CITINAVI Summer 2nd Quarter 2019 www.citinavi.net
DIGITAL DISRUPTION -our nation- e-residency ESTONIA
*Tax-Free Storage Wars JAPAN opening to immigration Is Divorcing Uncle Sam Right for You? Global Residency & Citizenship Navigation by Investment Europe, Caribbean Islands & Canada
DIGITAL NOMADS FINANCE Editor’s Preface
“Financial independance makes the world go round”. However, managing your money wisely while you move around the world has its own pitfalls and issues. The articles of this summer number should give you an overview of all the key topics regarding expat destination countries of free or lowest tax, finance, offshore companies advantageous for remote workers, mostly self-employed, freelancers, entrepreneurs, the wealthy people…. Our CITINAVI magazine includes review on alternative residence and citizenship, taxation and property, as well as living expenses and financial planning. In particular, The United States is the only major country in the world that taxes the income of its citizens and permanent resident status holders regardless of where they live (German citizens have a taxation burden for 10 years). the Foreign Account Tax Compliance Act (“FATCA”) went into full effect on July 1, 2014., U.S. citizen expats sleepless nights in anticipation of a notice from the IRS asking why they have not been filing U.S. tax returns or reporting all their non-U.S. assets. This law impacts directly 4.8 million American Digital Nomads and the number of US citizens renounciating US citizenship escalated since then. . When it comes to living abroad, there are special considerations to be aware of depending on your nationality and circumstances and individual finance solutions whether retirement or other financial goals. There are also matters that need to be examined when it comes to the jurisdiction of entry. Firstly, the
investment in alternative residence and citizenship programmes does not automatically lead to obtaining tax residence in that jurisdiction. The main criteria is for a country to impose a tax liability on an individual, apart from source, is principal residence (the number of staying dates per year). For the entrepreneur nomads or the wealthy people, the importance of obtaining tax advice at every step of this process cannot be underestimated. Although often associated with tax evasion, offshore banking can be a perfectly legal way to make managing your money more convenient and flexible while you are abroad. When you move abroad, you may be faced with paying various kinds of tax in several countries. The overview of UK gift tax article helps you make sense of the UK tax system in your new home away from home. Many an expatriate might first start thinking about financial planning, pension provisions. A dream to depart for Nomads’ freedom without a plan remains a dream.
Editor in chief Dr. Juerg Steffen Hyong-Jin KWON CEO Henley & Partners IMC Geneva Polo club 2nd Quarter 2019 - 3
Citizenship Navigation - summer 2019
contents Nomad Cruise ............................... p.6-7
USA EB-5 project - Become an american movie producer & get your U.S. VISA! by Kat Conway ...... p.36-37
DIGITAL NOMADS, A Rising Trend ............................... p.8-9
Taxation of gifts under UK law by Dmitry Zapol ...............................p.38-39
Editor’s Preface ................................... p.3
e-residency ESTONIA by Kaspar Korjus .......................p.11-13
WHAT IT TAKES TO BUILD AN Efficient 53 RCBI Programme by Stéphane Tajick .. .................................................... p.40-41
Prince Albert of Monaco's "Top Cars Collection" ...............p.14-15
GRENADA, E-2 Visa: Grenada to U.S.A. ......................p.42-45
Tax-Free Storage Wars by Atossa Araxia Abrahamian ....................p.16-19
Portugal’s Attractive Tax Regime for Newcomers by Rosa Freitas Soares ..............................................p.47
20 DIGITAL DISRUPTION - our nation -
The true “value” of art by Karolina Blasiak ............................................p.20-21 Global Citizen: Dr. Juerg Steffen , CEO Henley & partners .............p.22-23 DESTINATION FOR DIGITAL NOMADS (Freelancers, Entrepreneurs and the wealthy people) .............p.24-25
FRANCE THE NEW STAY "TALENT PASSPORT" French castle golden visa ................................ p.50-51
JAPAN - SINGAPORE - SOUTH KOREA p.26
Asia Consolidates Its Passport Power
BREXIT: THE FREEDOM TO END 57 FREEDOMS? by Malcolm Dowden p.53
Japan Begins Experiment of Opening to Immigration .................p.27
Sovereign Equity: A Paradigm Shift by Dr. Christian H. Kälin .................p.54-55
Euorpe’s Migration Lessons for Japan by Irina Angelescu .........................p.28
Proposed Changes to Bulgarian Citizenship Law Would Make Program Similar to EB-5 by Ivan Petrov ......p.57
Japanese Citizenship - Naturalization to Japan by Hyong-Jin KWON ......p.29 Where do Multi-Nationals call home? .. ..........................................................p.30 Citizenship-by-Investment Programmes with Eric Major, Ceo of Latitude Consultancy .....................................p.31-33
POST OFFERING OBLIGATIONS FOR EB-5 ISSUERS “YOU CLOSED, NOW WHAT?” by Bruce C. Rosetto & Bracha Pollack .......................... p.48-49
At the heart of the Atlantic, in the footsteps of a mythical crossing, QUEEN MARY 2 ........................ p.34-35
If you would like to be considered for submitting an article, please contact : CitizenshipNavigation@gmail.com Advertisement : email@example.com Asso. Onsaemi Worldwide 29 Boulevard Grande-Duchesse Charlotte, 1331 Luxembourg
Malta, The Blockchain Island 61 – Then and Now by Chris Borg & Dr Chris Agius .................................p.61 renounciation US Citizenship Is Divorcing Uncle Sam Right for You? by Alexander F. Marino ..............p.62-65 A Qualified Difference, IMCET Education & Training .................p.68-69
Editor in chief : Hyong-Jin KWON Graphic designer: Rina Asanuma Social Media, Website Seo/Sem Planner: Nan Qin Market Research: Ke XU Vietnam: Vy Trieu Le, Huynh Thanh Liem Japan desk : Rumi IWAKI Advertising marketing : Ryoici Kosaka
Rumi IWAKI 2nd Quarter 2019 - 5
I have to be honest, when I first heard about the Nomad Cruise a few years ago, I thought it was the worst idea in history. Having a bunch of online entrepreneurs and digital nomads in the middle of the ocean with limited to zero wifi sounded just plain stupid. Then when I went on a cruise with my family and realized how boring it was to be stuck with hundreds of 70 year old retirees, I vowed to never go on another cruise again. But then meeting everyone last year in Gran Canaria before their departure and hearing about how amazing it was afterwards through friends who went made me change my mind and give it a shot and I'm glad I did. It's not for everyone and in this post I'll explain who it's for, who will love it, who will hate it, and how you can best prepare yourself before you go. I originally thought I would use it as an excuse to just hang out with friends from Chiang Mai who were also going but ended up meeting a ton of new friends and spending time sitting at different tables each night to get to know new people over dinner each night.
