Page 1

US immigration and investment special edition

Issue 16

Summer 2018 Inside This Issue Features The growing EU market for expat residency regimes Advantages and perils of investing in the UK Updated rules around due diligence

City Focus London

Country Spotlights Antigua and Barbuda Canada Cyprus The Commonwealth of Dominica Grenada Liechtenstein Malta Portugal St Kitts & Nevis St Lucia UK USA

www.citizenshipinvestment.org


2

Citizenship By Investment


CONTENTS Summer 2018 City focus London ...................................................................................................................................................................................................................................... 06

Features Growing pains: meeting the demands of an expanding industry ..................... 08 Invest. Grow. Prosper: The new investment opportunities in St Kitts and Nevis ................................................... 10 Global mobility and taxation....................................................................................................................................................... 12 Robust due diligence for citizenship by investment in the EU............................... 14 Advantages and perils of investor and entrepreneur routes to Britain ......................20 The grass really is greener: The growing EU market for expat residency regimes ............................................................... 23 The shifting nationality landscape .................................................................................................................................... 26 How highly do you value your freedoms?: Cyprus Investment Scheme - your gateway into the UK .................................................... 30 Obtaining a second passport........................................................................................................................................................ 50 The Invisible Wall is already up and running!.......................................................................................... 84

Country spotlights Antigua and Barbuda .................................................................................................................................................................................. 34

Publisher’s note:

SAM HUSSAIN

W

elcome to the summer edition of Citizenship by Investment – your resource for citizenship and residency options. If you’re reading this in London, we also welcome you to the Global Investment Immigration Summit 2018 – East Wintergarden, London, the leading trade and invest migration event (Thursday 21st to Friday 22nd June). We are honoured to announce the Hon. Gaston Browne, Prime Minister of Antigua and Barbuda, as our keynote speaker. Other top industry figures will discuss hot topics including: the impact Brexit will have on the right to live in Europe and travel across the EU; the role blockchain and cryptocurrencies are having, and will play, in the investment immigration industry; and our speakers will advise on how to start a business in the USA – global mobility, tax regimes and planning techniques. If you’ve missed out or can’t make it to London, or 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.

Sponsored by

Canada ....................................................................................................................................................................................................................................... 40 Cyprus ........................................................................................................................................................................................................................................ 42 The Commonwealth of Dominica ..................................................................................................................................... 48 Grenada ................................................................................................................................................................................................................................... 52 Liechtenstein ................................................................................................................................................................................................................. 54 Malta .............................................................................................................................................................................................................................................. 58 Portugal ................................................................................................................................................................................................................................... 66 St Kitts ........................................................................................................................................................................................................................................ 70 St Lucia...................................................................................................................................................................................................................................... 72 UK ...................................................................................................................................................................................................................................................... 74 USA.................................................................................................................................................................................................................................................. 78 BLS Media are contract publishers of high quality media for prestigious organisations, event organisers, governments and trade associations both in the United Kingdom and internationally. Our experienced publishing team will develop your publication from initial concept through to completion. Our services include: creative design, PR, advertising sales, sales training, editorial and distribution. Published by BLS Media Ltd, info@blsmedia.co.uk www.blsmedia.co.uk Unit 5, ‘Hiltongrove N1’, 14 Southgate Road London N1 3LY

Whilst every care has been taken in compiling this publication and the statements contained herein are believed to be correct, the publishers and the promoters will not accept responsibility for any inaccuracies. Reproduction of any part of this publication without permission is strictly forbidden. BLS Media make no recommendation in respect of any of the advertisers and no recommendation may be implied by way of the presence of their advertisements. Advertising: For advertising enquiries in future editions of contact Sam Hussain info@blsmedia.co.uk | www.blsmedia.co.uk

Especially for this edition, CS Global Partners looks at new investment opportunities in St Kitts and Nevis, and also the demands that come with an expanding industry. Jonathan Cardona, CEO of the Malta Individual Investor Programme Agency, shares his thoughts on best practice in the investment migration industry and the lessons that can be drawn from the experience of Malta. Mishcon de Reya LLP also consider the effect Brexit will have on investment migration into the UK. Also in this edition, James Quarmby of Stephenson Harwood LLP explores the growing EU market for expat residency regimes, and Jenny Tryfonos, citizenship and residency advisor from Astons, asks how highly do you value your freedoms in relation to the Cyprus Investment Scheme? 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

3


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, and for this edition we’ve included an expanded number of articles dealing with US immigration (pages 78 to 97), for those especially interested in the various, popular American investor schemes. American experts offer their views. From CMB Regional Centers, Kyler James and Boris Rubbani discuss the importance of due diligence when selecting a regional center; Marta Drozd Czernecka from Driftwood Acquisitions & Development, L.P., knows the smart way to invest in

4

Citizenship By Investment

US hotels; Stephen Strnisha of Cleveland International Fund advises on short term EB-5 extensions; Mona Shah and Associates Global answers your EB-5 FAQs. Also, ahead of any physical wall, Jinhee Wilde argues the case that an invisible wall is already up and running. Elsewhere in our Summer issue Marco Gantenbein from Henley & Partners Middle East reviews some of the main conclusions of the third edition of the Kochenov Quality of Nationality Index (QNI) in ‘The shifting nationality landscape’. We have statistics from Investment Migration Insider, which reveal the preponderance of Chinese immigrants in the worldwide figures. The increasingly relevant subject of due diligence is explored from different aspects by both

Don Eales and by Jonathan Cardona, of the Malta Individual Investor Programme Agency. With Brexit looming, the theme and its impacts on citizenship and investment is again covered, this time by Mishcon de Reya LLP. Prashant Ajmera looks at ten of the best Canadian business immigration programmes offered under the Provincial Nominee Business Immigration Program (PNP). In addition, James Quarmby of Stephenson Harwood LLP argues the case that the grass really is greener when it comes to expat residency schemes. We hope you find this Summer 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.


Purveyors of Publishing Excellence BLS Media is an innovative, progressive and creative media company with traditional attention to detail, led by experienced professionals. The EB-5 Gateway covers many different topics related to trade and investment in the US. This unique publication presents information regarding the EB-5 program that caters to a Middle-Eastern, North-African and Persian Gulf readership, giving advertisers an opportunity to reach this largely untouched market. CBI is an ultimate guide for Arab HNWIs looking to invest for residency/citizenship purposes. With an editorial focus on finance and investment, real estate, issues that face HNWIs 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.

BLS Media Unit 5, Hiltongrove N1

+44 (0) 20 7241 1589

14 Southgate Rd

+44 (0) 871 314 0213

London N1 3LY

info@blsmedia.co.uk

www.blsmedia.co.uk

Citizenship By Investment

5


CITY FOCUS: LONDON by DON EALES

Britons want dual citizenship after leaving EU, in a recent survey conducted by CS Global Partners. LondonIsOpen is a major campaign – launched by the Mayor, Sadiq Khan – to show that London is united and open for business, and to the world, following the EU referendum.

L

ondon is the capital of the United Kingdom, standing on the banks of the River Thames, which flows majestically through half of the country. The city had a shaky start, founded by the Romans as Londinium, burnt to the ground 50 years later by Boudica (famous Queen of the Celtic Iceni tribe), rebuilt and then abandoned after the withdrawal of the Roman legions. London is not only an economic hub for the United Kingdom, but also for Europe as well as being a major financial hub worldwide. Historically it was split between the counties of Essex, Surrey, Middlesex, Kent and Hertfordshire, which today largely make up Greater London, a region governed by the Mayor of London and the London Assembly. With Britain at the vanguard of the Industrial Revolution from the late eighteenth century, London rapidly expanded to become the leading metropolis in music, fashion, finance, arts, commerce, education, entertainment, healthcare, media, research and development, tourism, transportation and professional services. The capital is the world’s largest financial centre and has the fifth- or sixth-largest metropolitan area by GDP in the world. London is one of the most visited cities measured by international arrivals, and it has the largest city airport system measured by passenger traffic. It is also popular for international students, as there are 103,000 international students living and learning in the city today. In 2012, London became the first city to have hosted the modern Summer Olympic Games three times.

and accounting for 13.4% of the UK population. London’s urban area is the second most populous in the EU, after Paris, with 9,787,426 inhabitants at the 2011 census. The city’s metropolitan area is the most populous in the EU with 14,040,163 inhabitants in 2016, while the Greater London Authority states the population of the city-region (covering a large part of the south east) as 22.7 million. London was the world’s most populous city from around 1831 to 1925. The city has four World Heritage Sites: the Tower of London; Kew Gardens; the site comprising the Palace of Westminster, Westminster Abbey, and St Margaret’s Church; and the historic settlement of Greenwich (in which the Royal Observatory, Greenwich defines the Prime Meridian, 0° longitude, and GMT). Other landmarks include Buckingham Palace, the London Eye, Piccadilly Circus, St Paul’s Cathedral, Tower Bridge, Trafalgar Square, The Queen Elizabeth Park and The Shard. Numerous museums, libraries, galleries, sporting events and other cultural institutions take place in London, including the British Museum, British Library, National Gallery, Natural History Museum, Tate Modern and an array of superb West End theatres.

There are a diverse range of people and cultures and in the capital there are more than 300 languages spoken. A truly multicultural place.

The London Underground is the oldest underground railway network in the world and the more recent Overground network has joined it to encompass more of the city.

It is estimated that the mid-2016 municipal population (corresponding to Greater London) was 8,787,892, the largest of any city in the European Union

London, UK the perfect time and location, as millions of EU citizens who currently live in the UK – and the British people living in Europe, face uncertainly. 89% of

6

Citizenship By Investment

It’s intended to show the world that London continues to follow its traditions and remains entrepreneurial, international and full of creativity and possibility. It reassures the more than one million foreign nationals who live in London that they will always be welcome, and that any form of discrimination will not be tolerated. London is presented as the best city in the world. It is entrepreneurial, international and outward looking. The key ingredient of the city’s success has been the flow of brilliant ideas and talent from across the globe. The city is comfortable in its diversity, proud of its history and optimistic about its future. Sadiq is urging all Londoners, organisations and businesses to show their support for the #LondonIsOpen message via social media and other creative ways. He states; “We don’t simply tolerate each other’s differences, we celebrate them. Many people from all over the globe live and work here, contributing to every aspect of life in our city. We now need to make sure that people across London, and the globe, hear that #LondonIsOpen. I urge everyone to get involved with this simple but powerful campaign to send a positive message to the world”.


“We don’t simply tolerate each other’s differences, we celebrate them. Many people from all over the globe live and work here, contributing to every aspect of life in our city. We now need to make sure that people across London, and the globe, hear that #LondonIsOpen. I urge everyone to get involved with this simple but powerful campaign to send a positive message to the world”.

Citizenship By Investment

7


by MICHA-ROSE EMMETT CEO, CS Global Partners

GROWING PAINS: MEETING THE DEMANDS OF AN EXPANDING INDUSTRY

8

Citizenship By Investment

T

he appetite to achieve a second citizenship grows year-on-year. It’s an exciting time to be in an industry shifting and expanding to meet the needs of the market. But with an increased number of countries and clients poised to enter the investor immigration scene, a great responsibility comes with it to ensure that frameworks remain robust and attuned to side-step those looking to breach the system. Earlier this year, the OECD (Organisation for


Economic Co-operation and Development), a forum to promote sound economic policies worldwide, released a consultation document entitled Preventing Abuse of Residence by Investment Schemes to Circumvent the CRS*, relating to the suspected misuse of residency by investment (RBI) and citizenship by investment (CBI) programmes as a means of tax avoidance. The OECD invited stakeholders from the industry to comment and share their views to find mechanisms to mitigate potential abuse. The consultation document, derived from suspicions that the investor immigration industry was being used by those wishing to circumvent the system, raises two very important elements to be considered in the context of an expanding environment: how we define the products offered and future regulatory demands. Though the title of the report directs the OECD’s response initially and predominantly at residency by investment schemes, there were numerous occasions where the consultation document defined citizenship by investment under the same banner, and this presents a problem in rectifying the suspected transgression. A number of key factors separate CBI and RBI within the broader investor immigration scene: • Direct citizenship by investment programmes offer citizenship only. Programmes such as Dominica and St Kitts and Nevis do not provide a residency status, and no certificate of tax residence is issued to economic citizens upon receipt of citizenship. • Persons cannot falsely claim to be a tax resident because the citizenship alone cannot determine an individual’s residency status. • Direct CBI programmes provide only a certificate of naturalisation. Any application to request a passport, or other official documentation related to identity, occurs after the respective government department (i.e. the citizenship by investment unit) grants the citizenship. • An economic citizen’s place of birth is declared on their new passport. There is no attempt to conceal any information – thereby minimising the risk in aiding or abetting nefarious characters who intend to commit tax evasion or identity fraud. • Residency by investment programmes may provide certificates of

Due diligence from all stakeholders is paramount, not just when it comes to granting citizenship or residency, but in the execution of CRS policies as well. residency or ID cards even if a resident does not actually have a physical presence in the jurisdiction where the residency has been granted.

Growth and evolution Transparency and education can play a positive role in the OECD ratifying this issue. Separating CBI and RBI allows regulations to be implemented fairly and consistently, to meet the demands of this developing industry. Due diligence from all stakeholders is paramount, not just when it comes to granting citizenship or residency, but in the execution of CRS policies as well. This is just one example of how the industry will be implicated as it grows and evolves. It invites the question, what future considerations may we have in this growing industry? Technology is certainly one important consideration. At the time of writing, reports of a new cryptocurrency ‘citizenship coin’ had been announced, which unlocks a new set of complications for the industry. While innovation in the industry should certainly be applauded, regulatory frameworks must be considered in light of its rapid growth. How will a ‘citizenship coin’ adhere to the strict anti-money laundering policies governing these CBI programmes? And what role will CRS play in respect of the reporting requirements of clients who decide to use cryptocurrency?

equality. A look at the gender pay gap in the United Kingdom financial services sector revealed that on average, men are paid 24% more than women. The disparity in equality was made evident when 10,000 of the nation’s largest firms were called to submit pay gap information to the UK’s Office for National Statistics. This is just one of many disproportionate statistics that demonstrate the timeliness of addressing gender equality in the investor immigration sector. Indeed, lifestyle magazine of the industry, Belong, launched a survey** inviting comment from the industry. As countries look to adopt immigration programmes to stimulate their economies, so too will clients follow. And, this will only increase the appetite for professionals to become engaged. The industry is poised for new and innovative developments, and we must look to best practice within the industry, and that of the broader financial sector, to ensure frameworks are robust enough to cope with the increased demand. * The Common Reporting Standard (CRS) is a system of information exchange between nations, enabling financial institutions such as banks to automatically share details of users to combat tax evasion. CRS is part of the OECD’s framework, and was first approved for execution on request from the G20 Summit in 2014. ** It can still be completed via the link www.surveymonkey.co.uk/r/ womensurveybelong.

These issues arising from the industry ’s evolution call into question broader periphery topics relevant to any growth sector. Among them is diversity of representation. Contextually, the investor immigration scene sits within the broader financial sector, which has recently been subject to some criticism regarding gender

Citizenship By Investment

9


INVEST. GROW. PROSPER: THE NEW INVESTMENT OPPORTUNITIES IN ST KITTS AND NEVIS by CS GLOBAL PARTNERS

I

n 1984, St Kitts and Nevis became the first nation-state to authorise citizenship to those willing and able to contribute to its economy. More than three decades later, the twin-island Federation remains at the forefront of the economic citizenship industry, with a Citizenship by Investment Programme that is today widely recognised as the Platinum Standard. Driving St Kitts and Nevis’ success is its commitment to innovating in a shifting market, while preserving a strong focus on due diligence, and the highest quality of service. Early 2018 has demonstrated why the St Kitts and Nevis Citizenship by Investment Programme (CBI) continues to be a pacesetter in the industry, with a number of constructive changes to the Programme. The CBI’s temporary funding module, the Hurricane Relief Fund (HRF), drew to a close, which delivered economic stimulation against a particularly difficult hurricane season in 2017. The Prime Minister of

10 Citizenship By Investment

St Kitts and Nevis, Dr the Honourable Timothy Harris, said the HRF had “exceeded all expectations”, attracting worldwide investment that would secure the twin-island nation’s future. Prime Minister Harris signalled the closure of the HRF with the announcement of the Sustainable Growth Fund (SGF) – a new ongoing investment pathway to achieve second citizenship through the CBI. Made available from 1 April 2018, the fund will provide a permanent alternative to the long-standing Sugar Industry Diversification Foundation (SIDF) contribution model, in existence since 2006. The Sustainable Growth Fund is representative of a nation that is future-conscious, forward-thinking, and finding ways to stimulate the economy in a strong, and yet consistent, manner. Moving beyond the need to diversify from the sugar industry, the SGF is symbolic of the nation taking great strides to achieve prosperity. The SGF presents a lower minimum contribution to achieve second citizenship,

and simplifies the costs for each family member included in the application. The investment threshold for a main applicant is US$150,000, the threshold for a spouse is US$25,000, and the threshold for any other family member is US$10,000. Therefore, a typical family of four, composed of a main applicant, a spouse, and two children, is required to contribute a total of US$195,000. The contribution of US$10,000 per dependent (excluding the spouse) is a welcome change to larger families, who can affordably include additional children or parents of the main applicant and spouse who fulfil the requirements. The SGF path to second citizenship offers all the same quality assurance for which the St Kitts and Nevis Citizenship by Investment Programme is known. For example, investors will still be able to apply to the Accelerated Application Process (AAP) – a unique feature of the CBI that guarantees the processing of an application in 60 days or under (including the issuing of a passport). The strict vetting procedures, which earned the Programme


the perfect score for due diligence in the Financial Times’ PWM publication, will be maintained with the same simple and efficient process. While prospective applicants are unlocking their future of greater stability, the economic stimulation received from the SGF will provide St Kitts and Nevis with equalled opportunities to thrive. The Sustainable Growth Fund will focus on stimulating the areas of education, health and infrastructure, mitigate the effects of climate change, support economic growth, and promote, preserve, protect and develop the culture and heritage of the nation. Simultaneously to introducing the SGF, the Government also unveiled a new option for real estate investors. Before April 2018, applicants for citizenship of St Kitts and Nevis wanting to purchase property were required to single-handedly invest US$400,000, plus pay any applicable taxes. A further requirement was to hold that

property for a minimum of five years. Real estate investors now have the alternative option to invest into a share scheme paying a minimum of US$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. Early 2018 bore witness to a Federation determined to retain its legacy in the citizenship by investment industry, providing discerning applicants with new investment opportunities in the quest to achieve second citizenship. Investor immigration is growing and evolving, and globally, it moves quickly to adapt to the demands of the international market. That may bring with it some unpredictability, but one thing is certain: St Kitts and Nevis has been evolving their Citizenship by Investment Programme since 1984, and they will continue to make improvements in the quest to ensure the twin-island nation’s prosperity.

“While prospective applicants are unlocking their future of greater stability, the economic stimulation received from the SGF will provide St Kitts and Nevis with equalled opportunities to thrive.” Citizenship By Investment 11


GLOBAL MOBILITY AND TAXATION by DON EALES

G

lobal mobility is very desirable and its benefits are numerous, particularly having a dual nationality with visa-free passports for all your family and improved educational opportunities – but this article focuses on one of the core benefits, which is improved taxation. The following considerations need to be addressed from the very beginning:

• Prepare income tax returns • Ensure compliance with tax laws in countries around the world • Deliver tax planning for the reporting of equity awards • Establish compensation reporting procedures and tax withholding requirements for assignment allowances and benefits

• Review the most tax-efficient delivery of benefits globally

• Promote best practices to implement shadow payroll internationally

• Review the best fit for the company and its employees

• Apply for a Certificate of Coverage to minimise social security tax obligations

• Create and update the country tax policy • Implement and support the tax reimbursement policy

• Minimise global income tax and report requirements by taking advantage of treaty positions designed to reduce double taxation.

• Conduct pre-departure/post arrival consultations

Providing effective tax advice requires an understanding of global tax laws and how

12 Citizenship By Investment

to apply them in each jurisdiction and it is advisable to use senior professionals who have experience working in both corporate organisations as well as large public accounting firms. This blend of experience allows collaboration and provides advice that is both technically sound and ready to implement in your organisation.

Developments in the USA The Internal Revenue Service (IRS) in America recently announced that it will begin to ramp down the 2014 Offshore Voluntary Disclosure Program (OVDP) and close the programme on 28 September 2018. By alerting taxpayers now, the IRS intends that any US taxpayers with undisclosed foreign financial assets have time to use the OVDP before the programme closes. Since the OVDP’s initial launch in 2009, more than 56,000 taxpayers have used one of the programmes to comply voluntarily. All told, those taxpayers paid a total of $11.1 billion in back taxes, interest and penalties.


The planned end of the current OVDP also reflects advances in third-party reporting and increased awareness of US taxpayers of their offshore tax and reporting obligations.

to meet the increasing demands of a broad range of internal and external stakeholders in supplying information about (tax) compliance.

The number of taxpayer disclosures under the OVDP peaked in 2011, when about 18,000 people came forward. The number steadily declined through the years, falling to only 600 disclosures in 2017.

A control framework structured around people, processes and data can support the management of global mobility and the related (tax) compliance on both an operational and a strategic level, and can contribute to their strategic agenda.

The current OVDP began in 2014 and is a modified version of the OVDP launched in 2012, which followed voluntary programmes offered in 2011 and 2009. These programmes have enabled US taxpayers to voluntarily resolve past non-compliance related to unreported foreign financial assets and failure to file foreign information returns. Whether a person has global mobility or not, it is imperative not to violate tax laws and to declare offshore assets and undisclosed foreign accounts to avoid a tax enforcement investigation. This is a high priority for tax regimes worldwide, not just in America. Another example from America is the implementation of the Foreign Account Tax Compliance Act (FATCA) and the ongoing efforts of the IRS and the Department of Justice to ensure compliance by those with domestic and foreign US tax obligations. This has raised awareness of US tax and information reporting obligations with respect to undisclosed foreign financial assets. Because the circumstances of taxpayers with foreign financial assets vary widely, the IRS will continue offering options for addressing previous failures to comply with US tax and information laws, and return obligations with respect to those assets.

