across this sector, the country has marked an incredible progress. From the motorway development, in total worth â‚Ź1.1 billion, to the new submarine power cable between Montenegro and Italy. Montenegro has improved it all.

Since 2006, when the country gained independence, the nation has prospered, and today Montenegro is a EU candidate country and has just recently joined NATO as its 29th member state. The development of some large investment projects, which have varied in size from â‚Ź400m to â‚Ź1.1 billion, has made financial involvement in Montenegro of keen interest to the media and many other various stakeholders. Its wild beauty and unique position are not the only elements that make this destination attractive. The political scene has greatly improved in the last few years, and greatly adds to the overall stability, economic growth, security, legacy and quality of living. For the business and investors, corporate tax rates of just 9% shows the positive

Since its independence, many investors from diverse countries have chosen Montenegro as their second home. This fact has inspired the Government of Montenegro and its leaders, to create a unique citizenship by investment programme. The programme itself was announced in August this year and is expected to begin in October. Passport holders will definitely enjoy the benefits of citizenship, by being granted an entrance to 117 visa free countries and it will make them feel and become a true global citizens in their new home called Montenegro.

Citizenship By Investment 51


RESIDO MONTENEGRO: THE KNOWLEDGE BEHIND YOUR INVESTMENT

New properties in the Porto Montenegro marina

Leila Calic of Resido Montenegro

W

ith blossoming potential, the fairy tale region of Montenegro offers more than initially meets the eye. We speak with Leila Calic of Resido Montenegro to learn why now is an opportune time to invest in Montenegro. With a tailored approach to their consultancy, the company offers a wealth of local expertise with specialisms in off-market luxury villas and greenfield developments, ensuring you the peace of mind of an investment backed by all the support you need.

How did Resido Montenegro begin, and what are your goals? Resido Montenegro (the name translates into English to ‘Residence in Montenegro’) started in 2007. With my origins in the ex-Yugoslavia but having been born in France, I invested in the country with a vision. My vision was that one day it would become an important destination for both tourists and investors – which Montenegro has today become. For those who seek to fill their journeys with a combination of sensations and experiences, this tiny country is a concentrated mixture of beautiful natural scenery all year round, sports and recreational activities for all the family or for the more adventurous, and a distinct cultural heritage. The atmosphere is friendly and new homeowners can quickly feel like newly adopted locals. 52 Citizenship By Investment

In July, the government of Montenegro announced that it would be launching a citizenship-by-investment programme in October 2018, seeking to attract 2,000 foreign direct investors from non-EU countries. As this programme is aimed towards useful investment for the long-term prosperity of the country and its citizens, we are confident this will rapidly attract a lot of suitable investors from abroad. At Resido Montenegro we can offer them a wide range of know-how and experience in the development of tourist-related projects. My multi-lingual team and I assist and guide our individual and corporate investors in acquiring properties that fully match with each person’s unique requirements. We take care of them from our own motivation and requirement checklist, through a targeted property selection shortlist, all the way to completion of the whole legal, financial and administrative process, and the conclusion of the sale. We offer them a range of new and authentic properties, urbanised land for residential and tourist project developments, or for the home of their dreams.

For those buying in Montenegro for the first time what kind of advice can you give? With prospective first time buyers in Montenegro, we ensure they are educated in all aspects of their investment. With so much misinformation around, it can often be overwhelming and confusing. At Resido Montenegro we learn about you and the motivation behind your investment. We do this in order to provide you with the right type of property for your needs, and we even suggest those that you may not have initially had in mind!

This may be a summer home overseas where extended family can come together every year, or an investment property where you hope to make a profit in the future. Many clients even seek a unique off market property to renovate, restoring historic buildings bursting with potential. Learning about our clients ensures that we gain a vast perspective of who you, the buyers, are. We can then offer a holistic approach to helping you fulfil your desires.

Montenegro is fast becoming an attractive place for investors. Why is this? The country’s easy access to property ownership is why. One of the other main reasons is the low tax environment, with 9% corporate tax for example. Not only this, the Euro is the official currency – which is obviously attractive to investors used to dealing with other Eurozone nations. There are also already vast and well-sited locations available for development. Opportunities still exist to create a commercial, residential or hospitality developments that have the potential to be incredibly profitable. Another the reasons, however, is the Montenegrin lifestyle. Beyond simply the search for a good ROI or the attraction of low taxes, investors like to have a feeling of connection with a country. With Montenegro being so magical and easy to fall in love with, this is inevitable.

What can you tell us about the new projects in Montenegro and how are they evolving the region? At the moment Resido Montenegro has new proposed project developments in Montenegro, above 40 to be exact! The largest of these luxury residential projects are


Porto Montenegro, Portonovi, Dukley Gardens and Lustica Bay. The question of where you choose to invest is based on the lifestyle tastes of the buyer. I always suggest buyers visit the developments to learn what kind of unique selling points each property has. As part of our consulting service, we propose a personalised accompaniment that we prepare up-front. We will suggest only those projects that suitably meet our buyer’s lifestyle and needs. Come Autumn 2018 the citizenship programme will also be in place. This will be tied to specific projects, and limited to a certain number of buyers within the three coming years. The government of Montenegro continues to make progress in attracting foreign investment, proving there is nowhere in Europe that offers such a difficulty-free process. Looking into the near future, Montenegro is also on the agenda for future enlargement of the European Union by 2025. The country is preparing itself for the transition and we expect the long-term benefits of this to be considerable – to cement Montenegro’s place firmly within the EU family.

On a practical note, what may future purchasers need to know? When we start the selling process, we always recommend our clients have a trusted lawyer to accompany the purchase. We coordinate this with the Notary to guarantee the selling process runs smoothly from A to Z. Clients feel their purchase is in trusted hands, and as a company we pride ourselves upon this.

Listed Penthouse in a Luxury beach development where 5% yield is guaranteed some nautical window-shopping. It’s the deepest harbour in southern Europe, and comes flanked by the country’s trademark rolling hills. Tivat has got a fairly high-status history. An Illyrian queen – Teuta – the town’s alleged namesake – had a summer home here, and during the Middle Ages the area was almost exclusively owned by wealthy noblemen. Also, Tivat was ruled by the Republic of Venice for around 250 years. You can still spot some Venetian-esque buildings here and there.

Choosing Tivat will see you touching down in the UNESCO-protected bay of Kotor, in between jewel-blue water and tree-cloaked hills.

Besides the many hotspots, it is packed with elegant boutiques, lifestyle terraced bars and restaurants. and the views are jawdropping. Head over in the late afternoon, and you will witness the town’s day-to-night transformation as the after dark scene begins to buzz.

Tivat’s shiny marina, intimate and cosmopolitan environment – Porto Montenegro – is packed with break-thebank boats, so it’s ideal for a wander to do

Tivat and its charming surrounding will match your expectations in terms of entertainment, beauty, health, education, food and banking.

Can you give a good example of a popular hotspot in Montenegro today?

This combination of historic grandeur with modern developments such as Porto Montenegro offers an incredibly rich residential experience. However, as part of our portfolio, we also offer some key off-market properties in different areas of the country which are aimed at experienced investors looking for both mid and longterm investments.

Tell us about your rental management and your project management. Ten years ago we launched this service in the area of Tivat. We call this a ‘long-term rentals service’, which strangely did not exist previously! Tivat was a very small town with a military harbour that has now become a luxury mega-yachts marina. This continued evolution today attracts superyacht owners who naturally have a higher rate of enquiries for rentals. Approximately 90% of tenants are from abroad, and as expatriates they now give Montenegro an incredibly varied financial landscape. We assure our property buyers who are investing To Let that they can be hands-off while we are hands-on. We take care of all the management of the rental properties for those looking for an investment, right down to construction. We monitor the project with professionals from the ground up, and we remain the main point of contact throughout, to make the whole experience run smoothly.

W: www.residomontenegro.com

E: leila@residomontenegro.com Luxury Condo-hotel Regent

T: +382 69 146 266

Citizenship By Investment 53


NEW ZEALAND GOLDEN VISA’S PRICE MARK-UP GAMBLE PAYS OFF: APPLICATIONS DOWN, REVENUE UP by INVESTMENT MIGRATION INSIDER IMIDaily.com

N

ew Zealand’s Category 2 Investor Visa – the world’s “pickiest” such programme, with rejection rates hovering around 50% – last year doubled its investment requirement. That decision has earned the Kiwis an additional NZ$173m (US$116m). New Zealand’s Investor Visa (NZIV) programmes are dearly priced: The Category 1 Plus Investor Visa costs NZ$10m; Category 2, NZ$3m. The difference between the programmes is that while Category 1 requires physical residence of 44 days in New Zealand in each of the last two years of the minimum three year investment period – or 88 days over the three year investment period – Category 2 mandates 146 days in the country in each of the last three years of a minimum four year investment period – or 438 days over the four year investment period. Category 2 – additionally – requires business experience and English proficiency, and has an upper age limit for main applicants of 65 years. Since inception, the programme has raised just north of NZ$4 billion, or about US$2.6 billion.

Double price ≠ half the demand Having seen a dramatically rising influx of applications in each year since the two-track programme opened in 2008, the government

54 Citizenship By Investment

New Zealand Investor Visa (Category 1) applications

Declined

Approved

80

60

40

20

0

10

-20

09

20

11

-20

10

20

12

-20

11

20

13

-20

12

20

14

-20

13

20

15

-20

14

20

16

-20

15

20

17

-20

16

20

18

-20

17

20


last year chose to double the price of its Category 2 visa, testing investor interest in Kiwi residence permits. From a strictly economic perspective, what would motivate a doubling in price is a gamble that it won’t be accompanied by a corresponding halving of applications and, as such, boost total revenue. That’s a bet that doesn’t always work out. Some may recall what happened when the UK’s Tier 1 Investor Visa programme – UKT1(i) – doubled its price in 2014; Application volumes plummeted by some 90%. Certainly, much of that drop was due to an inflated rate of applications received in the hurried months before the advertised price increase but, at last count, application volumes for the UKT1(i) remain at 2011 levels or 70% below their 2014 peak. For New Zealand, however, the bet appears to have paid off; Raising the price of the NZIV2 by 100% has led to a mere 35% fall in (approved) applications and has translated into growth of 29% in total revenue (from NZ$601.5m to NZ$774m). Rejection rates for the two programs are astonishingly high; overall, New Zealand rejects more than half of all applicants, although the more expensive NZIV1 has a somewhat higher rate of successful applications.

New Zealand Investor Visa (Category 2) applications

Declined

600

400

200

0

10

-20

09

20

11

-20

10

20

12

-20

11

20

13

-20

12

20

14

-20

13

20

Rejection rates by country (both programs)

15

-20

14

20

16

-20

15

20

17

-20

16

20

Overall average 51.3%

18

-20

17

20

Rejection rate

60% 55% 47%

35%

31%

30%

Rates of rejection, however, vary considerably between countries; Whereas only one in five Singaporeans are turned down, New Zealand declines the applications of 55% and 60% of Chinese and Malaysian nationals, respectively. As in the past, Chinese make up the bulk of applicants (as indeed they do for virtually every golden visa programme), accounting for 68% of approved investor visas. At a very distant second, Americans received some 6% of visas issued in the period July 2008 to 30 June 2018.

Approved

20%

China

US

UK

Japan

Singapore

Malaysia

Others

Approved investor visas by nation of origin (both programs) Others 14.4%

Malaysia 1.4% Singapore 1.9% Japan 2.6% UK 5.1% US 6.3% China 68%

Citizenship By Investment 55


COUNTRY SPOTLIGHT

QUICK FACTS Capital city: Lisbon Population: 10,379,57 (Est 2016) GDP growth: 2.5% (Est 2017) Area: 92,212km2 Government: Unitary constitutional republic President: Marcelo Rebelo de Sousa Prime Minister: António Costa Currency: Euro (€) (EUR) Dialling code: 351 HDI: 41st Ease of doing business index: 25th

PORTUGAL

P

ortugal can be found on the Iberian Peninsula, bordering Spain and the Atlantic Ocean. As a maritime kingdom, Portugal established the first global empire over 500 years ago, becoming one of the world’s major economic, political and military powers in what we now call The Age of Discovery. The nation was famed for its mastery of the seas, and this resulted in voyages which pushed the bounds of European knowledge along the African coast and beyond the Cape of Good Hope, Vasco Da Gama’s discovery of the sea route to India, to the coast of Brazil (1500) and beyond. The empire expanded, and they monopolised the spice trade worldwide, thus creating immense wealth, becoming one of the world’s major economic, political and military powers and expanding Western influence across the globe.

The fact that the country faces ocean side has influenced many aspects of its culture – its beautiful beaches have proven to be a very popular tourist destination and much of the countries architecture is rooted in its rich history which harkens back its naval past, influenced and paid for by its colonial possessions. However, as with all great empires, it was met with many setbacks and finally with the destruction of its capital city, Lisbon, in 1755 at the hands of an earthquake, tsunami, and subsequent fire. After that Portugal lost much of its power, to other naval states like France and Britain. Perhaps this history can be reflected in the spirit of Portugal’s people who are known to celebrate what they have as they know that at any moment, life can throw a curveball and everything can be taken away. There is a real communal sense that one should live for today and it leads to a very pleasant atmosphere which is infectious – it is difficult to worry when you are in the company of Portuguese citizens. 56 Citizenship By Investment

Culturally, Portugal is refined and features a unique mixture of tradition and modernity which you will struggle to find in any other location. Its breathtaking landscape, fine cuisine and even finer wines are the perfect medicine for all holiday goers suffering from the dreariness of everyday life. The climate could be described as mild, but the 3,000 hours of sunshine a year and 850km of beaches that these sun rays visit are great for those looking for an increase in Vitamin D. A large majority of Portugal’s citizens are Roman Catholic but it is home to a large number of small communities representing different faiths and so it gives off a welcoming impression to all who grace its borders. The official language is, of course, Portuguese derived from early Latin. Although if Portuguese is not your first language, you should not fear as according to International English Proficiency Index, Portugal has a high proficiency level in English, proficiency higher than in countries like Italy, France or Greece.

Economy The majority of industries, businesses and financial institutions have traditionally been located around Lisbon and Porto, but after the revolution in 1974, their most notable era of economic expansion ended and since they have tried to adapt to the changing modern global economy, a process that is successfully continuing still. There is now more focus on exports, private investment and developing a high technology sector. Having suffered from a severe recession and the indignity of accepting a bail-out in 2011 (which they have now exited) the national commitment to a reformist momentum endures and unemployment continues to fall. The World Economic Forum places Portugal 36th on its economic index, a significant rise from 51st in 2013. The International Monetary Fund issued an update report last year stating a strong nearterm outlook and an increase in investments and exports. They said, “Sustained strong growth together with continued public debt reduction would reduce vulnerabilities arising from high indebtedness, particularly when monetary accommodation is reduced”. Portugal is a notable producer of minerals particularly copper, tin, tungsten and uranium. Lithium is also mined from their subsoil. Portugal is among the top ten producers of lithium, which is increasingly sought after by manufacturers of electric cars and mobile phones who use the element


in their batteries. There is great interest in exploring lithium deposits further in the areas from Alto Minho to Beira Baixa, passing through Trás-os-Montes, where Dakota Minerals already is mining the ‘white oil’ in a €370m investment. One of the country’s main exports is wine and it is the seventh largest exporter in the world by value. The genesis of this trade dates back to the Roman Empire. Its wineproducing regions, the Douro valley and Pico Island, are protected by UNESCO and offer a large selection of different wines from a vast array of grapes, all distinctive due to variations in soil and climate. Another thriving industry is aerospace, electronics and textiles exist, and investment is growing strongly in the biotechnology and IT sectors. Research grants are prolific, particularly for neuroscience and oncology. Tourism remains extremely important to the country and it is one of the top 20 most visited countries in the world with 13 million tourists every year. For foreign investment, apart from just the beautiful location, they have a strong infrastructure (15th in the world) with widespread broadband connectivity and it is also a leader in electronic payments – up and ready for business. There is an open door to a market of 500 million and two years ago the country ranked highest in the Trading Across Borders Rank. Portugal has a highly developed motorway network and a port system among the best in the world. (Sines was recently the fastest growing container port in the world). Porto Airport was named as the 3rd best European airport in 2013 while the Atlantic Corridor is a rail freight line across Europe which is among the best in the world.