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This post has been updated for 2019 after attending my second Nomad Cruise, this one starting in Las Palmas, Gran Canaria going through Morocco and ending in Lisbon, Portugal. : by Johnny FD
Nomad Cruise started in October 2015 and back then we couldnâ€™t believe how much this crazy idea would grow. We are proud to look back at magical trips, an ever-growing community and experiences none of us will ever forget. The idea of the nomad Cruise is to gather the digital nomads on a cruise to meet, exchange ideas, help each other, etc. In addition to participating in a transatlantic cruise all together, there are conferences, workshops, meetings organized in perspective as well as visiting the islands There are on board with 2000 passengers on the cruise. The discotheque is reserved for nomad Cruise participants every day from 10 am to 4 pm. During the 10 days aboard non-stop, conferences are organized every morning from 10am to noon. The topics of the conferences are very varied: from the life of digital nomad to the details of internet security, SEO, internet marketing, instagram, etc. Every day, given a logbook with all the activities on the boat: dance lessons, health talks, mojito competitions, quizzes, karaoke, casino games, etc around sun and pool with jacuzzi, you'll enjoy a fairly busy program you must also enjoy life on board. In your cabin, there is also TV with movies. The nomad Cruise offers the possibility of sharing your cabin with another member of the group to pay less if you travel alone. For the evenings aperitif, show, dinner, then discotheque. There is also a photo gala evening with the captain, so plan an evening outfit. For dinner, you can eat with everyone in the restaurant, tables are reserved for digital nomads or buffet if you miss dinner. Every night, there are spectacles of quality with several themes such as Rock Party, world dances, movie-themed dances, tribute to ABBA, Beatles, Frank Sinatra, etc. In addition, the Brazilian dancers are sublime-talented and the band Monarch who plays music live every night. Also thematic evenings where you can dress according to the theme: evening in white, rock party.... the tropical evening on deck 11 around the pool. The disco is open every evening from 23:30 to 3:30. Again the opportunity to discuss with the digital nomads around a drink but also to meet other passengers. What's great about this cruise is that it's accessible to young people with affordable price. In addition, it is a Latin-style cruise with lots of Latin Americans and so the music that goes with: salsa, reggaeton. In short, there is atmosphere on the dance floor.
2nd Quarter 2019 - 7
Digital Nomads A Rising Trend
It is amazing to work-travel-live anywhere in the world — as long as wiress internet is connected for expats. The Digital Nomads trend shows no signs of slowing down, with more people valuing their lifestyle and companies offering increased flexibility to attract and retain workers. Seeing the world while holding down a full-time job sounds too good to be true, but with the right planning, equipment and support, it can be done.
The terms of ‘Expat’ and ‘Wealthy’ With the increasing globalization of the world’s travel destinations and working habits, the traditional term ‘ expat’ describing « Blue cards of innovative-highly skilled professions or executive expatriates abroad» represents no longer the diversity of expats and the reasons behind their decition to move abroad. With an estimated 50 to 60 million expats accross the globe, expats make up a growing share of the population of certain countries. Over the past five years of the Expat Insider survey, the average age is 44.2 years and expats tend to be highly educated. In 2018, a better quality of life (28%), finding a job abroad on their own (24%), and the simple enjoyment of life abroad (23%) remained the most common reasons for moving abroad. The desire to live in a particular country has lost significantly in importance , dropping from the common reasons in 2014 (24%) to a share of 14% in 2018. Expats are seemingly becoming more pragmatic about where they move, leaving them also less particular about their new destination. The term of « wealthy » also determines today the integrated values of one’s knowledge, talent, and global connections as well as what one has accumulated. A new generation of digital nomads (several millions) is increasing rapidly relevant to the steadly growing global wealthy people ‘A few happy’. The wealthy individuals and families, if they are not globally connected, will remain limited by the particular context, policies and their citizenships, these factors can limit their ability to respond to new threats or opportunities of global travel, business, culture, residence of better educational access for 8 - Citizenship Navigation
their children that appeal to them.
Digital nomads In the recent research, 4.8 million Americans described themselves as digital nomads. Among traditional U.S. workers, 27% said they "might" become digital nomads in the next 2-3 years, and 11% said they planned to. The trend also crosses demographic lines. Although digital nomads skew young and male, 31% are female, and 54% are older than 38. The number of digital nomads will likely grow substantially over the next few years. Extended travelers, freelance workers and entrepreneurs who work remotely to earn a living and, more generally, conduct their life in a nomadic manner with the help of digital tools like a laptop or smartphone with a Wi-Fi hotspot, a solid pair of earbuds with a mic. Such workers often work remotely from foreign countries, coffee shops, public libraries, co-working spaces, or recreational vehicles. One thing that unites digital nomads as their name implies, is their reliance on technology, a proliferation of cloud-based tools. Their toolbox may include online and video chat services, content creation tools, cloud-based storage and online services. The growth of supportive services, such as coworking spaces, online talent marketplaces and job sites, digital nomad tour services and online information sites such as Nomad List, which offers data including the cost of living in various locales, have helped the movement grow, the researchers found. Digital nomads may vary depending on status; common types of digital nomads include affluent people, younger people, freelancer, entrepreneurs or refugees. Positive reasons, such as financial self-sufficient or a career allows a freedom of living anywhere for location independence. Negative factors for why people become digital nomads include a reduced amount of fulltime employment, political unrest, and a high cost of living in their country of origin. Digital nomads may change a residency as expat employee or self-employed entrepreneur by investment in a new destination country (or visit frequently to one or multiple destinations), the typology and logistics of digital nomading can be extraordinarily complicated.