Global Mobility Survey Recently, 86 professionals from multinational organisations across the world, who were involved in managing or leading global mobility programmes, were polled. Participants were invited to take part in a joint research project conducted by the RES Forum and PwC. This research aimed to obtain an insight into the nature and scope of the involvement of global mobility departments in managing (tax) compliance with respect to international employment mobility, and whether global mobility functions are leveraging their capabilities on a strategic level to achieve their business objectives. The survey was carried out in July and August 2015. The participants brought together a representative cross-section of business types, sizes and global headquarter locations. They confirmed that tax compliance with respect to international employment mobility is of significant importance to global mobility departments today. Global mobility functions can be organised

Survey participants were also asked a series of questions relating both directly and indirectly to the building blocks of the Tax Management Maturity Model that was developed by PwC, which aims to lead organisations in a practical way to establish a Tax Control Framework (TCF). Strategic alignment is highly valuable in supporting longer term objectives and operational goals. It is normally well accepted in firms that the global mobility function’s exposure to risk is high and therefore risk management activities related to global mobility are crucial. The benefits of being in control of global mobility (tax) compliance from an operational to a strategic level will allow organisations to connect operational outputs to strategic goals. Linking global mobility with other internal stakeholders, e.g. HR, finance, risk and the wider tax function, can be the stepping stone to implementing global mobility data management in an effective and holistic framework and as such can connect the interdependencies between the different functions. This in turn allows global mobility teams, and professionals, to support the wider organisation in achieving its strategic objectives. The business environment, and therefore organisations, is undergoing rapid change and the international mobility of employees has become fundamental to the delivery of strategic business objectives. This can be attributed to talent management being increasingly important on the strategic HR agenda and cross border employment rapidly increasing in volume in new and varied forms. And yet, whilst the international mobility of employees can be an enabler of an organisation’s strategic business objectives, it can also be perceived as an inhibiter in achieving the same strategic goals. Understanding the impact of cross border employment and how this relates to HR objectives and (tax) compliance aspirations, as well as the timely involvement of global mobility teams are all critical in supporting the achievement of the overall strategic business objectives. This continues to be a challenge for both the business and global mobility. It is clear that the global mobility function still has some way to go in terms of influencing the HR agenda, never mind the business agenda. Only 35% of global

mobility teams are involved in the creation of the people strategy. Respondents cite that their engagement with the business is often through the HR function – as a filter is effectively applied, their impact is limited and their value not fully leveraged. It is only possible to identify an area of risk once all of the moving parts and components of the global mobility process are understood. In order to stay on track and add value (not only as an HR mobility expert but also in providing expertise on compliance requirements) the global mobility team has to be fluent in the key risks for global mobility (tax) compliance. To identify key risks it is essential that compliance processes are firmly embedded in the company and used in practice. Once the foundations of the processes have been bedded in, the next step is to prioritise key risks based on a variety of factors such as what is currently happening in the organisation, volume of moves, what new territories are being entered and (tax) compliance regulations, amongst other factors. The key risks listed by respondents seem predominantly of an operational nature due to a lack of alignment of global mobility with the strategic objectives of the organisation. Automated data collection, via HRIS systems for example, was not then widespread. However respondents noted that these systems were becoming increasingly prominent in the process for collecting the compensation data for globally mobile employees. More than 40% of firms did not have a formalised procedure to assess how complete and correct global compensation data collected actually was. Regarding the UK and Brexit and the current uncertainty over tax issues, they will probably not be resolved until the final criteria have been established but preparations need to be made for the movement of key personnel into and out of the region. Since the UK’s vote to leave the EU on 23 June 2016, one of the key areas for employers with internationally mobile workers has been immigration. Another area which may also have a significant impact on employers with a globally mobile workforce are the EU social security regulations. Under current EU regulations, where an employee meets the necessary conditions as a posted or multi state worker, it is often possible for the employee to remain in their home country social security system with their existing tax conditions. This allows the employee to maintain an unbroken social security record in their home country. However, the prospect of a ‘hard Brexit’ throws doubt as to whether this system will continue for internationally mobile workers, which could mean changes are required to employers’ policies and processes and possible additional social security costs and taxation. Citizenship By Investment 13


ROBUST DUE DILIGENCE FOR CITIZENSHIP BY INVESTMENT IN THE EUROPEAN UNION by JONATHAN CARDONA

CEO of the Malta Individual Investor Programme Agency

I

n an ever-changing world, a one which is becoming more volatile both politically and economically, successful individuals seek opportunities to stay ahead. Several strategies are utilised. Some are increasingly resorting to investment migration as a way of improving their way of living or expanding their business interests. Affluent individuals are looking at citizenship by investment (CBI) options as a means of securing their future. This is a subject that attracts a fair share of passionate discussion. Some people accept it, some simply despise the concept of citizenship by investment. All in all it has put countries offering such programmes into the spotlight, with strong calls from stakeholders for stringent due diligent processes; often the result of misconceptions or lack of knowledge about the industry. The reality is somewhat different; Citizenship-by-Investment Units (CIUs) employ very thorough and unparalleled due diligence systems which are often looked-up to by their peers in the financial services industries. The benefits of the robust due diligence processes adopted by CIUs go beyond the investment migration industry. In this article we will try to address three issues, which intertwine with each other. First, how CIUs could be providing an essential service to jurisdictions, through their work in due diligence. Second, how sharing of information across Citizenshipby-Investment Units could help to combat financial crime, money laundering and financing of terrorism. Thirdly, we will explore how distributed ledger technology (DLT) could be used to achieve such an information sharing platform, which potentially could revolutionise the due diligence process within the CBI industry and beyond.

Why CBI due diligence is a good thing Professionals within the industry know very well that CIUs conduct very stringent due diligence. The application processing time and documentation required for each application are usually very good indicators of the rigorousness of the due diligence for a particular CBI programme. 14 Citizenship By Investment

These attributes are usually good indicators of the rigorousness of the due diligence for a particular CBI programme. To use an example, Malta conducts what has been termed as the ‘gold-standard’ of due diligence processes in the industry. Our CIU goes to a serious level of detail on a number of aspects of an applicant including identity and verification, business and corporate affiliations, PEP status and sanctions/watch-lists, sources of funds and wealth, reputation and adverse media, legal and regulatory issues and also the impact that an applicant has on their immediate network and society in general. This level of in-depth analysis is only possible because the Malta CIU has access to the required resources and support to be able to conduct such stringent due diligence, including, the required monetary budget, the human resource, the network of service providers, the techniques and the insight gained through four years of intense scrutiny from a number of bodies, including international media. Like all other operators, the Malta Individual Investor Programme Agency (MIIPA) carries a lot of responsibility on its shoulders to make sure that only reputable individuals are granted passport rights to Malta and the EU for the sake of the other citizens. This contrasts sharply with the way nearly a million individuals EU wide annually receive citizenship through naturalisation. The scale of such exercise is potentially too large to allow for the same level of due diligence conducted by the Maltese CIU on its applicants. The resources required to conduct the same level of due diligence as the Malta CBI programme,

make this undertaking an almost impossible task. Malta, was able to adopt this approach, because the number of applications it processes in a year – circa 300 – is but a fraction of what the rest of the 27 member states are processing in terms of non-CBI naturalisations. This leads to the conclusion that Malta and other CIUs who have adopted a stringent due diligence process are in fact providing a service to the European Union; that of thoroughly screening a small percentage of individuals being naturalised as EU citizens. Arguably, one could state that the reason why such due diligence is required is because CBI applicants carry a high risk. However this is not a strong enough argument because the risk does not go away if the same individual acquires citizenship through other channels. There is only one way to identify and manage risks posed by non-EU citizens, which is through stringent due diligence; and the best positioned units to provide this are CIUs.

Sharing of information is also a good thing What should a CIU do once all of that information about a high-net-worth individual (HNWI), or ultra-high-net-worth individual (UHNWI) is obtained? If this was an FIU, the obvious answer would be; share the information. This is what the Egmont Group is synonymous with; international co-operation.


Sharing of information by FIUs is a great thing to have because it helps member states to collaborate and fight against terrorism and financial crimes. Thus far, sharing of information on rejected applications between CIUs has not yet taken a legal format. Not even sharing of information on who got accepted. Malta is on the front on this matter because it is one of the few countries that publishes a list of individuals who have acquired citizenship, which includes the individuals who acquired citizenship through its CBI programme. There is ample criticism on this practice; some say that this puts those people at risk, others say that the state should provide even more information such as country of origin. Regardless of what should happen, Malta once again stands out by being consistent with the notion that in fighting money laundering and financing of terrorism, sharing information is crucial.

So should CIUs share information about the applicants they are processing? With an adequately secure and transparent platform, we believe that the answer is yes. Obviously the necessary legislation should be in place to ensure that data protection provisions are well taken care of and adhered to.

Distributed Data-As-A-Service (DDaaS) through Blockchain In October 2017, OCBC Bank, HSBC, Mitsubishi UFJ Financial Group (MUFG) and the Infocomm Media Development Authority (IMDA) issued a joint press release stating that they have developed and tested a KYC blockchain. Estonia, has the concept of verified digital identities. This concept should be taken a step further and use Distributed Ledger Technology (DLT) for digital due diligence. If nations, upload digital versions of documents such as birth certificates, passports, police conducts and medical reports, amongst others, onto a blockchain controlled by the individual, then this would allow that same individual to fully control a portfolio of verified documents, which in an instant could be shared with another entity such as a bank, an insurer, a stock broker or as in our case, a CIU, to enable a due diligence process to become faster, less cumbersome as potentially, information could be exchanged almost in real time. In such a scenario, an individual would have control at the micro level, disclosing only information relevant to the CIU, whilst the CIU knowing that the information it is receiving originates directly from the issuing entity, rather than having copies which then need to be certified, and apostilled accordingly. The security that is synonymous with blockchain is also an extremely

welcome advantage to this, as opposed to a printed piece of paper, which needs to be stored in some dusty recess for five, seven or even ten years. This is an area which MIIPA plans to spearhead in the near future.

Conclusion Citizenship by investment programmes are constantly subject to criticism simply because there is always room for improvement. Maybe, this stems from the fact that the modern version of CBI programmes are a relatively new proposition or because certain CIUs need to up their game when it comes to the due diligence conducted on applicants. Some CIUs – such as Malta – are indeed providing a real, tangible benefit to the EU’s fight against financial crime, money laundering and financing of terrorism. They are thoroughly scrutinising high-risk U/HNWIs who before the inception of CBI, were being naturalised as EU citizens, with little due diligence. Furthermore, we have seen how this service can be improved through the sharing of information across CIUs, using blockchain technology.

“We will explore how distributed ledger technology (DLT) could be used to achieve such an information sharing platform, which potentially could revolutionise the due diligence process within the CBI industry and beyond.”

Citizenship By Investment 15


WEALTH FORUM ADVISORS: A multi-disciplinary team offering bespoke private client services

W

ealth Forum Advisors is an international multidisciplinary consultancy which is an integral part of and complementary to The Wealth Forums conferences and seminars.

A firm believer in continuous professional development, Richard’s skillset has continued to evolve to suit the bespoke needs of a highly mobile client base of global citizens for whom there are no borders.

The Wealth Forums regular conferences in London, Lugano, Monte Carlo and Panama plus our joint ventures with The Commonwealth Secretariat and others have helped to propel The Wealth Forums brand to the top of the bespoke private client services events and thought leadership sector.

RICHARD MOIR. PRINCIPAL.

Therefore, it seemed logical based on client demand and feedback that we create Wealth Forum Advisors to martial the potential and goodwill generated by the conferences.

Richard has enjoyed an international career in servicing the needs of a diverse multi-ethnic ultra high net worth clientele.

Founded by Alison Bradley and Richard Moir, the Wealth Forum Advisors is designed to be flexible, eclectic, multidisciplinary, international, innovative and above all client focused. It includes and is supported by Keystone Law’s Family Office team of dedicated lawyers, trained in each of the necessary fields to support Wealth Forums clientele.

Initially trained in portfolio management, private banking, asset protection, insurance and corporate services in Geneva, Monte Carlo, Nassau and London.

16 Citizenship By Investment

A proactive, ‘can do’ yet prudent individual, Richard is known for his international market access, research and business development capabilities. A specialist in international relations, he is often called upon as a strategic advisor to family offices, governments, companies and others concerning matters of security, due diligence, country risk, citizenship by investment,

reputation clean-up, management and enhancement. As founder/CEO of The Wealth Forums, Richard has become known as a pioneer, innovator and ‘thought leader’ who is not afraid to challenge the status quo. The series of Wealth Forum conferences in Switzerland, Monaco, UK and Panama have all been widely acclaimed for their high calibre speakers and delegates. Therefore the formation of Wealth Forum Advisors in partnership with fellow Principal, Alison Bradley is to be welcomed for its distinct vision, ethos and dedicated client focus.


Comprised of advisors of the highest calibre and professional reputation, we have been able to gather the best practitioners and offer their services under the Wealth Forums brand, thereby offering the client a unique reservoir of talent; a veritable “one stop shop” unlike any other.

Wealth Forum Advisors will evolve with the private client community we serve. Our services and skillset will be regularly updated to reflect the contemporary business environment, best practice, ethics and needs of our clientele.

...offering the client a unique reservoir of talent; a veritable “one stop shop” unlike any other.

Our current panel of advisors offer the following services; Legal:

Specialised insurance service:

Multi-jurisdictional estate planning:

• Fraud and asset tracing • Litigation / claims management • In-house general counsel / litigation counsel • Forensic investigation • Tax / estate planning • Marine / superyachts • Compliance and risk management • Anti-corruption • Family and matrimonial • Luxury asset purchase • UK and international property • Art and antiques • Aviation

• • • • •

• Wealth planning • Strategic advice • Legal

Security / risk management:

International security:

• • • • • •

• Asset tracing • Due diligence investigations • Due diligence reports (people / companies)

Disruptive technology Risk audits Bomb / bullet proof security solutions Private security / protection Asset (including yacht) security Forensic investigation

ALISON BRADLEY. PRINCIPAL. Alison is a dynamic international litigation lawyer with a background as a trusted advisor to high net worth individuals, family offices and companies and is part of the Family Office Team at Keystone Law. Trained at Newcastle University and the College of Law London, Alison’s practice covers civil

Kidnap and ransom Fine art and jewellery Marine and aviation Bloodstock International private medical insurance

International investment, migration and expatriate management: • • • •

Citizenship by investment Safe havens / second citizenship Lifestyle management Real estate services

and criminal fraud and financial and commercial disputes in the UK High Court and internationally. Prior to joining Keystone, Alison ran the in-house litigation department for a family office, heading up, amongst other things a £1.8 billion claim against a foreign bank and a large wrangle with the Serious Fraud Office, both of which were successfully resolved. Alison is known for her creative and practical approach to dealing with complex, high value contentious litigation and provides well developed, focused and intelligent dispute resolution strategies often involving PR and media management, strategic communication, forensic

Reputation management and public relations • UHNWI and company PR management • Public affairs – strategic advice and early warning • Strategic communication

Lifestyle management • Lifestyle and/or business coaching • Individual counselling / couples counselling • Stress management • Executive coaching • Dispute resolution/mediation

investigation and due diligence, together with legal advice and case management services. A worthy adversary, Alison is accustomed to challenging conventional methodology. Having worked alongside the Wealth Forums for a number of years now, Alison is proud and excited to form Wealth Forum Advisors together with Wealth Forum CEO Richard Moir, to establish and develop an unparalleled multidisciplinary ‘one stop shop’ attending to the needs of the Wealth Forum patrons and a diverse international clientele. Please feel free to contact Alison Bradley at Alison@wealthforumadvisors.com or Richard Moir at Richard@wealthforumadvisors.com who would be pleased to assist. Citizenship By Investment 17


A REVIEW OF GIIS 2018

MUMBAI, INDIA, 27-28 FEBRUARY 2018

T

he BLS Global – Citizenship by Investment Summit was declared a great success by the attendees that included foreign intermediaries, project developers, regional centres, attorneys and investment professionals and significantly, high-net-worth investors. Citizenship/investment programmes aimed at HNWIs are becoming increasingly popular, offering the significant benefits of flexibility, mobility, and the freedom to live and work in a global environment and the summit proved extremely informative in that regard. The JW Marriott in Juhu, Mumbai was a great venue and the production impeccable. On day one, following an opening keynote address from Chandrakant Salunkhe, president of SME Chamber of Commerce in India, the Caribbean Sessions began with the presentations of the CBI programmes offered by Grenada, The Grenadines, Antigua and Barbuda, Dominica, Saint Lucia and St. Kitts and Nevis. German residence permits and investment options were also presented before the lunch break. The afternoon of day one was given over to the USA and their very attractive EB-5 investment opportunities 18 Citizenship By Investment

in real estate, which includes visafree passports for investors and their families. The day concluded with one of our renowned BLS Global cocktail receptions, an international occasion represented by both the attendees as well as the cocktails!

special dinner in the evening. All in all, a very pleasing and informative event with much more planned by the team at BLS Global for 2018, beginning with our Global Investment Immigration Summit in the East Wintergarden at Canary Wharf, London on 21-22 June.

Day two of the event began with the Mediterranean sessions, kicked off by a presentation from Malta (whose CBI programme has increased four-fold in popularity over the last few years). Presentations on Cyprus, Portugal and the UK were followed by a very fruitful networking lunch. In the afternoon it was the turn of Ireland, Bulgaria, Canada and Germany to present the particularattractions of each of their CBI programmes, and the renowned lawyer Prashant Ajmera gave a special session which was titled Awakening Indian HNI Tiger–Mystery Revealed, which was very revealing and informative. Contact him for more details.

www.events.citizenshipinvestment.org

The summit concluded with an overview from attorneyat-law Stefan Taschjian, and a concluding vote of thanks from BLS Global to all the speakers was followed by a


Citizenship By Investment 19


ADVANTAGES AND PERILS OF INVESTOR AND ENTREPRENEUR ROUTES TO BRITAIN An interview with HELENA SHEIZON, the founder and CEO of Kadmos Immigration Consultants

What was it that attracted you to immigration? Do you enjoy working in this field? About 35 years ago, having just finished school in the gloomy late-Soviet Moscow, my best friend and I were fantasising about the ideal place to set up home and start a new life. At that time, we saw the hostile environment contained behind the Iron Curtain; the world outside was friendly and welcoming to us, with a distinct whiff of freedom. I believe that people should have the freedom to choose where to make their home, whether for a short while or for good. For the last twelve years, I’ve been advising clients on the best immigration options for them. Whether driven by the lifestyle they seek, educational opportunities for their children, or by business prospects they aim to pursue, immigration is always a complex issue with life-changing outcomes. I help my clients make their dreams come true. I also make sure these dreams are well-rooted in reality, which is why they can relax knowing their future is in safe hands.

In your opinion, what are the main factors restricting immigration to the UK? A main factor is the lack of immigration options available for low and medium skill20 Citizenship By Investment

Helena was called to the bar at the Middle Temple in 2005, and by 2006 set up her firm, Kadmos Consultants, a boutique immigration and business consultancy. Kadmos Consultants has since helped hundreds of people achieve their goals in making Britain their home through business and family immigration. level workers. It’s a shame, as this could eliminate workforce shortages in a number of fields if operated like the route currently used for highly skilled employees (titled Tier 2 in immigration jargon). At the other end of the spectrum, another factor is the restriction on permitted absences from the UK for high-net-worth individuals (HNWIs) seeking permanent residency in the UK. Until recently, there were no restrictions on absences for family members of the main visa holder, which allowed careful planning of an immigration strategy to achieve maximum benefit for the family. Nowadays, people are put off by the requirement to spend at least 180 days a year in the UK, but I believe the effect of these restrictive changes will soon level out. Britain still remains an attractive destination and careful strategy planning will help you get to where you want to be.

Which immigration options are the most appealing? After the spousal visa route, which is restricted to partners of British citizens or residents with indefinite leave to remain, investor and entrepreneur routes remain among the most flexible options you can think of. They allow HNWIs to enjoy the

British lifestyle while offering a relative freedom of movement outside the UK, without jeopardising the right to eventually be accepted as a permanent resident. Both routes require investment, but they are very different in essence and should not be confused.

What are the benefits and challenges of the entrepreneur route? Tier 1 Entrepreneur route is for those who wish to set up and run their own business in Britain. For the majority of business people, the required level of investment is £200,000. This capital can be split between two applicants with a joint business idea if they apply for entry clearance at the same time as an entrepreneurial team. The funds can also be provided by a third party, as long as one can demonstrate a genuine intention to invest the money in the business. One of the main hurdles of this route is the risk associated with starting up a new business. It is a well-known fact that the majority of new enterprises do not reach their third birthday and 80% do not survive for five years. Funding investments in a new business is always associated with risks, and this is where Kadmos Consultants are uniquely placed to help both with immigration compliance, as well as with viability and sustainability of the business.


From the start, every detail of the entrepreneur route should be carefully developed, including a thorough and reliable Plan B to protect and prepare the client for any outcome. What kind of help do you offer overseas entrepreneurs? Our work with entrepreneurs normally starts with the preparation of a business plan. Unlike other consultants, we never provide any off-the-shelf, standardised solutions. On the contrary, our primary task is to understand the proposed business’s objectives and ambitions, before picking it up at its existing stage and encouraging its development into a fully-fledged, actionable business plan. The plan needs to be thought through, of course, with an eye to immigration requirements, adding a further layer of complexity. It’s very important not to keep immigration and business concerns in separate drawers. One of our tasks as business consultants is to integrate immigration requirements into the overall business plan, keeping it simple, down to earth and practical. This way, we ensure that the client’s long-term goals are met. From the start, every detail of the entrepreneur route should be carefully developed, including a thorough and reliable Plan B to protect and prepare the client for any outcome. As a case study example, when assisting a young mum in setting up her business, we had to consider the various locations of her children’s schools (as she still had the school-run!) in relation to her business’s opening times, investment schedule and advertising strategy. We also had to consider her other freelance work options for her to support herself before the business’s income was reliable. With a clear road map to success, taking action is much easier. And there’s no better reward than to see things work!

How different is the investor route? An investor is required to invest at least £2m into UK government bonds, share capital or loan capital within active and trading UK registered companies. Some benefits of this route include the waiver of the English language test, as well as the right to work or study in the United Kingdom - enjoyed by both the main applicant and their dependants.

It’s not enough to have £2m available for investment, however. For initial applicants, the first hurdle is to open a UK bank account with confirmation that the bank will accept a transfer of £2m. This involves enhanced due diligence checks carried out by the bank, including a full investigation of the source of the funds. We normally recommend opening an account with a wealth management firm to handle the investment portfolio, as this provides certainty and reduces any risk of delays in the investment process. It’s essential that the portfolio manager is familiar with the Tier 1 investor programme, since the timing and type of investment are crucial to the success of this immigration route. The investment needs to be made within three months of an entry date into the UK. Although this seems like enough time to find your bearings and decide on your investment portfolio, complications can always arise with exchange rates and money transfers to the UK, as well as with due diligence checks if not carried out in advance. Not every investment qualifies, and often investors are not aware that proceeds of sale of any investments in the portfolio must be reinvested into eligible investments within a certain time frame. Many extension applications fail because of easily avoidable errors like this, which unfortunately cannot be corrected in hindsight.

Can immigration lawyers make a difference when mistakes have already been made? When there is no way of correcting a mistake (such as a crucial step not being completed on time, for example) then the only way to deal with the situation is by asking the Home Office to exercise discretion. You would need to explain why this should happen, and emphasise why your particular case is deserving and different from others facing the same difficulties. Lawyers can fight your corner

and save the day, but there’s still no way to guarantee the outcome in advance. For this reason, it’s always better to have a lawyer on board from the start, to help you avoid these mistakes – not correct them!

What made you decide to add ‘citizenship by investment’ programmes to your services? Many of our clients either wish to gain, or don’t want to lose, their EU citizenship. One of the most attractive solutions on the market is Cyprus. It’s incredibly quick – in just under six months you can become an EU national. This process requires investment in property – generally considered one of the safest options in the long term – and holds no residency requirements, although it gives the investor a right of residence and a European passport. Until the Brexit date, this still works as a route to settling in the UK, which is particularly important for those who care for parents or have responsibility for extended family. EU law is considerably more generous in respecting the right to family unity, which for many people is a decisive factor that cannot be ignored. The British Government has promised that those who are in the UK before May 2019 will not be required to leave, so there is still time to take advantage of these EU rights. Helena can be contacted for consultations in relation to business and family immigration by email to helena@kadmos.org.uk No1 Olympic Way,

Wembley Park, London,

Middlesex, HA9 0NP, UK Call:

+44 (0) 20 8930 9503

Email: helena@kadmos.org.uk Website: www.kadmosimmigration.com Citizenship By Investment 21


Welcome to privatebanking.com www.privatebanking.com is the leading Internet portal, social networking platform and specialty search engine exclusively dedicated to the Private Banking and Wealth Management industry.

“Our mission is to provide you with superior online tools capable to generate quality leads and attract and hold customers’ attention required to establish strong recognition for your brand and your services.�

www.privatebanking.com


THE GRASS REALLY IS GREENER

The growing EU market for expat residency regimes

by JAMES QUARMBY Stephenson Harwood LLP

T

ax competition is a hot topic at the moment and there has been much huffing and puffing by the OECD and the EU about its allegedly harmful effects. For instance, in February 2014, the European Commission issued a press release in which it calls for solidarity between member states on tax policy and warns that the EU “cannot accept national measures that encourage tax shopping by citizens and businesses, or that are designed purely to steal the tax base of neighbours”. Now it must be recognised that these communiqués are heavily influenced by the concerns of the ‘big beasts’ of the EU – Germany, France, Italy and so on – those countries with the biggest, most inefficient and most hostile tax regimes. Not surprisingly, they feel threatened when neighbouring countries wish to roll out the welcome mat for wealthy foreigners. The EU’s smallest member state, Malta, felt the wrath of the European Commission

recently over its Individual Investor Programme. The concern was that Malta was giving away its citizenship too easily to nonEU nationals. The government of Malta has been forced to tighten up the rules – including a new requirement that the applicant must be resident in Malta for at least 12 months before he or she can apply for citizenship. There was also a request that Malta put a cap on the number of individuals who will be allowed to apply, leading to an upper limit of 1,800 admissions over the life of the programme; over 1200 applications have been made. But what Malta is doing is nothing new – a number of EU member states are offering residency and/or passports in return for cash. In Spain you can obtain residency through the Special Investor Residence Visa, which is also known by the more colourful name of the “Golden Visa” programme. This programme is open to EU and non-EU nationals who invest the required amount of money into the Spanish economy. In return the investor gets residency for one year initially, but this is renewable for another two years subject to the investment being maintained.