Living in Portugal Portugal is a parliamentary republic based on a 1976 constitution, amended in 2004. The government holds the nation’s sovereignty and not only has executive powers but also limited legislative powers, mainly concerning its own organisation. The parliament is known as the Assembly of the Republic with 230 deputies who are elected for a maximum term of four years. The legislature is elected by proportional representation, used in 20 multimember constituencies. Power is shared between the president, the assembly, the government and the courts.

The country is a member of the European Union and was a founding member of NATO, the eurozone and the OECD. It enjoys a high standard of living, a high-income advanced economy and a developed market. There is a low crime rate, little corruption, press freedom, social progress, prosperity and it is ranked as the most peaceful country in Europe and third in the world. It is now a secular state with one of the world’s highest rates of moral freedom. Portugal has also been declared Europe’s leading destination for golf. As well as the EU, Portugal is a full member of the Latin Union and has a dual-citizenship with its former colony – Brazil. Sharing a long history and a common language there is a mutual interest in using their bilateral political capital to increase trade and investment and to partner together in science, technology, culture and education. Over recent years trade has grown steadily and is relatively balanced with over 600 Portuguese companies having a presence in Brazil and an increase in Brazilian investment in Portugal. Co-operation between the countries extends across the areas of innovation, nanotechnology, biotechnology and energy production. Many people, after spending time in Portugal, come to the conclusion that they would like to live there permanently. To these people, there is some good news, citizenship by investment is entirely possible in Portugal, but you will need to invest a minimum of €500,000 in order to qualify for a “golden visa”. Once you have acquired a golden visa, it is then possible to apply to become a citizen of Portugal after six years. In comparison to other some other EU countries, the minimum cost of investment is a little higher, but there are many benefits to Portuguese citizenship, including low tax rates, low minimum stay periods and, of course, the benefits of a climate and culture that are in-line with each other – easy going, with hot periods. While being a more expensive option than some of its neighbours, Portugal offers investors a warm and friendly climate, gorgeous coastlines and vibrant cities in which to seek residence. Diverse, beautiful and culturally arresting, Portugal, in many ways, offers bits of the best of all of Europe.

ROUTES TO CBI IN PORTUGAL Property Investments: Acquisition of property above €500,000. Acquisition of property above €350,000 for properties more than 30 years old or located in areas of urban renovation.

Capital Investments: Transfer of funds above €1,000,000. Transfer of funds above €350,000 for research activities. Transfer of funds above €250,000 for artistic or cultural activities. Transfer of funds above €500,000 for capitalisation of small and mediumsized companies.

Job creation: Creation of a minimum of 10 jobs. Once issued, the Golden Visa will be valid for an initial period of one year and then will be renewed for subsequent periods of two years. The simplicity of the Golden Visa Programme implies an extremely reduced amount of requirements being asked from the investor. The Golden Visa Programme sets out that the investor must comply with general requirements applicable to all types of qualifying investments and also with the specific requirements of each type of qualifying investment.

In general, all investors have to comply with the following requirements: Keep the investment for a minimum period of five years. Funds for investment should come from abroad. Entry in Portugal with a valid Schengen visa Absence of references in the Portuguese Immigration and the Schengen services Absence of conviction of a relevant crime Minimum stay in Portugal: seven days during the first year and 14 days during each subsequent period of two years In total, Portugal’s Golden Visa has raised almost €3.8 billion since it began in October 2012 (to 30 April 2018), equating to 6,159 investment residence permits, and 10,396 permits for family members. The vast majority of those chose to invest in property, and most were Chinese. The other top nationalities applying for the scheme have been from Brazil, Russia, South Africa, and Turkey. Citizenship By Investment 57


THE PORTUGUESE GOLDEN VISA OR RESIDENCE PERMIT Why Portugal?

In the current era of economic and political uncertainty, a home away from home makes more and more sense. In a complex, unstable and difficult world, such a home should be in a peaceful, safe and stable country, preferably with modern infrastructure, good business opportunities and talented people. On the west coast of Europe there is such country: Portugal. A place of adaptability, flexibility and a warm welcome, but which is also innovative. A new world of opportunities… Portugal is one of the world’s most ancient nations. From the 15th to the 17th century, Portuguese discoveries were responsible for important advances in technology, nautical sciences, cartography, astronomy and shipbuilding. Five centuries later, Portugal is writing new pages to its history. Portugal today is home to companies that develop some of the finest innovations, impacting the world with technologies, products and software, but it is also, the birthplace of some of the best traditional products. A country that also defines itself by the talent of its people, with great infrastructure, advanced communication systems, and a friendly economic environment. Portugal is considered by POLITICO an “oasis of stability”. Not only a good country in which to invest but also a most desirable place to live. Blessed with abundant sunlight and warm temperatures, it is place to visit and enjoy, where English is spoken 58 Citizenship By Investment

throughout the country. It is also one of the best tourist destinations in all of Europe. You can find a safe, environmentally responsible environment, a rich leisure and culture, with a good health system. With such great weather, food and people, the Portuguese authorities managed to launch a very simple and attractive programme: The Residence Permit for Investment Activity or the Golden Visa Programme.

The Golden Visa Programme in Portugal The Golden Visa Programme was launched in 2012 and has been promoted as a visa or a citizenship by investment scheme. This visa has proven itself, and become the most attractive and popular option across Europe, with investors attracted because of its ease and flexibility, along with all the benefits it provides. The idea is to attract foreign investment and boost the Portuguese economy, through the possibility of obtaining a fast-track residency permit in Portugal, alongside other benefits, pursuing investment activities by transferring capital, creating jobs or acquiring real estate, it is open to those who have entered the country regularly (e.g. holders of valid Schengen Visas, or beneficiaries of Visa exemption).

Without discrimination on nationalities or religions. If you invest, you get the residence permit. The visa allows the applicant and family to gain a residency permit in Portugal for 12 months and is then renewed on a twoyearly cycle. This visa allows its holder

by FILIPE ESPINHA Strategic and Legal Solutions Creator, Attorney at Law

to travel freely across Europe within the Schengen zone. The most attractive part of the visa is that after five years you can then apply for permanent residency within Portugal and after six years you can apply for citizenship, the basic requirements to qualify is the initial investment, a clean criminal record and the ability to spend a minimum of seven days in Portugal each year, without the need to reside in Portugal. It is a very straightforward investment programme (check Qualifying Investments box), very few documents are required, and applications have priority processing with the Immigration Authority (SEF), however it may take almost one year to get the Residence Card. That’s why you should look for the support of professionals in all the steps from investment to application and afterwards.

Qualifying investments You must fit at least one of the following investments: • €1m capital transfer into Portugal; • 10 job positions creation in Portugal; • €500,000 in real estate property in Portugal or €350,000 in specific Portuguese urban or rural areas; • €350,000 in scientific research in Portugal; • €250,000 in Portuguese arts, culture and heritage; • €500,000 in small and medium businesses in Portugal.


The investment established for the golden visa has to be maintained for a minimum of five years from the date when the Portuguese golden visa is established. Once residency has been granted you will have the right to live, work and study anywhere within the European Union, once citizenship has been granted you will become an EU citizen and will have the same rights as anyone in Portugal.

Benefits Those who hold a Portuguese golden visa are entitled to: • Freedom to live and/or work in Portugal (or not – the minimum stay requirements are seven days in the first year and 14 days during each of the two subsequent two-year periods, whether or not consecutive), while keeping another residence in another country. • Visa-free travel in Europe/Schengen area – permanent free entry and circulation in Portugal and the other 25 Schengen countries. • Fully extendible to direct family members without further investment, including the spouse or partner, under-aged or dependent children, dependent parents, and under-aged siblings of either spouse or partner if legally under their supervision. •E  U citizenship – the applicant and his or her family may obtain permanent resident status after five years or after six they will be eligible to acquire Portuguese citizenship. Portugal accepts dual citizenship and has one of the best ranking passports in the world. • Property or investment ownership in an EU country – Portugal is a free market and open economy with many business opportunities with no need for special authorisations and with many e-government fast procedures. • Residency in Portugal – an alternative residency in terms of safety, security, health, education and lifestyle. With access to all Portuguese public services, including health, law and education • Tax benefits – there may be additional tax benefits to the Portuguese investor visa is that holders will not have to pay tax on worldwide income if they live in Portugal for less than 183 days per Portuguese tax year. Or the option to become a “non-habitual resident” of Portugal for tax purposes, thereby paying little or no tax for at least ten years.

Costs Besides travel expenses, government fees and taxes, professional fees are likely to add significantly to your total Golden Visa costs, so make sure that whoever you engage provides a full and transparent quote. Also, you should consider the several existing taxes: Stamp duty; Property Transfer Tax

(IMT); the Real Estate Tax (IMI); Income Tax (IRS); Corporate Tax (IRX) and, of course, Value Added Tax (IVA). Your rights as a resident: J A professional activity (as an employee or as an independent professional) J Education and professional training J Official recognition of education diplomas and professional qualifications J Healthcare J Social security benefits, tax concessions and trade union protection J The law and the courts of law J Tax benefits Your Portuguese attorney will assist your requirements for a Portuguese Golden Visa, plus details on the programme and Portuguese citizenship by investment. You attorney should cover not only immigration law, but also real estate, corporate and tax matters. It is critical to ensure the right project and legal advice is obtained before embarking on such investment. The Portuguese Golden Visa programme has proven very popular with our clients and investors. If interested, please get all the information and legal assistance from Portuguese Attorneys that can assist and help you every step of the way!

The future The launch of the Golden Visa programme created a financial bubble for the economy that was suffering a recession. Six years have passed, foreign investment from outside Europe weighs less and less on the global volume of real estate trade. Nevertheless, since its inception, the programme has already raised more than €3.7 billion. In the foreseeable future, there will be no major changes the programme. One of the big attractions for investors are the returns from rental as tourist numbers in Lisbon have grown from 6 million per year in 2006 to over 11 million, with figures in 2017 up around 15%. Portugal is one of the fastest growing tourist destinations in Europe. However, recently Transparency International criticised many EU countries, including Portugal, for the lack of clarity surrounding the popular golden visa schemes, and raised serious concerns over the risks of money laundering and the security of the EU member states. A report titled European Getaway – Inside the Murky World of Golden Visas, compiled in conjunction with Global Witness, says golden visa schemes have seen the EU welcome over 100,000 residents, with Portugal, Spain, the UK, Hungary and Latvia topping the list of EU states where resident permits are most easily handed out to foreigners. The report implies that checks for money laundering and corrupt and illegal origins of the investment are not especially rigorous. This has been a great

concern for Portuguese authorities and within some political sectors. While some changes have been made to the programme, namely in August 2017, where a preference for job and business creation type of investments was indicated; the Golden Visa Portugal through property investment remain the preferred among the investors due the simplicity, the current ROI rates (from 3% to more than 10%) in the real estate market and the returns from rental as tourism in Portugal. Concern is also levelled at the fact that the Immigration Authority (SEF) supposedly does not check whether applicants are subject to ongoing investigations or open criminal complaints outside of Portugal, and the applicants’ source of wealth and funds. Transparency International, added that “enhanced checks should be extended to all family members.” We may expect this to be addressed, as many social influencers and political decision makers have called for increased public scrutiny of successful applications. In fact, no one is against Residence Permits being handed out to select individuals who would benefit Portuguese society, though many would up the ante against golden visas being “sold in a system that favours corruption”. Frankly, the embarrassment is not in the attractiveness of Portugal, but in the negative perception that the programme has, created by the increasing bureaucratic barriers which began in late 2014, challenging the credibility of the programme. However, we are certain that many foreign citizens will discover this attractive programme. In summary, it is one of the best citizenship by investment programmes in the world.

Key Facts J F reely invest in Portuguese property of €500,000 or €350,000 (reduced option)

 lean criminal record J C  o requirement to reside in J N Portugal

J P ermanent residency after five years for the whole family

 itizenship after six years J C

J E U Schengen Visa to travel freely from the beginning

 ependent children and J D

parents all in one application

Citizenship By Investment 59


THE IMPORTANCE OF HOLDING A GOLDEN THE IMPORTANCE OF HOLDING A EUROPEAN VISA RESIDENCE PERMIT CARD. RESIDENCE PLAN It is impossiblePERMIT to read CARD: the textBACKUP bellow and not consider SOLUTION YOUfor AND YOUR a backup planFOR solution youand yourFAMILY! family! REAL out ESTATE relocation required. The Portuguese

Golden Visa Program has been Awarded as

Tiago Camara CEO PTGOLDENVISA.COM

Global residency and citizenship, are an increasingly Global residency and citizenship, are an important aspect of private and professional life of this increasingly important aspect of private and new trend of global citizens. Diversification of both professional life ofaffairs this through new trend of residences global business and personal multiple citizens. Diversification of bothquality business and or citizenships can deliver increased of life, mobility, security, andresidences improved tax personal affairseducational through options, multiple andcitizenships estate planning capabilities. For individuals, having or can deliver increased quality ofthe flexibility of choosing where to live, providing a better life, mobility, security, educational options, and quality of life for their families, access to better education, improved tax and estate planning capabilities. and a safe haven in times of political instability is one For having the flexibility choosof theindividuals, main reasons to consider this type ofofsolution. ing where to for live, providing a better qualityglobal of Other reasons investors to decide on getting residency and citizenship: tax optimisation, more privacy life for their families, access to better educaby avoiding the bank systems that are reporting and tion, and a safe haven in times of political providing personal info from their investors, avoiding instability is one of the main reasons to concountries with political instability, often with civil wars sider this type solutions. Other reasons are and terrorism; andofthe opportunity for entrepreneurs also enough fortoinvestors towithin decide on getting and their families move freely several countries global residency and citizenship: tax optimizafor business. tion, more privacy by avoiding the bank The typical investor profile, looking for suitable solutions systems that are reporting and providing peron residence permits and citizenship, is a wealthy sonal info their or investors, avoidcurrently counindividual whofrom is an expat business owner, tries political instability, ofteninvestors with civil living inwith Middle East, Asia or Africa. These are wars terrorism; for Entrepreneurs able to and secure the future of their next generationsand normally through the a realfree estatemove investment in countries their families within several that provides them this Golden Cards or even passports. countries for business; The typical investor By having a residence permit in a European country like profile, looking for suitable solutions on ResiPortugal investors and their families are free to live, work dence Permits and Citizenship, are relocation. wealthy and travel within the Schengen area without individuals who are expats, or business The Portuguese Golden Visa Program has been awarded as the bestcurrently Residencyliving Program Globally,East, by theAsia Global owners, in Middle or Residence Program Index (GRPI), aimed attracting Africa. These investors are able to atsecure the overseas investment to Portugal. The Golden Visa is very future of their next generations normally straightforward, simple and with clear legal rules. So far, through a Real Estate Investment in Coun97% of the candidates for the Golden Visa programme tries that provides them thisinGolden Cards are applying through investment Portuguese real or even Bytohaving a Residence Permit estate,Passports. primarily due the great returns investors are getting on the properties in Portugal. Low supply and in an European Country like Portugal inveshigh demand is generating gains to for live, real estate tors and their familiescapital are free work investors up to 12% every year, especially in the major and travel within all Schengen countries withcities (Lisbon, Oporto and Algarve).