Hire an tax professional advisor W h a t e v e r t h e i n d i v i d u a l o r f a m i l y ’s circumstances, whether as primary motive for such decision to change a residence or as their direct consequence, tax issues and implications will always play an extremely important role. There are tax consequences of working in one place and living in another. Some companies, usually those that want remote workers and digital nomads in their ranks, will handle the heavy lifting for you, but most leave you to sort it out. You may change residence which may range from wanting a better education (yourself or future children). It may quite simple to be the natural desire to secure a more stable living environment for your family. In most countries, you can usually avoid paying taxes on your income by not spending more than six months there at a time (basically 183 days per year), but rules vary in every country. There are also certain deductions you may be able to take as a digital nomad, like the home office you’re using abroad. Use the IRS Tax Preparer Directory (USA). Complications escalate if acquiring a new residence results in a dual tax residence situation on the basis of the number of days being spent in another jurisdiction or any other relevant criteria, such as the individual’s centre of vital interests. Bearing in mind that obtaining residence or being taxed on citizenship (such US citizenship & green card holders) could often result in taxation on one’s global income. For the entrepreneur nomads, the importance of obtaining sound tax advice at every step of this process cannot be underestimated, both from professionals in the existing country as well as in the country of immigrating residence.
10 ONLINE COMMUNITIES FOR DIGITAL NOMADS Successful digital nomads typically have a financial cushion. The digital nomad community has had various events established to host members of it, such as the Nomad Cruise.
1) NOMAD LIST Over 53,000 members. One of the original and largest online communities of digital nomads and remote workers, Nomad List was created by Levels, a Dutch programmer, entrepreneur, and all-around hero and role-model in the community at large. https://nomadlist.com 2) DIGITALNOMAD.COMMUNITY This is the world's "First Decentralized Autonomous Platform for Digital Nomads and the Remote Workforce," built by DNX and based on the Ethereum Blockchain. https://chat.digitalnomad.community/home 3) ESCAPE ARTIST EscapeArtist is one of the world's largest and oldest expatriate resources for real estate, living, working, traveling, retiring, and investing abroad and overseas. What it has resulted in is one of the strongest online communities in the world for those looking to take their lifestyles international. giving updated informations about financial freedom (offshores, investment on real estate, commodities, cryptocurrency, teak and timber), second residence, citizenship by investment … organizing community events in USA.https://escapeartist.com 4) HELLOFELLOW A start-up based in Germany, HelloFellow is an online community and information exchange for expats, emigrants, nomads and other travelers abroad. Their goal is to help you meet other foreigners who live in your neighborhood and share a similar background and life challenges. It’s a community more intimate than a Facebook group with 1,000s of people. https://en.hellofellow.com/ 5) NOMADBASE NomadBase is an app available in select cities, created to help people connect with other remote workers and nomads in the same city. https://nomadbase.io/ 6) GLOBAL DIGITAL NOMAD NETWORK Over 32,000 members This is the original nomadic Facebook group that was created to connect remote workers from all over the world. Powered by OG digital nomad Johannes Voelkner
of web•work•travel and Nomad Cruise. https://www.facebook.com/ groups/1428340887415620/ 7) MEETUP.COM Around 60,000 members This is the online source for offline meetups, so if you haven't tried Meetup.com yet, you definitely should. There are a variety of Digital Nomad-related groups, but also seemingly infinite niche topics outside the nomad realm. They help you to meet like-minded people from all walks of life. Whether you're looking to attend a dinner party in Berlin or knit a scarf with ladies in the Australian Outback, the combination of topics, interests and locations is practically unlimited. https://www.meetup.com/topics/digitalnomads/ 8) FLYLANCER About 2,500 members Penned as "the world's largest offline community for remote workers, freelancers and digital nomads," Flylancer helps you to meet offline in 15 major cities around the world. http://flylancer.com/ 9) DIGITAL FREELANCER More than 5,500 members This community provides access to tools, guides and support to help virtual freelancers build thriving businesses or take their existing venture to the next level. Courses, job stream, chat feature and "highly actionable" articles are available as well. https://digitalfreelancer.io/ 10) REMOTIVE: THE COMMUNITY OF REMOTE WORKERS Over 700 members The purpose of Remotive is to meet likeminded professionals, support each other as a community, share remote jobs and provide productivity tips. https://remotive.io/community ------------------------ others ---------------------https://www.facebook.com/ DigitalNomadGirls/ https://digitalnomadcommunity.net/ h t t p s : / / w w w. f a c e b o o k . c o m / g r o u p s / digitalnomadsuccess/ https://www.reddit.com/r/digitalnomad/ https://www.internations.org/ https://nomadsoulmates.com/ 2nd Quarter 2019 - 9
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NEW YORK MANHATTAN WhatsApp +33750521847 WeChat : Parisneko firstname.lastname@example.org
DIGITAL DISRUPTION - our nations e-residency ESTONIA
Children born today will grow up with a radically different understanding of how governments should serve them : by Kaspar Korjus I’ve been thinking a lot about the future recently. Partly because it’s a requirement for my job — as the head of Estonia’s e-Residency programme — but more importantly it’s because my wife has given birth to our first child. My wife and I grew up during the collapse of the Soviet Union and the rebirth of Estonia as a free country, followed by the rapid reforms that led to it become the world’s most advanced digital nation. However, I firmly believe that our son is going to grow up through even more interesting and transformative times in the years ahead. Despite much of the negativity in the news right now, the overall trend appears to be positive for the opportunities that await him and other children entering our world right now. The internet and other advances in digital technology are enabling more people to live and work globally with greater freedom, independent of any fixed location. As a consequence, governments like ours in Estonia are evolving fast into borderless digital nations in order better serve and benefit from the rise of these new world citizens.