So how much do you need to invest? The answer is – not much. You can qualify if you make either one of the following investments: (i) real estate of €500,000; or (ii) €1m in bank deposits or companies in Spain; or (iii) €2m in Spanish government bonds or certain local bonds; or (iv) the creation of local jobs. The Spanish Golden Visa scheme was heavily influenced by that of its neighbour, Portugal, which introduced its own Golden Visa scheme a year or so earlier. The minimum investment criteria remained largely the same as those for Spain until Portugal introduced several new and cheaper options in 2015. Examples include a €350,000 investment in properties older than 30 years or in ‘urban regeneration zones’ and a €350,000 investment in scientific or technological research. The Portuguese scheme only obliges the applicant to reside in the country for seven days during the first year, with another 14 days over the following two years. That’s a remarkably short period of time. Individuals become eligible for permanent residence after five years, although applicants must meet certain criteria such as a basic knowledge of Citizenship By Investment 23


Portuguese, and passports are available after six years. This period of time before qualification for a Portuguese passport is about consistent with other EU member states (including the UK). One of the reasons Malta got into trouble is that under what has now been dubbed the “Golden Passport” scheme, it was prepared to dish out passports almost straight away in return for a cash payment of €650,000. But is the Maltese scheme worth looking at? If you are a non-EU national looking for an EU passport then the answer is yes. You will have to pay a total of €1.15m, which includes a €500,000 investment in the local economy and a fee of €650,000, but that’s about it. Another consideration when weighing up the options is what you will pay in taxation once you become a resident of one of these countries. This is where the Maltese scheme becomes more interesting as although the up-front cost is higher, you will end up paying less in taxation and will qualify for the passport more quickly. The problem with both Portugal and Spain is that they have world-wide models of taxation – this means that once you become a resident you will be liable to tax on all of your income, regardless of where it arises. This is a big blow if you have substantial sources of foreign income or gains. Malta, on the other hand, has a remittance basis of taxation and that means you are only taxed on foreign income or gains that are actually brought into Malta. As you can imagine, that makes a huge difference to your potential tax liabilities. To be fair, Portugal has tried to ameliorate its normally high rates of tax by introducing special low rates of tax for individuals who are working in certain sectors. This can lead to a top rate of tax of 20% on such income, but the fact remains that for most kinds of foreign passive income or gains, the full rates of tax will be payable.

24 Citizenship By Investment

One of the other players in this market is Cyprus, which has for some years offered attractive packages for HNW individuals. To get residency in Cyprus is pretty easy – you need to acquire property of at least €300,000 and be able to show annual income of at least €30,000 (plus €5,000 per dependent and €8,000 for a dependent parent or parent in law). In addition you must make a deposit of €30,000 to a Cypriot bank, which will be blocked for the first three years. Like Malta, Cyprus has a remittance basis of taxation that means that you will normally escape taxation on your non-Cyprus income. Getting a passport is less easy as it requires a hefty investment in the local economy which, given the collapse of its banking system and much of the local economy with it, doesn’t look attractive. I don’t know about you, but investing €2m in the Cypriot economy doesn’t fill me with either hope or joy. Another drawback of Cyprus is that, like Malta, it’s an island in the Mediterranean with limited connectivity to Europe (compared to, say, Madrid, and Lisbon). This is an issue for the internationally mobile individual. Of course, the most international of all Of course, the most international of all cities in Europe is London and despite all the recent changes in the UK’s legislation it remains an attractive place to live. The UK has its own investor programme (called the Tier 1 Investor Visa) and in return for an investment of £2m you can get a visa to live here. The UK also has a remittance basis of assessment that means for the first seven

years as a resident, you can enjoy freedom from taxation on your foreign income or gains, provided they are kept outside of the UK. Thereafter an annual fee is payable (called the ‘remittance basis charge’), which starts at £30,000 per annum. The final EU contender is Ireland, which recently introduced its own investor programme. You can invest either €1m in a government bond or €1m in an Irish business and this will get you residency. Ireland also has the benefit of a remittance basis of taxation, but without the annual fee after seven years. These schemes are all targeted at non-EEA nationals and they share the same objective – to lure wealthy foreigners to their shores. Of course, if you are already an EEA citizen then you do not need any of these schemes because the EU Treaty gives you complete freedom of movement within the EEA. There is plenty of evidence that EEA citizens are moving to save tax – witness the large number of French people who have moved to the UK since Francois Hollande declared war on the rich. Of course, following the UK’s decision to leave the EU the free movement of individuals to and from the UK could be seriously hampered. At the time of writing it is unknown what the future arrangements will be for Europeans coming to the UK after 31 December 2020, but the worstcase scenario is that they will have to apply under the Tier 1 Investor Visa rules. Whatever happens after Brexit, there will still be competition for high-net-worth individuals and their businesses, perhaps even increased competition. This is a good thing – without competition countries can become sclerotic, inefficient and complacent. The EU Commission may not like it but tax competition is healthy – not harmful – and it’s definitely here to stay. Three cheers to that!


MIGRATE WORLD

CITIZENSHIP REDEFINED

A

t Migrate World, we specialize in assisting investors become true citizens of the world through guiding them in investing to gain a legal second citizenship and passport in a number of countries around the world. It’s significant to consider which citizenship you pursue, as with the rising numbers of promoters in this business, you could easily be misled onto non-constitutional programs. It is also crucial to make sure that you are dealing with an authorised agent for the schemes you are seeking.

sell after seven years as opposed to five years with the other real estate investment option starting at US$400,000.

With over 15 years of experience navigating the complex process of obtaining a second passport, we offer a wide range of services, from residency and citizenship by investment to company formation, real estate purchasing, financial and legal services and more, to ensure our clients are well established, wherever they find themselves.

The Commonwealth of Dominica offers an Economic Citizenship programme, as well providing the option to invest in real estate starting at US$200,000. In addition to St. Lucia’s National Economic Fund, the island provides the option to invest in property worth US$300,000. St. Lucia and Dominica are considered the most economical programmes for a single applicant, as government fund contributions begin at US$100,000.

When it comes to building a new life, there is no standard approach and so we recognise that it is integral to develop a bespoke approach that will provide each client with what he is seeking: security, decent education, tax benefits, reputable work and simply ease of travel. Our complete list of programmes range from the Caribbean to the European Union, as well as Canada, the USA, and the UK. The investment options for those programmes range between making a government donation or contribution, investing in real estate, or investing in a government approved project or business.

In Antigua & Barbuda, the option to contribute to their National Development Fund in return for citizenship and passport is currently at an offer of US$100,000 for a family of four and US$125,000 for a family of five, excluding processing fees. Antigua and Barbuda also provides the option to invest in property, which can be sold after five years, starting at US$200,000.

Europe is of course a popular destination as well. The Portuguese Golden Residence Permit offers three options including investing in property with a minimum value of €350,000-€500,000. Portugal provides the fastest route – 45 days – to a residency in the EU, competing with Malta which takes around 60 days to issue the residency card. We also provide the Maltese Individual Investor Programme, which offers the option to invest in real estate as well as contribute to the economic development of the island.

Caribbean programmes are popular for being quick and simple and the fact that they allow visa-free entrance to more than 120 countries including the EU’s Schengen zone and the UK. These take three to six months to issue a passport through either contributing to a government or making a real estate investment, with amounts ranging from US$100,000-$200,000 for single applicants.

Bulgaria is a strategic crossroad between Europe, Russia, and the Middle East. Moreover, the Bulgarian economy has experienced rapid growth and the programme is an attractive one, allowing permanent residency leading to citizenship with no in-country residency requirements by investing in €240,000 worth of government bonds, receiving Bulgarian citizenship within two years.

Established in 1984 as the pioneer of Caribbean citizenship by investment, the St. Kitts and Nevis Citizenship by Investment programme is one of the most well respected and most emulated in the world. The government has recently started a new fund that gives investors a passport by contributing a minimum of US$150,000 to the Sustainable Growth Fund. Under the fund, the SGF, investors have the option to invest in real estate worth US$200,000 – which they can

Cyprus provides a property permanent residency option of €300,000 and citizenship if you invest €2m, or €500,000 in government bonds combined with €2m in real estate. Options to invest in Cyprus are attractive because it generally takes three months to get the residency and three to six months to acquire European citizenship and a passport. Cyprus enjoys a business-friendly tax system, with a corporate tax rate of just 12.5% – one of the lowest in the European Union.

The UK offers two visa-investment options – the Tier 1 Investor Visa and the Tier 1 Entrepreneur Visa – both of which allow investors to quickly gain legal residency in the country within six to nine months. The UK is an incredibly powerful economy – with London being an international hub for business. In North America, the Canada Entrepreneur Program aims to attract experienced entrepreneurs who are ready to invest in the province of Prince Edward Island, starting at C$150,000. There are both 100% ownership and partial ownership streams for interested entrepreneurs. A second investor programme option is also available through the province of Quebec. Both of these provinces provide programmes with high approval rates. The US Citizenship and Immigration Services runs its Immigrant Investor Program, popularly known as EB-5. Participants must invest a refundable US$500,000 in a new enterprise which is a for-profit activity formed for the ongoing conduct of lawful business. Get in touch with us for details on the project we are promoting in Florida.

Migrate World offers partnerships, knowledge, expertise, and established relationships that many of our competitors simply cannot offer and we do so with honesty as participants of the United Nations Global Compact. Headquartered in Dubai and with offices across the world – from Canada to Jordan, Egypt, the Philippines and beyond – we are never more than a phone call or email away. Our clients also come from a variety of backgrounds including the Middle East, South Asia and Africa. Call us at +971 4 355 5288, email us at info@migrateworld.com, or visit us at www.migrateworld.com for a consultation. Citizenship By Investment 25


THE SHIFTING NATIONALITY LANDSCAPE by MARCO GANTENBEIN, managing partner, Henley & Partners Middle East

lottery’, to use Ayelet Shachar’s memorable phrase.

t is no secret that our nationalities have a direct impact on our lifestyles and on our freedom to think independently, do business, and live longer, healthier, and more rewarding lives. Having a substandard nationality is thus a significant liability, with long-lasting implications for the whole life-project of the holder.

An exception to the rule is the expansive freedom of movement and settlement enjoyed by nationals of France, the Netherlands, and Finland, among others. These are the most globally integrated citizenships in the world, turning the national borders of roughly one quarter of the world’s states into myths for their holders and liberating their citizens from imaginary geographical limitations that require them to forget about opportunities beyond the borders of ‘their’ state.

I

Recently launched, the third edition of the Henley & Partners – Kochenov Quality of Nationality Index (QNI) offers the global community a credible evaluation of the world’s nationalities. The Index is the only one of its kind that objectively measures and ranks all the world’s nationalities according to the value they provide to those who hold them. Nationalities are ranked on a 0-100% scale and divided into ‘quality tiers’, ranging from Extremely High Quality to Low Quality. In the majority of circumstances our nationality therefore plays an important role in establishing a highly irrational ceiling for our opportunities and aspirations, reflecting the core aspect of being a national of some place, which is a random consequence of birth boasting no correlation with a person’s achievements, ideas, feelings, and desires – ‘a birthright 26 Citizenship By Investment

The creators of the Index, Prof. Dr. Dimitry Kochenov and Dr. Christian H. Kälin, made a conscious decision not to make the QNI a perception-based index. Rather, the Index uses a wide variety of quantifiable data to determine the opportunities and limitations that our nationalities impose on us. Specifically, it measures both the internal value of nationality, which refers to the quality of life and opportunities for personal growth within our country of origin, and the external value of nationality, which identifies the diversity and quality of opportunities that our nationality allows us to pursue outside our country of origin. The QNI uses a sophisticated combination of quantifiable data derived from leading international institutions and experts,

including the United Nations, the World Bank, and the International Air Transport Association. Nationalities are divided into five quality-based tiers: • Extremely High Quality: Nationalities with a value of 75.00% and above • Very High Quality: Nationalities with a value of between 50.00% and 74.99% • High Quality: Nationalities with a value of between 35.00% and 49.99% • Medium Quality: Nationalities with a value of between 20.00% and 34.99% • Low Quality: Nationalities with a value of 19.99% and less


It’s good to be French One of the most noteworthy moves in this latest edition of the QNI is the shift in France’s quality of nationality from second to first place overall. France takes over the reins from Germany, which was the global leader for the past seven years. The French nationality earned a score of 81.7% out of a possible 100%, while Germany scored 81.6%. The difference between France’s and Germany’s results is fractional: France’s comparative advantage lies in its greater Settlement Freedom, attributable mainly to the country’s former colonial empire. Following closely behind France and Germany on the QNI are Iceland and Denmark in 3rd place and 4th place, respectively, with scores of 81.5% and 80.9%. In 13th place, the UK narrowly missed the top 10 but made it into the Extremely High Quality tier, with a score of 78.2%. Last year, the UK scored 79.2%. The US increased its position by two ranks this year, claiming the 27th spot on the QNI with a score of 69.4%, up from 68.8%. The country’s relatively poor standing on the Index is mainly due to its low Settlement Freedom compared to EU member states.

Colombian nationals have experienced a major improvement in Travel Freedom. In 2013, they had visa-free or visa-on-arrival travel access to 59 destinations, compared to 112 destinations in 2017, including the countries in the Schengen Area (as of 3 December 2015). The success story of the Colombian nationality over all the years of QNI measurement turns Colombia into the poster child of how to ensure constant improvement in the quality of nationality. The Qatari nationality meanwhile, dropped massively as a result of regional diplomatic conflicts. Astonishingly, and given a relatively respectable starting point, the Qatari nationality dropped more significantly than war-torn and unstable Libya, Syria, and Iraq. Between 2013 and 2016, its value had already suffered from increased tensions in the region, as reflected in the country’s GPI score (from 1.400 in 2013 to 1.716 in 2016). The Qatari nationality dropped from 56th place in 2013 to 70th place in 2016. Together with its free-fall to 87th place in 2017, this leads to a 31-position decrease in total.

The broad spectrum of nationality According to Dr. Kälin, the QNI is highly relevant to individuals interested in understanding the circumstances associated with their nationality, as well as to individuals looking for an in-depth picture of opportunity and risk in a country before they decide to make it their home. But the Index is also crucial for government and institutional stakeholders who want a neutral evaluation of how their country fares relative to others and of what they can do to become more competitive and compelling globally. Indeed, the QNI proves that one cannot possibly be correct in stating that all nationalities and passports are equally good. Some nationalities are radically better than others: being born French gives one a huge advantage over the liability brought about by a Somalian nationality, for example. With the QNI, illustrating this difference visually becomes simple.

Movers and shakers The Georgian nationality experienced a spectacular rise of 20 positions, from 104th position on last year’s General Ranking to 84th position this year. Its improved ranking was mainly caused by a significant increase in visa-free or visa-on-arrival travel destinations, linked to its 2017 visa-waiver with the Schengen Area. The Ukrainian nationality experienced a similar dramatic rise, from 99th position in 2016 to 80th position in 2017, also as a result of visa-liberalisation with the Schengen Area. Consequently, the Ukrainian nationality recovers towards the positions it occupied on the 2013 and 2014 QNI General Rankings (75th place with 32.8% in 2013, and 79th place with 32.3% in 2014), although the ongoing armed conflict in Ukraine continues to compromise the nationality’s Peace and Stability score. The Iraqi nationality dropped 15 places, from 150th position (18.6%) to 165th position (15.1%). With Peace and Stability remaining equally poor last year, a large number of countries introduced travel restrictions for Iraqis, which caused the nationality’s Diversity of Travel Freedom to drop from 27 to only nine visa-free or visaon-arrival travel destinations. The value of the Colombian nationality has improved spectacularly over the past five years, during which period it has jumped from 111th place (26.1%) to 61st place (40.7%). While Human Development increased slightly, and Peace and Stability decreased somewhat, Citizenship By Investment 27


28 Citizenship By Investment


Citizenship By Investment 29


HOW HIGHLY DO YOU VALUE YOUR FREEDOMS? Cyprus Investment Scheme - Your gateway into the UK by JENNY TRYFONOS, citizenship and residency advisor, Astons

S

econd citizenship is fast becoming commonplace for HNWIs and their families, who are not only looking for political stability, a better quality of life, good educational prospects for their children and ease of travel around the globe, but more importantly because they value their freedoms. European citizenship allows for free movement of: • People – EU applicants are able to reside, work, study and travel visa-free to 28 European countries, including the UK, Switzerland and Liechtenstein to name but a few. The entire family are eligible, and children can benefit from lower tuition fees within the EU, including the UK’s world rated universities; • Services – European citizens and their companies can trade freely within the EU, without common obstacles; • Capital – EU citizens can transfer funds between any European country and invest in any activities they choose including property; • Goods – All goods produced can be transferred freely within the EU.

Non EU nationals chose second citizenship because they are fed up of the ongoing restrictions and red tape, their lack of freedom to travel visa free all that is associated with living and trading in their own country of residence whose economy may be less sophisticated. Most aspire to live or acquire second citizenship in one of the leading CIP countries such as the UK for their Tier 1 Investor or Entrepreneur visas that offer a sophisticated lifestyle, some of the world’s leading universities and a stable economy with good prospects for growth. However the proposed changes to Brexit and the stringent criteria to acquiring permanent residency (PR) and citizenship by investment, often leaves non EU nationals depleted, before they have even met the criteria and often non-compliant with the rules. This can result in endless applications for visa extensions, sizeable ongoing fees, without any assurance of acquisition of PR and no guarantees of citizenship at the end of the process. Astons assists many UHNWIs in obtaining EU citizenship via the Cyprus citizenship by investment programme, enabling them to acquire an EU passport in only six months, from application submission. The Cyprus Investment Scheme, is now recognised as one of the most attractive programmes around the world, allowing entry into the UK with all the freedoms of an EU national, including property investment, education, and business opportunities from outset, while waiting their five years, before applying for permanent residency with view to future UK citizenship. It is still unclear what Brexit will bring, however EU nationals are currently treated favourably and can exercise their freedoms until such a time where the UK Brexit offers more clarity, with March 2019 Brexit date looming, speculation suggests that the time may be extended even further into 2021. However any current EU rights would likely be protected by any future transitional arrangements.

So, here below are the many reasons that Cyprus is proving an excellent gateway into the UK: • It is the fastest route to EU citizenship, where an EU passport can be acquired in only six months and EU PR issued within seven days of application (both applications made simultaneously).

• A straightforward, simple application process, with no source of wealth, language or medical testing; • No requirement for a government donation, unlike Malta and other countries – so strictly an investment only programme, with investment to be held for only three years; • No physical residency requirement throughout the whole application process, or after citizenship has been acquired (other than a one-day visit to provide biometrics).

The benefits of Cyprus CBI over UK Tier 1 visa, Entrepreneur visa and other UK business immigration • No filing of company accounts or complex audit submission – which is a mandatory criterion in the UK • No English language requirement (currently required as part of settlement), unlike the mandatory requirement under UK directive rules; • No restriction in investing in UK property or any other type of investment; • No restrictions due to source of wealth and transferring of funds from foreign bank accounts; • No strict criteria to adhere to including leaving the country if criteria are not met; • No ongoing amendments to rules and changes to criteria, making it increasingly hard to meet visa requirements and adding to client frustrations • No top up criteria for depreciation in investments; • Certain UK visa categories do not permit settlement. Apply for your Cyprus passport today and plan to live freely as an EU national in the UK, enjoying all your EU freedoms. For further information on UK, European or Caribbean citizenship and residency programmes, please contact Konstantin Kaminskiy at +44 (0)20 7292 2977 or +44 (0)20 7043 6026 or email kk@astons.com www.astons.com/eng/citizenship/cyprus/

30 Citizenship By Investment


DUE DILIGENCE FOR CITIZENSHIP BY INVESTMENT (CBI) by DON EALES

O

ne of the essential elements of any CBI programme is the quality of the individual requesting citizenship and the traceable source of the potential investment funding. Due diligence is applied to establish that the finance is not from any illegal source or from funding organisations that are not fully legal.

to make sure that they are not granting citizenship to undesirables with links to criminal or terrorist organisations. “The United States strongly believes that all countries have an inherent responsibility to their citizens and the international community to review fully all applicants who seek a nation’s citizenship,” the statement said.

America has requested that nations in the Caribbean with citizenship-by-investment programmes must make absolutely sure that each individual application provides the highest level of correct due diligence. Antigua, Barbuda Dominica, St Lucia, St Kitts and Nevis all have schemes which grant passports to individuals in return for investment levels that are specified by each country individually.

Dr Timothy Harris recently stated that his country ’s programme included the best due diligence procedure currently anywhere in the world. This comes after an overhaul of their system in response to a decision by Canada to impose a visa restriction on St Kitts passport holders over concerns about the type of candidates being granted citizenship. The US also specified it’s concerned that the programme was also being used to bypass sanctions on Iran.

The US Embassy in Barbados has issued a statement warning each of the above nations

“We believe that we have now one of the strongest due diligence mechanisms,”

the prime minister said. The US statement added that it respected the right of any nation to generate revenue using investment immigration, provided the right checks were being made. It added, “The United States does not approve or disapprove individual aspects of citizenship by investment programmes.” “While the United States government is willing to consult with governments on their citizenship investment programmes, the ultimate decisions to offer and how to operate such a programme, including the issuance of citizenship and related identifying documents, such as passports to applicants, lie with each individual government and not with the United States.” The US offers its own permanent residency-through-investment programme, the EB-5, which can lead to citizenship in the long term. Citizenship By Investment 31


The Organisation for Economic Cooperation and Development (OECD) Signatories of the multilateral competent authority agreement on automatic exchange of financial account information and intended first information based in Paris, is overseeing the global move towards an automatic exchange. This is the current global status as of 15 January 2018 disclosing of information known as the Common Reporting Standard (CRS), which the 98 countries below have agreed to. 1. ALBANIA September 2018 2. ANDORRA September 2018 3. ANGUILLA September 2017 4. ANTIGUA AND BARBUDA September 2018. 5. ARGENTINA September 2017 6. ARUBA September 2018 7. AUSTRALIA September 2018 8. AUSTRIA September 2018 9. AZERBAIJAN September 2018 10. BAHAMAS September 2018 11. BAHRAIN September 2018 12. BARBADOS September 2017 13. BELGIUM September 2017 14. BELIZE September 2018 15. BERMUDA September 2017 16. BRAZIL September 2018 17. BRITISH VIRGIN ISLANDS September 2017 18. BULGARIA September 2017 19. CANADA September 2018 20. CAYMAN ISLANDS September 2017 21. CHILE September 2018 22. CHINA (PEOPLE’S REPUBLIC OF) September 2018 23. COLOMBIA September 2017 24. COOK ISLANDS September 2018 25. COSTA RICA September 2018 26. CROATIA September 2017 27. CURAÇAO September 2017 28. CYPRUS September 2017 29. CZECH REPUBLIC September 2017 30. DENMARK September 2017 31. ESTONIA September 2017 32. FAROE ISLANDS September 2017 33. FINLAND September 2017

34. FRANCE September 2017 35. GERMANY September 2017 36. GHANA September 2018 37. GIBRALTAR September 2017 38. GREECE September 2017 39. GREENLAND September 2017 40. GRENADA September 2018 41. GUERNSEY September 2017 42. HUNGARY September 2017 43. ICELAND September 2017 44. INDIA September 2017 45. INDONESIA September 2018 46. IRELAND September 2017 47. ISRAEL September 2018 48. ISLE OF MAN September 2017 49. ITALY September 2017 50. JAPAN September 2018 51. JERSEY September 2017 52. KOREA September 2017 53. KUWAIT September 2018 54. LATVIA September 2017 55. LEBANON September 2018 56. LIECHTENSTEIN September 2017 57. LITHUANIA September 2017 58. LUXEMBOURG September 2017 59. MALAYSIA September 2018 60. MALTA September 2017 61. MARSHALL ISLANDS September 2018 62. MAURITIUS September 2018 63. MEXICO September 2017 64. MONACO September 2018 65. MONTSERRAT September 2017 66. NAURU September 2018 67. NETHERLANDS September 2017

68. NEW ZEALAND September 2018 69. NIGERIA September 2019 70. NIUE September 2017 71. NORWAY September 2017 72. PAKISTAN September 2018 73. PANAMA September 2018 74. POLAND September 2017 75. PORTUGAL September 2017 76. QATAR September 2018 77. ROMANIA September 2017 78. RUSSIAN FEDERATION September 2018 79. SAINT KITTS AND NEVIS September 2018 80. SAINT LUCIA September 2018 81. SAINT VINCENT AND THE GRENADINES September 2018 82. SAMOA September 2018 83. SAN MARINO September 2017 84. SAUDI ARABIA September 2018 85. SEYCHELLES September 2017 86. SINGAPORE September 2018 87. SINT MAARTEN September 2018 88. SLOVAK REPUBLIC September 2017 89. SLOVENIA September 2017 90. SOUTH AFRICA September 2017 91. SPAIN September 2017 92. SWEDEN September 2017 93. SWITZERLAND September 2018 94. TURKEY September 2018 95. TURKS & CAICOS ISLANDS September 2017 96. UNITED ARAB EMIRATES September 2018 97. UNITED KINGDOM September 2017 98. URUGUAY September 2018

These countries share information among themselves and recently published a consultation document on the potential misuse of these citizenship-by-investment schemes as part of what it calls its “CRS loop-hole strategy ’. The document details how citizenship-by-investment schemes can potentially be exploited to evade the CRS due diligence procedures; “reminds stakeholders of the importance of correctly applying relevant CRS due diligence procedures in order to help prevent such abuse”; and what measures might be used to ensure that this doesn’t happen, while still permitting such schemes to remain in place.

resident [there] for tax purposes only, and provides his financial institution with supporting documentary evidence (e.g certificate of residence; ID card; passport; utility bill of second house).”