60 Citizenship By Investment

To apply for the Portuguese Residence Permit Cards, the best Residency Program Globally, by the through real estate investment, foreign nationals, Global Residence Program Index (GRPI), either personally or through a company, are required aimed at investment attractingthat overseas to make an conformsinvestment to one of the to following investment with a Portugal,conditions: the Golden Visa isina real veryestate straightforvalue of at least €500,000; or real estate with more ward, simple and with clear legal rules. So far, than 30 years construction time withfor a value at 97 percent of the candidates the ofGolden least €350,000.

Visa programme are applying through investment in Portuguese INVESTMENT FUND real estate, primarily due to the great returns investors are getting on Besides real estate investments, investors are now and able the properties in Portugal. Low supply to apply for Residence Permit Cards by investing in high demand is generating capital gains for shares of an investment fund. Since September 2018, real estate investors to €350,000 12 per cent, every investors are now able to up invest in a Golden year,qualified especially in the (Lisbon, Visa investment fundmajor which iscities fully regulated by the Portuguese Stock Exchange Market and Oporto and Algarve). audited by legalised third party companies. ThisPermit option To apply for the Portuguese Residence comes free of taxes and is focused on the bottom Cards, through real estate investment, foreign line investment, creating a very fast and interesting nationals, either personally or through a comsolution, focusing on high returns on investments. pany, are required to make an investment that conforms todeveloped one of the following conditions: PTGoldenVisa in a close collaboration with one of theinmost Portuguese investment realexperienced estate valued at at least fund managers in Portugal, is the implementation €500,000; real estate with more than 30 years of the first fund qualified for Golden Visa – the SIF construction time with a value of at least INVESTMENT FUND. The Fund is sustained by two €350,000; value least major criteriareal and estate we fullywith sharea100% of of theatstrategy €400,000 in areas less than 100tocitizens vision – investing in realwith estate which is easy resell, perinvesting square inkilometre; with and real estate real whichestate is easyintoareas rent out. This investment fund was developed to take a safe less than 100 citizens per square kilometre approach to market any leverage. The term with a value of atwithout least €280,000. of the investment is seven years, custom-designed Our team of PTGoldenVisa.com has more to optimise the Golden Visa requirements and it is than 10toyears experience in the expected generate over 6% return perCitizenship year. Industry and provides an integrated service Our team of PTGoldenVisa.com more than to investors interested in has applying fortenthe years of experience in the citizenship industry and Golden Visa Residence Permit Cards, starting provides an integrated service to investors interested with their family analysis, advisory on the best in applying for the Golden Visa Residence Permit Real starting Estate with Investments, Cards, their family Legal analysis,support advising onand Property the best realManagement. estate investments, legal support and property management.

Our team is ready to deliver! We provide investors of mind theirinvestors family Our team is the readypeace to deliver! We provide the peace of mind their family needs. needs. Contactususnow: now: www.ptgoldenvisa.com Contact www.ptgoldenvisa.com


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Citizenship By Investment 61


COUNTRY SPOTLIGHT

QUICK FACTS Capital city: Basseterre Population: 54,821 (Est 2016) GDP growth: 2.7% (Est 2017) Area: 261km2 Government: Federal parliamentary constitutional monarchy Monarch: HM Queen Elizabeth II Governor-General: Sir S.W. Tapley Seaton Prime Minister: Timothy Harris Currency: East Caribbean dollar (XCD) Dialling code: 1 869 HDI: 74th Ease of doing business index: 134th

ST KITTS AND NEVIS

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aint Kitts and Nevis, also known as the Federation of Saint Christopher and Nevis, is an island state in the West Indies and a member of the Commonwealth. Nestled in the Caribbean as part of the Leeward Islands chain of the Lesser Antilles, it is the smallest sovereign state in the Western Hemisphere, in both area and population. The capital city, Basseterre, is on the larger of two islands, Saint Kitts. The smaller island of Nevis lies roughly 3km southeast of Saint Kitts across a shallow channel called “The Narrows”. Saint Kitts was named “Liamuiga”, meaning “fertile land”, by native inhabitants, the Kalinago Indians. Christopher Columbus sighted what is now Nevis in 1493 and gave that island the name San Martín. The current name “Nevis” is derived from a Spanish name Nuestra Señora de las Nieves, meaning Our Lady of the Snows, perhaps in reference to the white clouds which usually wreathe the top of Nevis Peak. The islands are of relatively recent volcanic origin (approximately 3.45m years old), with large scenic central peaks covered in tropical rainforest. There are numerous rivers descending from the mountains to whitesand beaches. Beds of offshore coral, teeming with fish of every stripe and colour. 62 Citizenship By Investment

With the beautiful nature, there is a long and rich cultural history. Brimstone Hill Fortress National Park, dating from 1690, is a UNESCO world heritage site that has been dubbed the “Gibraltar of the West Indies”. Tourists can see where tobacco, indigo and then sugar was grown on the historic plantations, take sweaty rainforest hikes, or relax on the sandy, palm-fringed beaches. The sugar industry survived until 2005, and a unique legacy of this is the St Kitts Scenic Railway where passengers can ride for 29km along a narrow gauge line built to transport cane. Today the island lives by tourism, a transformation that appears to have been achieved with record speed. St Kitts now welcomes a steady stream of cruise ships and has a 394-room Marriott resort and casino. Major luxury property developments are taking shape and a private jet terminal and superyacht marina recently opened. It is also known for a number of celebrations including Carnival (December-January) and the St. Kitts Music Festival (June). English is the official language but is Saint Kitts Creole is also widely spoken.

Economy At the turn of the 18th century, St Kitts was the richest British colony in the Caribbean,

a result of the sugar trade. The economy had traditionally almost exclusively depended on the growing and processing of sugar cane until the late 1970s when the government backed a drive into small-scale, exportoriented industrialisation. Tourism has since become the largest source of foreign exchange. There is a small offshore banking and shipping sector. Agriculture makes up 1.3% of the economy, with industry being 27.2% and services making up 71.5%. The economy of St Kitts and Nevis experienced strong growth for most of the 1990s but a number of hurricanes contributed to a sharp slowdown, particularly in the agricultural, tourism and construction sectors. According to the IMF, St Kitts and Nevis attained the strongest growth and fiscal performance in the ECCU region in recent years, with public debt set to meet the ECCU’s 60% of GDP target in 2018. The strong performance owes much to citizenship by investment (CBI) inflows as well as overall prudent macroeconomic policies. GDP in St Kitts and Nevis is projected to reach around $1.05 billion in 2020. Saint Kitts and Nevis is a member of the Eastern Caribbean Currency Union (ECCU). The Eastern Caribbean Central Bank (ECCB) issues a common currency (the East


Caribbean dollar) for all its members and regulates and manages monetary policy and banking. The US dollar is widely used as well. The United States is the main export and import partner for the country, accounting for 56% of the total exports and 31.7% of imports.

Citizenship by investment The St Kitts and Nevis passport is issued to citizens for international travel. The passport is a Caricom passport as Saint Kitts and Nevis is a member of the Caribbean Community. Interested parties can acquire citizenship if they pass the government’s background checks and make an investment into an approved real estate development. The St Christopher (Kitts) and Nevis passport issued is valid for 10 years, which can be renewed thereafter. It takes about three to four months processing time. The Government has introduced extensive legislation to attract financial services businesses to the island. The Citizenship by Investment Programme has also been in operation since 1984, allowing foreign investors to acquire citizenship under certain conditions. This makes it the oldest existing citizenship programme in the world, as well as the most reputable citizenship programme in existence. St Kitts & Nevis citizenship is highly regarded. As a result, St Kitts & Nevis citizens enjoy a passport with an excellent reputation and very good visa-free travel, including to all of the EU’s Schengen Area, Hong Kong, Switzerland, and other countries. Accordingly, the St Kitts & Nevis Citizenship by Investment Programme is an attractive option for individuals looking to acquire a second citizenship through investment without prior residence requirements. When you acquire citizenship under the St Kitts & Nevis Citizenship Programme, you and your family enjoy full citizenship for life, which can be passed on to future generations by descent. As a citizen of St Kitts & Nevis, you have the right to take up residence in St Kitts & Nevis at any time and for any length of time.

REQUIREMENTS AND PROCEDURES Minimum Investment

2. Real estate

To qualify for citizenship of St. Kitts and Nevis under its citizenship by investment programme, there are two active options:

Designated recoverable real estate investment with a value of at least US$400,000 plus payment of various registration and other fees. Additional fees apply for any accompanying family members. The real estate investment of US$400,000 may attract two applicants at US$200,000 each plus government fees, but this can only be resold after seven years. The government works with various approved real estate developers. You can buy villas or apartments or luxury condos, provided you satisfy the minimum investment. The real estate is expensive, but it is a recoverable investment after five years.

1. Sustainable Growth Fund (SGF) St Kitts and Nevis has launched new Sustainable Growth fund, effective from 1 April 2018 after the expiry of Hurricane Relief Fund. The Sustainable Growth Fund for a single applicant will require a contribution of US$150,000, inclusive of Government fees. The contribution for a family of up to four will be US $195,000 following incremental steps. The fund will benefit St Kitts and Nevis in sustainable areas such as healthcare, education, alternative energy, heritage, infrastructure, tourism and culture, climate change and resilience, and the promotion of indigenous entrepreneurship. The contribution requirements under SGF are: • Main applicant: US$150,000 • Family of four: US$195,000 (i.e. main applicant – US$150,000, spouse – US$25,000, two children – US$10,000 each) • Additional family dependents: US$10,000 The government also allows for parents and grandparents over the age of 55 to be included in the application as dependents, if they are living with and are fully supported by the main applicant. The contribution of US$10,000 is required for each additional dependent, regardless of age.

The real estate can be sold after five years – it also qualifies the next buyer for citizenship, as of 2012. Effective from April 2018, two persons (joint) can buy real estate each contributing $200,000 meeting $400,000 requirement but the property can only be resold after seven years. You can expect total costs of US$492,000 or more, with the real estate option for single applicant. Additional costs apply for accompanying family members. The SIDF is a much cheaper option for citizenship, compared to real estate investment. The average processing time is between four and six months, if property is purchased from a developer that meets all criteria for efficient processing of citizenship application.

Fees and costs Minimum investment: US$150,000 Sustainable Growth Fund (SGF) or US$400,000 (Real estate) Government fee: main applicant – US$35,000, spouse – US$20,000 Due diligence fee: main applicant – US$7,500, each dependent over 16 – US$4,000 Passport fee: US$355 per person Lawyer fee

You will not be taxed on foreign income, capital gains, gift, wealth, or inheritance tax so this may complement your current wealth protection and tax planning strategies. Citizens of St Kitts and Nevis are allowed to hold dual citizenship, and the acquisition of citizenship is not reported to other countries. The regulations regarding citizenship by investment are contained in Part II, Section 3 (5) of the Citizenship Act, 1984. These provisions allow the government to operate a program under which citizenship is granted to persons who qualify under criteria set by a cabinet decision. Citizenship By Investment 63


Are you looking for the right place to invest? St. Kitts provides a healthy climate for business and investment. Situated in the Eastern Caribbean, this exotic tropical island provides an array of investment opportunities in seven priority sectors, namely: Tourism, Financial Services, Information Technology, Agriculture, Light Manufacturing, International Education and Renewable Energy. St. Kitts is rapidly developing with modern infrastructure; roads, international air and sea ports and advanced telecommunication services. Located just three hours by air from the east coast of the United States of America, St. Kitts is perfectly located for doing business. The Government offers investment incentives; including tax holidays for certain qualified investment projects and businesses. There is No Personal Income Tax in St. Kitts or any restrictions on the repatriation of profits and imported capital. The country’s Citizenship by Investment Programme is the oldest and most respected programme of its kind. Its passport provides instant visa-free access to over 150 countries. Citizenship by Investment is an ideal gateway to the world for individuals and families in search of secondary citizenship. 64 Citizenship By Investment

Priority Sectors Tourism Information Technology Agriculture Light Manufacturing Financial Services International Education Renewable Energy Tel: 869-465-1153 www.investstkitts.kn office@investstkitts.kn


ST. KITTS AND NEVIS CITIZENSHIP BY INVESTMENT PROGRAMME by the St. Kitts Investment Promotion Agency

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t. Kitts & Nevis ranked first in the Caribbean region for its citizenship by investment (CBI) programme, in the 2018 Passport Index, released by leading international CBI firm, Henley & Partners. This is a significant accomplishment for St. Kitts & Nevis as the small island state recently signed a historic Visa Waiver Agreement with Russia. St. Kitts and Nevis was also the only Caribbean island recognised in Bloomberg BusinessWeek’s travel list for 2018, positioning the country as a more attractive destination for CBI programmes. Currently, St. Kitts & Nevis residents enjoy visa free/entry permits to over 150 countries/territories including Germany, Italy and the United Kingdom, while citizens also enjoy “short stay” visa waivers to France. This is extremely beneficial to St. Kitts & Nevis’s CBI programme, which continues to

maintain its high standards of conducting business, and St. Kitts and Nevis is working hard to ensure that its CBI programme remains a first-class brand. Investors in the programme are given the option to invest in real estate or make a contribution to the Sustainable Growth Fund (SGF). SUSTAINABLE GROWTH FUND (SGF) CONTRIBUTION Applicants may qualify for citizenship through a contribution to the Sustainable Growth Fund (SGF). • Single applicant: a non-refundable contribution of US$150,000 is required • Main applicant with up to three dependents (for example, a spouse and two children): a non-refundable contribution of US$195,000 is required

• Additional dependents, regardless of age: US$10,000 Upon submission of an application, nonrefundable due diligence and processing fees must be also paid. These fees amount to US$7,500 for the main applicant, and US$4,000 for each dependent of the main application who is over the age of 16 years. REAL ESTATE INVESTMENT Applicants may qualify for citizenship through an investment in a pre-approved real estate project, which may include hotel shares, villas, and condominium units. The minimum real estate investment required by law is US$200,000 (resalable after 7 years) or US$400,000 (resalable after 5 years) for each main applicant. Upon submission of an application, nonrefundable due diligence and processing Citizenship By Investment 65


fees must also be paid. These fees amount to US$7,500 for the main applicant, and US$4,000 for each dependent of the main applicant who is over the age of 16 years. On approval in principle of an application made through a real estate investment, a government fee applies, as follows: • Main applicant: US$35,047 • Spouse of the main applicant: US$20,047 • Any other qualified dependent of the main applicant regardless of age: US$10,047 In addition to these fees, real estate buyers should be aware of purchase costs (mainly compulsory insurance fund contributions and conveyance fees). The government has succeeded in creating an attractive investment climate through sound policies and careful planning. A new landscape of opportunities is now available to investors under defined, prioritised sectors. These include tourism, offshore financial services, information technology, agriculture, international education, renewable energy and manufacturing. The government offers tax incentives in the form of exemption from import duty and tax holidays of up to 15 years for qualified investments. The Hotel Aids Act allows for exemption from import duty on materials for the refurbishment or construction of a hotel and tax holidays of 10 years for hotels with 30 or more bedrooms and 5 years for hotels with 10 to 29 bedrooms. St. Kitts offers numerous opportunities for wealth preservation through an attractive tax regime for doing business. There are no personal income tax and no capital gains 66 Citizenship By Investment

or death tax. St. Kitts is attractive as an international financial centre because its services cater to small closely held companies with an easy application process and reasonable rates. In addition, the Financial Services sector is equipped with experience and knowledgeable staff and the jurisdiction boasts a regulatory body that meets international standards. Foundations, and Captive Insurance Companies, are identified as unique investment opportunities due to the nature and viability of the products. Companies registered in St. Kitts and Nevis can repatriate all capital, royalties, dividends and profits. There are no exchange controls in St. Kitts and Nevis and the invoicing of foreign trade transactions may be made in any currency.