Back to the future
It’s completely understandable if you are wary of any attempt to predict the future though. Most are not usually very accurate. Consider the movie Back to the Future 2, which I’m looking forward to watching with my son soon. It’s a prediction of 2015 that was made in 1989. In their vision of the future, all technology has advanced to the next level — so cars can fly, skateboards can hover and clothes can talk — but people’s lives are actually still stuck in the 1980s. The problem is that we tend to focus on how technology will advance, but not on how that new technology will alter the way we live our lives in more fundamental ways. In one scene for example, a family is sitting round a dinner table while the children are absorbed with their devices, including one that looks like Google Glass. So far, this is quite well predicted — as people with more parenting experience than me will know too well. However, all of the devices suddenly start ringing together and the daughter then looks up to say “dad, it’s for you.” So the movie correctly predicted the proliferation of (what seem to be) internet connected devices, but couldn’t imagine the transformative impact they would have. It’s obvious to us
today that there wouldn’t be a single home phone line anymore because our communications are now individualised. As if to reinforce my point, the future Marty McFly then says he’ll take the call next door before trying to hide messages coming through on the family’s ‘futuristic’ fax machines. This demonstrates how we keep projecting our existing ways of thinking onto our visions of the future and fail to see the most significant changes before they happen. So to predict the future we need to think less about advanced new technology and more about new ways of thinking, enabled by technology. We must embrace the reality that concepts we consider entirely normal now could rapidly change — or disappear entirely. Back to the Future 2 didn’t foresee the changes to our communications industry as a result of the internet and yet the full impact of digital disruption has only just begun. Many other industries have already been radically changed too, such as the media, retail and commerce, while others are facing it now, such as banking and financial services. I believe we haven’t fully appreciated how the internet is about to change our world in other ways too. Perhaps the most important industry about to undergo digital disruption is governance. Our concept of nations might seem permanent to us now, but they are relatively new concepts and they are not immune to disruption either. It is this change that I believe will have the furthest reaching impact during my son’s lifetime.
The evolution of nations
For millions of years, humanity was restricted to small groups of nomadic hunters and gatherers until new innovations enabled us to farm in fixed locations. As a consequence, human settlements began to grow and yet more innovations were required — such as currencies — to govern these communities and enable people to diversify into different societal roles. Those settlements grew by trading and interacting with each other and then even larger structures of governance emerged to oversee this. The biggest reorganisation then took place with the industrial revolution, which further concentrated our communities in ever-growing cities that could manufacture on a large scale to meet the demands of large populations. From this, our nations were born. 2nd Quarter 2019 - 11
This is where we are now — a very small period in human history in which the world’s population has been restrained by geographic boundaries. A nation is assigned to us at birth and then it usually stays with us for life. This random allocation of the world’s population determines our life opportunities more than almost any other single factor. That wouldn’t make sense for any other aspect of our lives though.
That’s why we launched e-Residency in order to scale up our digital nation by offering our services to even more ‘users’ around the world. The main advantage of being an e-resident right now is the ability to start and run a trusted locationindependent EU company with minimal cost and hassle so we are essentially exporting our business environment to those who don’t have the same advantages as us.
Take Facebook groups, for example. There are Facebook groups for almost every area of interest in the world (my favourite is Estonian e-residents by the way), but imagine if you were assigned a Facebook group at birth then had to remain within that specific online community for the rest of your life — unless you went through a lengthy and expensive process to switch to a different group. The abundance of Facebook groups is undoubtedly a good thing, but they work better when everyone has the freedom to choose which ones they want to join and contribute to. Personally, I wouldn’t want to be stuck in a flat earth group! In a similar way, different nations have different values and opportunities too. It’s only relatively recently that large numbers of people on our planet have gained the power to travel, communicate and trade across borders. I take this f r e e d o m f o r g r a n t e d n o w, b u t m y parents could only dream about these opportunities when they were my age. Now I’m the one dreaming about the even greater freedoms ahead of us if we can choose nations as easily as Facebook groups. Our nations are now undergoing a digital revolution, which will radically reshape them once again — this time into borderless online communities with services that can be accessed anywhere there is an internet connection. Consider the fact that Estonia already offers almost every public service online. As Estonian President Kaljulaid recently pointed out, Estonia is the first digital society with its own state, although plenty more will follow.
However, this is only the start. I recently asked what would happen if Estonia offered ‘estcoins’ to e-residents for example (and you’ll be hearing more about that proposal shortly) and the Head of our Tax Board recently speculated that e-residents could one day be offered services paid for through personal taxation, such as health cover and pensions.