UK Finance and AFME2 response to the OECD consultation document named “Preventing abuse of residence by investment schemes to circumvent the CRS” published on 19 February 2018 was to welcome its proposals and quoted “We believe that this approach is to the benefit of both policymakers and businesses and helps to avoid any unintended consequences arising from the OECD’s initial proposals”. And “We recognise the importance of increasing transparency in cross-border transactions and promoting compliance with tax obligations. This is demonstrated by the significant investment financial institutions have made to ensure that they comply with the CRS and FATCA”. They also stated that in order to maintain the integrity of the CRS regime, they recognised how important it is to prevent misuse of CBI. If there are particular jurisdictions operating RBI/ CBI programmes, and they are not willing to co-operate with the OECD, these jurisdictions could be specifically listed on the OECD’s website. If the jurisdiction operating such scheme has a network of double tax treaties, the operation of treaty “tie breaker clauses” in such cases should be expressly set out.

“Citizenship-by-investment/residence by investment schemes can potentially be exploited to help undermine the CRS due diligence procedures”, the OECD consultation notes. “This may lead to inaccurate or incomplete reporting under the CRS, in particular when not all jurisdictions are disclosed to the reporting financial institution. “Such a scenario could arise where an individual does not actually reside in the relevant jurisdiction, but claims to be 32 Citizenship By Investment

Among the countries that have wellestablished citizenship-by-investment schemes are Cyprus, Malta, St Kitts and Nevis, the US, UK, Australia, France, Greece, Hungary, Portugal, Spain, Latvia, Antigua and Barbuda and Dominica. Canada used to have an investor visa programme that saw more than 35,000 investor visas issued, but discontinued it unexpectedly in 2014, after having suspended it two years earlier, amid concerns that it was contributing to inflated house prices in such cities as Vancouver, which was and remains popular with wealthy Chinese investors The American EB-5 programme recently was extended in its current framework to 23 March at its current US$500,000, but remains the subject of debate in Washington about how – if at all – it should continue, with some lawmakers arguing that the investment amount should increase to US$1.35m.


2 OF 3 INVESTOR IMMIGRANTS WORLDWIDE ARE CHINESE REVEALS STATISTICAL ANALYSIS Chinese Proportion of total approved applications (historical data)

Others

Chinese

100%

75%

50%

25%

00%

by INVESTMENT MIGRATION INSIDER IMIDaily.com

W

e did the math. The Chinese investment migration market is the investment migration market.

It was no easy task, as data sets don’t lend themselves very easily to apples-to-apples comparisons, sometimes historical records are missing, and sometimes you have to comb through spreadsheets in Greek. Nonetheless, we can say with a great degree of certainty that, since 2008, at least 68% of all approved residence permits based on investment (golden visas) were claimed by Chinese nationals. The analysis looked at the most popular golden visa programs around the world, including the United States EB-5, Quebec Immigrant Investor, Portugal, Spain, and Greece Golden Visa, United Kingdom Tier 1 Visa, Australia Significant Investor, and New Zealand Investor Visa programs (category 1 and 2), as well as the Malta Residence Visa program. Due to the limited availability of data, the Malaysia My 2nd Home program and the Thai Elite residence program were not included in the analysis. It’s estimated that the largest source country for MM2H applicants is China, who make up just shy of a third of all cases.

United States EB-5

Quebec QIIP

Portugal Golden Visa

Spain Golden Visa

Greece United Kingdom Australia Golden Visa Tier 1 Investor SIV

New Zealand Investor Visa

Malta RVP

Highlights Chinese nationals are the largest applicant group in all nine programs surveyed and make up an absolute majority of applicants in six of them. Chinese nationals have invested at least US$27 billion in residence programs since 2008 (likely closer to US$35 billion). Accurate figures for the UK Tier 1 Investor program are unavailable as the statistics do not distinguish between fast-track and nonfast-track ILR-applications. The Malta RVP, the Thai Elite program and MM2H also do not report total investment amounts. Since November 2012, Chinese nationals have invested no less than US$117m a month through Australia’s Significant Investor program.

IN RESIDENCE PROGRAMS SINCE 2008

Chinese immigrants have additionally invested $880 MILLION

Since Portugal opened its golden visa program in late 2012, Chinese individuals have invested US$43m a month in the country.

$804 MILLION

Chinese immigrants have additionally invested some $880m in Spain, $804m in Greece, and more than $15 billion in the United States.

$15 BILLION

With New Zealand’s Investor Visa, Chinese nationals accounted for 67% of approved applications and 71% of those rejected. Citizenship By Investment 33


COUNTRY SPOTLIGHT

QUICK FACTS

ANTIGUA AND BARBUDA

D

ubbed the “heart” or “gem” of the Caribbean because of its strategic location in the middle of the Leeward island chain, the independent Commonwealth state of Antigua and Barbuda comes very close to many people’s idea of paradise. This ideal geographic positioning makes the tropical twin-island jewel a regional travel hub, with excellent air links to North America and Europe.

experienced continuous growth in Foreign Direct Investment (FDI). 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 Gross Domestic Product (GDP) per capita in the sub-region.

Home to over 100,000 people and blessed with 365 powder-white sand beaches, the country is revered as one of the most beautiful places in the world.

Antigua and Barbuda, along with seven other states, is a member of the Eastern Caribbean Currency Union (ECCU), a development of the Organisation of Eastern Caribbean States (OECS), which uses the Eastern Caribbean dollar (XCD) as its currency. The EC has been pegged to the US dollar for the last 40 years, contributing to long-term financial stability.

Antigua, the larger of two islands of Antigua and Barbuda, is a popular tourist destination and is accessible on direct flights from the UK, USA, and Canada. With mysterious abandoned forts, Neolithic caves and an unspoilt beachfront, Barbuda is host to a wild bird sanctuary standing on a mesmerising lagoon. Antigua’s flatland topography was well suited to produce its early crops of tobacco, cotton and ginger. The main industry, however, developed into sugar cane farming which lasted for over 200 years. Today, with its 30 year independence from Britain, Antigua’s key industry is tourism and related service industries. The next largest employers are the finance services industry and the government. Historically, as a result of tourism and real estate, Antigua and Barbuda has 34 Citizenship By Investment

Why was the Antigua and Barbuda programme established? Like many countries around the world, Antigua and Barbuda was adversely affected by the 2008 economic crisis. After considering various options to jumpstart the economy, the government saw the Citizenship by Investment Programme (CIP) as the most effective way to re-attract FDIs, renew interest in the real estate market and spur investment in the general economy. Though Antigua and Barbuda is a relatively new entrant into the economic investment arena, it has become very popular with investors owing to its straightforward

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

and transparent application process, fast turnaround time and the quality of real estate offerings. The reduction in processing fees in 2017, gave the programme an additional competitive advantage. After the devastation of Barbuda, the smaller, lesser-populated of the two islands by Hurricane Irma in September 2017, a further decision was taken by the government to decrease the National Development Fund (NDF) contribution for a limited time period*. This, the government feels, will allow for the allocation of the estimated US$200m urgently needed to rebuild a stronger, greener Barbuda, and simultaneously reducing carbon footprints. The NDF is a non-profit fund that is subject to parliamentary oversight by way of a six monthly report to be presented to Parliament in sufficient detail to allow for transparency and accountability. The fund will also be audited by an internationally recognised accounting firm. The Antigua and Barbuda CIP Act was passed in April 2013, setting up The Citizenship by Investment Unit (CIU). The first application was received in November of that year and the first citizenship granted in February 2014. The Act allows for anyone 18 years and older and/or his family, who commits to making an investment under one of three options, to apply for citizenship.


What are the benefits of Antigua and Barbuda? • Visa free access to over 135 countries, including the United Kingdom, the Schengen area, Hong Kong and Singapore • 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 • History of a stable currency US$1 = EC$2.70 since 1976 • Antigua and Barbuda is a stable Westminster-style democracy • Well-established legal and regulatory framework, supporting civil and commercial relationships • Well-educated work force, skills and abilities for modern workplace • Active and committed member of international community * NDF Limited Time Offer: November 1, 2017 to October 31, 2018 In addition to visa free travel to over 135 countries, eligible investors have the right to reside permanently on the islands. The recent elimination of personal income tax makes it even more attractive. Applicants must submit to a rigorous due diligence (DD) or background check process. The only residency stipulation is that new citizens spend at least five days on Antigua and Barbuda in the five years following the granting of citizenship.

WHAT ARE THE THREE OPTIONS OFFERED UNDER THE CIP? THE NATIONAL DEVELOPMENT FUN (NDF)

Processing Fees

$25,000

$25,000 for a family of up to 4 persons

$50,000 for a family of up to 4 persons with incremental payments of $15,000 for each additional dependent.

Contribution

$100,000

$100,000

$125,00

Due Diligence

$7,500

$7,500 + $7,500 for spouse, $2,000 per dependent 12-17, $4,000 per dependent 18 and over

$7,500 + $7,500 for spouse, $2,000 per dependent 12-17, $4,000 per dependent 18 and over

* Other fees payable include passport fees. These fees are subject to change. * All fees quoted are in US dollars

THE REAL ESTATE AND BUSINESS INVESTMENT OPTIONS

Processing Fees

$50,000

Minimum Investment Due Diligence

$7,500

$50,000 for a family of up to 4 persons

$50,000 for a family of up to 4 persons with incremental payments of $15,000 for each additional dependent.

$400,000

$400,000

$7,500 + $7,500 for spouse, $2,000 per dependent 12-17, $4,000 per dependent 18 and over

$7,500 + $7,500 for spouse, $2,000 per dependent 12-17, $4,000 per dependent 18 and overr

* Other fees payable include passport fees. These fees are subject to change. * All fees quoted are in US dollars

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

Additionally, new citizens can add new dependents after approval and there is no HIV test requirement for minors under 11.

Citizenship By Investment 35


What is the function of the CIU? The CIU is responsible for processing applications and for recommending the approval of real estate and business investment options. There are a few factors that contribute to the rapid success of the Programme, which include the Unit’s highly competent staff, comprising mostly of private sector individuals. With a turnaround time of about 60 days, the CIU quickly became one of, if not the most efficient Unit in the region, surpassing countries that had been in the industry for far longer or just prior to its entry. Secondly, the fact that Antigua and Barbuda has maintained a strong presence in the high-end tourism sector for more than four decades and already had certain infrastructure in place, the country quickly became an attractive portal for those seeking to invest in real estate and business. Thirdly, the twin-island state had the opportunity to learn from the already established programmes and model its real estate offerings and escrow arrangements accordingly. In order to give investors the confidence that developers will deliver on their promise, the Unit exerts some control over the management of escrow accounts. Lastly, the CIU has been very visible in the international community by attending and presenting at various industry conferences and establishing a strong presence in a number of high-quality publications. This visibility, along with a culture of efficiency, a robust due diligence process, transparency and accountability, made residence and citizenship industry experts, Henley & Partners, rank the Programme number one in the region and number four globally.

“In addition to visa free travel to over 135 countries, eligible investors have the right to reside permanently on the islands. The recent elimination of personal income tax makes it even more attractive.”

“…a culture of efficiency, a robust due diligence process, transparency and accountability, made residence and citizenship industry experts, Henley & Partners, rank the Programme number one in the region and number four globally. What are some of the reasons people may desire a second-citizenship? Unfortunately, the politics of one’s home country generally dictates the freedom of movement of many people. A second citizenship gives this demographic the opportunity to become a global citizen; an opportunity that should be afforded every individual by virtue of them being a resident of planet Earth. In addition to mobility, citizenship and residency investment programmes allow families greater security, access to education, quality of life, stability and diversification of wealth.

Does the Programme accept applications from any country, or are there exceptions? There is a “Restricted Country List” comprising Afghanistan, Iran, Iraq, North Korea, Somalia, Yemen and Sudan. Nationals of the countries listed are eligible to apply for citizenship in Antigua and Barbuda under the Citizenship by Investment Programme after having met the following criteria: • Individuals born in these restricted countries but who migrated before the age of majority and/or have maintained permanent residence in Canada, the United Kingdom, the United States of America, Australia, New Zealand, Saudi Arabia and the United Arab Emirates, for a period of not less than 10 years and maintain no economic ties to any restricted country.

How are applicants vetted? All applicants must apply through a locally licensed agent ** and are subject to processing and Due Diligence (DD)/ background check fees, depending on the ages of the members of the family. The DD process is an extremely involved and stringent procedure. The CIU employs a multi-tiered process which involves, but is not limited to, searches in global sanctions and embargo

36 Citizenship By Investment

lists, alerts and watch lists issued by financial regulators, law enforcement and other government agencies worldwide. These lists contain the profiles of high risk and “potentially” high risk individuals and entities, Politically Exposed Persons (PEPs) and their relatives and close associates, high-profile criminals and blacklisted entities. The Unit engages the services of international DD providers to conduct extensive research on all members of the family in every place they would have lived for more than six months during the past 10 years. The Unit also focuses on ruling out direct or indirect involvement in terrorism, international investigations or cross border money laundering activities when assessing eligibility. Where derogatory information is discovered at any of these stages, the applicant is denied.

What are some of the benefits that have been derived from the Programme? Over the life of the Programme, Antigua and Barbuda has seen a resurgence in the country’s real estate sector and renewed interest in the hotel sector. This economic boost has allowed for environmentally responsible projects such as solar energy and reverse osmosis to be developed. The local populace has also benefited from direct contributions to social development schemes. Additionally, the construction boom expected as a result of the Programme will create more employment opportunities and other spillover benefits, to improve the economic livelihood of normal Antiguans and Barbudans. ** A Locally Licensed Agent is a citizen of Antigua and Barbuda or who is lawfully ordinarily resident for a period of not less than seven years. Looking to the future, the country anticipates that the revenue flows from CIP will assist in fostering cottage industries such as agro-processing, improve the agricultural sector and support the creation of new industries, thereby, ensuring diversification of the economy. 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 second citizenship programme of choice. For more information about the Antigua and Barbuda Citizenship by Investment Programme, visit www.cip.gov.ag or email info@cip.gov.ag.


designed for contemporar y caribbean living

T

amarind Hills is one of the most exciting recent developments in the Eastern Caribbean. Created by the internationally acclaimed architects Lane Pettigrew and Rob Denning to take the maximum advantage of its stunning location between two of Antigua’s most beautiful beaches, all properties boast magnificent west facing views, floating infinity edged pools with huge wrap around terraces, and the finest European kitchens and bathrooms. There are a range of one to four bedroom villas, apartments and cottages available for rental and sale on a freehold basis, and owners are free to use their property as often as they choose. A fully managed rental programme is available for those who wish to benefit from a return on their investment. Alternatively owners can live in their property year round, enjoying all the onsite facilities of a five star resort. Most properties feature private infinity edged pools, floor to ceiling glass walls, high speed wi-fi, cable TV, built in entertainment systems and many offer private areas for media rooms, personal gyms or offices.

moorings, 24 hour concierge and restaurants. The international development team have over 40 years experience of producing successful resort developments throughout the Caribbean, and are extremely excited by what they feel is the combination of a world class product on a uniquely beautiful location. Construction has gone well to date with the first three phases handed over, and either occupied or rented. Newly designed one bedroom apartments will be complete in November 2018, and visitors are welcome at all times to visit the show homes and sales and marketing suites.

For complete relaxation and reinvigoration in 2019 the resort will have a signature spa, fully equipped gym, pilates and yoga studios. Other facilities will include a beach club, boardwalk,

For a no obligations site tour visit the on site sales office and show home at Ffryes Beach. Call +1 268 562 7380 or email: rufus@tamarind-hills.com

w w w. t a m a r i n d - h i l l s . c o m


38 Citizenship By Investment


Citizenship By Investment 39


Canada business immigration programmes – under the Provincial Nominee Business Immigration Program (PNP) –10 options to choose from! by PRASHANT AJMERA

C

anada is a pioneer in business immigration programmes and has always remained forefront in coming up with new programmes and options to attract entrepreneurs from all over the world. Due to the attractions of setting up businesses in the major urban centres of Canada, such as Toronto, Montreal and Vancouver, the federal government has signed an agreement with various provincial governments, which has developed their own business immigration programmes for SMEs and also for farmers in some provinces. This allows an investor to choose from 10 PNP Entrepreneur business immigration programmes.

General requirements: 1. The investor must have assets of C$400,000-$800,000;

2. Two to three years of business experience as an owner or senior executive of a company; 3. A business exploratory trip to Canada for two to three weeks and;

4. A detailed business plan with a complete understanding of the viability and legality of the business to be started in Canada; 5. Job creation for two to three people for local Canadian citizens or permanent residents.

40 Citizenship By Investment

Investors are allowed to open new a business, purchase an existing business or make a partnership with local businesses. If investors do not take an exploratory trip to meet government departments, professionals, business associations, business counterparts, etc to find out about the correct rules and regulations for operating a business in Canada and then make a detailed business plan, we believe the officer will not be satisfied and your application isn’t likely to receive approval. Please note that the amounts and requirements shown are minimum as a guide only. If an investor does not show their commitment to start and operate the business themselves, they will also have difficulty in getting an application approved.


Here is a summary of some of the most popular programmes: Province

Programme name

Minimum requirement

Minimum investment In Canadian dollars

Remarks

British Columbia

Farmer/business owner/ operator

a) Age = no limit

No deposit

c) Experience = 5 years

investment = min C$200,000

IELTS not necessary. There are other options for higher investment for company who wish to expand business in BC.

b) Personal net worth = C$600,000 d) Business key person can immigrate with the applicant e) Mandatory visit before application

Young farmer

3 years of experience in farming

C$150,000

Applicants are required stay on the farm

Entrepreneur

a) Age = no limit

Urban area C$250,000

a) 7 days visit mandatory

Manitoba

Net worth $350,000

b) Experience (owner/manager) = 3 years C) Personal net worth = C$500,000

Entrepreneur New Brunswick

b) Basic English (no IELTS) online process

Ruler area C$150,000

a) Age = 22-55

b) Experience = business owner 3 years / manager 5 years C) Personal net worth = C$600,000 (C$300,000 liq.)

C$250,000 and deposit of C$300,000

IELTS 5 band – online process

d) Education = 12 years school + 2 years college Post graduate entrepreneurial stream

IELTS 6 band each Must be in valid Post graduate study permit

a) Age = 20-40

b) Experience = 1 year in NB as owner and manager of business

c) Education = 2 years study in NB at university or college Entrepreneur

a) Age = 21 years+

b) Experience = owner 3 years / manager 5 years

IELTS 5 band

C$150,000+

c) Net assets = C$600,000 Nova Scotia

International graduate entrepreneur

a) Age = 20-40

IELTS 6 band each

b) Experience = one year in NS as owner and manager of business in NB

Must be in valid post graduate study permit

c) Education = 2 years study in NS at university or college Entrepreneur

a) Experience = 3 years as business owner or senior manager b) Net assets = $1,500,000 in Toronto area / $800,000 outside Toronto or IT sector c) Can do new, existing or JV business

Ontario

Entrepreneur

Prince Edward Island Entrepreneur (work permit)

a) Age = 21-59

b) Personal net worth = $600,000 min

C$1,000,000 in Toronto and outside Toronto or CIT/Tel. sector C$500,000

C$200,000 deposit

c) Education = High school

C$25,000 will be refunded after 6 months

e) Investment = $150,000

C$25,000 after 1 year and C$100,000 after 2 years

a) Age = 21-59

Same as above

b) Personal net worth = $600,000 min

IELTS 5 Band and creation of 2 new jobs

IELTS 4 bands

IELTS 4 bands

c) Qualifying 50 pts.

d) Ready to invest = C$150,000

AUTHOR PRASHANT AJMERA The author is an Indian immigration attorney with 25 years of experience in the area of practice residency and citizenship by investment, with presence and associates in several countries. www.ajmeralaw.com

Citizenship By Investment 41


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 mosaic-adorned villas.

Economy

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.

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.

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. 42 Citizenship By Investment

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.

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 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 business-friendly 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. 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. 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. 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

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.

Citizenship by Investment in Cyprus 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.

Citizenship By Investment 43


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 memberstates. 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. 44 Citizenship By Investment

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.

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.

Latest

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”.

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

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.


CYPRUS CITIZENSHIP BY INVESTMENT Cyprus, a member of the European Union since 2004 provides one of the most attractive, quick and straight forward investment immigration programs to wealth individuals non EU citizens and is the only EU country that offers both options of Permanent Residency or Citizenship without the requirement of residency. Most importantly both programs are based on investment and the investment need only be kept for 3 years, after that period the investor can dispose of the investment as opposed to a donation to the government that applies to most of the other Countries’ programs. Both programs are offered through a fast track procedure enabling the applicant to receive an EU passport within 3 months or a permanent residency permit within 2 months.

Conditions / Criteria • Invest in Cyprus, an amount of at least €2.0m • Have a residential property in Cyprus of no less than €0.5m • Clear criminal record.

Benefits • EU citizenship; • EU passport; • Granted within 3 months; • No residency requirement; • No language requirement; • Investment can be disposed of after 3 years; • Visa-free travel to more than 157 countries. Quickly and cost efectively obtain visas for other countries, such as the USA; • A secure investment, rather than a donation like in many countries; Access to the best education and healthcare institutes; Children have the right to much lower tuition fees in European Union countries because they are nationals of a European Union country; • Insurance policy against political instability; • EU passport holders are entitled to enter, reside, study and work in the European Economic Area (European Union, Iceland, Liechtenstein, and Norway) and Switzerland without a visa. • Wonderful holiday destination; • Low crime rate; • Property(ies) acquired can be rented; • There is no inheritance tax; • One of the lowest property taxes in the world

• The applicant’s spouse and any dependants up to the age of 28 are eligible to apply along with the investor without the need of satisfying further economic criteria.

Benefits of Cyprus Permanent Residency • Fast track procedure allowing for the issuance of Permanent Residence Permit within two months; • Permit covers the whole family; • Acquire property of €300,000 in Cyprus • No physical residence requirements during or after the application procedure (the applicant, his/her spouse and any dependants need only visit Cyprus once every 2 (two years); • No language requirements; • A secure investment, rather than a donation like in many countries; • Insurance policy against political instability; • Children have the right to much lower tuition fees in European Union countries because they will be considered permanent residents of a European Union country; • Closest EU country to the Middle East ; • Wonderful holiday destination; • Low crime rate; • Well known and established financial and tax planning jurisdiction; • The property acquired will be freehold; • No inheritance tax; • Property acquired can be rented; • One of the lowest property taxes in the world;

www.stalworthpro.com | info@stalworthpro.com | +35 722 270 803 88 Arch. Makariou III, 2nd Floor, Office 203 2224 Latsia, Nicosia, Cyprus


QUESTIONS & ANSWERS

INVESTING IN CYPRUS: THE GATEWAY TO EUROPE by N. PIRILIDES & ASSOCIATES LLC

Could you give a brief overview of Pirilides’ key services and the firm’s key objective? N. Pirilides & Associates LLC is a boutique law firm which has enjoyed over 35 years of the highest glory in its field. Our firm offers an extensive range of innovative legal services for clients and their businesses. We pride ourselves on offering a professional, personalised and punctual service. Our firm has developed cultural awareness fostering a fruitful and long-lasting relationship with international clients and we are in a position to offer advice domestically as well as internationally; under common law and civil law systems; in local and cross-border transactions; on day-to-day operations and all kinds of diverse challenging deals.

The key services offered by the firm are: • Litigation and arbitration • Corporate and commercial • Property related • International tax planning • Trusts • Forex • Residency and citizenship • Shipping and ship management 46 Citizenship By Investment

The firm’s main objective is to maintain and enhance the standard of excellence delivered to our clients over the last 35 years through the new generation of high calibre advocates and legal consultants.