Contact:

St. Kitts Investment Promotion Agency

2nd Floor KOI Building, #1 Airport Road Golden Rock St. Kitts

Tel. (869) 465-1153

Fax (869) 465-1154

www.investstkitts.kn

office@investstkitts.kn


Tel: 869-465-1153 www.investstkitts.kn office@investstkitts.kn Citizenship By Investment 67


C O UN TRY SPO TLIGHT

COUNTRY SPOTLIGHT

QUICK FACTS Capital city: Castries Population: 178,015 (Est 2016) GDP growth: 1.6% (Est 2017) Area: 617km2 Government: Unitary parliamentary constitutional monarchy Monarch: HM Queen Elizabeth II Governor-General: Neville Cenac Prime Minister: Allen Chastanet Currency: East Caribbean dollar (XCD) Dialling code: 1 758 HDI: 89th Ease of doing business index: 91st

SAINT LUCIA

S

aint Lucia is a sovereign island country in the eastern Caribbean, part of the Lesser Antilles. The varied landscape and tropical climate, moderated by northeast trade winds, has something to offer all visitors. From the vast expanses of sandy beaches to the towering Piton mountains, a world heritage site, Saint Lucia makes for a sensational setting. The French were the island’s first European settlers, signing a treaty with the Carib Indians in 1660. After that, rule of the island switched many times between France and Britain. Saint Lucia became an independent state and a member of the Commonwealth of Nations in 1979, and consequently, its a legal system is based on both the civil law and English common law. The year typically features a dry season from December until the end of May, and a wet season from June until the end of November. The average daytime temperature is an estimated 29°C. As the island is located near to the equator, the temperature does not vary greatly throughout the year. Between 1667 and 1814, control switched between French and British hands a total of 14 times. Due to the development of the sugar industry, Saint Lucia was considered an attractive colony to hold. The official language of Saint Lucia is English, however, Saint Lucian Creole French is widely spoken.

68 Citizenship By Investment

Politics Saint Lucia is a two-party parliamentary democracy with Queen Elizabeth II as the Head of State; her presence is represented by a Governor-General. The Prime Minister is usually the head of the party that holds the majority in the House of Assembly. There are 17 seats in the House of Assembly, and eleven seats in the second chamber of Parliament, the Senate. As well as being a member of the Commonwealth, Saint Lucia is a member of the Caribbean community (CARICOM) and the Organisation of Eastern Caribbean States (OECS). It maintains friendly relations with all of the active major powers in the Caribbean – the US, Canada, France and the UK.

Economy The country’s gross domestic product in purchasing power parity was estimated at US$2,384 in 2017, ranking 194th internationally. The services sector accounted for 82.8% of GDP, followed by industry and agriculture at 14.2% and 2.9%, respectively. The island nation has been able to attract foreign business and investment, especially in its offshore banking and tourism industries, enticed by a well-developed legal and commercial infrastructure, an educated

workforce, improved roads, an upgraded communications system, port facilities, and a business-friendly entrepreneurial climate. Tourism is Saint Lucia’s main source of jobs and income – accounting for 65% of GDP – and the island’s main source of foreign exchange earnings. The manufacturing sector is the most diverse in the Eastern Caribbean area. Crops such as bananas, cocoa, coconuts, avocados and mangos are grown for export. The popular tourist season tends to be January to April due to the weather. The island currently attracts over 900,000 visitors annually, most of which are stopping off as part of a cruise. As well as the twin peaks of “The Pitons”, other attractions include a drive-in volcano, the rainforests, the Sulphur Springs, Fort Rodney in Pigeon Island National Park and boat and fishing trips. Saint Lucia implemented a 15% Value Added Tax in 2012, but decreased it to 12.5% in February 2017. Major export and import partners are France, US, UK, Brazil, Trinidad and Tobago, and the Netherlands.

Citizenship by Investment Saint Lucia Citizenship by Investment Programme was established following the enactment of Citizenship by Investment Act in 2015 (Act No 14 2015) making it


HOW TO QUALIFY Those wishing to secure a Saint Lucian passport through the Citizenship By Investment Programme must be at least 18 years of age, have no criminal record and be in good health. Furthermore, in order to qualify for citizenship in Saint Lucia, investors must fulfil one of the four following investment options.

3) Enterprise projects

1) National Economic Fund (NEF)

• Cruise ports and marinas

Saint Lucia National Economic Fund is a fund established to receive cash investments from the citizenship programme that will be used in the funding of government-sponsored projects. The Finance Minister must seek approval from Parliament for the allocation of funds for his chosen purposes.   Once an application for citizenship through investment in the Saint Lucia National Economic Fund has been approved, an investment as follows is required: • Single applicant: US$100,000 • Main applicant plus Spouse: US$165,000 • Applicant applying with spouse and up to two other qualifying dependants: US$190,000 the newest programme to join the other citizenship by investment programmes (CIP) in the Caribbean region. Saint Lucia has inherited decades of experience in this regard from its Caribbean neighbours.

Benefits • Applications, including those with dependents, will be processed within three months • No residency requirements • Passport allows for visa-free travel to more than 100 countries, including the Schengen Zone, the UK and Hong Kong. • Application process does not require an interview or a visit to Saint Lucia • Education and managerial experience are not required • Global income is not taxed

• Each extra qualifying dependant, of any age: US$25,000

2) Real estate projects The Cabinet of Ministers will evaluate proposed real estate projects for the possibility of citizenship. Approved real estate projects can come under two categories: • Luxury branded hotels and resorts • Luxury boutique properties The applicant must enter into a binding purchase and sales agreement for an investment in an approved real estate project. Investments, totalling the agreed purchase price, are deposited in an escrow account managed both by the property developer as well as the Saint Lucia based Citizenship by Investment Unit. • Minimum investment required: US $300,000

The Cabinet will evaluate enterprise projects to appear on the approved list for the Citizenship by Investment Programme. Approved enterprise projects come under seven categories: • Speciality restaurants • Agro-processing plants • Pharmaceutical products • Ports, bridges, roads and highways • Research institutions and facilities • Offshore universities Once approved, the enterprise project becomes available for further investments from other applicants for citizenship by investment. The following minimum investment is required:

Option 1 – A sole applicant • A minimum investment of US$3.5m (and create at least three jobs)

Option 2 – More than one applicant (joint venture) • A minimum investment of US$6m with each applicant contributing no less than US$1m (and create six jobs)

4) Government bonds Citizenship by investment may be made through the purchase of non-interestbearing Government bonds. These bonds must be registered and remain in the name of the applicant for a five year holding period from the date of first issue and not attract a rate of interest. Once an application for citizenship by means of an investment in government bonds has been approved, the following minimum investment is required: • Sole applicant: US$500,000 • Couple (applicant and spouse): US$535,000 • Applicant applying with spouse and up to two dependants: US$550,000 • Each extra dependant: US$25,000

• Inclusion of dependent children under 25 • Inclusion of dependent parents of the applicant or his or her spouse above 65 who habitually live with and is fully supported by the applicant • Inclusion of mentally or physically challenged dependent children and/or parents, fully supported by the applicant. Citizenship By Investment 69


A CLIENT FOCUSED APPROACH TO CITIZENSHIP BY INVESTMENT by CINDY EMMANUEL-MCLEAN, consulting partner at TM ANTOINE Partners

TM

ANTOINE Partners Advisory has carved out a special place in the citizenship by investment landscape of Saint Lucia, the Caribbean and the globe. As an authorised agent, registered in Saint Lucia, we do not just help clients submit their applications for citizenship of Saint Lucia – our work is much more specific and detailed than that. We specialise in creating targeted solutions for each client. This includes helping clients choose the best Caribbean citizenship programme for their circumstances. The individualised approach to citizenship by investment was a result of a conscious effort to make the clients and their solutions the first and only focus for our citizenship advisory.

Our inspiration Before launching the citizenship advisory as part of the law firm of TM ANTOINE Partners, Thaddeus M. Antoine, the managing partner, travelled extensively attending citizenship by investment conferences and educating himself about the industry. He played a pivotal role in helping shape Saint Lucia’s programme as a Senator of Government in 2015/2016. During his many fact-finding missions, he met extensively with marketing agents, promoters, agents and government officials. The conferences did not cater to the individuals who would be applying for citizenship. Everything to be learnt about the needs of the clients was offered by third, fourth- and fifth-party service providers. Thirty months ago, in March of 2016, TM ANTOINE Partners Advisory submitted the first application for citizenship by investment. Today, the process used by the company to assess clients, prepare applications for submission and communicate with clients has completely evolved. Everything we do is aimed at making our assertion that we provide five-star service, offering a tailored approach for the unique circumstances of each of our clients from enquiry to citizenship, the reality that the client experiences when working with us. This is first evidenced by the free PreApplication Assessment that is offered by TM ANTOINE Partners Advisory to each of the clients who express an interest in applying for citizenship of Saint Lucia. 70 Citizenship By Investment


Finding the perfect fit The free Pre-Application Assessment involves conducting an initial due diligence background check on the prospective applicant. Any areas of concern are immediately pointed out to the client and discussed as to how it would affect their application for citizenship. Where the due diligence background check reveals issues that legislatively would prohibit the prospective applicant from obtaining citizenship of Saint Lucia, TM ANTOINE Partners Advisory advises the client that the application cannot proceed. This is a clear example of putting the interests of the client ahead of those of the company. Another key feature of the Pre-Application Assessment is providing clients with a comprehensive estimate of the costs of obtaining citizenship of Saint Lucia as well as the other four countries offering citizenship by investment in the Caribbean. Cost is perhaps the most significant factor for some clients and there is value in giving the clients the full range of options available to them. The result of that practice is that each client gets to apply for the Caribbean programme that is the best fit for them. That is important to TM ANTOINE Partners Advisory, more critical than persuading every client to subscribe to any single programme. We are always happy to meet the clients’ needs either on our own or through our trusted partners throughout the Caribbean. TM ANTOINE Partners is committed to guiding prospective applicants who, after the completion of the Free Pre-Applicant Assessment, have determined that they will proceed with their application. We design a customised checklist for each applicant detailing the documents and forms that they will need. Clients who follow the TMA checklist save time by focusing their efforts on only what is needed to complete their application. We will often include a request for additional supporting documents not ordinarily required by the Citizenship by Investment Unit. We do so because a complete application should answer all questions that are likely to arise about our clients. This approach has resulted in an almost 100% success rate for the applications we submit to the Unit. Our TMA Online Tool is used to provide Assessment Feedback to clients who can provide corrections, additional information and explanations online in real time. This has reduced the time it takes to get a file ready for submission by over 65%. Our Assessment Feedback is detailed and lets each client know exactly what must be done to bring their application into compliance with the requirements of the Citizenship by Investment Unit.

Meeting client expectations TM ANTOINE Partners Advisory would love to boast 100% satisfaction among our clients but at this time it is not possible to do so. Of most concern to clients is what they see as the inordinate amount of time it takes for their applications to be processed. Other than costs, the processing time is the second most quoted reason for our clients choosing other Caribbean islands. It is clear that Saint Lucia

values its reputation and therefore puts a premium on due diligence background check on all applicants. This accounts for the longest part of the application process and sometimes takes the delivery of decisions on applications way beyond the desired 90 days. As new options for obtaining a second citizenship are being offered to global citizens, it is critical that the Caribbean become more responsive to the needs of the clients. Governments processes are often clogged with bureaucracy and political interests but that should not dissuade them from building an elasticity into their citizenship by investment programmes that allows them to change to meet the ever-changing expectations of prospective investment citizens. Other Caribbean islands, most recently Grenada, and especially Dominica and St. Kitts have managed this process relatively well. In recent times, these countries have made changes to their offerings, which we believe make them more attractive to the global market. Based on the requests that we are getting from our clients Saint Lucia is lagging in significant ways. Our clients want the option to add new members of their family to their applications after approval. They want to apply for their dependent children who are past the age of 25. They need to include their children between the ages of 18 and 25 who are not currently enrolled in schools. All these are options which they have in the other Caribbean countries and are willing to pay a premium to get them. We must strive the find the balance between our need to protect our reputation and the desired longevity and viability of our Programme.

bolster one’s case for obtaining citizenship and presenting options for applicants to engage with the Programme.

Saint Lucia – Let her inspire you Given all the changes that TM ANTOINE Partners Advisory would like to see in the Programme we are always ready to answer the question – why Saint Lucia? We are unashamed to provide you with the most biased answer that we can provide – Saint Lucia is simply good. Saint Lucia is simply good for business with a diversified economy, diversified and skilled labour force and a diversified investment portfolio. Saint Lucia is simply good for life. Our life expectancy is 74.5 years for men and 79 for women. We have a rich and vibrant culture that caters to every lifestyle. Saint Lucia is simply good for fantasy. Oprah Winfrey described Saint Lucia as the number one location to see before you die. That is further endorsed by the numerous couples that have made Saint Lucia consistently rank as the number one wedding and honeymoon destination in the world, most recently in 2018.

Contact us TM ANTOINE Partners wants to give you your passport to Saint Lucia, to freedom. Please contact me to discuss your options.