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In addition, we now receive frequent visits from policy makers in other states who are interested in learning from the success of ‘e-Estonia’ and even launching their own e-Residency programmes. Azerbaijan will be the second country to launch one, while others are in various stages of discussions about what they intend to offer to their future e-residents. If all countries could attract members online as easily as Facebook groups then they can develop unique selling points for their own e-services. We wish Azerbaijan all the best for their programme because they are not actually trying to replicate Estonia’s offer, but instead want to focus on their own unique advantages. As the new e-Estonia website proclaims, we have built a digital society and so can you. This digital development is good for everyone, everywhere because it will improve the quality of governance globally if people can freely choose which nation they want to access e-services from. For a glimpse of that future, let me tell you about my son’s experience. Welcome to Ruufus’ world Our child was given his ID number almost immediately after he was born into our
advanced digital nation of Estonia. This forms the basis for his secure digital identity, which he will use throughout his life for authenticating himself online and accessing e-services from both the public and the private sector. While we were busy admiring our new child at the hospital, the doctor was busy entering the first data about him into our state’s Population Registry — such as his name, sex, date of birth and the fact we are his parents. This information is really useful straight away because various parts of government would need it to better serve us as new parents, such as by scheduling health checks, supporting with child care and allocating our parental leave allowance. This would generate added hassle for new parents in most countries, but in Estonia the information begins flowing automatically between departments and agencies along our secure, decentralised information network known as the ‘X-road’. When we got home from the hospital and finally took our eyes off our child long enough to open up a computer, we logged in using our own secure digital identities and used our permission as parents to add one more vital bit of data — his name, Ruufus. This is his story so far, but it’s going to get far more interesting. By the age of 7, Ruufus will be starting school to learn to read, write and code like all other children. That doesn’t mean we expect him to code an app one day, any more than we expect him to write a novel, but these are the basic skills that he will need to understand the world around him. Ruufus’ time at school will coincide with rapid advances in the development of artificial intelligence and blockchain technology and this will be used by governments to make smarter decisions and deliver vastly more efficient public services. Ruufus probably won’t have the option of a career in the civil service ahead of him, but he will instead prepare for new jobs that we can’t yet begin to imagine.
His schoolwork will be set and completed digitally and — unfortunately from his perspective now— that means we’ll always know if he has homework to do. Ruufus won’t just grow up in our digital nation, but also in a truly digitalised world where e-services are trusted by everyone and offline concepts like ink signatures, scanning and posting will seem absurdly old fashioned. I know this seems scary to many people around the world now, but our experience in Estonia has given us the opposite perspective. Storing important personal data on paper isn’t just inefficient. It’s also dangerous. In contrast, we can see exactly who is accessing our digital data and then challenge any use that we consider to be unjustified. Blockchain-like technology is already being used to protect our health records by providing a public ledger, which can never be altered or erased. By the age of 15, Ruufus might want to start earning his own money for the first time. He won’t need to restrict his employment opportunities to local businesses however as it will be just as easy to collaborate with people (and instantly get paid by them) on the opposite side of the planet. Cryptocurrencies currently show no sign of disappearing so it is more likely that they will have evolved by then into viable decentralised currencies in which he’ll want to receive payments. That means governments will have needed to figure out how to accept (and tax them) by this point too. But perhaps governments don’t have to ‘tax’ Ruufus by then anyway. Governments can instead earn their main source of income by selling their services globally in the form of monthly subscriptions — much like how Netflix currently delivers its service. We would have to ensure that this is done in a way that improves the welfare of everyone, such as those in need of healthcare. By using smart contracts based on blockchain technology for example, Ruufus could start allocating his money directly to those that need it with greater transparency and efficiency, without the need for government middlemen (like me!). At age 18, Ruufus might want to go explore the world for himself. Fortunately, he won’t have to save up his money or do too much planning first because so much of his life will already be locationindependent, including his source of income. This is already the reality for an increasing number of ‘digital nomads’ today, but Ruufus will have the added opportunity to choose which nations that he wants to serve him globally. The rise of Estonia as a leading digital e-resident of nations that seem surprising to us now because developing nations that embrace digital disruption could
quickly overtake developed countries that don’t. Like me, I hope Ruufus will always be proud to be Estonian, but everyone benefits from increased engagement with other countries. He could choose to run a company in Botswana to access the emerged African business environment. He could choose to pay personal taxes (or a subscription) to South Korea to benefit from their world leading health cover and social protections. While travelling at this age, Ruufus will also be legally allowed to have his first drink in a bar across most countries. He won’t need to prove his age though as he can just use his government-backed digital ID if challenged to show that he is legally allowed in. An important principle that we already have in Estonia is that organisations are only allowed to access the minimum amount of data that they can justify needing. The bars have no reason to know Ruufus’ date of birth because they merely want to request the answer to their question about whether he is over 18. During his 20s, Ruufus might want to settle in one location or live across many. One very important difference to most people today though is that he can make this decision more freely without the need to live next to his place of work or study. Remote work is already acceptable in many industries and it will soon become the norm. This will help alleviate some of the biggest challenges of modern life today, such as the stress and expense of living in crowded cities, as well as the pressures caused by migration. Consider the disruptive impact of elevators, for example. Before they were introduced, the upper floors were the least desirable because they were the least accessible, but that is now the opposite. In a similar way, Rufus might not feel the need to migrate away to London or Berlin in order to find work. I do hope he has even more freedom to travel than me, but he could also enjoy the freedom to access opportunities from around the world — while living in our beautiful Estonian countryside if he wishes.
In 30 years, Ruufus will be a bit older than me and this is around the same period into the future predicted in Back to the Future 2. By this point, Ruufus will have been building up his pension through his subscriptions to Japan but he may also have enough money to invest more heavily in a country of his choice. Right now, ‘investing in a country’ just means investing in property and businesses within a particularly country, but Ruufus might have the option to literally invest in a country. After examining white papers from various countries, Ruufus could choose to invest in crypto tokens issued by the one with the best plan for the future. Perhaps Ruufus enjoyed visiting the tiny island nation of Fiji during his travels and now wants to invest in their digital development. In the digital era, there will be no reason why nations can’t scale up and achieve vast growth in the same way that great startups do today. If a nation like Fiji can use the investment to deliver services that solve people’s problems globally then the country could achieve astronomical growth. Ruufus has an enormous head start in this emerging digital world where far too many people currently face financial exclusion because the services they need are either unaffordable or unavailable in their location. By the time he is older than me though, I hope those advantages that we enjoy as Estonians are available to everyone. Our job at the e-Residency programme is to help make that happen and I hope you will sign up and join us. Thank you for reading my thoughts. My final questions are for you. What services would you choose to access right now from another country if you could? And which country do you think could best offer those services if they were to evolve into a borderless digital nation too? Let me know in the comments below … or contact your government directly and ask them what their plan is for the digital disruption ahead.