What is the legal framework for the citizenship program in Cyprus? Who is eligible to apply? On the basis of the relevant Cyprus Council of Ministers’ Decision (dated 13 September 2016), non-Cypriot investors can apply and acquire Cyprus citizenship by naturalisation (by exception) on the basis of the Civil Registry Laws 20022015). Additionally, Cyprus citizenship may also be granted to the family members of the main applicant (i.e. spouse, children under 18 years of age and adult dependant children aged 18-27 years old) as well as to the parents of the applicant provided an additional investment in residential property of a minimum of €500,000 is made. The Cyprus citizenship by Investment program is open to high-net-worth individuals meeting simple pre-defined conditions. Qualified applicants can be granted Cyprus citizenship approval within 90 days from submission of all necessary documents, making the Cyprus citizenship programme the fastest in Europe.

What is the citizenship through Naturalisation by Exception scheme? On 13 September 2016 the Council of Ministers has revised and approved the “Scheme for Naturalisation of Investors in Cyprus by Exception” in an effort to further attract foreign investment into Cyprus. The new criteria are even more favourable than before with the minimum necessary amount of investment having been reduced from €2.5m to €2m. Under the new procedure, the investors are given several options as to how they can invest in Cyprus, providing greater flexibility. A nonCypriot citizen will now be eligible to apply for the obtainment of the Cypriot citizenship, provided that, inter alia, one of the following economic criteria is met: • Investment in real estate, land development and infrastructure projects • Investment in financial assets of Cypriot companies • Investment in Alternative Investment Funds or financial assets of Cypriot companies / organisations that are licensed by the Cyprus Securities and Exchange Commission • Combination of the aforementioned investments – including investments in special Government Bonds of the Republic of Cyprus up to €500,000


What are the benefits of investing in Cyprus for HNWIs? Cyprus, over the years, has become the European jurisdiction of choice for high-networth individuals (HNWIs) from all around the world. A significant number of investors have established their private and business residence in Cyprus because of its advanced economy and its high human development index, which takes into account life expectancy, education, income and general quality of life. Such HNWIs also choose Cyprus citizenship to establish a personal base in Europe, as Cyprus is considered to be an attractive international business centre offering high quality professional and financial services. Further, and in order to enhance this status, the Cyprus government has introduced numerous tax and other incentives, which have attracted a plethora of international clients. Additionally, Cyprus hosts a large expatriate community, having the third highest percentage of foreign residents in the EU, and provides a high quality education and healthcare system.

Cyprus has a robust agenda of tax reforms and incentives, what advantages do these measures offer to international businesses and foreign investors? Indeed, the Cyprus government has put in place an attractive, relatively simple and stable tax infrastructure, which combines a low-tax regime with a wide network of Double Tax Treaties (DTTs). Some of the advantages of the Cyprus tax system are as follow: • A uniform tax rate of 12.5%, applicable to the worldwide income of resident companies • Dividends, interest or royalties paid to non-residents or tax residents, and the nondomiciled are not subject to withholding taxes

• Gains from sale of qualifying titles (including shares) are tax exempt, provided that no immovable property is held in Cyprus. • Dividend Income is exempt from Cyprus Tax in most cases • There is no Capital Gains Tax on disposal of property abroad • The tax loss incurred during a tax year, and which cannot be set off against other income, is carried forward subject to conditions, and set off against profits over the next five years • There are no Controlled Foreign Company (CFC) rules • There are no thin capitalisation rules • Notional Interest Deduction on equity is granted • There are group relief provisions between Cyprus companies • Tax resident companies can make use of Cyprus’s DTT Network (reduced withholding taxes) • Tax resident companies can have access to EU directives • There is a unilateral tax credit relief where no DTT exists • There are no capital gains or income tax upon liquidation • Favourable company reorganisation rules • Favourable tax rates for tax resident individuals • Exemptions of income from first employment in Cyprus

What tax benefits can be gained from the citizenship by investment program in Cyprus? The acquisition of Cypriot citizenship does not in itself influence the tax treatment of an individual. Tax is imposed based on the tax residency and domicile of an individual. In general, a Cyprus tax resident individual can benefit from a number of tax incentives, as follows: • No tax on dividend and interest income assuming he/she is also non-domiciled in Cyprus • No tax on any profits earned from the disposal of securities including shares and bonds, provided that no immovable property is held in Cyprus • A 50% tax exemption of gross employment income earned in Cyprus by an individual earning more than €100,000 of gross employment income per annum, and who was resident outside Cyprus before the commencement of his employment in Cyprus (applies for 10 years) • A 20% tax exemption of gross employment income (up to a maximum of €8,550) earned in Cyprus by an individual, and who was resident outside Cyprus before the commencement of his employment in Cyprus (available up to 2020) • No tax on employment income earned for offering services to an overseas employer, or to an overseas permanent establishment (PE) of a Cypriot employer for more than 90 days in a tax year • No tax on total taxable income up to €19,500 • A 5% tax on pension received from abroad exceeding €3,420 • No estate duty, wealth, gift or inheritance tax.

What other benefits can be gained from this citizenship? Being a Cypriot citizen is an advantage which entails a plethora of benefits, also deriving from the country’s membership in the EU. Some of these benefits are the following: • All the rights of an EU citizen protected by EU legislation and regulations include the following: freedom to travel and reside (and work), do business, study and travel anywhere in the EU • Free movement of capital – Transfer any amount of money from any member state to another, purchase of property in any EU member state of choice and invest in any activities of choice • All family can obtain Cyprus citizenship i.e. spouse of applicant, children under 18 years, and adult dependent children (over 18 years and up to 28 years) • Dual-citizenship is permitted • No requirement to physically reside in Cyprus – either before, during or after the approval of the citizenship application In the past 12-18 months citizens from which countries have shown the greatest interest in Cyprus’s citizenship by investment program? From our experience, clients come from different parts of the world and take advantage of the attractive favourable tax regime and other benefits Cyprus offers. Russia, Israel, China and the Middle East are the main countries showing interest in Cyprus. Each client has a different need and intention, and yet, each client enjoys the same benefits whilst achieving his/her personal aims.

How do you see Cyprus developing in the next two to five years? With its economy on an upward course, Cyprus has all the right elements determinedly in place to sustain its reputation as a successful international business centre in one of Europe’s most interesting investment locations. The country combines various advantages as a business base, offering a professional yet relaxed atmosphere, allowing businessmen/investors to enjoy the best of both worlds – a safe and secure environment for family life and a sophisticated infrastructure from which to grow and develop businesses. The sunny, warm and almost always-pleasant Mediterranean beautiful weather of the island surely plays its role and can win over even the most cynical or busy kinds of people.

5 Amathountos str., Pirilides Building, 1st - 3rd Floor, 3105 Limassol, Cyprus Tel: +357 25 830830 | Fax: +357 25 830759 info@pirilides.com | www.pirilides.com

Citizenship By Investment 47


COUNTRY SPOTLIGHT

QUICK FACTS

THE COMMONWEALTH OF DOMINICA

S

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. 48 Citizenship By Investment

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, elected by the House of Assembly for a five-year term. The

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

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 plants due to its rich volcanic content. The landscape is also a prime candidate for real estate development and there are a number


“The Commonwealth of Dominica has the honour of being nominated as one of the happiest places to live on earth”. 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 pre-approved 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: 1. Single applicant: a non-refundable contribution of US$100,000 is required 2. Main applicant and spouse: a nonrefundable contribution of US$175,000 is required 3. Main applicant with up to three qualifying dependents. A non-refundable contribution of US$200,000 4. Additional qualifying dependants US$25,000

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:

Due diligence fees

• US$25,000 for single applicant • US$35,000 for main applicant and spouse • US$35,000 for family up to 4 persons, including the main applicant • US$50,000 for family up to 6 persons, including the main applicant • 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 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 49


OBTAINING A SECOND PASSPORT by DON EALES

In the UK

A

second passport саn be оnе оf thе bеѕt thіngѕ that any person mау роѕѕеѕѕ. Thеrе may be many reasons for getting a ѕесоnd раѕѕроrt and whаtеvеr they are, реорlе аrе сеrtаіnlу drаwn at securing іt. Gеttіng a ѕесоnd British раѕѕроrt іѕ nоt illegal as some people may thіnk, so what exactly is the advantage to holding a second passport? For an individual, the greatest advantage is surely the legal right to work without restriction in various countries ¬ a particular benefit of passports from countries in the European Union. The main benefits are as follows; Saves you a lot of time Imagine a case in which you plan to apply for multiple visas at different embassies, but you only have one passport. This can be very difficult because you have to wait for the processing of one application before going to the next one. On the contrary, with the second British passport you can achieve this. Handy for frequent business travellers If you regularly travel for business, you will experience the annoyance of a passport that fills up quickly. This is particularly painful when you visit countries that place a one-page visa 50 Citizenship By Investment

in your passport each time you visit. Sometimes there is still a lot of space in your passport, but there is only one clean page that is needed for a visa sticker. You can fill one passport with small stamps and the other passport for stickers. A backup copy of your current passport It can be very difficult if you lose your first passport, especially if this is the only one you have. This may force you to cancel your planned trips and even miss essential functions outside your country. Having a second UK passport as a backup could be a great option instead of having to wait for a replacement to be processed. Another reason is by getting a second passport you can travel to other countries easier. There are countries that allow only restricted entries. A valid second passport will open more opportunities to go to different parts of the world. Whatever the reasons and benefits are, make sure to go through a legal route while securing a second UK passport. Working things the legal way ensures safety for you and your purposes. It is a quick way to extend your expired passport This is because a few conditions must be met to request a second passport. Unlike new passport applications, you only need to provide your passport photos and a photocopy of the original passport, after which you are ready to travel.

It allows you to visit countries in conflict Did you know that visiting certain countries might not be possible if your passport has been approved by an enemy nation during your previous visit? This is where the concept of a second British passport comes in because once you have it you can get your visa to help you visit an adversary, which might ban or limit entrance otherwise.

International perspective After the EU referendum 100,000 Britons requested Irish nationality in the first six months of 2017, as many Britons are understandably concerned about the impact it will have on their rights to live in Europe and travel across the EU. It is estimated that roughly 6m people in Britain have some Irish connection – and many of them are eligible for an Irish passport. The vast majority of those are happy to stay put. But if the negotiations in Brussels were to end in a disorderly Brexit, many might be tempted to take out Irish citizenship as an insurance policy that guarantees their rights to travel in Europe. One way in which tens of thousands of UK nationals are trying to mitigate the risk is to acquire a second passport in an EU state and take out dual nationality. France and Germany have also reported a significant increase in the number of Britons seeking citizenship, albeit on a smaller scale. In 2016, 1,363 Britons


France and Germany have also reported a significant increase in the number of Britons seeking citizenship, albeit on a smaller scale. In 2016, 1,363 Britons applied for French citizenship, an increase of 264% in that year. The German Federal Statistics office recently said that 2,865 Britons took German citizenship last year, a 361% increase. applied for French citizenship, an increase of 264% in that year. The German Federal Statistics office recently said that 2,865 Britons took German citizenship last year, a 361% increase. Nick Rollason, a partner at the law firm Kingsley Napley, says he is not surprised at the major increase in the numbers of Britons taking out dual nationality with an EU member state. “The UK doesn’t care about how many passports you have. And a decision to take out dual nationality will not normally affect your tax position, which tends in most states to be determined by residency not nationality.” Where Britons may face difficulties is that some EU states are keener than others on the principle of second passports. Mr Rollason states that Austria and the Netherlands are much more restrictive than other EU states. He commented that the retention of dual British and German nationality may also prove tricky. “It is fine as long as the UK is a member of the EU but there is a question about what will happen to dual UK-German citizens after Britain leaves”.

Citizenship by investment Developing countries may strive to sell citizenship in order to help disaster recovery or development and more opportunities to buy real estate with an accompanying passport are being offered. With so many developers desiring to profit from the global demand for citizenship by investment (CBI) it is a case of caveat emptor and buyers who don’t use expert advice can end up overpriced real estate and passports that don’t particularly benefit them. Demand for second or alternative citizenships among high-net-worth individuals is at an all time high as the industry matures. Passports

are fast becoming much more than status symbols for the super-rich: they are increasingly perceived as an integral aspect of sound financial planning.

times and residency requirements. Some programmes involve investment in property or business while others simply require donations.

The growing need for visa free access to the US, Canada, Europe and beyond among wealthy citizens of politically or economically unstable countries, together with the threat posed by the ever-expanding global tax net, is pushing citizenship to the very heart of the financial services sector. Simply put, financial advisers and their clients can no longer afford to ignore the benefits of alternative citizenship.

“The point is there are options and a property developer is not going to tell you which is the best one for you or your client,” says Chapman. “In Antigua alone, for example, you can make a donation of US$100,000 to the Antigua National Economic Fund, invest US$400,000 in an approved real estate development or US$3.5m in an approved enterprise project.”

“Predictably, as the number of enquiries regarding citizenship proliferates, so do the number of developers and agents joining the CBI bandwagon,” says Robin Chapman, an expert in schemes from the Caribbean. “The trouble is that very few of the property developers and agents offering passports have the skills and experience necessary to provide genuine value for money for their services. Very few can give the advice required in selecting the right scheme or the legal expertise needed to understand the investment agreements, the statutes and regulations behind them or to process the eventual application. As the majority are not lawyers, and therefore can’t grasp the small print, they miss significant flaws in the deals offered.” What is also apparent is that not everyone needing a second citizenship would benefit from investing in property or enterprise, which can be more expensive and riskier. All Caribbean CBI countries run alternative options known as government donation funds. These programmes enable individuals to acquire citizenships and passports possibly more cheaply and without the requirement to invest in property or otherwise. Caribbean CBI deals are popular because they cost less, take less time to process and in many cases, can be inherited by future generations. Citizenship of any of the Caribbean islands of St. Kitts, Antigua, St. Lucia, Dominica and Grenada allow visa-free access to the UK, the Schengen Area (comprising 26 European countries), and uniquely, for holder of a Grenadian passport, visa-free access to Russia and China. Grenadian citizenship also carries the potential for a United States E-2 treaty trader visa. This allows you to live and run a business in the United States, once your business plan has successfully undergone rigorous vetting by the US authorities. The E-2 is arguably a better prospect for many families than a US Green Card.

As well as hosting some of the most competitively priced and appealing CBI schemes on the market, however, thanks to the recent hurricanes, the Caribbean CBI countries, in a bid to fund recovery, are responsible for the proliferation of cut-price donation schemes in a race to the bottom and new and tempting but perhaps dubious property-based citizenship schemes do exist. “The investment side of CBI is full of traps for the unwary,” explains Robin Chapman. You really cannot pick a CBI investment from a website. You need advice from someone who has walked the development site and knows the investment and its regulatory background inside out and, importantly, can compare it with the alternatives.” One of the challenges in choosing a property-based CBI is to find one that prices its real estate at market value. Of the many CBI schemes available in the Caribbean island of Grenada, the majority involve investment in residential property. A good example is Mount Cinnamon, which has been around for ten years and has proven profitable. The Sunday Times listed it as one of the 100 best resorts in the world. With so many CBI options on the table and so many risks for the ill-informed, seeking expert advice is essential in choosing the most appropriate scheme and avoiding making serious mistakes.

Selecting the most suitable of the Caribbean citizenship programmes requires some homework. In the Caribbean, like elsewhere, citizenship schemes vary enormously between and within countries, with huge differences in costs, tax implications, application processing Citizenship By Investment 51


COUNTRY SPOTLIGHT

GRENADA

T

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 sand and invitingly clear waters, the 52 Citizenship By Investment

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 eco-friendly 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 red-tiled 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 53


COUNTRY SPOTLIGHT

QUICK FACTS

LIECHTENSTEIN

W

hen people think of Liechtenstein, most people picture a kind of Ruritanian, fairy-tale state, small in scope and vast in wealth. Its snowy mountain scenery and picturesque medieval style castles make it akin to a set straight out of a Disney movie. This vision is not far from reality – this is the perfect destination for highnet-worth investors seeking a quiet, safe and luxurious place to comfortably settle down. In geographical terms, Liechtenstein is situated between Switzerland and Austria in the centre of the Alpine arc. It is the fourth smallest country in Europe. Its western neighbour Switzerland is around 260 times larger. In the west and south, the national frontier runs alongside the Swiss cantons of St. Gallen and Graubünden. In the north and east, Liechtenstein shares a long frontier with the Austrian federal state of Vorarlberg. Despite its mountainous location, Liechtenstein’s climate is mild. It is strongly influenced by the effect of the Föhn (a warm, dry downslope wind in the Alps), which lengthens the growing period for vegetation in spring and autumn. Annual precipitation ranges from 900 to 1,200 millimetres. In the winter temperatures sometimes drop below minus 10°C, summer daytime temperatures generally fluctuate between 20 and 28°C. 54 Citizenship By Investment

Constitution The principality is a constitutional, hereditary monarchy on a democratic and parliamentary basis; the power of the state is embodied in the reigning prince and the people. Head of State HSH Prince HansAdam II, Prince of Liechtenstein succeeded Prince Franz Josef II in November 1989. On 15 August 2004, Hereditary Prince Alois became Regent. The government consists of a five-member team, nominated by parliament and appointed by the Prince for four years. The population is spread over eleven municipalities. Schaan forms Liechtenstein’s largest municipality with around 6,000 inhabitants. Around 5,400 people live in the capital, Vaduz. A third of the population are foreign nationals, mainly from Switzerland, Austria and Germany.

Economy The fourth smallest state in Europe, it resulted from a union between the County of Vaduz (1712) and the lands of Schellenberg by the Princes of Liechtenstein. Although small, it is also one of the wealthiest states in terms of GDP per capita. Lichtenstein actually has more companies registered under its province than it does citizens. A large portion of the rationale behind setting up a business in Lichtenstein is due to its very low business taxes. With a corporate tax rate

Capital city: Vaduz Population: 37,922 (Est 2017) Area: 160km2 Government: Unitary parliamentary constitutional monarchy Monarch: HSH Prince Hans-Adam II Regent: Alois, Hereditary Prince of Liechtenstein, Count Rietberg Prime Minister: Adrian Hasler Currency: Swiss franc (CHF) Dialling code: 423 HDI: 15th

of 12.5%, the only other country in Europe who can boast lower rates is Andorra with a 10% maximum tax rate. Its Rules of Incorporation which are required to start a business are also easier to meet than most other countries. These factors partly result in Liechtenstein being a fantastic location in which to start and maintain a business. Liechtenstein’s reputation as a haven for wealthy investors was not always secure. In fact, following the end of the war in Europe, it was forced to sell many of its national treasures in order to survive financially, including a portrait drawn by Leonardo Da Vinci which was purchased by an organisation in America for US$5m, then a record amount for such a painting. In order to escape these poor financial straits, the country lowered its corporation tax rates in the 1970s. This led to a large number of companies incorporating there, and as a result, the country became one of the wealthiest in the world, enjoying one of the highest standards of living. Outside investment in Lichtenstein’s growing economy saw it develop into a successful, highly industrialised freeenterprise economy. In terms of industry involvement, a large sector that brings in revenue is ceramics. In fact, Liechtenstein has the strange title of being the world’s most prominent provider of false teeth! Other industries include electronics, textiles, precision instruments, metal manufacturing, power tools, anchor


bolts, calculators, pharmaceuticals, and food products. It’s most recognisable international company and largest employer is Hilti, a manufacturer of direct fastening systems and other high-end power tools. Liechtenstein produces wheat, barley, corn, potatoes, dairy products, livestock, and wine. Tourism accounts for a large portion of the country’s economy. Liechtenstein participates in a customs union with Switzerland and employs the Swiss franc as the national currency. It has been a member of the European Economic Area (an organisation serving as a bridge between the European Free Trade Association (EFTA) and the European Union) since 1995. It is also a member of the European Economic Area (EEA) since May 1995 and participates in the Schengen Agreement for passportfree intra-European travel. The government is working to harmonise its economic policies with those of the EU. Since 1923, there has been no border control between Liechtenstein and Switzerland. The Principality is known as an important financial centre, primarily because it specialises in financial services for foreign entities. The country’s low tax rate, loose incorporation and corporate governance rules, and traditions of strict bank secrecy have contributed significantly to the ability of financial intermediaries in Liechtenstein to attract funds from outside the country’s borders. Liechtenstein has chartered 17 banks, three non-bank financial companies, and 71 public investment companies, as well as insurance and reinsurance companies. The Principality’s laws permit the corporations it charters to issue bearer shares.

Relocating there Culturally, as Liechtenstein is small, it has adopted much of the cultural traits of the neighbours who surround it, such as Austria, Baden-Wurttemberg, Bavaria, Switzerland, and specifically Tirol and Vorarlberg. The “Historical Society of the Principality of Liechtenstein” plays a role in preserving the culture and history of the country. In order to redeem the prior situation in which the country was forced to sell much of its fine arts in order to prosper, it now is home to the Private Art Collection of the Prince of Liechtenstein, which can be found at the Liechtenstein Museum in Vienna, and holds claim to being the world’s leading private art collections. A country of peace, Liechtenstein has no military as it is one of the only countries in the world which operates under the principle of neutrality. In fact, the last surviving soldier of the army of Liechtenstein died in 1939 at age 95; the demise of the German confederation meant that the country could disband the small 80 man army it once had and its Parliament took the opportunity to refuse to provide funding for a new replacement army. The Liechtenstein National Police force totals 125 employees and even then these people have little to do as the country boasts one of the lowest crime rates globally.

Liechtenstein is the perfect location or investors seeking a calm, peaceful, prosperous country to do business with start-ups and its picturesque snow-coated landscape is not too hard on the eyes either. With a high standard of living quality and low crime rates, Liechtenstein is a safe and secure investment for any HNWI looking to live a stable life with all of the luxuries that come with it. If you live in Liechtenstein over six months in the tax year you are considered to be a resident and you are subject to unlimited tax liability on your worldwide wealth and income. Less than six months, and you are only subject to limited tax liability on your wealth and income from Liechtenstein sources, including income from employment pursued in Liechtenstein.

Liechtenstein is the perfect location or investors seeking a calm, peaceful, prosperous country to do business with. The comparatively flexible rules of incorporation and low corporate tax rates make it a haven for business owners and

Citizenship By Investment 55


TAKING A CLOSER LOOK AT

LIECHTENSTEIN

56 Citizenship By Investment

by PHILIPP KIEBER, managing director, Interadvice


W

hen you are looking for a strategic country for economic activities in Europe and worldwide, a place for asset protection and wealth planning or a new residency you should have a closer look at the Principality of Liechtenstein in the heart of Europe. The Principality of Liechtenstein is a constitutional hereditary monarchy based upon democratic-parliamentary principles. The small state is located between Austria and Switzerland, with which it has a customs and currency union. It has 37,000 inhabitants, the capital is Vaduz, the official language is German, and the business language is English. Travelling there is easy as the international Zurich airport is within a one-hour radius (115km). The Principality is independent, and following the customs treaty with the neighbouring country of Switzerland in the year 1923, it has close administrative and economic ties with Switzerland. In addition, it also has a currency union with Switzerland. Liechtenstein is a member of the United Nations (UN) and of the European Economic Area (EEA), although, like Switzerland, it is not a member of the European Union (EU). In November 2013, an international convention to prevent tax evasion (“OECD/Council of Europe Convention”) was signed. International Liechtenstein is most known as an offshore place but in fact is one of the most highly industrialised countries in the world. Through its customs treaty with Switzerland and the membership in the European Economic Area (EEA), Liechtenstein and in the country established companies are in a very comfortable economic situation. When talking about Liechtenstein also the very stable economic and political situation of Liechtenstein has to be mentioned. All over the world states have to deal with political and economic crises and banks all over the world have problems with bad loans. While the Principality can refer to its triple A rating of S&P, which was just confirmed in January 2018. Also there is no public dept and the banks can refer to its good ratings. Other location factors beside the stable social, legal and economic order and the high level of political stability and continuity are the liberal company law, liberal economic policy, good infrastructure, stable Swiss franc as official currency, the little bureaucracy and direct administrative channels. Liechtenstein, a place for business activities and asset protection Liechtenstein succeeds in doing the split being a place for business activities as well as a safe haven for asset protection over generations. The Liechtenstein

Persons and Companies Act (Personenund Gesellschaftsrecht – “PGR”) and the Trust Enterprise Act (Gesetz über das Treuunternehmen) establish a liberal, flexible statutory framework that is characterised by the spirit of entrepreneurial freedom and facilitates various company forms and asset holders; the trust (Treuhänderschaft) as well as the trust enterprise (Treuunternehmen/ Geschäftstreuhand) are also enshrined in law. While the stock corporation is an ideal vehicle for commercial activities, foundations are established to pursue common-benefit objectives, holding foundations (succession arrangements for companies) or as family foundations (estate planning, protection of family assets). The Liechtenstein trust can pursue similar purposes. This is closely based on the English common law model. Modern tax law in Liechtenstein The uniform tax rate for legal entities that are not covered by the special arrangement for private asset structures (Privatvermögensstrukturen – “PVS”) is 12.5% of net earnings. A number of special aspects are applicable when determining net earnings. For example, earnings and profit shares (dividends) from participations are not subject to tax, and an interest deduction of 4% may be made on operationally necessary equity capital. Dividend distributions are tax-exempt. Asset management foundations, establishments and fiduciary companies, in accordance with the rules governing private asset structures (Privatvermögensstrukturen – “PVS”), subject to certain preconditions (in particular: no economic activity as well as asset management by an independent third party), may choose to be taxed at the minimum income tax rate of CHF 1,800.00 per annum. Trusts are subject exclusively and without further conditions to the minimum income tax rate amounting to CHF 1,800.00 per annum. Liechtenstein holding company for Swiss companies The Principality of Liechtenstein has established double taxation conventions and treaties on the exchange of information for tax purposes with a number of states. Of interest is the Double Taxation Treaty with Switzerland which was set into force on 1 January 2017. This means Swiss withholding tax (35%) is entirely waived on interest payments to natural persons or legal entities domiciled in Liechtenstein, and the tax rate on dividends is reduced to 15% or will be entirely waived, depending upon the size of the shareholding. An effective option may consequently be a Liechtenstein holding company for Swiss companies or a corporate holding foundation for long-term corporate succession arrangements.