The desired future At TM ANTOINE Partners we still concur with the findings of the Task Force on Citizenship by Investment who proffered that there are five important decision-making factors for persons considering investment in a CIP programme. • Cost – measuring the costs pertinent to the application and the net investment that the applicant is required to make. • Speed – the time it takes to citizenship • Global Mobility – the total number of countries accessible visa-free on a passport as well as access to the most desirable places to visit • Simplicity – clarity and seamlessness of the application process • Quality of Life – based on external quality of life indices. For at least three of the five factors, there are simple, easy and painless steps that Saint Lucia can take to increase the unique selling point of its Programme. We must find ways to effectively reduce the time it takes to get to a decision. An aggressive campaign of increasing the number of countries with which we have visa-free access must be pursued while working diligently to protect those existing visa-free relationships. The application process needs to be streamlined by reducing the number of forms to be completed, widening the range of supporting documents that can be used to

Cindy Emmanuel-McLean consulting partner TM ANTOINE Partners Tel: 1 (416) 727 1648 1 (758) 519 2917 1 (758) 453 2000 cmclean@tmantoinelaw.com https://cip.tmantoinelaw.com

TM ANTOINE Citizenship By Investment 71


SEEKING ADDITIONAL CAPITAL FOR YOUR EB-5 PROJECT: CONSIDER THE NEW OPPORTUNITY ZONE PROGRAM by CLEM G. TURNER Chiesa Shahinian & Giantomasi PC (CSG)

A

lthough there is a significant increase in EB-5 capital originating from India, Vietnam, Brazil and other countries, the EB-5 market has not fully recovered from the decline of Chinese investors in recent years. Although the influx of EB-5 capital remains steady, it may take projects longer to find the capital they seek. This article will examine the newly enacted Opportunity Zone Financing Program, and determine if it might be utilised to provide additional capital into existing or contemplated EB-5 Projects.

What is the Opportunity Zone Program? On December 22, 2017 the Tax Cuts and Jobs Act created the Opportunity Zone Program, which is designed to foster investment in “Opportunity Zones” (O-Zones). O-Zones are low-income areas designated by each state and certified by the US Secretary of the Treasury. Approximately 8,700 census tracts have been designated as O-Zones. The O-Zone Program provides a significant tax incentive to investors in Qualified Opportunity Funds, which are investment

vehicles created to invest in property located in O-Zones. Qualified Opportunity Funds are to be financed by their investors’ taxable capital gains from prior investments. After a sale, investors have 180 days to funnel their taxable capital gains into a Qualified Opportunity Fund. If the investor holds this investment for five years, their original deferred taxable gain will be reduced by 10%. If the taxpayer holds the investment for two more years, the taxpayer will receive an additional 5% tax reduction. Tax on the original reinvested gain is due on December 31, 2026, therefore to qualify for the full 15% reduction, the investment in a Qualified Opportunity Fund must be made on or before December 31, 2019. If the taxpayer holds the investment in the Qualified Opportunity Fund for at least ten years, the taxpayer will be allowed to exclude the entire gain on any appreciation of the Qualified Opportunity Fund. Although the US Treasury Department has not yet released final Program regulations, numerous Qualified Opportunity Funds have sprung up and are raising significant sums of capital, to be deployed when final regulations are enacted. It is estimated that over $6 trillion in capital gains were realized last year that would have been eligible for tax breaks under the O-Zone Program.

Target Employment Areas v. Opportunity Zones To qualify for O-Zone funding, an EB-5 Project must be located in an O-Zone. Within the EB-5 Program, most projects are located in Targeted Employment Areas (TEAs). A TEA is a census tract that is either: (a) rural or (b) has an unemployment rate equal to 150% of the national unemployment average. However, EB-5 Program rules allow a number of census tracts with higher unemployment adjoining the EB-5 Project’s location to be incorporated into the TEA analysis. Thus, there is some flexibility in determining if an EB-5 Project is located in a TEA. For a census tract to qualify as an O-Zone, it must have: (a) a poverty rate of 20% or higher or (b) a median household income that is less than 80% of the surrounding area. However, not every qualifying area has 72 Citizenship By Investment


Source: Fund for Our Economic Future’s analysis of Qualified Opportunity Zone tracts, as designated by the U.S. CDFI Fund.

Land of Opportunity DESIGNATED OPPORTUNITY ZONE CENSUS TRACTS been certified as an O-Zone. The new law allowed governors to designate only 25% of their states’ eligible census tracts as O-Zones. As a result, slightly more than 10% of the country’s census tracts have received an O-Zone designation. If an EB-5 Project is not also in an O-Zone, it will not be eligible to receive O-Zone funds. However, if a project is located in an O-Zone, there is no approval process or waiting time, as Qualified Opportunity Funds can self-certify with the IRS. A link to a list of approved O-Zones and other resources can currently be found at https://www.irs.gov/newsroom/opportunityzones-frequently-asked-questions.

EB-5 Program and O-Zone Program comparison Structuring – Both the EB-5 Program and the O-Zone Program require the investors in their projects to be equity holders. In EB-5, the equity held by investors is often in a special purpose vehicle (SPV) and the SPV either finances a loan or a preferred equity investment into the project. Under the O-Zone Program, it is expected that the investors would hold preferred equity in the project, or in a parent company. Accordingly, existing EB-5 structures may need only moderate revision to accommodate Qualified Opportunity Fund capital. Furthermore, an EB-5 Project raising capital will already have a full suite of equity offering documents, and these documents may only require moderate revision to enable the project to raise Qualified Opportunity Fund capital. Target investments – While many businesses are eligible for investment under each program, real estate investment is heavily favoured under both. The EB-5 Program requires the investment to generate jobs, and real estate “ground-up” construction or major renovation projects are large job creators. The goal of the O-Zone Program is economic revitalisation, and properties must be either ground up construction developments or major renovations to qualify. While certain “sin” businesses are ineligible for O-Zone benefits (e.g. casinos, liquor stores, massage parlours, etc.), many projects popular with EB-5 investors would work well in the O-Zone Program (e.g. hotels, hospitals, assisted living facilities, schools, etc.).

Investor motivation – While the EB-5 investor is seeking an immigration benefit, and the O-Zone Investor is seeking a tax benefit, both investors are seeking the same prominent feature in an investment property – SAFETY. Under EB-5, the investor is required to hold their investment until they receive their permanent green card, typically a five-year process, though it can be as long as ten years if visas are not available in the investor’s home country. Thus, both types of investors ideally want the project to last 5-10 years and may evaluate potential investments based on longevity. (Eligible EB-5 investors can be redeemed after five years, if necessary, while the O-Zone investors remain in the project.) Furthermore, neither investor is motivated by investment income. Although the O-Zone investor would prefer capital appreciation, dividend distributions to both of these investors may be nominal. Thus, EB-5 investors and O-Zone investors can both be described as “patient” and “content” investors.

Conclusion The similarities in location, target investments, structure and investor motivation could make eligible EB-5 Projects very interesting to potential O-Zone investors. If your EB-5 Offering could benefit from an influx of inexpensive and patient capital, consider launching an O-Zone Offering. Qualified Opportunity Funds have already been created and will be seeking properties for investment when final regulations are released. If you are interested in pursuing O-Zone capital to supplement your EB-5 raise, or if you are considering an EB-5 investment and have US capital gains that you would like to defer and reduce, contact an attorney or accountant with expertise in this innovative and novel law. www.csglaw.com

CLEM G. TURNER CORPORATE AND SECURITIES LAWYER Clem Turner is a partner in the New York Office of Chiesa Shahinian & Giantomasi PC, which has been providing quality legal counsel to clients for over 45 years. Clem is a member of the firm’s Corporate and Securities Group. Mr Turner is a graduate of Princeton University and Georgetown University Law Center and is admitted to practice law in New York and California. Mr. Turner has significant experience in immigration investment, crowd finance, venture capital, securities law, general business and corporate counseling. He has counseled numerous corporations and Regional Centers raising capital through the EB-5 Program on matters of structuring, strategy, securities law and corporate law. His experience includes EB-5 offerings ranging from “direct” $1m raises up to complex $400m raises and everything in between. Mr. Turner has been selected multiple times as a “Top 15 Corporate EB-5 Attorney” by EB-5 Investors magazine. He has been interviewed about the EB-5 program by various media sources, including NPR’s Marketplace, The Real Deal Magazine, Real Estate Weekly, and Southern China Morning Post. Mr. Turner has published several articles related to EB-5 and routinely lectures at events and conferences throughout the world. Mr. Turner is a respected member of the EB-5 trade association, “Invest in the USA” (IIUSA), and currently serves on its Public Policy Committee and Chairs its Securities Law Sub-Committee.

Citizenship By Investment 73


See what’s possible EB-5 IMMIGRATION SERVICES •

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SUCCESS DRIVEN BY EXPERIENCE, SKILL AND CREATIVITY Obtaining great results originates from the ability to view issues from diverse perspectives. Our decades of experience providing insightful and strategic legal counsel delivers business solutions time and again. Let CSG transform your vision into reality.

CLEM TURNER, ESQ. | CTURNER@CSGLAW.COM CHIESA SHAHINIAN & GIANTOMASI PC NEW YORK CITY

WEST ORANGE

74 Citizenship By Investment

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AS DEMAND FOR THE US EB-5 VISA CONTINUES TO RISE IN INDIA, DISTINCTIONS ARE MADE WITH CHINA By MONA SHAH ESQ. AND HERMIONE KRUMM ESQ. Mona Shah & Associates Global

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s the Times of India publish yet another article on the increase in the popularity of EB-5 visas, the Chinese media report on the rapid slowdown of a once booming industry. For years the EB-5 industry has been bolstered by wealthy Chinese investors, but the heyday for the Chinese EB-5 market seems to be ending as new applicants appear wary of heightened uncertainties surrounding the program (legislative and regulatory) as well as the ever-increasing visa backlog facing the Chinese nationals that has been anticipated to be 10+ years. The EB-5 Immigrant Investment Program was created by the US Congress in 1990 to stimulate the economy through job creation

and capital investment. Between fiscal year 2010 and 2015 alone, over $19.6 billion of foreign direct investment (“FDI”) flowed into the United States under EB-5 from across the world and supported over 414,000 American jobs.1

immense population size and robust pace of economic growth, there was vast room for growth in the EB-5 program in India – indeed it was only a matter of time before Investors at the very least, brought it on par with China.

Despite the EB-5 program’s tangible benefits, particularly for Indian citizens, India only comprised a 1.1% share of the overall EB-5 market in 2015. By comparison, China dominated the overall market with 83.5% or 8,156 approvals. Even Vietnam, which India dwarfs in population size, commanded a greater share of the market with 2.9% of approvals in 2015. In FY2016, India stood out as only the sixth most common country of origin for EB-5 investors. Given India’s

The shifts in the top six countries for EB-5 demand is particularly noticeable in the most recently published analysis by IIUSA (the national trade association for the EB-5 Regional Center Program), on the latest Form I-526 (Immigrant Petition by Alien Entrepreneur) data by investor’s country of chargeability for fiscal year (FY) 2017, the demand from China has been dampening since FY 2016, with every subsequent year a decreasing number of filings. Citizenship By Investment 75


Table 1: Rankings of 1-526 Filings & Growth Rates by Investor’s Country of Chargeability (FY2015-FY2017) FY2015 Rankings

Country of Visa 1-526 Filings Chargeability (COC) (Number) (YoY Growth)

FY2016

Country of Visa 1-526 Filings Chargeability (COC) (Number) (YoY Growth)

FY2017

Country of Visa 1-526 Filings Chargeability (COC) (Number) (YoY Growth)

1

China

13,530

39.2%

China

10,948

-19.1%

China

8,771

-19.9%

2

Vietnam

289

127.6%

Vietnam

404

39.8%

Vietnam

587

45.3%

3

India

239

102.5%

India

354

48.1%

India

523

47.7%

4

Brazil

229

108.2%

Brazil

156

-31.9%

Brazil

215

37.8%

5

Tiawan

170

60.4%

Tiawan

151

-11.2%

Tiawan

182

20.5%

6

South Korea

167

68.7%

South Korea

143

-14.4%

South Korea

136

-4.9%

Others 163 COCs

1,182

62.9%

Others 163 COCs

1,025

-13.2%

Others 163 COCs

970

-5.4%

Worldwide Total

15,805

44.5%

Worldwide Total

13,181

-16.6%

Worldwide Total

11,384

-13.6%

Data Note: Margin of error: +/-6.4% Data Source: U.S. Citizenship and Immigration Services (IIUSA Obtained via FOIA) Prepared by: Lee Li, IIUSA

The United States is the second-most common destination for Indian migrants For Indian immigrants, the EB-5 program makes a lot of sense. The United States is the second-most common destination for Indian migrants, representing approximately two million of the total 14 million Indian migrants worldwide. Compared to both the overall native-born and foreign-born populations in the US, Indian immigrants are on average significantly higher educated, more likely to be employed and have a higher household income. These statistics are reflected in the high usage of EmploymentBased Green Cards and skilled occupationbased H1-B visas amongst Indian citizens. According to the Department of State, Employment-Based Green Cards for Indian citizens are backlogged to June 2008 for 2nd Preference and March 2005 for 3rd Preference. In addition, the promise of increased scrutiny and reform for the H-1B and L-visa categories have made these routes significantly less straightforward. In sharp contrast, no backlog for 5th Preference (EB5) currently exists for Indian citizens. Evidence suggests however, that while China and India share similar population sizes and economic growth figures, the similarities end there. For one, the diasporas of the respective countries are very different. By merit of the countries’ shared colonial heritage, Great Britain was the primary destination for Indian migrants in the years following Indian independence. This was facilitated by the British Nationality Act of 1948, which stipulated that citizens of the British Empire and former colonies (those countries that formed the British Commonwealth), had the automatic right to remain in the UK if they chose. This special status ended with the Immigration Act of 1971, but only after thousands from across 76 Citizenship By Investment

the Commonwealth had already emigrated. In contrast, American immigration restrictions were relaxed after the passage of the Immigration and Nationality Act of 1965, which removed country-based quotas; and the Immigration Act of 1990, which created the Diversity Immigrant Visa and the five Employment-Based Visa categories that we have today. The majority of Indian immigrants arrived after 1990 via the Employment-Based channels. Today, Indian citizens are the top recipients of H1-B visas, comprising 70% of the total share. However, while this information explains why the destination country of choice for Indian migrants shifted to the US, it still does not explain the discrepancy in the number of EB-5 applicants between India and China. In some ways, China is the victim of its own success. As the country became wealthier, more people were able to afford the Immigrant Investment Program, which requires at least a minimum of $500,000 investment in a project located in a Targeted Employment Area, that previously had been out of financial reach. A culture that values Western – especially American – education has also been the driving force behind the fuelled interest in US immigration. The two factors are equally applicable to an emerging

market in the EB-5 realm – India – which

is likely to be passed the baton as the new leading runner in the field.

Indian applicants have proven to be different from the Chinese With the increase in the popularity amongst Indian Investors this past year, Regional

Centers have flocked to India’s major cities

and financial hubs in the hope of uncovering the next untapped EB-5 Supermarket. Like

its neighbour to the north, China, India has also experienced phenomenal economic

growth and overseen a rise in geopolitical prominence over the past decades, albeit a little later than the Middle Kingdom.

Yet, while both India and China may be on similar economic trajectories, their

emigration patterns, particularly in terms

of EB-5, are quite different. As India’s GDP continues to grow and its government

becomes more open to outward and inward FDI, there are marked differences.

The typical Chinese Investor lives in China and applies for the visa through registered migration agents at the consulate. In

contrast, almost half of the Indians applying for EB-5 in 2016 and 2017 were already US

visa holders, either students or H1B holders.