2nd Quarter 2019 - 13
Prince Albert of Monaco's "Top Cars Collection" "There are more than 100 vehicles in perfect working condition that can be used by His Highness whenever he chooses. This is why the collection transcends the concept of a mere museum."
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Visiting Monaco is always an experience sensation automobile when entering the museum, the top cars collection of His Highness, Prince Albert II. At the end of the 1950s, the car enthusiast Prince Rainier III began collecting old cars. The very first entry was a 1903 DEDION BOUTON. Notable cars in the collection include the Bugatti Type 35 driven by William Grover-Williams that won the inaugural Monaco Grand Prix in 1929, and Sébastien Loeb's Citroën DS3 WRC, which he drove to victory in the 2013 Monte Carlo Rally. 38 cars from the collection were put up for auction in 2012 due to Prince Albert II's desire to re-organise and expand the collection. Monte-Carlo Racing The ‘Rallye Automobile Monte-Carlo’ is the oldest rally in the world. It dates back to 1911, earning it a coveted place amongst motorsport’s elite events. Historically, competitors began the rally from cities located in all four corners of Europe, going on to tackle treacherous and demanding road conditions before meeting at the finish and celebrating together in the unique surroundings of Monte-Carlo. This iconic event – the 73rd edition of which was held in January, 2015 – takes place in the Alpes-Maritimes, Hautes-Alpes, Alpesde-Haute-Provence and Isère regions of France and, of course, Monaco itself. Since its debut, this rally has always been regarded as the one that every driver and manufacturer wants to win. The ‘Rallye Automobile Monte-Carlo’ has been a regular feature on the FIA World Rally Championship calendar since the series’ inception in 1973, its only absence being from 2009 to 2011 when it served as the opening round of the Intercontinental Rally Challenge instead. The Principality and the ACM organiza between five and six major events every year : Formula 1 Grand Prix, Formula E(electric) which is very successful, Historical Grand Prix (every two years), Monaco Rally, Historical Rally nd E Rally (electric). This collection showcases a fine range of competition cars. For any competition Rally, Formula 1, Endurance, there is a car for every event - a natural choice in the Principality ! Furthermore the museum held the largest and and most prestigious Ferrari exhibition, cars of Maranello the world has ever seen by March 31, 2019. Car racing is an integral part of Monaco's identity. Formula 1 Monaco Grand Prix The ‘F1 Monaco Grand Prix’ is widely regarded as one of the most prestigious motorsport events in the world, with a reputation as illustrious as that of the Indianapolis 500, Le Mans 24 Hours and Rallye Monte-Carlo, affectionately nicknamed ‘the Monte’. The race weekend schedule is atypical in that the first two free practice sessions take place on the Thursday, with the circuit open to the public on the Friday afternoon and each evening. The Monaco Grand Prix attracts some 200,000 spectators over the course of the weekend, and is considered by fans to be one of the unmissable events on the Formula 1 sporting calendar. FORZA ITALIA Among the cars of splendid selection, there are the rare Cisitalia 202 from 1950 was personally driven in true style by Prince Rainier to open the 1948 Grand Prix, Ferrari 250 GT Cabriolet Series 2 from 1963, Alfa Romeo Spider from 1965, Maserati Mistral from 1968.....
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Tax-Free Storage Wars by Atossa Araxia Abrahamian
Arcis is a new art storage facility in Harlem that offers its clients a Foreign Trade Zone. But are they selling the art world a luxury tax haven, or just banking on confusion? On September 17, 2014, the art world’s upper crust convened in Luxembourg City to fête Le Freeport, a warehouse where the ultra-rich hoard paintings, cars, jewelry, wine, and other luxuries in duty-free comfort. Waiters in red uniforms dodged oversize bouquets of white lilies to pass around trays of champagne, and an orchestra played an overture written especially for the occasion before an audience that included the Grand Duke of Luxembourg and top executives at Deloitte. That evening, two American businessmen mingled among the government ministers, gallerists, and local bigwigs. Kenneth Cayre, a wealthy real estate developer, and Tom Sapienza, an accountant who’d worked for years in art shipping and handling, were planning their own entrée into the fine art storage business. But instead of operating in the luxury tax haven of Luxembourg, they would open their storage facility in a place not known for its low taxes: New York City.
This story is published in collaboration with Artsy Editorial. Artsy is a global platform for readers to learn about, discover, and purchase art. 16 - Citizenship Navigation
The terms “free port,” “free trade zone,” and “foreign trade zone” are used interchangeably in the art world. They generally denote a place that’s free of customs duties and other taxes— but the extent of that freedom depends largely on the jurisdiction of the facility. That’s why most of these warehouses tend to be in existing tax havens, like Luxembourg or Switzerland. In the United States, these areas are called Foreign Trade Zones, and they’ve existed under the protection of Customs and Border Patrol since the first opened on Staten Island in 1937. Today, they’re located in airports, in seaports, and on waterfronts, but also in warehouses and urban centers. They’re a big part of the U.S. business landscape: There were 263 of these zones in 2016, employing 420,000 people across the country, with hundreds of billions of dollars worth of merchandise, from car parts to pharmaceuticals, moving into and out of them. The zones typically take advantage of what’s known as an inverted tariff. When there are federal duties on the imports of raw materials, like steel, but not on the import of a finished product, like a tractor, it makes sense to bring the steel into the duty-free zone, manufacture the vehicle there, then formally import it without incurring the taxes. None of this applies to artwork, though, because there are no federal import duties on art. Nor are FTZs home to any art studios engaged in manufacturing. Until recently, there was only one American FTZ dedicated to art, and it was in Delaware, which from a tax perspective is as close to a Luxembourgish freeport as you can get in the continental United States, so the facility was not only free of customs duties, but also most local and state taxes.
a painting bought at Christie’s and stored uptown would not get preferential treatment when it came to sales and use tax over a painting going anywhere else. Arcis got the competitive, insular art storage world wondering exactly what its executives were selling.