Why Interadvice Anstalt? On the landscape of professional Liechtenstein trustee offices, Interadvice Anstalt is not the biggest player but a very old reliable company, which started its activity in 1922 by the greatgrandfather of the author. Interadvice focuses on the core business of trustee services, which is developing tailored and long-term solutions in a specialised team for selected private and business clients. The client’s interest has always first priority. We see ourselves as a provider of family office services and solutions.

Thanks to our co-operation with law firms and fiduciary offices, asset managers and consultants in a wide variety of countries, we are able to clarify complex questions or to refer clients to precisely the right specialists. Thanks to our co-operation with law firms and fiduciary offices, asset managers and consultants in a wide variety of countries, we are able to clarify complex questions or to refer clients to precisely the right specialists. This co-operation keeps us self-dependent and the solutions are always in the best interest of the clients. If you are looking for a Trust Company in Liechtenstein which is interested in long term relationships and respectful and efficient cooperation we would like to offer you our services.

AUTHOR PHILIPP KIEBER (Mr) Philipp Kieber, Dipl. liecht. fiduciary expert, is member of the board of directors and managing director of Interadvice Anstalt. He is the fourth generation of the family to work for Interadvice Anstalt; he is also a co-owner of LieAdvice AG, which specialises in services for domestic (commercial) companies and private individuals in Liechtenstein. Philipp Kieber Landstrasse 25 Li-9490 Vaduz www.interadvice.li p.kieber@interadvice.li Tel: +423 232 24 12 Fax: +423 232 05 42

Citizenship By Investment 57


MEDITERRANEAN ISLAND WITH A GLOBAL FUTURE

T

he concept of the global citizen is not a new one. Since the beginning of history, there have been those bold individuals who looked past the shores of their own land to the opportunities beyond. Blessed with a strategic location at the heart of the Mediterranean, linking Europe with Africa and the Middle East, Malta is no stranger to hosting visitors from around the globe. With unrivalled historic charm, natural beauty, a sunny climate and an even sunnier disposition, the Maltese islands have long been a meeting point for cultures, a vibrant community of travellers. English-speaking and a European Union member state, Malta has continued building on its strengths and today is home to a strong and diversified business community, boasting of a rate of real GDP growth which is the highest in the EU. Having established a regular presence at the top of European league tables, the Maltese economy is moving from strength to strength, with the major drivers of growth being a diligent, adaptable workforce and a competitive fiscal framework. No wonder, then, that in this context, Malta is also an extremely attractive jurisdiction for global citizens to live, work and enjoy the best that the Mediterranean has to offer. In addition to its dynamic business environment, Malta boasts a robust education and public healthcare systems, as well as a safe, welcoming residential environment. The World Economic Forum’s 58 Citizenship By Investment

Global Competitive Index for 2017-18 ranked Malta’s health and primary education system at 11th place, scoring higher than both Germany and the UK.

Whatever your requirements, Malta has something to offer:

by SIMON XUEREB director, private client services, KPMG in Malta +356 2563 1000 | simonxuereb@kpmg.com.mt

businesses. Well connected and with access to unique access to markets in Europe and beyond, Malta is an island confident enough to seize the opportunities brought about by rapid change.

• The Malta Individual Investor programme offers a route to citizenship by naturalisation for an applicant, minor dependents and qualifying ascendants; • Resident but non-domiciled individuals are taxable on a source and remittance basis of taxation; • The Global Residence Programme offers a flat 15% rate of tax upon income arising outside of Malta which is received in / remitted to Malta; • The Malta Residence and VISA Programme offers a 5 year national VISA (with Schengen VISA free travel for up to 3 months in any 6 month period); • An attractive fiscal environment for business activities, which would usually result in an effective Maltese corporate tax rate of between 0% - 6.25%. In a growing trend, high-net-worth individuals who originally looked to Malta for personal and lifestyle reasons are coming to see the innumerable benefits of embracing the island as a regional base for their

English-speaking and a European Union member state, Malta has continued building on its strengths and today is home to a strong and diversified business community, boasting of a rate of real GDP growth which is the highest in the EU.


Malta: Your gateway to Europe 1st

1st

4th

ANGLOPHONE DESTINATION

HEALTH AND PRIMARY EDUCATION

(Internations 2017)

(World Economic Forum 2017/2018)

7th PERSONAL HAPPINESS (Internations 2017)

ECONOMIC GROWTH IN THE EUROPEAN UNION (2018 Commission Forecast)

7th DESTINATION FOR EXPATS (Internations 2017)

Follow KPMG in Malta:

www.kpmg.com.mt

Citizenship By Investment 59

© 2018 KPMG, a Maltese Civil Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.


C

M

Y

M

Y

Y

MY

K

GLOBAL INVESTMENT IMMIGRATION SOLUTIONS

Malta • Cyprus • Egypt • Turkey • Montenegro • The Caribbean

www.gicg.net www.gicgmalta.net


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

T

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.

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.

It is one of the smallest and most densely populated nations in the world and has two official languages, Maltese and English.

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.

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

Politics

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, 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% Citizenship By Investment 61


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 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), 62 Citizenship By Investment

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 debtto-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

• Spouses and children are required to contribute €25,000 each • Unmarried 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 property agreement for a at least €16,000 p.a. both on five year contracts • Applicants are required to invest €150,000 in bonds or shares. The investments must be in stock sanctioned by the Maltese government • Applications 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. Citizenship By Investment 63


THE IMPORTANCE OF DUE DILIGENCE: LESSONS FROM MALTA Malta’s Individual Investor Programme (IIP) is considered to have the best due diligence procedures in the industry. Jonathan Cardona, CEO of the Malta Individual Investor Programme Agency, shares his thoughts on best practice in the investment migration industry. Can you give us an overview of Malta’s Individual Investor Programme (IIP) and its economic impact? The programme was not designed to address any form of economic distress, and our economy does not depend on income from the programme. Malta is experiencing growth rates of 6% plus in recent years, and the revenue from the IIP is certainly welcome and is giving our economy an extra boost, but it is not required to keep our economy afloat. When the programme was launched in 2014, the rationale was to attract international talent to the country and to create a sovereign wealth fund. The programme is currently capped at 1,800 successful applicants, and to date, we have approved 900 applications.

Malta is often cited as being the reference point and gold standard in terms of due diligence. Can you run us through the process that Malta follows? We have developed a multi-tier due diligence system where we ensure that the applicant does not have a criminal record or pose a threat to national security. First of all, applicants do not approach the agency directly, but all applications have to go through an approved agent. These agents conduct tier 1 due diligence, including KYC checks in line with established industry standards. If these checks yield positive results, the applicant can move on to the next stage, which is the application for a residence card. As part of this process, the Maltese police perform background checks and searches in the Europol and Interpol databases. Once the agent receives clearance from the police, the applicant can start preparing the actual application for the programme. It usually takes between two to six months to complete the application and gather all the supporting documentation.

Can you tell us what checks you perform when screening applicants, and how exactly you develop an applicant’s risk profile? Once we receive the IIP application, we ensure that all the documents that we require have actually been submitted, such as birth certificates, marriage certificates, inheritance certificates and company information. We then pass on the information to specialist due diligence companies. We always contract 64 Citizenship By Investment

two companies to investigate each applicant. Connecting the dots between people, businesses and financial records has become a complex task, and we take no chances. Once we receive the reports prepared by the third-party due diligence firms, our internal due diligence team goes through the file again, adding our own findings from sanction lists and other online databases. They create an internal executive summary about the applicant, applying a risk matrix with seven categories that we have developed. The risk matrix starts with the identification of the family and the question whether they are politically exposed persons (PEPs). We also place a strong emphasis on the source of their funds and the source of their wealth. We are further looking into their business affiliations, their general reputation and any legal as well as regulatory issues that might affect the application. Last but not least, we define their ‘impact radius’. This means we are taking into consideration anything that could affect Malta’s reputation should citizenship be granted. For instance, an individual might be involved in a legal activity that we feel is morally and ethically wrong.

What are the next steps? We complete a peer review, where our team comes together and the file is reviewed one more time. The team then prepares a recommendation whether to accept or reject an applicant. This recommendation is presented to a senior manager, who reviews the file again. At any stage, we might request additional information from the applicant if questions arise or we require clarification. Finally, we send our recommendation and the supporting documentation to the responsible minister, who then makes a decision whether citizenship is granted or not. The decision of the minister is final and cannot be appealed. Approximately 20% of the applications are rejected, which I believe shows that we are taking the due diligence system very seriously.

are members of a professional body. We have adopted this system to ensure traceability, facilitate communication and ensure personal responsibility for each application. We also expect high communication standards from our agents, and we do not accept agents who act irresponsibly.

Many argue that the industry will need to look to the banking sector and to attain the same level of due diligence that banks are performing. Is this a level that the industry needs to get to? Ultimately yes, and in many ways we are already operating like a private bank. The levels of checks that we are doing are not too far off from what the banking sector is doing. For instance, more and more emphasis is put on source of funds and wealth. We are receiving a substantial amount of funds and we need to ensure that the source of funds is clean. We need a clear picture of the current wealth and how it is being generated and what is the history behind it.

The investment migration industry seems to feel that it receives a lot of unfair criticism. Do you agree with this statement? I think everyone in the industry does encounter misinformation as well as a general misunderstanding of the industry. We, in Malta, had discussions both with big media outlets and international organisations, and we have explained our processes and procedures. We have already seen that a lot of the ‘heat’ eases when people gain real insight into how we run our programme. However, I think, as an industry our communication with all stakeholders needs to improve further. We also need to understand better what their real concerns are so that we can, if necessary, implement any safeguards to mitigate these concerns.

What other measures have you implemented to safeguard the integrity of the programme?

Many countries in the world are opposing CBI programmes. What, in your opinion, does the industry need to do to regain credibility and avoid that other countries revoke visa-free access?

The entire process is being overseen by an independent regulator, while applicants, as I have already mentioned, need to make use of an accredited agent. These agents are individuals who hold a professional status and

Citizenship is a sovereign matter of national competence. However, I believe, everyone in this industry needs to make sure that other stakeholders are also comfortable with the design of a programme. In Malta, we don’t


accept applicants from Afghanistan, North Korea and Iran, but we are also careful not to create issues with countries with whom we have visa waiver agreements, such as the US. This means citizens from countries who are on the US travel ban also cannot apply.

Many CBI programmes struggle to achieve the right balance between transparency that is demanded by the public and confidentiality that many clients, for completely legitimate reasons, request. What’s your view? We publish the names of individuals who become Maltese citizens, and we are one of the few countries in the world, and the only one in Europe, which does that. I understand that there are applicants who prefer if we would not reveal their identity. However, we are committed to this level of transparency, and we make this very clear to every applicant.

How do you believe the industry will develop in the coming years, and what lessons can other countries learn from Malta when it comes to designing and implementing a CBI programme? I believe the level of international scrutiny will increase in the coming years. Today, financial crime, money laundering and terrorist financing are on everybody’s mind, and we, as an industry, will be subject to more checks and controls. The due diligence process has to be taken very seriously, as failure to do so can tarnish the reputation of a programme, and ultimately, the value of a country’s citizenship. Working collectively as an industry, we all want to continuously evolve our systems and raise the bar, but I must say that it is disappointing to see that applicants who have been rejected by Malta are receiving passports from other countries. This calls for greater cooperation among countries.

Malta’s Individual Investor Programme at a glance The Individual Investor Programme (IIP) requires an investment in the National Development and Social Fund of €650,000 for the main applicant and €25,000 for a spouse. In addition, applicants need to pay application and due diligence fees of €13,700 per couple, and are required to purchase a property with a minimum value of €350,000 or rent a property for which the minimum annual rent exceeds €16,000. Finally, they must invest €150,000 in governmentapproved financial instruments, which, together with the property, must be retained for a minimum period of five years. Jonathan Cardona is the Chief Executive Officer of the Malta Individual Investor Programme Agency (MIIPA). The Programme is designed to attract global high-net-worth individuals to obtain Maltese Citizenship. Jonathan is also an advisor on EU Affairs to the Prime Minister of Malta. Citizenship By Investment 65


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 66 Citizenship By Investment

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. 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-osMontes, 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 wine-producing 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 highincome 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.

ROUTES TO CBI IN PORTUGAL

As well as the EU, Portugal is a full member of the Latin Union and has a dualcitizenship 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.

Transfer of funds above €350,000 for research activities.

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.

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 €250,000 for artistic or cultural activities. Transfer of funds above €500,000 for capitalisation of small and medium-sized 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 67


THE IMPORTANCE OF HOLDING A GOLDEN VISA RESIDENCE PERMIT CARD.

It is impossible to read the text bellow and not consider a backup plan solution for youand your family!

Tiago Camara CEO PTGOLDENVISA.COM

C

M

Y

CM

MY

CY

CMY

K

Global residency and citizenship, are an increasingly important aspect of private and professional life of this new trend of global citizens. Diversification of both business and personal affairs through multiple residences or citizenships can deliver increased quality of life, mobility, security, educational options, and improved tax and estate planning capabilities. For individuals, having the flexibility of choosing where to live, providing a better quality of life for their families, access to better education, and a safe haven in times of political instability is one of the main reasons to consider this type of solutions. Other reasons are also enough for investors to decide on getting global residency and citizenship: tax optimization, more privacy by avoiding the bank systems that are reporting and providing personal info from their investors, avoid countries with political instability, often with civil wars and terrorism; for Entrepreneurs and their families the free move within several countries for business; The typical investor profile, looking for suitable solutions on Residence Permits and Citizenship, are wealthy individuals who are expats, or business owners, currently living in Middle East, Asia or Africa. These investors are able to secure the future of their next generations normally through a Real Estate Investment in Countries that provides them this Golden Cards or even Passports. By having a Residence Permit in an European Country like Portugal investors and their families are free to live, work and travel within all Schengen countries with68 Citizenship By Investment

out relocation required. The Portuguese Golden Visa Program has been Awarded as the best Residency Program Globally, by the Global Residence Program Index (GRPI), aimed at attracting overseas investment to Portugal, the Golden Visa is a very straightforward, simple and with clear legal rules. So far, 97 percent of the candidates for the Golden Visa programme are applying through investment in Portuguese real estate, primarily due to the great returns investors are getting on the properties in Portugal. Low supply and high demand is generating capital gains for real estate investors up to 12 per cent, every year, especially in the major cities (Lisbon, Oporto and Algarve). To apply for the Portuguese Residence Permit Cards, through real estate investment, foreign nationals, either personally or through a company, are required to make an investment that conforms to one of the following conditions: investment in real estate valued at at least €500,000; real estate with more than 30 years construction time with a value of at least €350,000; real estate with a value of at least €400,000 in areas with less than 100 citizens per square kilometre; real estate in areas with less than 100 citizens per square kilometre with a value of at least €280,000. Our team of PTGoldenVisa.com has more than 10 years experience in the Citizenship Industry and provides an integrated service to investors interested in applying for the Golden Visa Residence Permit Cards, starting with their family analysis, advisory on the best Real Estate Investments, Legal support and Property Management. Our team is ready to deliver! We provide investors the peace of mind their family needs. Contact us now: www.ptgoldenvisa.com


Real Estate | Immigration Services | Property Management

Awarded Portuguese Integrated service provider for Golden Visa Residence Permit

Global Banking & Finance Awards 2017 PTGoldenVisa

Best Golden Visa Service P rovider Portugal

DOWNLOAD FREE EBOOK@ WWW.PTGOLDENVISA.COM

Citizenship By Investment 69


COUNTRY SPOTLIGHT

QUICK FACTS

ST KITTS AND NEVIS

S

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 white-sand beaches. Beds of offshore coral, teeming with fish of every stripe and colour. With the beautiful nature, there is a long and rich cultural history. Brimstone Hill Fortress National Park, dating from 1690, 70 Citizenship By Investment

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

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

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 visafree 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. 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.

REQUIREMENTS AND PROCEDURES Minimum Investment To qualify for citizenship of St. Kitts and Nevis under its citizenship by investment programme, there are three active options:

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.

2. SIDF contribution A one time charity donation of minimum US$250,000 to the Sugar Industry Diversification Foundation (SIDF) plus payment of processing fees. Additional fees apply for accompanying family members. The SIDF is a non-profit foundation established for the purpose of supporting the former sugar workers, conducting research into the development of industries to replace the sugar industry, funding the development of these alternative industries and providing further support to secure the sustainability of the national economy. The SIDF has been designated as a special approved project for the purposes of the St. Kitts and Nevis Citizenship-by-Investment Programme; its accounts are public and are annually audited by a large international

audit firm. The minimum contribution or US$250,000 per person is non-refundable once passport is granted. The SIDF option is the fastest and cheapest way to attain second citizenship.

3. Real estate 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. 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. NB: The Hurricane Relief fund option required US$150,000 donation for a family of four. This scheme closed on 30 March 2018.

Fees and costs Minimum investment: US$150,000 Sustainable Growth Fund (SGF) or US$250,000 (SIDF) 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

Citizenship By Investment 71


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. 72 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 the newest programme to join the other


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.

1) National Economic Fund (NEF) 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 governmentsponsored 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 • Each extra qualifying dependant, of any age: US$25,000

2) Real estate projects 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

The Cabinet of Ministers will evaluate proposed real estate projects for the possibility of citizenship. Approved real estate projects can come under two categories:

• 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

• Minimum investment required: US $300,000

• Education and managerial experience are not required

3) Enterprise projects

• Global income is not taxed • 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.

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

• 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.

• No residency requirements

Once approved, the enterprise project becomes available for further investments from other applicants for citizenship by investment. The following minimum investment is required:

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

• Cruise ports and marinas • Agro-processing plants

• Pharmaceutical products

• Ports, bridges, roads and highways • Research institutions and facilities • Offshore universities

Citizenship By Investment 73


BREXIT AND INVESTMENT MIGRATION TO THE UK

T

he UK has a long history of welcoming talent and investment from overseas. This practice has led to the creation of a diverse and culturally rich society which appeals not only to those seeking tax efficiency, but also political stability, excellent educational opportunities and the benefits that flow from the UK’s tradition of upholding the rule of law. Immigration policy in the UK, however, is currently in a state of flux, and there is uncertainty surrounding the future landscape of migration to the country. This uncertainty emanates, most notably, from the referendum decision of 23 June 2016, in which the UK public voted to leave the European Union. One of the key issues in the UK’s Withdrawal Agreement from the European Union is the determination of the rights of 3.5 million EU nationals currently living in the UK and 1.2 million UK nationals currently living in other EU countries. Although Britain once had an open door policy when it came to immigration, 74 Citizenship By Investment

since the late 20th century, rising immigration in the UK has triggered a debate about immigration controls, and the UK government has come under increasing pressure to reduce the number of individuals migrating to its shores. The topic of immigration loomed large in the UK’s referendum debate on continued EU membership. In the same month as the referendum vote, an Ipsos Mori survey reported that 33% of respondents indicated that the number of immigrants coming to the UK was one of the most important issues influencing their vote. Nevertheless, it is not disputed that immigration has contributed to the social and economic success of the UK.

Mrs May went on to promise: “I couldn’t be clearer: EU citizens living lawfully in the UK today will be able to stay [post-Brexit]” with an easy route to settlement (also known as permanent residency).

In an open letter to citizens of the EU published on 18 October 2017, the UK Prime Minister Theresa May stated, “We want people to stay and we want families to stay together. We hugely value the contributions that EU nationals make to the economic, social and cultural fabric of the UK”. Promising that “citizens’ rights are [her] first priority”, she confirmed that it is not her intention to use citizens’ rights as bargaining chips in Brexit negotiations.

The end of free movement?

As part of its Brexit agenda, the UK government has pledged to introduce new migration controls for European Economic Area (EEA) nationals and their family members, and is also expected to introduce changes to the UK’s domestic immigration system. Such changes will inevitably impact the ways in which both non-EEA and EEA nationals, including those with the capacity to invest, seek to come to this country.

Currently, EEA nationals are able to come to the UK with their family members to live (if self-sufficient), work or study with relatively few restrictions under freedom of movement rights – knowns as “Treaty rights” – enshrined in EU law. After five years in the UK exercising Treaty rights, EEA nationals and their family members can apply for documents evidencing their


permanent residency in UK. With the UK set to leave the EU in March 2019, the details concerning the future relationship between the UK and the EU, including trading and immigration arrangements, remains unknown. Delays in the publication of the UK government’s white paper setting out the landscape of the UK’s post-Brexit immigration system are a cause of uncertainty for UK businesses and EU citizens in the UK alike.

“One notable outcome of the Brexit vote from a high net worth immigration perspective has been a significant rise in Tier 1 (Investor) applications”

A study by the Institute for Government in the UK (IFG) states that two million of the three million EEA nationals currently in the UK have resided here for five years or more, and could therefore qualify for permanent residence. Many of the remaining one million would qualify by the time the UK is expected to leave the EU in 2019. The IFG’s report notes that in order to process the applications of all those currently eligible for a residence document by the time the UK leaves the EU, the Home Office would need to make approximately 3,600 decisions per day. Currently, the Home Office is making approximately 650 decisions per day. At the Home Office’s current rate, it would take 11 years to process the millions of applications from EEA nationals residing in this country. The UK government has remained silent on how it will address this issue. There will be changes to the current rights of EEA nationals to reside in the UK. In a leaked Home Office document concerning the future of immigration policy in the UK, it appears that the government plans to reduce the number of low-skilled migrants coming to the UK’s shores dramatically. It also describes plans to place tougher restrictions on the rights of EEA nationals to settle in the UK, and in particular on their right to bring in family members. The imposition of such controls would represent a seismic shift in the landscape of UK immigration policy and will, in turn, impact the UK economy.