How Chinese and Indian investors got EB-5 visas, FY2016 Outside the US Mainland China

Inside the US 98% 2%

India ATLAS | Data: US Department of State, IIUSA

60% 40%


Difference in expectations and preferences For Chinese applicants, the program’s primary attraction was not in the investment returns, allowing for the model whereby agents or middle men collect high fees. A vast majority of Indians on the other hand expect a return on their investments. The past few years have shown that the Chinese prefer EB-5 projects that are large glamourous real estate projects, usually a loan model with a set maturity date. Investors have completely passive roles with no management input. In contrast, many Indians have shown a preference for affordable, small-in-scale more entrepreneurial projects (usually a preferred equity model).

eight out-of-country Tier 1 applicants from India from 2014-2017, but over 135 such applicants from China over the same period.2

What does this all mean for EB-5 going forward? The fact of the matter is that traditionally favoured immigration channels for Indian citizens are drying up. Like in the UK, employer-sponsored visas (EB-2 and EB-3) are dominated by Indian citizens. Not only

of all facets of US immigration law; her expertise ranges from specialist business law to complicated, multi-issue federal deportation litigation before the US Courts of Appeal. Recognised as an industry leader in EB-5, Mona has received many accolades for her work, including voted top 25 EB-5 attorney in the US four years in a row; Top Lawyer by Who’s Who International, ‘Top Attorney of North America’.

Why the differences exist The macroeconomic environments of the respective countries have played a part in the differences between the two countries. China’s rapid development occurred in no small part due to the massive inflows of Foreign Direct Investment that the country has received. Yet, economic freedoms in the country are significantly curtailed. The government has a heavy hand in the marketplace and access to private capital is severely restricted. 90% of the companies listed on the Shanghai and Shenzhen stock exchanges are state-owned, greatly discouraging private entrepreneurship. Property rights and corporate governance regulations are also significantly more opaque in China. The end result is a comparatively more nurturing and favourable environment for domestic entrepreneurs in India than in China. Coupled with a general aversion to foreign investment and a preference for domestic sources of capital, one can see that outward investment has not historically been a major factor in India. This can help explain why investment visas like EB-5 are not as popular amongst Indian citizens. With entrepreneurship more greatly rewarded and venerated in India, the opportunity cost of investing abroad is higher for Indians than it is for Chinese investors. A more favourable environment for high-networth individuals (HNWIs) in India means that immigration channels catering to this demographic are less in demand. Those in India with the capital to invest have more outlets, and a greater incentive to invest at home than do their Chinese counterparts. This is also supported by UK immigration data. Indians made up 55% of all Tier 2 (Skilled Worker Visa) applicants in 2016, but were essentially a non-factor in Tier 1 (Investor Visa) applicants. There were only

is there an enormous backlog for Indian citizens, but also, the process is long and contingent upon finding a willing employer. On the flip side, with lawmakers looking to raise the minimum investment amount, many potential applicants who would typically favour the traditional visas may be priced out. Those with the capital in hand may be inclined to continue investing domestically or in Indian dominated projects, leaving many regional centers out in the cold.

MONA SHAH, ESQ. UK born, Mona, a dual licensed attorney, was formerly a Government Prosecutor with the British Crown Prosecution Service. Mona has extensive knowledge

Mona, is also an adjunct professor at Baruch College, CUNY University. She has authored numerous articles, a published book for investors, coedited EB-5 Gateway (BLS) and is a recommended author with Lexis Practice Advisor. Mona is regularly invited to speak worldwide, has been interviewed by mainstream news channels, including Fox Business News, Al Jazeera and quoted in major newspapers, including the New York Times. Mona also hosts the first podcast series on EB-5, with over 55 podcast episodes.

HERMIONE KRUMM, ESQ. Hermione Krumm, Esq. is an associate attorney with Mona Shah and Associates Global. Hermione works with EB-5, corporate, merger and acquisition (M&A), intellectual property and foreign direct investment (FDI) matters involving China, the UK and the US. Hermione writes and comments frequently on current business and immigration issues. Her articles have been published by LexisNexis, ILW, EB5info, EB-5 Supermarket, etc. Hermione received her LL.B. (Hons) from the University of Manchester School of Law (UK), and obtained her LL.M. from Cornell Law School. Hermione speaks fluent English, Mandarin and Cantonese.

[1] Please see IIUSA, Economic Impact Of the EB-5 Immigration Program 2010-2011 (2013), available at https://iiusa.org/blog/ wp-content/uploads/2015/05/iiusa-implan-auber-eb5-economic-impact-report-_2010-2011_.pdf; U.S. Department of Commerce Economics and Statistics Administration Office of the Chief Economist, Estimating the Investment and Job Creation Impact of the EB-5 Program (2017), available at http://www.esa.doc.gov/sites/default/files/estimating-the-investment-and-job-creation-impact-ofthe-eb-5-program_0.pdf; and Western Washington University Center for Economic Business Research, Quantitative Assessment of the EB-5 Program: Economic Impacts and Contributions to the U.S. Economy 2014-2015 (2018), available at https://iiusa.org/wp-content/ uploads/2018/03/EB-5-Economic-Impact-Report-2014-2015-FINAL.pdf. [2] http://smithstonewalters.com/2017/06/08/record-number-tier-1-investor-visas/

Citizenship By Investment 77


THE CRITICAL ROLE OF REGIONAL CENTERS IN THE EB-5 INDUSTRY By PATRICK F. HOGAN CMB Regional Centers

I

mmigration by investment through the EB-5 program can be undertaken in one of two ways. There is the Regional Center Program and there is what is commonly referred to as a direct EB-5 investment. It is critical to remember that an EB-5 investment is likely one of the most important decisions a person may ever make. It is unlike any traditional business investment because EB-5 involves more than just money. Ultimately, an investor places their capital as well as their families’ future in what the United States Citizenship and Immigration Services (USCIS) defines as a new commercial enterprise (NCE) and the job creation that results from that investment. Proper due diligence is paramount in the selection of any EB-5

“It is important for any person considering immigration through EB-5 to understand the various types of regional center models that exist in today’s industry.” 78 Citizenship By Investment

investment, but proper due diligence should not stop with the project itself; rather it should begin with understanding the benefits that come from a properly structured regional center offering. Most individuals that are considering EB-5 are doing so in order to achieve immigration to the US. Most do not have a desire to establish and operate a business upon which their immigration hinges. Rather, they prefer to avail themselves of experienced regional center operators, thereby (hopefully) enhancing their chances of success. All regional centers are not alike. As such, the goal of this article is to point out some of those differences. However, many of the EB-5 opportunities presented to clients are done so by developers with no EB-5 track record and no experience in structuring an EB-5 project or providing proper oversight of the project to ensure that the EB-5 requirements are met. Historically, many of the EB-5 opportunities that were presented to clients were done so by developers. Nearly all of these developers had no EB-5 track record and no experience in structuring a project to be compliant with the EB-5 program. Most of these developers saw the investment capital associated to EB-5 as cheap funding for the projects they were developing. These vertically integrated structures brought with them conflicts of

interest between the goals and concerns of the developer and his/her project and the goals and concerns of EB-5 investors who were focused upon immigration success above all else. It is important for any person considering immigration through EB-5 to understand the various types of regional center models that exist in today’s industry. CMB Regional Centers operates as a true “third-party” regional center. Companies that offer EB-5 investments under the third party regional center model are not developers. Instead they are professionals who work to structure, offer and maintain EB-5 investment partnerships that connect EB-5 investor funds with job creating projects. Because most third party regional center models do not have a direct ownership or daily management interest in the job creating entity (JCE), they are well positioned to operate as a fiduciary of the NCE thereby looking out for the best interests of both the immigration and financial goals of their investors. A variation of the third party regional center emerged early on in our industry and became common in areas like the state of Vermont and in South Dakota. This now common model is often called the “rent-a-regional center” or “umbrella” model. In many cases,


these regional centers are simply a group or an individual that possess the required USCIS regional center designation necessary to allow a fee paying developer to utilise EB-5 to fulfil the capital needs of their own development project. These regional centers often take a hands-off approach to the structuring and oversight of the projects under their sponsorship. In some cases, this can result in a developer with little or no EB-5 track record

“A true fiduciary is one who remains actively involved throughout the immigration process from the perspective of their clients.” of their own bringing an EB-5 project to the market with the expectation that the regional center will serve no fiduciary or day to day oversight function. A third common regional center model is the “vertically integrated” regional center model. As described in the historical background of EB-5, these regional centers are often real estate developers who have filed for and received their own designation to operate as a regional center. These regional centers are also commonly formed for the purposes of completing one standalone project or to raise EB-5 capital for a series of the developer’s own projects. In the vertically integrated regional center model, the regional center is the developer of the project and the issuer of the EB-5 offering. Vertically integrated regional centers often provide little or no separation between the decision making of the regional center and the decision making of the developer. Developers utilising the rent-a-regional center or the vertically integrated models present EB-5 projects to the market with one primary goal, to receive low cost development capital from EB-5 investors in order to fulfil the needs of their own project. In many cases these developers possess little understanding of the initial and ongoing EB-5 program requirements and that decisions that may be made may operate in conflict with the goals of their EB-5 investors.

claim is supported by the argument that the project creates the jobs and ultimately returns capital to the investor. One should ask, why would these individuals downplay the role the regional center should play? The answer is simple, they have no EB-5 track record to stand behind. Additionally, one could ask if the developer is truly responsible for structuring the EB-5 investment, but their primary business to build the project, then who looks out for me if a conflict of interest arises? By providing a time-tested track record, an ethical, independent and experienced regional center like CMB Regional Centers brings incalculable value to a potential investor’s EB-5 pursuit. CMB’s structure provides true separation between the EB-5 investment partnership and the developer and by serving as a true fiduciary, mitigating any potential conflict of interest. Working with an experienced regional center should result in the investor being well informed and up to date with comprehensive information about projects and the entire EB-5 process. Indeed, a third-party regional center, when properly structured, can better protect, better inform and better serve the interests of the immigrant/investor. A well informed and knowledgeable client is a more confident and assured client. It has always been our objective at CMB Regional Centers to educate prospective clients so that they can make their best and most informed decisions. We are confident that an informed prospective EB-5 investor will likely select CMB for their immigration pursuit if they are given the opportunity to complete full and meaningful due diligence. The true measure of any EB-5 regional center is the success of its clients. CMB’s track record spans over 20 years and over more than 5,200 investors with over 4,500 individual investors receiving I-526 petition approvals, over 1,100 investors receiving I-829 petition approvals, and investors in 12 partnerships that have received return of capital.

When considering EB-5 one may ask themselves, why even use the regional center program at all? Although an EB-5 Green Card can be achieved utilising the direct EB-5 investment approach, the extraordinary value in choosing to invest through an experienced regional center like CMB Regional Centers should not be discounted. Success in EB-5 is measured by obtaining US permanent residence so the objective should be improving one’s chances of success. There is a huge benefit to the regional center program as job creation (ten new qualified jobs per investor) is a key metric in the approval or denial of each EB-5 petitioner. Foremost among those benefits is the ability to prove job creation through the induced and indirect job creation model. Only regional centers can utilise reasonable

“Although an EB-5 Green Card can be achieved utilising the direct EB-5 investment approach, the extraordinary value in choosing to invest through an experienced regional center like CMB Regional Centers should not be discounted.” methodologies in proving job creation. This is a powerful tool for proving maximum job creation. In fact, in the earliest years of CMB, our founder attempted to educate the entire EB-5 industry on the benefits of indirect job creation. In the two decades following CMB’s pioneering of the method, the utilisation of model derived indirect jobs has gone from

There are numerous regional centers and EB-5 offerings of this nature that will be found in the course of one’s EB-5 due diligence. In an industry that features so many developer driven projects, it comes as no surprise that some individuals operating in the EB-5 industry deny or disparage the value that experienced independent regional centers offer. A true fiduciary is one who remains actively involved throughout the immigration process from the perspective of their clients. Many individuals in EB-5 will claim that the regional center is irrelevant. This specious reasoning implies that all a potential investor needs to do is to look at the developer or the project itself. The Citizenship By Investment 79


an industry oddity to the gold standard. The ability to rely upon more than direct job creation alone is a tremendous benefit availed to a regional center affiliated EB-5 petition. However, there are many more benefits that a regional center brings to each prospective EB-5 petitioner. CMB Regional Centers believes that any person considering an EB-5 investment should be evaluating the merits of the regional center and looking for certain core characteristics. This includes a team of dedicated, full-time, professional staff that work to reduce language barriers, perform project monitoring and investment oversight, provide efficiency, consistency and assistance in preparing and submitting the relevant immigration documents as well as many other needs that may arise within their EB-5 partnerships. The role of a regional center starts long before a specific project is ever considered and it does not finish until after the receipt of all permanent green cards and return of capital to the limited partners. A leading regional center will perform a thorough analysis and due diligence of a project and will continuously monitor the project for compliance with the EB-5 program and loan requirements. The Regional Center Pilot Program was established in 1992 because the United States Congress envisioned a greater job creating impact than could occur from direct EB-5 investments alone. Even at the most basic level, a primary purpose of a regional center program is to pool EB-5 investments to achieve the immigration pursuits of each investor, which multiplies the force of each individual’s investment

“Qualified, experienced regional centers will bring to bear their significant institutional knowledge of petition submission processes, as well as a keen understanding of the inner workings of the submission and approval systems, to the benefit of their clients.� thereby increasing the likelihood of finding the best projects with the best developers. Experienced regional centers are able to establish relationships with quality developers, subsidiaries, and other entities that might be part of any given capital stack, which makes projects of a higher quality more likely. Additionally, experienced and established regional centers regularly interact with regulators and overseers, which helps build two-way institutional understanding, 80 Citizenship By Investment

thus improving communication and greatly reducing regulatory bumps in the road. There are other benefits that a regional center can (and should) be providing in an EB-5 transaction. However, not all regional centers are the same, and certainly some fail to meet these standards. Selecting an experienced regional center along with an appropriate project can improve the likelihood of success in terms of immigration and investment. As job creation is the most essential part of the EB-5 process, we will begin here.

The inclusion of indirect jobs Although many nations have residency or citizenship by investment programs, the US EB-5 program is unique in the requirement that an investor prove new job creation in order to be admitted as a permanent resident. The best regional centers will employ expert staff, including economists, financial analysts, and project managers in order to have the keenest insight into job creation mechanisms and the project as a whole, thus improving the accuracy and veracity of reporting, as well as the likelihood


of meeting and exceeding requirements of both job creation and project quality. As previously mentioned, the ability to include job creation based upon economic modeling is a benefit that is exclusive to the regional center. This effectively increases the qualified job creation by nearly double, while allowing the regional center (and ultimately the immigrant investor) the ability to rely upon the economic model rather than a person-by-person count of created jobs.