What Delaware lacks is prestige and proximity to auction houses, museums, and galleries, so Cayre and Sapienza recognized potential in a New York competitor. “We saw the attention at the opening,” Sapienza recalled at a 2017 art business conference, “and we decided we’re coming to market with a 21stcentury storage facility. Why not, as the icing on the cake, add a Foreign Trade Zone?” Their facility, which opened in April 2018 on a proletarian Harlem block on West 146th Street, is called Arcis Art Storage. “Arcis” is Latin for “fortress” — a fitting name for what’s essentially a museumquality bunker, currently insured to store up to $3 billion worth of goods. Like Luxembourg’s Le Freeport, which is armed to the teeth and admits next to no one, security is tight: Guests at Arcis must have their retinas scanned to go through the first door, then present their bare forearms for a vascular scan at a second door.
Instead of operating in the luxury tax haven of Luxembourg, Arcis would open their storage facility in a place not known for its low taxes: New York City.
A few inside the Arcis art storage facility in Harlem. (Zoe Wetherall for Artsy)
*** Kenneth Cayre, 74, has had a varied and eccentric career. His associates at Arcis, as well as friends and former colleagues, describe him as a sharp, family-oriented hustler. (He declined to be interviewed
Arcis got the competitive, insular art storage world wondering exactly what its executives were selling.
for this article.) Cayre began his importexport career in 1959 as a teenager, operating a floating duty-free store with his two brothers, sailing back and forth from Miami to the Bahamas with cigarettes, alcohol, perfume, and watches to sell to passengers who wanted to avoid high import duties. Over the years, he helped a cousin run a textile factory in Puerto Rico; operated a pantyhose manufacturer called Kandy Mills, in Hialeah, Florida; and, inspired by the rhythms of the Miami Beach club scene, started a record label with his brothers called Salsoul. In the early 1980s, the Cayre brothers started Good Times Entertainment, which distributed VHS copies of Jane Fonda exercise tapes, knockoff Disney movies, and other videos whose copyrights were in the public domain. An early encounter with Walmart founder Sam Walton led to a long-standing distribution deal, but the company was eventually sold to a private equity firm in 2003. The company filed for bankruptcy in 2005.
Once inside, visitors to the building will be wedged — geographically, at least — between a historic black church and a daycare center. But as far as the U.S customs agents are concerned, once goods are imported into Arcis — whether they’re coming from Shanghai or the Upper East Side — they are no longer within U.S customs territory. This was going to be Cayre and Sapienza’s edge over a crowded New York art storage market. But there was a reason no one else had done it yet: Even though customs duties don’t apply, New York State taxes do. This means
A client viewing room at Arcis. (Zoe Wetherall for Artsy)
To d a y, C a y r e o w n s a n d m a n a g e s property with his sons, Jack and Nathan,
including a million-square-foot chain of self-storage warehouses in the New York tri-state area called Treasure Island. In 2014, real estate heavy Steven Guttman made a splashy transition from cheap self-storage to high-end warehousing with Uovo, which now has branches in Rockland County and Long Island City, Queens — home to a burgeoning gallery scene and the contemporary art museum MoMA PS1. During this time, the art market was growing fast: Between 2005 and 2015, annual sales doubled to reach $63.8 billion, and more contemporary art is being produced and sold every day. Nearly 80 percent of all artwork is in storage, according to one storage executive, and since new art is made every day, demand for storage facilities — at least in theory — will grow continuously. In an application for property tax breaks from the city of New York, Cayre describes himself as “an artist at heart” and claims that after Superstorm Sandy ravaged the downtown gallery scene, he felt compelled to enter the art storage business. “Ken witnessed more and more galleries and Fine Art storage facilities vacating Manhattan for locations in New Jersey like Newark and Jersey City,” the application reads. A desire to clean up his image may have also provided motivation: In 2006, Cayre was accused by New Jersey con man-turned-FBI informant Solomon Dwek of having received stolen assets worth $2.2 million. Although he was never charged, Cayre was kicked off the board of a New Jersey medical marijuana foundation in the aftermath.
"Guests at Arcis must have their retinas scanned to go through the first door, then present their bare forearms for a vascular scan at a second door." In mid-2013, less than a year after the storm, Cayre spent $4.5 million on the Harlem parking lot where Arcis now stands and an adjacent property housing a childcare and eldercare center. Six months later, one of his sons ran into a real estate developer friend at a Super Bowl party, who offered to introduce the family to someone in the art storage business.