Impact on the Tier 1 (Investor) visa The long-term impact the UK’s exit from the EU will have on high-net-worth migration to the UK is difficult to predict. However, in the short-term it appears that, despite the political and economic uncertainty triggered by Brexit, the UK is continuing to attract overseas investors to its shores. Indeed, one notable outcome of the Brexit vote from a high-networth immigration perspective has been a significant rise in Tier 1 (Investor) applications. The Tier 1 (Investor) visa provides a high degree of flexibility and allows the main applicant and their qualifying family members to live, work, study and establish businesses in the UK without restriction. The visa is aimed at those with access to at least £2m to invest in UK government bonds, UK equities or loan capital in active UK registered companies (excluding those principally engaged in property investment). Applicants can also bring their partner and minor children with them to the UK, who can all live, work, study or establish a business in this country throughout the validity of their visas. The initial visa is usually granted for three years, with the possibility to extend for an additional two. Having spent five years in the UK on this visa – or less, depending on the level of investment – the investor can become eligible to settle in the UK permanently. Once permanent residence (known as Indefinite Leave to Remain or “ILR”) is achieved, applicants may withdraw their investments. Those who invest at least £5m can become eligible to settle after three years, and those investing

Citizenship By Investment 75


at least £10m can become eligible after just two years. Those who obtain ILR on an accelerated basis are able to apply for British citizenship and a British passport after five years in the UK. Before the referendum decision of June 2016, the number of individuals applying for Tier 1 (investor) visas had been on the decline. Data from the Office of National Statistics in the UK showed that the number of Tier 1 (Investor) visas granted by the UK fell from nearly 3000 in 2014, to 708 in 2015, and only 217 in the first half of 2016. The decline can be attributed in part to the doubling of the minimum level of investment from £1 million to £2 million in November 2014. However, the increased investment level is not the sole reason for the decline. Following a change to the Investor visa rules in November 2014, investors are now required to open a bank account in the UK prior to applying for the visa, and must therefore pass a UK bank’s stringent scrutiny regulations. This, of course, poses significant difficulties for nationals of certain countries who often struggle to open a UK account in a timely manner as a result of the bank’s interpretation of their regulatory obligations and/or

investor’s dependants. The dependants of a £5 million or £10 million investor are still required to wait at least five years to acquire settlement rights, and one further year before being able to apply for citizenship. They therefore cannot settle in line with their investor family member, thus falling short of the ultimate goal of many families. On 11 January 2018 the Home Office announced further changes to the settlement rules which have a significant impact on investors. For any visa granted on or after 11 January 2018, dependant partners of Point Based System migrants, including Tier 1 (Investors), must (in addition to the main applicant) also not be absent from the UK for more than 180 days in any 12-month period if they wish to qualify for settlement. Before this change in the rules, the absences of partners were not scrutinised and partners of investor migrants (who were often the wealth generators) could travel freely. The Home Office now expects both the main applicant and their partner to meet the residence requirements if they wish to apply for settlement. This change in the rules will have a huge impact on the partners of investor migrants, as well as on their children because, in general, the children of Tier 1 (Investors) can only obtain settlement if both parents also obtain settlement. Moreover, the way in which absences from the UK will be calculated has also changed. The Home Office will now calculate absences on a rolling basis, and can assess absences in “any 12-month period” they chose to look at, rather than looking at a defined 12-month period. This means that it is much harder for visa holders to manage their travel and to seek to ensure compliance with the rules for settlement.

international sanctions. Furthermore, those who come to the UK on an Investor visa and who wish to acquire settlement rights are required to adhere to strict residence requirements which many struggle to meet. To qualify for settlement, investors and their spouses/partners should reside in the UK for at least 180 days in any 12-month period. However, to qualify for citizenship, the investor should not spend more than 450 days outside of the UK over the fiveyear period immediately preceding the citizenship application. The vast majority of high net worth individuals have global lifestyles and adhering to these requirements is almost impossible. Finally, although the category offers an accelerated settlement route for those wishing to invest more, this is no longer an option for the 76 Citizenship By Investment

When faced with these restrictions, obtaining citizenship of another

EEA country to enable investors to reside in the UK under freedom of movement Treaty rights can appear more attractive. For example, for a minimum investment of €2 million in the Republic of Cyprus, applicants can acquire a Cypriot passport, and with it the full rights and entitlements of European citizenship, within six months.

Similarly, the Maltese Individual Investor Programme enables applicants to acquire Maltese citizenship within a year for an investment of around £1 million. Both the Cypriot and Maltese programmes allow the applicant to invest in property, which is now prohibited under the UK Investor rules. Holding Cypriot and Maltese passports enables the individual to live and work freely in the UK in exercise of EU Treaty rights. The fact that high net worth individual are prepared to obtain citizenship of another EEA country in order to reside in the UK is indicative of the continuing appeal of the UK within the high-networth community. The end of freedom of movement rights for EEA nationals in the UK post-Brexit means that high net worth individual wishing to reside in the UK would have to revert to domestic UK immigration routes.

Resurgence of the Tier 1 (Investor) visa Prior to the Referendum vote, the UK had seen a marked decline in Tier 1 (Investor) visa applications. However, on 1 December 2016, the Office of National Statistics released figures on the number of Tier 1 (Investor) visas granted in the third quarter of 2016. The figures revealed that the number of Tier 1 (Investors) entering the UK in the third quarter of 2016 was the highest number granted since the required investment threshold increased from £1 million to £2 million in November 2014. In the third quarter of 2016, the number of Tier 1 (Investor) visas granted by the UK rose from 40 in the previous quarter, to 72: a staggering 80% increase. When compared to the same quarter in 2015, the third quarter of 2016 shows an increase of 56%. The number of applicants has continued to rise, with 75 applications in the first quarter of 2017 and 85 applications in the second quarter of 2017. Statistics released in the final quarter of 2017 show that 81 new investors came to the UK between October and December last year. Although this represented a slight decline from the third quarter of 2017 when 114 new investors arrived in the UK between July and September 2017, overall for 2017 there was an increase in investors as compared to 2016, despite the overall net decline in migration for 2016. In 2017, Chinese and Russian nationals were the most represented nationalities by number. The data released also highlighted increasing applications from Turkey and India, two countries which previously have not shown significant numbers of investor applicants.


The reasons for the rise in Tier 1 (Investor) applications are likely to be threefold: (i) The drop in the value of the pound following the EU referendum; (ii) It is possible that citizenship by investment programmes offered by EEA countries (as described above) are becoming less attractive to foreign nationals hoping to obtain an EEA nationality to live in the UK, due to the uncertainty surrounding the continuance of freedom of movement rights under EU law; and (iii) Many fear that the UK government will tighten immigration rules in the aftermath of Brexit and so are pre-emptively seeking to secure their status before any adverse changes come into force. Although the rise in the number of Tier 1 (Investor) visas granted in the second quarter of 2017 does not yet match the pre-November 2014 levels, it represents

a significant increase and indicates that, despite the pejorative press surrounding the UK’s increasingly restrictive attitude towards immigration, the UK may be set to regain its position as a destination of choice for high net worth investors.

THE JOINT AUTHORS: Kamal Rahman partner & head of immigration Mishcon de Reya LLP, London

Competition for HNWs Competition for the world’s millionaires and the many economic contributions they bring, both in terms of direct investment and indirect spending, is fierce. With changes to UK domestic immigration being planned, the UK government has an opportunity to revisit its high-networth migration offering and put in place a framework which adequately attracts international investment in this country. Despite the uncertainty brought about by the outcome of the EU referendum, the UK environment is continuing to maintain its foreign appeal.

Natalie Loader associate Mishcon de Reya LLP, London

Fran Rance associate Mishcon de Reya LLP, London

Citizenship By Investment 77


SELECTING A REGIONAL CENTER: THE IMPORTANCE OF DUE DILIGENCE By Kyler James, vice president of government affairs, chief economist and Boris Rubbani, economist, project development

A

s EB-5 becomes more popular around the world, working with a successful regional center becomes even more important. Prospective EB-5 investors are tasked with overcoming linguistic and cultural barriers; reviewing and understanding sophisticated and complex financial and business documents based on US law; and finally selecting a project and investing their hard-earned money. In the face of this, it is important to look for a regional center that has the necessary experience and track record of helping families achieve their immigration goals, and transparency to answer any and all questions from the prospective EB-5 investor during their due diligence process.

Changes in the EB-5 industry During a recent industry conference, a member of the US Department of State announced that an EB-5 investor from mainland China filing today can expect to wait approximately 15 years for a visa to become available. EB-5 78 Citizenship By Investment

investors from Vietnam, India, and several other countries are also filing I-526 petitions at a rate that outpaces the visa allocation for their respective countries, which will possibly lead to delays of several years before a visa becomes available. Additionally, since 1 January, more regional centers have been terminated than in the entire history of the programme prior to 2018. Many of these regional centers were terminated due to inactivity, with a few terminated for cause. In this environment, it is important to recognise that success within the EB-5 industry does exist. Although past success does not necessarily imply future results, in an industry with significant regulatory and other requirements, experience does matter.

Client goals Each client enters the EB-5 process with a common set of goals. First, they would like to move to the United States as permanent

residents. Although incentives behind the move may differ, the defining characteristic of every prospective client is the desire to relocate to the United States. Incentives range from access to schools and universities to personal safety and security. The second goal for each family is the likelihood of receiving their funds back at the conclusion of the process. Each investor wants to ensure that they are not simply purchasing a green card. Indeed, an investor cannot simply purchase a green card through this or any other US immigration programme. It is therefore paramount to consider the operating experience of any regional center. There are only a select few that have achieved unconditional permanent residence status (I-829 petition approvals) for their EB-5 participants, let alone consistently accomplishing this in multiple EB-5 partnerships. For a regional center to be successful, the offerings must be deliberately structured to meet the foreign national’s


projects ensuring stability and predictability of investment offerings. With the current regulatory uncertainty and ever expanding retrogression in the EB-5 industry, it is more vital than ever for investors to be more cautious and scrutinise all EB-5 offerings in the market.

CMB success As early as 2011, CMB Regional Centers was recognised as one of the small number of regional centers with EB-5 participants that had been able to achieve the success of both I-526 initial petition approvals and I-829 final petition approvals. CMB has gone on to accomplish this goal in multiple EB-5 limited partnerships. Recently, the borrower in CMB Group XI repaid its loan to the partnership, more than one year before the maturity date. Group XI made an $80m EB-5 investment loan that helped to fund a portion of the costs of the Crescent Dunes Solar Power Plant near Tonopah, Nevada. Since Group XI had already achieved I-829 approvals for its limited partners, the partnership will now begin the process of returning capital to its eligible limited partners. Group XI will be the twelfth CMB EB-5 partnership that returns capital to its limited partners. Additionally, along with the repayment by the Group XI borrower, borrowers in 23 CMB EB-5 partnerships have repaid a total of $577m in EB-5 funds to date.

CMB’s history

ultimate goals: a permanent residency visa for the investor and his or her qualifying family members, and an opportunity to receive back the funds contributed. Taking all of this into account, only a few investment projects are suited for EB-5 capital.

Choosing a regional center Among the more than 900 regional centers that have currently been designated by USCIS, some have long and well-established track records, while the majority are newly established and relatively untested. The choice of a regional center is especially important because the regional center’s continued existence and success – demonstrated by predicted job creation accomplishment – is very important for the I-829 conditional removal process. In addition to choosing a regional center, an investor must choose a project, as many regional centers have more than one project available. The fact that one project of a particular regional center has been successful does not necessarily guarantee that the next one will be. A prudent investor should therefore dig deeper into all past offerings of the regional center in order to determine if there is a pattern of success and consistency. Additionally, since ultimately the investor’s fate is in the developer’s hands, the investor should research the history of the developer and whether the regional center has worked successfully with the developer in the past. Successful regional centers usually use the same business model for future

CMB’s first regional center was authorised on 15 August 1997. The formation of CMB, as originally constituted, was intended to assist California communities which had experienced the devastating economic effects of military base closures due to the determinations of the Federal Base Realignment and Closure Commission (“BRAC”). A total of 29 California military bases were either closed or re-aligned during this period. As a result, California lost more than 187,000 jobs or nearly 60% of all jobs lost nationally to base closures. Since 1993, there have been five separately announced Base Realignment and Closure recommendations, which further caused tens of thousands of additional job losses throughout California. As early as 1998, CMB’s investments in the former Norton Air Force Base through the Inland Valley Development Agency (IVDA) served as seed capital for the area’s infrastructure redevelopment. This allowed the IVDA to obtain matching funding from the federal government. CMB was the only organisation willing and able to provide the much needed matching funds for federal grants to be released towards the massive infrastructure projects that were being undertaken. In 2002, the IVDA entered into an exclusive master disposition and development agreement with Hillwood – a Perot Company. Beginning in 2007 and working with the IVDA and later directly with Hillwood, CMB funds were utilised in the successful public-private partnership known as AllianceCalifornia, which is now home to multiple Fortune 100 and 500 firms.

From 2007 to 2011, CMB provided over $101m in direct funding for the redevelopment of the Norton Air Force Base and local infrastructure through eight EB-5 limited partnerships. The funding was in the form of low-cost loan capital to the IVDA and the San Bernardino International Airport Authority (“SBIAA”). Today, the area is home to companies like Amazon, Pepsi, Pep Boys, Cott and Stater Bros, among others. The money invested by the eight CMB EB-5 limited partnerships has been repaid and is being transferred to the eligible initial EB-5 investors.

CMB’s track record To date, CMB EB-5 petitioners have received over 4,300 I-526 petition approvals through CMB-affiliated partnerships. Moreover, over 1,000 CMB EB-5 petitioners have received their I-829 petition approvals. Every CMB EB-5 project to date, which has been adjudicated by the USCIS, has received approval either through approved I-526 petitions or approved I-924 exemplar petitions. In total, CMB has raised over $2.8 billion in EB-5 capital, which has been matched with over $10.3 billion in additional public-private financing for a total capital investment of over $12.9 billion. Investment in a wide variety of sectors CMB has invested in a wide array of sectors including real estate, solar energy projects, an ethanol production plant, repurposed military bases and amusement parks, all with much success. The ability to effectively employ a loan-based alternative financing structure, rather than an equity-based model, has not only kept CMB competitive in the market, but has kept the clients’ interests at the forefront of the business. CMB applies the same business model to all of its projects to ensure transparency, stability and predictability of its offerings.

Advocacy As one of the oldest regional centers, CMB’s staff has broad-based knowledge complemented by experience. The team is proactively involved in various industry groups striving to bring about transparency and regulatory change aimed at making the industry safer for the investor and deterring bad actors. CMB’s CEO, Mr. Pat Hogan, is considered a seasoned expert in the EB-5 industry. He sits on the board of directors for the Association to Invest in the USA (IIUSA) and has been an active participant in furthering industry best practices and programme reauthorisation. Mr. Hogan is a frequent expert panellist on EB-5 issues and has testified about the EB-5 programme and CMB Regional Center’s successes before a State of Ohio subcommittee on Economic Development, as well as providing written testimony at a US congressional hearing on the EB-5 industry as a whole. Citizenship By Investment 79


80 Citizenship By Investment


Citizenship By Investment 81


THE SMART WAY TO INVEST IN U.S. HOTELS Our goal goes beyond helping our investors and their families achieve their dreams of living and working in the United States. We look to foster long term relationships and pride ourselves in having repeat investors who become part of our Driftwood family. by MARTA DROZD CZERNECKA, Investment Sales Manager, Driftwood Acquisitions & Development, L.P.

D

riftwood Hospitality (“Driftwood”), based in Coral Gables & Palm Beach, Florida, is a leading hotel owner, operator and developer in the United States. Driftwood and its affiliates own and/or manage more than 50 hotels, totaling more than 10,000 rooms and more than 4,500 employees. After years of partnering with institutional capital, Driftwood executives (Carlos Rodriguez, Sr., Carlos Rodriguez, Jr. and David Buddemeyer) created the ideal vehicle to deliver high-yielding, institutional quality hotel investment opportunities to small investment groups and high net-worth (“HNW”) individuals seeking to diversify their investment portfolios. This vehicle, named Driftwood Acquisitions & Development, L.P. (“DAD”), is acquiring approximately six to eight cash flowing hotels per year and developing an additional one to three new hotels per year. DAD’s unique business model invests the Fund’s capital to acquire hotels and then syndicates equity in them, while maintaining a 10% ownership interest, providing accredited investors (including EB-5 investors) with attractive returns. DAD also works closely with its affiliated operator, Driftwood Hospitality Management (“DHM”), to streamline operations upon acquisition, thereby reducing investors’ risk and driving 82 Citizenship By Investment

property-level profitability. Since its founding, DAD has syndicated over $600 million to over 400 HNW individuals, including more than 100 EB-5 investors.

The EB-5 Program & The Driftwood Difference DAD has designed two EB-5 offerings to implement at the Company ’s development projects, one debt, one equity. DAD offers the traditional industry model, which consists of a 5-year term loan, with some unique enhancements: 1. 2.0% interest per annum to investors, and 2. all jobs created go first to the debt investors. In addition, DAD offers a second investment option consisting of limited partner equity that yields attractive annualized returns of 8.5% over the investment term. DAD always places investors’ needs first and allows the flexibility to select whatever model works best for them and their families. More importantly, DAD’s interests are always aligned with investors as the Company ’s development projects are structured to benefit investors first, and then, DAD. For EB-5 investors, greater security exists in smaller development projects. They are less complex and generally possess clear start dates and completion deadlines, allowing the developer to leverage its expertise and create jobs, which is the most important requirement in securing a permanent green card. Given DAD is both the developer and hotel operator, the Company has complete control over the project. Furthermore, unlike most EB-5 projects DAD does not need to raise the entire EB-5

portion before construction commences or the hotel opens. In most cases, construction starts before EB-5 investors have invested their capital. Regardless of the final number of investors, the project’s completion is guaranteed. This is extremely rare and avoids the pitfalls of many largescale projects, which must wait until all investors are secured prior to starting the project, thereby unnecessarily extending the time it takes for an investor to obtain a permanent green card. Unfortunately, the EB-5 program is in a constant state of flux. For example, an important change with regards to the “tenant occupancy ” model was made in May 2018. Developers can no longer use this methodology to calculate the number of jobs created, something that does not affect DAD’s EB-5 projects as hotel construction generates numerous direct and indirect jobs. Furthermore, all of DAD’s projects have a job cushion exceeding 35%. Additional major changes are scheduled for September, such as an increase to required minimum investment levels and stricter guidelines for determining TEA’s. Therefore, it is of vital importance to select a partner that is trustworthy, accountable and possesses a proven track record. From DAD’s perspective, the goal is to ensure each investor receives a permanent green card and achieves their dream of living and working in the United States. DAD takes great pride in the trust bestowed by investors, and the unique bond formed when the Company helps individuals achieve their dreams.


Citizenship By Investment 83


THE INVISIBLE WALL IS ALREADY UP AND RUNNING! by JINHEE WILDE, ESQ., principal and managing attorney, Wilde & Associates

W

hile President Trump’s rhetoric on stopping illegal immigration and his administration’s discontinuation of the DACA programme and temporary protective status for various Central American countries has dominated discussions of immigration law. A littleknown fact is that this administration has been slowing, and in some cases even stopping, the legal immigration pathway in the absence of congressional action. What began as a travel ban and deportation of illegal immigrants who commit crimes while in our country has spread to a fullblown anti-immigration policy. This has led to an extraordinarily high number of visa application denials and delays, or re-examinations of already approved immigration petitions with no accountability of a reasonable period for adjudication. With respect to employment-based immigration, the business community has been hit with unprecedented USCIS 84 Citizenship By Investment

scrutiny of nonimmigrant petitions for skilled workers, managers, executives, and others; a dramatic increase in Requests for Evidence (RFEs) on ability to pay issue and/ or a demand for the full audit documents that Department of Labor (DOL) requests in the PERM LC process; new interview requirements; and proposals to eliminate work authorisation for spouses of certain H-1B workers; among other things. In addition to the more public heightened screening of designated groups of foreign nationals, many other visa applicants are quietly subjected to additional vetting of the “administrative processing” (AP) queue. Previously, AP was a general term previously used by Department of State (DOS) to refer to cases that appear to meet the basic visa eligibility requirements but require additional background or security checks or further review. However, since last year, most of these cases are marked as 212(g) denial after months of AP status. A 212(g) denial means applicants cannot be issued a visa due to failure to comply with the provisions of the Immigration and Nationality Act (INA) or related regulations.

Visa applicants generally are not given a reason why their cases have been placed in administrative processing or later denial after months under AP. While AP was certainly not rare prior to 2017, reports from the American Immigration Lawyers Association (AILA) suggest an increase in the number of cases that are being referred for administrative processing, as well as the length of time that such cases are held under the administrative processing. Among immigrant visa applications – particularly with approved I-140s for EB-3 and EB-3 Other categories – the visa consuls at various embassy posts have been denying cases on a wholesale basis and transferring the cases back to USCIS for re-adjudication of the I-140s without any explanation for their action. Even though the DOS’s own cable instruction states that consular officers should provide in writing “full explanation…of the legal and factual basis for visa denial and petition return.” Cable, DOS, 04-State-41682 (Feb. 25, 2004) at 6-10, published on AILA InfoNet at DOC. No 04030364, many applications receive a mere check mark noting 212(g) denial.


have to ask ourselves whether it’s good government for one agency to routinely reopen the determinations of a sister agency with clearly assigned jurisdiction over that determination.” Visa applicants seeking to come to the United States are not the only ones that have been impacted by new screening and vetting procedures. Beginning 1 October 2017, all employment-based green card (I-485) applicants must attend an in-person interview at a USCIS field office, and often these applicants are given needless RFEs on documents that were previously submitted or forced to wait a year or more after the interview without a decision while USCIS conducts an “extended review”. The chilling effect of these delays is compounded as the applicants put their lives on hold and the sponsoring employers suffer through a scarcity of sponsored workers.

businesses and stopping potential immigrants from embracing legal means to come to the US. These actions that work to frustrate legal immigration will not stop or reduce illegal immigration, and if allowed to persist as undeclared policy, it will only work to increase it. Prioritising employment-based immigration to help US companies with needed workers and encouraging more investment immigration will help our economy and the financial security of our country’s finite resources. The outline of a commonsense immigration policy exists. We need a workable system that balances the needs of new and old Americans.

Thus, a dramatic increase in the uncertainty and unpredictability of the legal immigration process is discouraging US employers from recruiting foreign workers and dissuading foreign workers from seeking opportunities in the US.

While the DOS’s visa office claims this is enough to satisfy the cable instruction, a check mark and the denial is a conclusion, not a “full explanation of the legal and factual basis for visa denial.” Making matters worse, the posts sometimes will cancel scheduled visa interviews and send the cases back to the USCIS for possible revocation without taking time to interview the applicants. During a visa interview, if the consular officer discovers that the underlying petition should not have been approved, or should be revoked, the consulate retains the right to return a petition to the USCIS. However, how could the consulate officer make such findings in the absence of an interview? In these circumstances, there is a clear indication that the consulate officers are operating with bias to deny visa applications without providing due process to many, if not most, of the EB-3 visa applicants. “[DOS] should not use the revocation request process as a means of disposing of problematic cases in which fraud, misrepresentation or ineligibility for status is only suspected but cannot be clearly established.” Cable, DOS, 01-State-121801 (13 July 2001), reprinted in 78 No. 30 Interpreter Releases 1276-78 (6 August 2001). By making USCIS re-review I-140 petitions that already have been adjudicated, USCIS resources will be further taxed with unnecessary work. As former USCIS director, Leon Rodriguez stated, “We always

These policies, coupled with the administration’s antagonism towards immigrants, have already had a measurable impact. In 2017, the number of H-1B petitions received by US Citizenship and Immigration Services (USCIS) for fiscal year (FY) 2018 declined for the first time in five years: 199,000, down from 236,000 in FY 2017. Between 2016 and 2017, international student enrollments in US colleges and universities fell 4% overall, and enrollments at the graduate level in science and engineering fell 6%. According to data released by the US National Travel and Tourism Office, for the first three quarters of 2017, 2.3m fewer visitors came to the US as compared to the same period in 2016, a 3.8% drop. As noted by the Visit US Coalition, a decline in tourism translates into billions in lost revenues, and thousands of lost American jobs. Meanwhile, USCIS has shifted away from its customer-focused philosophy and continues to struggle with crippling backlogs and slow processing times, while raising filing fees. Inquiries on cases of extraordinarily long processing times (more than 1+ years beyond normal processing times) are met with useless, boilerplate language of “the case is on an extended review… we understand your [clients] may be frustrated by the progress of their cases. However, USCIS must balance individual inconvenience against broader issues of public safety and national security.” While President Trump continues his very public fight for the construction of a physical wall, little by little, he and his administration are quietly and very deliberately restricting and slowing the pace of legal immigration by building an “invisible wall” that is harming US

Jinhee Wilde. Esq. P: (301) 881-8422 F: (301) 230-7108 E: jwilde@wildelawusa.com www.wildelawusa.com

Jinhee has been chosen as one of the top EB lawyers in the US by EB Investors Magazine (voted for by thousands of attorneys, immigration brokers/ agents, project developers and EB investors), candidates being chosen on reputation, track record and experience. This recognition is richly deserved, as the key aspect of her work, which is repeatedly mentioned by clients and colleagues, is her exceptional customer service. With hundreds of clients overseas she makes sure that phone calls and emails are replied to personally within hours – tackling issues fast instead of within days or even weeks. It is the personal care, thorough grasp of detail and speed of delivery that make Jinhee exceptional. Jinhee’s attention to detail and her 33 years of diverse legal experience have resulted in a great approval track record on her EB cases. Citizenship By Investment 85


86 Citizenship By Investment


EB-5 INVESTMENT – DEBT OR EQUITY OR FUND? Prashant Ajmera evaluates your three investment routes for EB-5

O

f late, a large number of regional centers have entered into the EB-5 market offering a variety of investment choices to investors. This has resulted in investors becoming more and more confused regarding the most appropriate investment option which is suitable to their needs and long term goals. I regularly meet clients who have a very sound financial background, yet are completely lost when choosing the right EB-5 investment. Here are the three most common offerings in the EB-5 market at present:

1. Debt model

Ninety eight percent (98%) of offerings in the EB-5 market are using this model. This model involves three entities: (i) The company who has been granted the ‘Regional Center (RC)’ approval (ii) The developers who have incorporated a company or LLP-1 for the project, and (iii) Another LLP-2 which is used as an investment vehicle for EB-5 purposes. As an investor, you will be making an investment in LLP-2, which will loan the funds to LLP-1. In return, LLP-1 will give credit for all jobs created in the project to LLP-2 so as to meet the mandatory ‘creation of 10 jobs’ requirement of the EB-5 programme. The investment is generally made for a period of five years. At the end of five years, the capital is returned to the investor by taking a second mortgage, depending on the type of project. LLP-1 also offers interest to the EB-5 investors which can be in the range of 1%-4% per annum. Ideally, if all these three entities are managed by one single developer company, then this particular EB-5 project can be considered a good selection.