Project monitoring and oversight The best regional centers employ staff with experience in project management and analysis to create regular project status reports as well as address in-bound inquiries. These associates apply best practices, including utilising on-site visits, as well as enforcing the contractual requirements for reporting of project updates from developers and other project partners to build detailed and verifiable progress reports. Ideally, the regional center will compile and regularly distribute these reports to investors. This project reporting, including both audited and unaudited financial

“It is critical that each prospective immigrant investor vet each regional center, project and offering they are considering.” information, monthly, quarterly and annual reporting requirements, on-site visits and news monitoring allows the regional center to ensure that the project is compliant with all EB-5 requirements. Having the most current and accurate information at hand can also be applied in the instance of specific client questions or concerns. Without these updates, the investor would find it much more difficult to be fully informed about the performance of the project, and in turn, the status of his or her investment. Here, it is critical that the regional center truly be independent from the project developer. A critical question that every investor must ask is whether the regional center will work for them if something goes wrong. If the developer and regional center are affiliated entities (or under common ownership) the regional center may work only to protect themselves and their ownership.

Preparing documents Qualified, experienced regional centers will bring to bear their significant institutional knowledge of petition submission processes, as well as a keen understanding of the inner workings of the submission and approval systems, to the benefit of their clients. As a regional center builds that experience, practices will become more refined, tailoring

templates and matching expectations, resulting in the highest likelihood of success at petition submission. Many RFE’s (Request for Evidence) or questions from the USCIS seen within the industry could be avoided by preparing a more thorough petition in the first place. An uninvolved or less experienced regional center may claim that the attorney of the immigrant investor should be preparing the petition fully, whereas an experienced regional center will better understand the project and know how to present the NCE and the JCE to the USCIS in a manner more likely to result in an approval. An experienced regional center should strive to work alongside the filing attorney to achieve success for their mutual client. In the instances of questions from regulators, the assistance of a regional center’s experienced personnel, often having been through the process, can be invaluable and lead to quicker and more positive resolutions. Here, the experienced regional center is able to work with the individual’s filing attorney to respond effectively and promptly to any NCE and JCE concerns from the USCIS.

Minimising language barriers/improving communication The best regional centers will employ multi-lingual staff, and when needed provide materials and reports in the preferred language of the client, ensuring communication is clear and comprehensive. Although the English version of all legal documents is the binding document, CMB has the ability to assist clients in over a dozen languages. While developers often enthusiastically support investor engagement, a regional center can provide a single point of contact between the pool of investors, allowing the developer to stay focused on the project without diverting resources. This allows the investors to come to the regional center (in whatever language is most convenient) with whatever questions they may have. When necessary, the regional center personnel can engage the developer to help answer more detailed questions. Further, individuals

wanting to visit the project location can coordinate this effort through the regional center and be minimally impactful on the progress being made at the project.

Conclusion The best regional centers in the EB-5 industry, including CMB, incorporate each of the core characteristics of a quality regional center as outlined above. It is critical that each prospective immigrant investor vet each regional center, project and offering they are considering. Likewise, they must vet and select an appropriate attorney and any other professional service providers they deem necessary. These service providers should be independent of the regional center to ensure that their focus is upon the EB-5 petitioner and no conflict of interest exists. CMB’s founder and CEO, Patrick Hogan, has often extolled the importance of proper due diligence including the need for any potential investor to conduct due diligence on CMB. Mr. Hogan has also stressed the need for all regional centers to provide true transparency to their clients. In an effort to achieve this, CMB submits itself to annual third party audits by the accounting firm BKD. Each of CMB’s EB-5 partnerships are audited and these audits are shared with the limited partners of each partnership. It is Mr. Hogan’s belief that every regional center should invite all prospective clients to conduct meaningful due diligence. It is through this due diligence that a client can increase the likelihood of success in both their immigration pursuit and their investment.

CMB Regional Centers

7819 42nd Street West Rock Island, IL 61201

www.cmbeb5visa.com Citizenship By Investment 81


Key Elements of a Safe EB-5 Project

The Importance of Transparency

While fancy marketing material are attractive, investors need to look beyond the flashy covers to determine whether the project is in fact a safe project to meet the two main goals of an EB-5 investment: 1) 2)

to receive U.S. permanent residency, and to receive a full return of their capital investment as soon as the law permits.

Many EB-5 projects purport to show investors that they expect to create more than the sufficient number of jobs required by USCIS for them to receive their green cards, and that their projects have a high chance of success so they will receive their money back. However, how high are the chances that their purported claims will come into fruition? The following are a few key points to consider when evaluating project safety from an immigration and investment perspective. Sufficient Job Creation Besides looking at whether the job creation projection in the economic report shows adequate job creation to

Manhattan Regional Center (MRC) Since its inception in January 2011, the MRC has been offering attractive real estate investment opportunities in New York City to EB-5 investors across the world. Under the leadership of its Managing Member, Mr. David Marx, MRC and its affiliated companies are staffed by seasoned architects, construction, legal and financing professionals who have successfully completed large-scale projects from inception through operation. Mr. Marx has over 30 years of real estate development experience. His development team has over 60 years combined experience in each aspect of real estate development that span a full spectrum of use, including hospitality, health care, residential, institutional and governmental. 82 Citizenship By Investment

meet the USCIS requirement, investors must look at how the jobs are created. For a construction project, job creation based on construction jobs alone is preferred because this would only require the project to finish construction to meet the job creation requirement. A completion guarantee would increase the likelihood that the construction will be completed, thereby creating the requisite number of the jobs for investors to receive their green cards. Job creation based on operation revenue is less certain, because the success of a business is dependent on factors that the business usually cannot control. Any economic downturn or increased cost in supplies may have a big toll on the business’s revenue. Thus, the more certainty the method of job creation, the more secure the project is in helping investors achieve their permanent green cards. Stage of the Project Investors need to choose projects that will be completed as stated in their business plans. If not, the projects will not likely create the jobs they claim they would and the chances of them receiving a return of their capital will be lower. For real estate projects, investors should verify that the developer owns the land and that the proper zoning and permits have been received. It is also critical for the project to have a healthy capital stack and proper financing in place. If construction has already begun, then investors can be more confident that

the project is real. Thus, it is always important to look for projects that have progressed to a more mature stage, not just in the planning stages where plans may easily change. Value of the Project and Collateral of the EB-5 Loan Whether or not an investor can receive a return of their capital depends largely on the success of the project. For projects using the loan model, this depends on the sufficiency of the collateral. Thus, investors must look carefully at the safety of the investment itself. Look at independent third-party appraisals and consult with trusted financial advisors who are familiar with the type and location of the project. Experience and Integrity of the Developer and Regional Center The people behind the project are the key to evaluate a project’s safety. The principals of the regional center and developer should be honest, reliable and trustworthy people. The project developer should have the expertise to complete the project, and the regional center should have the expertise to oversee that the project is proceeding as planned. Investors need to know that their interests will not be jeopardized by the many variables that can take place during the course of the EB-5 process. As such, both the developer and regional center need to show a commitment in putting investors’ interests first.


About the Author

Transparency throughout the Entire EB-5 Process Honest developers and regional centers should not be afraid to be open and transparent about the entire EB-5 process, especially about the project’s status and the use of investors’ funds. The project should be completed as planned to create the jobs needed to remove conditions from the investors’ conditional green cards. The investors’ funds must be used toward items that count toward job creation, otherwise investors are at risk of losing their green cards. As such, transparency of the project’s progress and the usage of funds are critical in achieving investors’ immigration success. To achieve transparency throughout the project’s progress, project developers should be sending regular progress reports to the investors. If the project is a construction project, then webcams should also be set up to enable investors to monitor the status of construction. Projects should also open its financial statements to let investors know whether the project is profitable, letting investors know whether their investment is safe and assess the likelihood that they will

receive a return of their capital. Financial statements should be audited by independent third-parties to ensure accuracy. Investors’ funds should be carefully monitored by experienced third-party fund and loan administrators and made transparent to the investors. Online portals should be set up for investors to see exactly where the funds are and how their funds are being used at any given time. Conclusion If an EB-5 project includes all the above elements, then the likelihood that its investors will receive their green cards and their money back are usually much higher. Each I-526 petition represents a family’s dreams and plans to immigrate to the United States. When an investor decides to invest in an EB-5 project, they are entrusting their future in that project’s hands. This is a sacred responsibility that project developers and regional center operators need to take very seriously. Every decision they make must be made with the investors’ goals and best interests in mind.

New York Office: 158-13 72nd Ave, Suite 2D, Fresh Meadows, NY 11365 California Office: 4685 MacArthur Court, Suite 330, Newport Beach, CA 92660 +1.212.209.3395 | info@ny-eb5.com | www.ny-eb5.com

Winnie Ng, Esq. currently serves as as the Chief Executive Officer of the Manhattan Regional Center (MRC) and the Chief Counsel of MRC’s associated projects.

Attorney Ng directs the affairs of MRC and works closely with securities and immigration counsels to ensure that MRC and its associated projects are in compliance with EB-5 and securities laws and regulations. Prior to joining MRC, Attorney Ng has provided legal services to hundreds of EB-5 investors in the past, assisting them with their I-526 petitions, consular processing, adjustment of status applications, and/or I-829 removal of condition petitions. She has also counseled many regional centers and project developers in structuring their regional centers and projects for EB-5 compliance. Fluent in English, Cantonese, and Mandarin, Attorney Ng frequently speaks at EB-5 conferences and seminars, and conducts EB-5 trainings in the United States and overseas. She has also authored articles on EB-5 and EB-5 related topics. She is an avid advocate for increased transparency and integrity measures to counter fraud and abuse in the EB-5 industry. Attorney Ng is a member of the State Bar of California, American Bar Association, Orange County Bar Association, American Immigration Lawyers Association, and the J. Reuben Clark Law Society. Citizenship By Investment 83


COUNTRY SPOTLIGHT

QUICK FACTS Capital city: Port Vila Population: 270,402 (Est 2016) GDP growth: 4.2% (Est 2017) Area: 12,189km2 Government: Unitary parliamentary republic President: Tallis Obed Moses Prime Minister: Charlot Salwai Currency: Vanuatu vatu (VUV) Dialling code: 678 HDI: 134th Ease of doing business index: 83rd

VANUATU

T

he Republic of Vanuatu is a South Pacific nation made up of 80 plus islands in an archipelago of volcanic origin that stretches 1,300km, east of northern Australia, southeast of the Solomon Islands, and west of Fiji. The largest towns are the capital Port Vila, on Efate, and Luganville on Espiritu Santo. Multiple waves of colonisers, each speaking a distinct language, migrated to the New Hebrides in the millennia preceding European exploration in the 18th century. This settlement pattern accounts for the complex linguistic diversity found on the archipelago to this day. There are more than 100 local languages – the most widely spoken being Bislama. The British and French, who settled the New Hebrides in the 19th century, agreed in 1906 to an Anglo-French Condominium, which administered the islands until independence in 1980, when the new name of Vanuatu was adopted. Vanuatu’s name is derived from the word vanua (“land” or “home”), and the word tu (“stand”), indicating the independent status of the new nation.

Economy The local economy is primarily based on small-scale agriculture, which provides a 84 Citizenship By Investment

living for about two-thirds of the population. Fishing, offshore financial services, and tourism, with an estimated 111,000 visitors in 2015, are other mainstays of the economy. Australia and New Zealand are the main source of tourists and aid. A small light industry sector caters to the local market. Tax revenues come mainly from import duties and ground rents. Since 2002, the government has stepped up efforts to boost tourism through improved air connections, resort development, and cruise ship facilities. Agriculture, especially livestock farming is the second target for growth. The islands offer scuba diving at coral reefs, underwater caverns and wrecks such as the WWII-era troopship SS President Coolidge. Hiking trails ascend active volcanoes such as Mt. Yasur. Other popular activities include rainforest ecotours, kayaking and deep-sea fishing, plus relaxing at resorts and spas.

Exports include copra, kava, beef, cocoa and timber, and imports include machinery and equipment, foodstuffs and fuels. Agriculture is used for consumption as well as for export and provides a living for 65% of the population.

Politics and government The Vanuatu form of government is quite similar to those of other Commonwealth countries. What makes it different is the French influence. That is probably why the head of state is called president and not governor. Unlike other Pacific states, the colonial government never installed a local government, whether French or British, so what has resulted is designed especially for the needs of Vanuatu. An example of that is the National Council of Chiefs (Malvatumauri), which is elected, and has advisory powers. The President has primarily ceremonial powers and is elected for a 5-year term by a two-thirds majority of an electoral college. This electoral college consists of members of parliament and the presidents of regional councils. The Prime Minister, who is the


head of government, is elected by a majority vote of a three-quarters of parliament. The Prime Minister, in turn, appoints the Council of Ministers, whose number may not exceed a quarter of the number of parliamentary representatives. The Prime Minister and the Council of Ministers constitute the executive Government. The Parliament of Vanuatu is unicameral and has 52 members who are elected by popular vote every four years. The constitution gives complete jurisdiction about constitutional matters to the Supreme Court.

Tax Vanuatu has zero corporate tax, it also has no income tax, no capital gains tax, no estate tax, no wealth tax, no withholding tax, no gift tax and no other personal income taxes. Aside from a locally applied 12.5% VAT, there are almost no taxes at all. With such a taxation regime in place for international companies and offshore companies incorporated in the jurisdiction, Vanuatu can rightly be considered as a ‘tax haven’ – and one of the most attractive in the world from many perspectives. Vanuatu companies will operate tax free in Vanuatu as long as their earnings are accumulated outside of the country – and that includes no income or corporate taxes for both residents and foreigners. Vanuatu registered offshore companies and international companies are prohibited by law from undertaking business in Vanuatu either directly, or on behalf of residents of Vanuatu. International companies and offshore, or exempt companies are simple to incorporate in Vanuatu. Company legislation allows for the formation of flexible business company structures. Offshore companies legislation in Vanuatu makes it possible for only one director and one shareholder to incorporate a company in Vanuatu. Directors can be a corporate body or a natural person. Companies are also exempt from capital and

exchange controls. Accounts must be kept but don’t need to be filed, and there are no auditing requirements. Vanuatu provides excellent offshore banking and banking services to private individuals and corporations. Vanuatu offshore banking centre is very active with numerous banks having received licenses to provide services. Vanuatu has a number of international bank branches and agents providing services to the public. Vanuatu offshore bank accounts pay no taxes on interest earned.

Living Vanuatu is a beautiful remote, tax-free tropical paradise, known not only for its great location and climate, but also as a great place for owning and operating a business.