However, in reality, we see that RC approval is obtained by one entity, which then seeks out a developer to develop the project and an entirely different third company is involved in marketing the project. If you do adequate research you will find that there are very few developers who are directly involved in the marketing of their project. In these type of projects, the local banks have the first claim, promoters have second claim and EB-5 investors have the last claim to receive any money in the event of project failure.

2. Equity model

Very few regional centers are currently offering the equity option for EB-5 investment. In this model, only one company or LLP is created by the developers of the project and EB-5 investors are required to make an investment in this particular LLP only. EB-5 investors give the managing rights to the developers. In this model, the investors are not given any fixed returns, but are offered a percentage of the profits as and when the project becomes profitable, while the developers take only a small portion of the profit. In this model, the risks are higher but returns can be as high as 10%-12% per annum. Some of the hotel projects for which our law firm has raised EB-5 investment capital were based on this model and have consistently given good returns. In many EB-5 projects, there are no loans taken from local banks or lenders except bridge loans. Because of this, the properties are mortgage-free right from day one and chances of failure are very low, while those of good returns are very

high. In case the project fails, the capital can be distributed amongst all the EB-5 investors as return of capital since there is only one class of investors.

3. Fund model

Quite a few companies are offering this model now. In first two options, there is one project and one company or LLP. In the fund model, a fund of a certain predetermined amount is created to loan money to several projects and hence the risk is distributed amongst several projects. An annual fixed return is given to investors which can be in the range of 1%-3%. Simply put, the first model can be compared to a debenture, the second one to a share investment and the third one to a mutual fund investment. Each model has its own pros and cons. However, the bottom line is that a viable EB-5 project must have good developers who have a successful track record in non-EB-5 and EB-5 project development.

This article outlines very general information regarding EB-5 investment options for the sole purpose of easy understanding for investors at large. Each investor must seek appropriate legal advice and consult their financial advisors before making any kind of investment. The author is an Indian immigration attorney practicing in the area of residency and citizenship by investment since the last 25 years. His law firm, Prashant Ajmera & Associates (www.ajmeralaw.com), has offices and associates in several countries around the world. Citizenship By Investment 87


A proven EB-5 Regional Center that has invested $240 million in successful projects benefitting foreign investors, developers and communities Projects receiving CiF loans represent $2.3 billion in total investment CiF has created or preserved over 13,000 jobs since CiF was founded in 2009.

Operating in OH, PA & KY The CiF region includes the metropolitan areas of Cleveland, Columbus, Cincinnati and Pittsburgh – with a total population of more than 9.5 million.

100% Success Rate

New offerings

All applications that have been processed by the federal government from our investors for permanent residency status have been approved and all investors due return of their capital have been repaid.

CiF is currently in the market with new offerings based on executed commitments and is poised to complete fundraising for these offerings before Sept. 30, 2018.

Demonstrated commitment to public-private partnerships CiF has cooperative agreements with port authorities across Ohio and ownership in CiF by a Greater Cleveland Partnership (regional chamber of commerce) affiliate.

Priorities CiF works only with proven, quality developers, but does not have an exclusive relationship with any, ensuring that investors are CiF’s top priority.

Extensive worldwide fundraising track record Fundraising includes all of the largest EB-5 markets, and CiF has had an office in China since 2010.

Approvals Has had 440+ I-526 approvals, 200+ I-829 approvals and 11 I-924 approvals through June 30, 2017.

clevelandinternationalfund.com 88 Citizenship By Investment

+1-216-245-0606


SHORT TERM EB-5 EXTENSIONS: WHAT INVESTORS SHOULD KNOW by STEPHEN STRNISHA, Chief Executive Officer, Cleveland International Fund

W

ith its actions just prior to 23 March, the US Congress once again indicated its preference for providing only a short-term extension for the EB-5 programme. Much effort had been exerted by the EB-5 industry to come to a consensus around a series of programme reforms and changes addressing those issues that had been raised concerning programme integrity and directing more investment to underserved areas of the United States. As an officer in the EB-5 trade association, Invest in the USA (IIUSA), it was disappointing to see that we were unable to bridge the divide between users located in our largest cities with the legitimate concerns raised by the rest of the country and their political leaders. Unfortunately, that is the state of play within the American political culture today. The resulting stalemate has further delayed codifying important reforms into law and, most importantly, prevented a long-term reauthorisation. As a result, the programme was extended unchanged until 30 September of this year. With mid-term elections, this November Congress’s attention will be on political campaigns as opposed to revisiting significant legislative matters so the clear consensus is that the program will likely have to operate with short-term extensions into 2019. What does this mean for EB-5 offerings and for investors who wish to consider EB-5 over the course of the next year? First, the good news: For now, the minimum investment remains $500,000 as opposed to being increased to $925,000 under the failed legislation. It should be noted that there are pending regulations from USCIS that could increase this to an even higher amount, and although the agency has

indicated that they now intend to move forward with these new rules, they have not done so as of this writing. Some doubt that they will, or that if they do so, they will come much later this year and at least at no higher amount than Congress proposed, given the large volume of comments to this effect submitted by the industry last year. In any event, the bottom line is that prospective investors have been given a reprieve from a price increase so that if they are truly interested, now is the time to act. Similarly, the failure to pass more comprehensive legislation means that the definition of Targeted Employment Area (“TEA”) remains unchanged. The effect of this is that nearly all offerings can remain at the minimum $500,000 investment level (as opposed to the non-TEA investment level of $1,000,000) and perhaps, more importantly, there will not be the potential disruption that may have resulted from offerings already in the market being affected by a change, negatively impacting both investors and projects. On the other hand, the proposed legislation included positive reform provisions that would have added greater transparency for investors and safeguards to ensure the programme’s integrity. These measures were aimed at the small number of bad actors in the industry and would have had the positive effect of eliminating them from the market. Fortunately, the discussion of these measures alone has moved the majority of the market to adopt such practices on a voluntary basis. In the meantime, however, it will remain important for investors considering EB-5 to consider the track record of the regional center they are working with as the best objective measure for making their EB-5 investment decision. Finally, the overall message to the market as we operate under short-term extensions is that EB-5 remains a viable means to achieve permanent residency status, especially for those coming from countries not affected by retrogression.

At this point, that group includes only China and Vietnam. For the balance of the world the path to conditional residency using EB-5 remains two to three years and for permanent residency five to six years. Note, however, that the latest prediction from the US State Department is that based on current demand longer waits could come as soon as June 2019 for investors from India, South Korea, Taiwan and Brazil. The message to take from all this is that while the programme’s extensions are likely to remain short-term, Congress continues to keep EB-5 alive (threats that the programme’s demise is imminent are simply not true) and that if an individual sees EB-5 as the means to achieve their dream of US permanent residency, now is in fact the best time to take advantage of this opportunity, especially if you are from the four countries mentioned above. For those from India, South Korea, Taiwan and Brazil, the window to utilise EB-5 with the fastest path to residency possible is closing, and they are best advised to move forward with their investment decision as soon as possible.

STEPHEN STRNISHA Citizenship By Investment 89


INDIA VS. PAKISTAN VS. BANGLADESH:

“The sun never sets on the British Empire!”

Sources: (1) New World Wealth (2) https://www.firstpost.com/business/ money/pakistan-among-top-3-nationswhose-super-wealthy-apply-for-secondcitizenship-1969529.html

by MONA SHAH, ESQ. & REBECCA S. SINGH ESQ. Mona Shah & Associates Global

in the world. Pakistan, on the other hand, is among the top three countries with the highest number of ultra-high-networth individuals (UHNWIs) [more than $30m in net assets] applying for second citizenship.2

,

A

t first sight, one could be excused for thinking that this was an article relating to cricket! With economic growth averaging 6% over the last two decades, South Asia has one of the world’s most dynamic economies. India is widely considered as the economic heavyweight in the region, yet one cannot ignore the substantial influence Pakistan and Bangladesh increasingly exert over South Asia. Interestingly enough, despite being former colonies of the British Empire and now all member states of the Commonwealth, the South Asian nations have failed to reap the full benefits by developing strong commercial relations with each other. Indeed, South Asia is one of the least economically integrated regions in the world. According to the World Bank, the total trade among the nations of the South Asian region is less than 5% of their trade with the rest of the world. One might attribute the lack of intraregional trade to 90 Citizenship By Investment

EB-5 visa numbers

high transport costs, protectionist policies and political tensions. With trade barriers and the deep-seated enmity between the nations in place, it naturally leads investors and entrepreneurs to explore economic opportunities elsewhere. One such hotspot is, obviously, the United States of America. The US is the land of dreams and opportunities and embraces many high-net-worth individuals (HNWIs), of which India and Pakistan have a strong supply. India has one of the largest populations of HNWIs in the world, boasting a total number of 218,600, with an estimated 2% of the top of the pyramid leaving the country per year,1 making it also one of the highest net outflows of HNWIs

In the last 24 months, the EB-5 program has become very popular with South Asian countries, especially with Indians. In FY 2017, Indian nationals represented 1.7% of the total number of EB-5 visas issued, with 174 EB-5 visas issued – the sixth largest source of EB-5 investors. Pakistani nationals represented just 0.2% of the total with 21 EB-5 visas issued. Bangladesh is outside the Top 20 with a negligible impact in the EB-5 sector.

Visa backlog India faces visa backlogs for most of the employment based categories: EB-1 (extraordinary ability/multinational executives), EB-2 (skilled workers) and EB-3 (unskilled workers). The number of EB-5 investors from India in 2018 has tripled. In fact, Mr Charles Oppenheim, chief of the


Department of State has predicted that India will have a final action date by June 2019. The date for the backlog could be earlier. There are no such backlogs for natives of Pakistan and Bangladesh

Bangladesh stands at 91st place, but it received an all-time high of $2 billion in FDI in 2016.

Currency funds transfer

Bangladesh ranks one of the lowest in the world, and the lowest in South Asia: 177/190. In particular, the country is second to last for contract enforcement. Bangladesh is ranked 159/190 for Getting Credit and 173/190 for Trading Across Borders

• Indian nationals are limited to $250,000 per fiscal year • Bangladesh: foreign transfers of capital are not allowed. • Pakistan: No limit on funds transfer through foreign currency accounts to and from Pakistan on an individual. The State Bank of Pakistan has suggested changes to the law (Protection of Economic Reforms Act) [PERA], but nothing as of yet

Ease of doing business

Pakistan ranks 147/190 in the world • 105/190 for Getting Credit • 171/190 for Trading Across Borders • Notably better for Resolving Insolvency (82/190) and Protecting Minority Investors (20/190) India ranks 100/190 in the world – around the middle of the pack • 29/190 for Getting Credit • 146/190 for Trading Across Borders • 4/190 for Protecting Minority Investors

Diversity visa None of the three qualify for the diversity visa lottery.

E-2 visa Only Bangladesh and Pakistan are eligible for the E2 Treaty visa. Pakistani nationals are also eligible for the E-1 treaty trader visa.

Reciprocity schedule

How long the visa can be used:

Bangladesh:

E-2: Valid only for 3 months, with two entries L-1: Multiple entries, 12-month validity

India:

L-1: Multiple entries, 60-month validity

Pakistan:

E-2: Multiple entries, 60-month validity L-1: Multiple entries, 60-month validity

Bilateral taxation treaties All three countries have bilateral taxation treaties with the United States for the avoidance of double taxation

Foreign direct investment India continues to be an attractive destination for FDI and is the 20th largest destination for inward FDI by total stock. FDI into India has nearly doubled over the past decade – representing almost 2% of GDP. Pakistan is much further down the list at number 61 worldwide. The US is one of the largest sources of FDI for Pakistan, as is China – through the China-Pakistan Economic Corridor, with numerous infrastructure and power projects currently in development. FDI in Pakistan fell by 71% between 2016 and 2017, with many concerned with inconsistent tax policies, an increased cost of doing business and worrying macroeconomic indicators.

MONA SHAH, ESQ.

REBECCA S. SINGH, ESQ.

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

As an advanced EB-5 practitioner, with a litigation background, Rebecca works with project developers as well as individual entrepreneurs. She is responsible for analysing, crafting and preparing project documents for RC designation and direct EB-5 project petitions, as well as I-829 petitions. Rebecca trouble shoots for other attorneys and is well versed in USCIS compliance.

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.

Rebecca is highly proficient at investor petitions, counselling clients through all stages of the EB-5 program. She has successfully filed complex source of funds issues from clients worldwide. Rebecca is an expert in consular affairs and adjustment of status cases, handling issues such as consular waivers, problematic “Age Out” issues, and non-immigrant and immigrant visa applications. Rebecca also has extensive EB-5 marketing experience, authoring numerous published articles, appearing and producing podcasts and other media streams, and traveling internationally for global conferences

Citizenship By Investment 91


FROM ONE US GREEN CARD HOLDER TO ANOTHER (POTENTIAL APPLICANT) by SEBASTIAN A. STUBBE, chief executive officer, Pine State Regional Center

A

s a long-time US permanent resident, I know first-hand the value of a green card. Like so many aspiring immigrants, I first arrived in the United States to study on an F-1 visa. My student visa served me well and I seized upon my school experience. But not until later, when I finally secured my green card, did I realise how much the United States had to offer someone like me. A world of unrestricted professional opportunities opened up for me, and my family benefited from the many advantages of American life. In the interest of full disclosure, I am in the business of EB5, so you might expect me to say this. But, I genuinely and objectively feel that pursuing a green card for our family was the single most valuable decision we made. And, I believe EB-5 remains one of the best ways to access the American Dream – as long as you put safety and quality first!

Many reasons to pursue the green card More foreign families than ever before are seeking an American education for their children, according to data from the Institute of International Education, a nonprofit organisation that promotes and analyses study-abroad programmes. The inflow from developing nations has surged in recent years, as families recognise the advantage of an American education. For instance, the number of Indian students in the United States has more than tripled over the past two decades, placing India second only to China in that respect. That said, the quota limitations for F-1 student visas pose a daunting challenge – and even for those fortunate enough to attain a student visa, restrictions on scholarships, financial aid, work opportunities, and Optional Practical Training (OPT) often prevent them from taking full advantage of that education. A green card can change all of that and open a wide range of opportunities. In addition to the allure of a US education, America continues to attract immigrants for a variety of individualised reasons, including access to better health care, freedom of expression, or the promise of financial opportunities. For others, the green card simply represents ‘mobility insurance’. 92 Citizenship By Investment

Other options are drying up Leading economies, including the United States, continue to tighten immigration rules. In the US, the H1-B visa category has been significantly restricted, and the EB-2 and EB-3 are facing mounting backlogs. Moreover, US non-immigrant visas like E-2, L-1, and H-1B require renewals every few years, which in some cases require additional investment or documentation. Meanwhile, the United Kingdom is in midst of increasingly challenging Brexit negotiations, and programmes in Australia and Canada are becoming more restrictive and expensive. In all of that, the EB-5 program remains one of the most reliable and cost-effective paths.

EB-5 is a great program, but safety is paramount Once you have a good understanding of how the program works, take your time and figure out which investment sounds right for you. Choosing an EB-5 project is an important and very personal decision, and investors should do their own due diligence. It’s all about minimising risk.

Some things to keep in mind as you choose a project: • First of all, remember that your return on investment is the path to legal immigration to the United States, so focus on which project has lower risk factors rather than which projects have better yield. • Invest in a top-flight immigration attorney: experience really does matter and your attorney will be the one to accompany you through the multi-year process. • Verify the independence of your regional center: it is an advantage for an EB-5 investor if the focus of the regional center is to protect investor capital, not to maximise profit for the developer. • Pay particular attention to (i) completion risk (ii) job creation risk, and (iii) USCIS approval status. • Finally, while not yet required by the USCIS, choosing a project that already employs a reputable broker dealer and a reputable escrow administrator can provide additional layers of independent oversight and protection.

Choosing an EB-5 project is an important and very personal decision, and investors should do their own due diligence. It’s all about minimising risk. Position yourself for potential program changes In recent years, pressure to reform the program has intensified among members of the United States Congress and the USCIS. Given that the investment price has not increased since the program’s inception 28 years ago, it is likely that the level will be raised in the near future. Additionally, there is broad consensus on the need for implementation of certain integrity measures. Finally, there is mounting pressure on the EB-5 program to benefit a wider array of needy communities. That was the original intention when the Immigration Act of 1990 introduced the EB-5 program, and yet in recent years, a majority of EB-5 dollars have flowed into wealthy neighbourhoods in large cities, where the need for funding is less pronounced. Now congressional leaders are pushing for a greater share of EB-5 funds to go to projects in rural or urban distressed areas, such as infrastructure and manufacturing projects that create jobs which often tend to be better paying, higher skilled, sustainable, and diversified. So, what should a prospective investor do today? First, contrary to common perception, there actually already are many high-quality rural and urban distressed projects. Secondly, it remains unclear when regulatory or legislative reform may come, but given growing competition for visas, it is not worth trying to time the market. Once you decide that EB-5 is the right solution for you and your family, I believe it is worthwhile to lock in an early priority date at a lower price, rather than waiting. From one green card holder to another (prospective applicant), I view EB-5 as the best way today to procure the option for a better future.


Citizenship By Investment 93


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. 94 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 95


EB-5 FAQS Q1: My question relates to a direct EB-5 project. How should I use the required capital to qualify for a direct EB-5 investment as I plan to open a restaurant in Delaware. If I buy an existing restaurant for $350,000 and I hire 10 full-time employees, where can I allocate the rest? A If you are buying an existing restaurant, you will only satisfy the EB-5 job creation requirement by hiring 10 additional employees. If the restaurant has been existing for two years or more and falls within the definition of a “troubled business”, i.e., it has suffered an annual loss of at least 20% of the company’s net worth over the last two years prior to receipt of the EB-5 funding, you may save ten jobs without the need of creating any new positions.

Send in your questions to the experts at Mona Shah and Associates Global. Here are a few questions from our subscribers:

Q3: I would like to help my brother apply for EB-5. Can I obtain a loan and gift it to my brother for his EB-5? A: Yes, you can obtain a loan to gift to your brother. However, the loan must be secured and collateralised by an asset you own (must be in your name). For example, you can take a loan against your property or a loan against your investments/401k. The purpose of the loan is also important, and you must state the purpose as either a gift or investment. USCIS will not accept the petition if the documents relating to the loan against your property states the purpose for home improvements.

The remainder of the funds can be invested in the expansion or renovation of the restaurant, equipment, marketing, wages to qualifying employees or other investment vehicles that will help grow the business.

Q4: What happens after my I-526 gets approved? I am located outside of the US.

invest $250,000 Q2: Can we, as an Indian couple, lify as a family? qua each in an EB-5 project, but still limit of $250,000 ce ittan rem Due to the annual outward 0 all at once. 0,00 $50 sfer tran ot per person, we cann primary applicant A: Either you or your spouse can be the itating the EB-5 facil ly simp (investor). The other party is is part of your path This . wire her anot investment by initiating d children under the of funds. Your spouse and any unmarrie s to your petition ative age of 21 will be considered as deriv fits. bene ion and enjoy the same immigrat

A: Upon approval of your I-526 petition, USCIS will forward your case to the Nati onal Visa Center (NVC). The NVC will cont act you. If you are not mainland-China/Vietna m born, you will be able to proceed by paying the appropriate application fees for you and each family member seeking residency, then filing the DS-260 application for each pers on. Once you have submitted the DS-260, along with the required documentation, the cons ulate will issue you a notice with the interview date. If the interview is successful, you will be granted a six-month visa to enter the US. You must enter within the given period. When you arriv e in the US, an immigration officer will stamp your passport (I-551 stamp) indicating your entry into the US. Once you enter and have paid the immigrant fee, your condition al green card will arrive to the mailing address within weeks. The condition al green card is good for two years.

Disclaimer: the information found in this section is intended to be general information; it is not legal or financial advice. Specific legal or financial advice can only be given by a licensed professional with full knowledge of all the facts and circumstances of your particular situation. You should seek consultation with legal, immigration, and financial experts prior to participating in the EB-5 program.

96 Citizenship By Investment


Q5: Can you give an estimate on the cost of the entire EB-5 process? A: Provided you invest in a project located in a Targeted Employment Area (TEA), the minimum investment amount is $500,000. Other costs may include: project administrative fee (approximately $50,000); USCIS application fees (for this publication $3,675 for the I-526 petition, $345 filing fee + $220 for you and each derivative for Consular Processing or $1,225 per person for Adjustment of Status, $3,750 for the I-829 petition and $85 per person for biometrics); and attorney fees (varies).

Q8: What happens if I marry after filing my I-526 petition? Will my spouse be included to receive a green card? A: Yes, your spouse can also obtain the green card as long as the marriage occurred prior to you receiving your immigrant visa to enter the US. If your I-526 petition is approved thereafter, you can contact the NVC to include your spouse. You will need documents to evidence your marriage.

Q6: When is EB-5 retrogression expected to happen for Indian applicants? A: Charlie Oppenheim, chief of the Visa Controls Office at the US Department of State predicted that the cut-off date for India would arrive no later than June 2019. This breaking news came in April 2018 during the IIUSA conference that was held in Washington, DC. As of now, India is still current.

Q9: Are the EB-5 visas allocated based on my country of birth or by nationality? I was born in India, but I am now a UK citizen. A: Visas are allocated based on your country of birth, not nationality. You will therefore be under the quota for India. However, if your country of birth has a backlog, you can use the country of birth for your spouse, if different. This is known as cross-chargeability. Cross-chargeability does not work if you and your spouse were born in the same country, but your children were born elsewhere. It is only based on your spouse. In addition, if you are looking to apply for the EB-5 visa for your child, who was for instance born in the UAE but has the Indian passport, the child can fall under the quota for UAE.

Q7: Do EB-5 direct investors have to have business experience? Do I have to set up a business similar to what I used to do in my home country? A: There is no specific requirement on business experience or skills required for EB-5 direct investors as long as you are able to create 10 full time positions for US workers. You must show at the I-829 stage that you have sustained your investment (used all the funds for the development and operations of your business) and met the job requirement. However, from a practical standpoint, to own and run your own direct EB-5 project in the US, experience in the relevant field is a plus. The business in the US does not need to be similar to the one you have in your home country.

Q10: I am an H1-B holder, with a pending I-140 petition. However, my priority date is April 2016, and there is a backlog for India under the EB-2 and EB-3 categories. Can I also file for EB-5? A: Yes, you can simultaneously have several immigrant petitions pending with USCIS. You will be able to stay in the US as your EB-5 petition is pending since you are on H1-B. Once your EB-5 petition is approved, you can apply for the green card. However, you cannot apply for adjustment of status simultaneously.

Citizenship By Investment 97


Investment Migration News in Russian

Expand your influence. Become our partner • Relevant information on all official investment

programs. • Online calculator to compare and choose the right program. • Excellent tool to raise brand awareness in Russianspeaking market.

www.portnansen.com

The only online portal to provide unaffiliated investment migration information to Russian-speakers: www.portnansen.com.


TI N

A

LE SA

E NT TH ME ER T D S N E U NV D YI VE P B RO HI PP S A EN IZ IT

C

R FO

A U G

M

RA G

O PR

wake up to paradise

T

amarind Hills is one of Antiguans premier real estate developments within the Antiguan Citizenship by Investment Programme. This five star resort development is located between two of the finest beaches in Antigua, and five minutes from a great variety of bars, restaurants, shops, golf and marina. There are a wide range of luxury modern villas available for sale, all of which qualify the buyer to apply for Antiguan Citizenship.

• For a limited time real estate prices are reduced to US$200,000 • Completed properties available with proven rental income • Antigua has visa free access to over 130 countries including the UK and Schengen countries • Tax advantages for first times buyers • No personal or worldwide income tax in Antigua

To a r r a n g e a v i e w i n g p l e a s e c a l l : TEL: +1 268 562 7380 or TEL: +1 268 736 4028 E M A I L : r u f u s @ t a m a r i n d - h i l l s . c o m W E B : w w w. t a m a r i n d - h i l l s . c o m

CBI Summer 2018  
CBI Summer 2018  
Advertisement