Life on Vanuatu is far from hectic. For anyone who has visited ‘The Islands’ before – in the South Pacific or elsewhere – the description ‘hectic’ is one of the last words you would use to describe island life. People in the islands, with Vanuatu being no exception, often prefer to relax and take life as it comes. Costs of living are relatively low, but as with any other small island nation, Vanuatu relies on imports, which drives up prices on items that cannot be produced locally. The islands have a very accessible system of banks, internet and mobile networks. This makes it very easy to move to Vanuatu, and yet still maintain a good and active connection with other places in the world. With powdery white sand, clear blue waters and the subtle whisper of palms swaying in the cooling ocean breeze – Vanuatu certainly offers up its fair share of tropical relaxation, though the archipelago isn’t just about beach front repose. Whether you’re seeking an authentic island experience, or an adventurer hoping for a few thrills, Vanuatu ticks a lot of boxes. The local cuisine includes fish, root vegetables such as taro and yams, fruits, and vegetables. Papayas, pineapples, mangoes, plantains, and sweet potatoes are abundant crops throughout much of the year while coconut milk and coconut cream are used to flavour many dishes. Most food is cooked using hot stones or through boiling and steaming. Citizenship By Investment 85


DEVELOPMENT SUPPORT PROGRAM (DSP) In 2017, GKIS was appointed the exclusive partner and distributor of the Development Support Program by Pan Oceanic Limited Vanuatu. Qualified incumbents can be granted citizenship of Vanuatu and travel visa-free or with preferred visa-on-arrival terms to 128 countries. DSP Features The Development Support Program (DSP) was established in 2016 as Vanuatu’s main Citizenship program. DSP replaces the Vanuatu Economic Rehabilitation Program (VERP) and Capital Investment Immigration Plan (CIIP). This highly prestigious nationality and passport program offers visa free and visa-on-arrival travel to 128 countries INCLUDING all of the European Union and most of the rest of the world. The country’s passport is ranked 37 in the world in the latest 2018 ranking index. •D  SP citizenship is full Vanuatu citizenship, not some other class such as “economic citizenship”. • But holders of dual nationality are subject to certain restrictions (see below). • The successful application covers the whole family, including the spouse and 2 children under 18. • For an additional fee, the “family” can also include additional dependants regardless of age. • Residency not required after citizenship has been acquired.

•C  ertified Passports color scan of all applicants (including the spouse and all dependents included in the application. Passport cover + 1st and last 3 pages of the passport). • Certified Identity card color scan of each person included in the application (where issued by the jurisdiction of nationality or residence). • Certified Birth Certificates of all applicants or household register, where available. • Certified Marriage certificate of applicant and spouse, if spouse is included in application. • Curriculum vitae (CV Resume) of applicant. • Notarised police clearance of applicants and dependants age 18 and above. • English medical certificate of applicants.

•N  o taxation except on land, share transfers, VAT on business done locally and import duties on goods imported for local business.

Applicant completes application form set and required supporting documents as described above.

• Applicants should have no less than $250,000 dollars of net personal assets when submitting their application. • Within one month after the application has been granted FIU clearance, the applicant should deposit the full application fee with GK Immigration services Limited (GKIS). • Applicants must submit an original or notarised certificate of no criminal record from the jurisdiction in which he/she has resided during the last 12 months and (if different) the jurisdiction of his/her principal nationality.

Documents Requirements •N  omination Form (including the spouse and all dependents inluded in the application). 86 Citizenship By Investment

• At that meeting or within one week thereafter the applicant, spouse and each dependant will be presented their Certificates of Citizenship and passports. • The above fees do not include ancillary services such as translations, editing, notarization, bank charges, financial service, medical check, legal, accounting and valuation fees, travel and accommodation or other similar outgoings. • The average time for an application to be processed from submission of application to grant is one month.

• 6 high definition passport photos of each person included in the application (40mm x 50mm, white background). • Proof of assets owned by the applicant to a value of more than US$250,000, with 6 months bank statement.

• Applicants must be over the age of 18 when submitting their application.

• Upon final approval by the Citizenship commission, the applicant, spouse and each dependent must attend a meeting in Vanuatu or Hong Kong to swear an Oath/ Affirmation of Allegiance.

• Most recent education proof of dependant children.

• No restrictions on education, background, language, age or business.

Eligibility

received FIU clearance has been rejected by the Commission.

Process

• Provision of KYC documents, application forms and US$2,000 for FIU clearance checks. • Following satisfactory inspection of the documents and completion of any necessary checks, an officer of the Citizenship commission and Immigration Services issues the FIU clearance. • Deposit of full application fee with GKIS in Hong Kong, along with the full application required documents. • The Citizenship Commission’s Screening Committee will then review and submit to the Citizenship Commission for final approval at its next meeting. • The Commission may approve or reject any application in its discretion but, upon refusal, any deposit paid will be refunded in full less Government KYC fee of US$2,000. To date no application that has

MICHAEL TAN Is the Founder and Chief Executive Officer of GK Immigration Services Limited. He specializes in the industries of relocations and investment immigration, having successfully assisted governments established and implemented citizenship by investment programmes in foreign markets. Michael obtained his Bachelors and Masters degrees in Australia and is very familiar with the South Pacific region.


GK Immigration Services Founded by Michael Tan, GK Immigration Services Limited is a Hong Kong company formed for the express purpose of promoting the Development Support Program and the offshore presence of the Republic of Vanuatu. GKIS is a close associate of Vanuatu Registry Services (VRS), Deputy Commissioner of the Vanuatu Financial Services Commission (VFSC). As Deputy Commissioner, VRS is a direct representative of the Government of Vanuatu and is vested with authority to affix and witness the Commission’s official seal to Certificates of Incorporation, Constitutions and Certificates of Incumbency and Good Standing in relation to companies incorporated under the International Companies Act and to designate employees to act as Authorized Officers for the purpose.

For inquiries, please contact: +852 91521 730 ops@panoceanic.vu

MICHAEL TAN Chief Excecutive Officer

DSP Highlights 45 days fast track programme Economical Tax free counrty

www.gkimmigration.com

128 visa free conuties Passport ranked 37 in the world

AZJustice1608 Citizenship Investment 87 Hong Kong • Port Vila •BySingapore


THE MOVEMENT OF THE INVESTMENT MIGRATION INDUSTRY ALONG THE LIFECYCLE CURVE promoters for handling the process seem to be in steady decline. Based on these initial observations, the investment migration industry appears to fall into either the ‘growth’ or the ‘shakeout’ phase. In order to dig a little deeper into the matter, let us review some evolutionary processes relevant to the industry4. Long-run changes in growth generally look favourable for investment migration. Demographics will likely continue to develop in a fashion that increases demand, with more people developing the need or the desire to become ‘global citizens’. There are no real substitutes or complementary products that threaten the industry. And while the penetration of the client base might be a concern in the long run (after all, the usefulness of each additional citizenship or residence diminishes quite significantly), this point probably does not yet apply. by DANIEL HUBER, group head of agent services, Henley & Partners

T

his article intends to give a brief overview of the investment migration industry while also speculating on its future development. The development of any industry over time is subject to industry lifecycle theory1, which attempts to explain the various stages an industry passes through as it ages. Not all industries go through this lifecycle at the same pace; they also do not necessarily go through every phase or through all the phases in an identical order. Nevertheless, industry lifecycle theory is a useful framework to draw on when evaluating a particular industry. On a practical level, each phase in the lifecycle poses certain challenges and offers certain opportunities to industry participants. One of the most popular models within industry lifecycle theory was introduced by Michael Porter in the 1980s2. The following graph gives a basic overview of Porter’s model, showing the relevant key characteristics of each phase. What stage of the above lifecycle is the investment migration industry currently in? Evidently, the industry has not yet reached the ‘mature’ stage. Growth is high, consolidation has thus far not occurred, and the barriers to entry remain low3. The recent trend in the Caribbean of lowering the donation amount required for a citizenship approval is, however, a sign of increasing maturity. Similarly, the prices charged by local agents for submissions and those charged by 88 Citizenship By Investment

Over the years, there have been changes in buyer segments. The industry has clearly moved on from early adopters. The legitimacy of the offer is more widely recognised, particularly in the market for citizenship, and this trend is likely to continue in both the residence and the citizenship spheres, with more countries offering solid programmes. In the past few months alone, Moldova and Montenegro – both small but fast-growing European countries – have launched strong citizenship offerings. Learning by (potential) buyers has an impact here, forcing industry participants, including governments, to offer sensible, reliable solutions. Nevertheless, in countries where internet access is restricted or where clients have limited English language skills,

transparency levels can be problematic, which may prevent customers from properly informing themselves on investment migration matters. In order for the industry to grow in a healthy way, the continued reduction of uncertainty should be a priority. And while the diffusion of proprietary knowledge is certainly progressing, there continues to be a lack of firm, reliable information available. Rumours and hearsay in some outbound countries are widespread, hindering the evolution of the industry, specifically in regions plagued by the issues outlined here. Sometimes a lack of transparency can also be a problem in the inbound country, resulting in public disapproval of the programme in question and in growing skepticism towards the industry as a whole. Innovation in terms of product, marketing, or processes can have a significant influence on the structure of an industry. Being a relatively new industry, investment migration has thus far experienced constant innovation. And yet, while there are similarities among the various programmes in both the residence and the citizenship space, a dominant design marking the shift from the ‘introduction-growth’ phase to the ‘shakeout-mature’ phase has by all accounts still not emerged. The investment migration industry is unique insofar as the actual product is provided by a country and its government. This feature can limit innovation – for example, if there are political factors involved. By contrast, marketing, distribution, and processes are implemented by the private sector. A dominant design is therefore more likely to arise in these areas. Government policy changes can obviously have a major impact on the industry, as became apparent when the Canada programme was

Figure 1: The Industry Lifecycle

Growth Rapidly increasing demand

Mature

Low competition Demand

Introduction Early adaptors

Limited or no growth

Falling prices Fragmentation

Shakeout

High prices

Slowing growth

High risk

Intense competition Declining profitability Time

Fully consolidated High entry barriers

Decline Negative growth Excess capacity High competition


closed in 2014. The long waiting list for EB-5 visas that affects nationals of some countries will likely also lead to meaningful shifts. Finally, the direct regulation of entry into the industry or of competitive practices – at the level of the OECD, for instance – would mean even more drastic internal changes. The last evolutionary process to briefly be reviewed here is entry into and exit out of the industry. Both small start-ups and larger firms from adjacent industries such as accounting and legal services have entered the investment migration market and will in all likelihood continue to do so. Exits are less frequent and usually affect younger companies that have not managed to generate traction. This observation puts the industry somewhere between ‘growth’ and ‘shakeout’ in the industry lifecycle, which is consistent with the other processes analysed so far. Quantitative or statistical evidence is generally sparse in investment migration. Most countries offering citizenship programmes do, however, publish lists of licensed agents. Aiding the investigation into industry concentration, Table 1 below gives an overview of the numbers of agents in important destinations for citizenship-by-investment: that is, destinations where agents are publicly listed and where their details are accessible online. All these agents are approved by the regulatory body of the specific destination to either submit applications to the government (local agents) or promote the programme in the destination (marketing agents), or else, in the cases of Dominica and Malta, to do both. The systems vary slightly from one destination to the next, but they are quite similar overall.

the submission process. Moreover, because the available information for this region is lacking, the number of agents covering the important Cyprus citizenship-by-investment programme is not included. The overall number of companies working in the citizenship sector of the investment migration industry is therefore higher than the number indicated in the table above. Most of these companies are small- to medium-sized, and practically all are held privately. It is thus quite evident that the industry is in a fragmented state with regard to citizenship5. A broad look at the residence sector provides less statistical evidence but gives a very similar impression, in part due to the large number of available options6. How will the industry develop from here, then? In order to progress to a more consolidated state, the key is to overcome the reasons for fragmentation, the most obvious one being low overall barriers to entry. Low barriers to entry alone are usually not a sufficient reason for fragmentation, though. Other relevant causes include a lack of economies of scale, the absence of a significant learning curve, no advantages of size when dealing with buyers and suppliers, diverse product lines, and local factors (control, image, contacts, regulation, and so on). Let us briefly review these causes. Economies of scale would be expected in a global business such as investment migration: for example, in marketing and administration (that is, the processing of applications). Both areas also benefit from progress on the learning curve, which is no doubt even steeper for firms working with governments, where long-term relationships, expert know-how on laws and regulations, and a strong track record are

Table 1: Number of Agents in Selected Destinations

Antiqua and Dominica Grenada Barbuda

St Kitts and Nevis

St Lucia

Malta

Total

Local agent

35 15 54 13 117

Marketing agent

140 34 52 33 259

Local and marketing agent

41

Total agents

41 49 106 46 150 567

175

The total number of companies licensed as agents in these destinations is around 526, because 41 firms have licenses in more than one destination. Five firms hold a license in Malta as well as at least one license in a destination in the Caribbean. These are most likely the firms most focused on investment migration. No statistics are available or can be calculated for the distribution of cases and applications among these agents. For the majority, investment migration is only one aspect of their broader business operations. Many agents are lawyers providing a number of other services; some are real estate, trust, or other professional services firms. A significant number of companies not covered by this table still operate in connection with these programmes, mostly in the field of marketing and promotion. Such companies typically work together with local agents for

150

19

required. The size of the firm should also have an impact when dealing with clients. A large firm offers more security: it can provide a wider range of programmes and solutions, and it also should be able to offer better conditions (or capture higher margins), because it has more power in negotiations with real estate developers, for instance, or with local agents regarding submission fees. Product lines in the industry are indeed diverse. With more countries continually adding offers, particular in the residence space, this diversity is set to continue to increase. It is unlikely, therefore, that consolidation will occur across the full product range. At the same time, as standardisation increases, more and more countries will offer ‘programmes’ in the narrow sense of the word, with little further differentiation possible. That, in turn, will make consolidation more probable.

Local factors such as image and contacts are key in the distribution segment of the investment migration industry. Weakness in these areas can put large firms at a disadvantage, but probably not to the extent that progress in the life cycle would be hindered. The requisite local control in terms of the management supervision of operations and the setting of the right incentives can also be achieved by a larger firm with proper leadership and managerial instruments in place. Whether local regulation contributes to fragmentation in the industry or promotes consolidation remains an interesting question. China, for example, has licensing requirements for agents distributing programmes. But China is still, in every aspect, a highly fragmented investment migration market. In many markets, smaller agents often simply ignore local regulations or even rather basic compliance standards, whereas bigger firms cannot afford this type of behaviour. Considering the nature of the industry, it would make sense for the major market participants (including the ‘producers’, which is to say governments or countries) to push for and agree on stringent global regulation. Such a push would – and probably will – be a major driver of consolidation and of further movement along the industry lifecycle curve. “Overcoming fragmentation can be a very significant strategic opportunity,” according to Porter. In the distribution sector of the investment migration industry, this opportunity certainly exists. Naturally, there are obstacles, including the low barriers to entry still in place, but these obstacles can be overcome if economies of scale are created – for example, through the use of technology for processing or even across the entire value chain. It will be interesting to see how these developments play out in the coming months and years. 1. For a deeper explanation and an overview of the literature, see Mirva Peltoniemi, ‘Reviewing Industry Life-Cycle Theory: Avenues for Future Research’, International Journal of Management Reviews 13, no. 1 (2011): 349–375. 2. Michael E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors (New York: Free Press, 1980), 157. 3. Cf. Ralph Dahinden, ‘Welcome to the Jungle: Dealing with the Investment Migration Industry’s Bad Apples’, Investment Migration Insider, 2 August 2017, https://imidaily.com/opinion/ welcome-to-the-jungle-dealing-with-theinvestment-migration-industrys-bad-apples-byralph-dahinden/. 4. Porter, 163–184. 5. Ibid., 191. 6. See, for example, Christian H. Kälin, Global Residence and Citizenship Handbook (Zurich: Ideos, 2016), or for a recent typology of programmes in the EU, see Jelena Džankić, ‘Immigrant Investor Programmes in the European Union (EU)’, Journal of Contemporary European Studies 26, no. 1 (2018): 64–80. Citizenship By Investment 89


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www.events.citizenshipinvestment.org 92 Citizenship By Investment

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