2nd Quarter 2019 - 17
That someone turned out to be Tom Sapienza, now a 48-year-old dad of three from Long Island with dusty blond hair and the wholesome, slightly stiff demeanor of a Little League coach. An accountant by training, he’s a khakis-andblazer kind of guy, which makes it hard to imagine him at a glitzy art opening in Luxembourg. But Sapienza had a Rolodex of potential clients at museums, galleries, and family offices — fruits of a decade working as a consultant and CFO at Crozier Fine Arts, one of the world’s biggest art storage firms. Sapienza’s tenure there ended on a sour note: According to legal documents, he was fired in 2012 and subsequently sued the company for allegedly denying him his share of equity. His ex-colleague, Simon Hornby, declined to comment on the termination and the lawsuit; Sapienza also declined to comment on the suit, which was settled in 2017. Cayre and Sapienza hit it off, and before long, were en route to a castle in Maastricht for a business seminar designed to educate art world professionals about finance and to educate financiers about the art world. “It was to expose Ken to the new global art world,” Sapienza says. In the class, they heard a presentation by a business professor about Le Freeport and the business of Free Trade Zones for art. “We left with binders and binders of information,” says Sapienza.“He loved it.” The first free ports were established in early modern Europe as way stations for goods like grain, coffee, or spices. Their extraterritorial status saved traders time and money, but since the contents of these warehouses were perishable, the facilities weren’t intended for longterm storage, let alone keeping valuables like paintings and sculptures. But as globalization made more and more types of business transnational, these facilities evolved too. Today, free ports are a crucial cog in the global art trade. Their contents are fiercely guarded, top secret, and largely tax-free. But which exact taxes they incur depends on their location. “The term ‘free port’ really does mean something phenomenal in Europe and Asia,” says Jason Kleinman, a partner and art-tax-law expert at Herrick Feinstein LLP. Those free ports exempt buyers and sellers from VAT and income taxes, and because of their clear perks, they have courted art collectors for decades. “These locations confer great tax advantages to the people who use them to store or conduct business,” Kleinman says, adding that when sales take place within a foreign free port, sellers also save 18 - Citizenship Navigation
on shipping and handling costs. For speculators flipping Picassos, free ports specializing in art and luxury items offer an attractive deal. American FTZs, by contrast, have more limited benefits and have historically served the automotive, electronics, and oil industries. The art world got one of its own in 2015, when Austrian art shipper Fritz Dietl opened the 36,000-squarefoot Delaware Freeport. His art-centric outpost allows clients who buy pieces in New York or Miami to avoid state sales taxes if they ship their pieces directly there — but the saving is due to the tax breaks offered by the state, not because it’s a FTZ.
"For speculators flipping Picassos, free ports specializing in art and luxury items offer an attractive deal." That’s because while American FTZ rules do waive federal customs duties when they are applicable, they don’t eliminate state or city sales and use taxes; in that respect, FTZs are part of the state they’re in, but not part of the country. Federal law further stipulates that goods can’t be bought and sold within the zones, so under-the-radar handoffs aren’t possible either. And New York’s sales and use taxes on art are levied based on the location where the buyer gains possession of the item, whether it’s acquired at a domestic sale or at an auction abroad — so the most an FTZ could possibly do is defer that cost while the item is in storage. In other words, if a $10 million painting ends up hanging on a billionaire’s wall in New York after passing through an FTZ, the FTZ alone will not save its owner from the state’s 8.875 percent tax on sales and use. It might be more convenient or indeed more prudent to store a painting bought in Manhattan just a few miles uptown from the auction house than in Delaware or Long Island, because moving art is risky, but an FTZ won’t save money. And in the event that a painting was bought in London and brought to New York, the most the FTZ would do is defer tax until the piece leaves the zone. Since artwork isn’t dutiable, there’s nothing to gain from avoiding customs. “I spent hours researching it,” Kleinman says, “and I concluded that Arcis is a taxfree zone in search of a tax.” Nevertheless, a tax-free anything sounds good to a certain clientele, even
if the actual benefits are limited (or, as Kleinman suggests, virtually nonexistent). “People toss the term around all the time,” Kleinman says. “It’s P.R.” After the Maastricht seminar, Sapienza called a former Crozier colleague, Kevin Lay, who joined Arcis as director of operations in 2016. For Lay, a rakish former punk rocker who is more visibly artsy than Sapienza, art preservation is a matter of philosophical import. “Art storage is time travel,” he says. “When you look at a painting you’re standing where the painter stood, and as custodians of culture it’s up to us to return this in the same condition it came in.” Now complete, the warehouse looks a bit like a steely blue iceberg: monolithic, windowless, and blank. There’s no obvious signage save for a large purple A, for Arcis, on the north face of the building, about 10 feet above a 16-feet-high and 40-feet-wide loading dock that opens onto 146th Street. “If your art doesn’t fit here, it won’t fit anywhere in the city,” says Sapienza. (The largest dock at Uovo’s New York City facility is 13 feet 7 inches high and 11 feet 10 inches wide.) A discreet black car entrance leading into the loading area and visible only from one-way mirror windows in the executives’ offices will accommodate the rich and wary.
Detail of the Arcis storage facility. (Zoe Wetherall for Artsy)
Inside, the newly painted facility smells disconcertingly like an Ikea stockroom and looks, at first glance, like an ordinary industrial warehouse: exposed beams, large metal columns, huge mechanical doors, and stark white walls. The ground floor is divided into viewing rooms with $1,000-a-bulb lighting, per the company, and ceiling rigs for moving heavy sculptures. There’s also a loft-like space where artwork will be inventoried, and, on the higher levels, private storage units in different sizes, along with larger shared spaces.
"Cayre applied for and received $13 million in tax breaks on construction by promising the warehouse would bring six full-time and 10 part-time jobs to East Harlem." Serious protection costs serious money. The price of storing a painting at Arcis can range from just a bit more than at your average self-storage facility to thousands of additional dollars a month depending on the size of the unit, whether there’s custom shelving, and where in the building it’s located, says Lay — but he won’t say by how much. Cayre applied for and received $13 million in tax breaks on construction by promising the warehouse would bring six full-time and 10 part-time jobs to East Harlem and calculating that its benefit to the city, mainly in other taxes, would total $20 million. But employment at art storage facilities typically goes to aspiring artists who know how to handle, crate, and transport the art; even Arcis’s own filings note that the business will require “employees with specialized skills sets similar to those of a museum registrar.” That could explain why an administrator at a community organization on the south side of the block called Street Corner Resources, which does job placement for young people as part of its larger mission of reducing gun violence, said on a recent afternoon that he’d heard nothing about
Arcis, let alone the possibility of jobs there. Staff at neighboring bodegas, a barbershop, and a local diner were aware of the facility because they’d served chatty construction workers from the job site; none of them knew they would soon share a block with million-dollar paintings. At the senior center next door to Arcis, whose building Cayre’s company acquired, a coordinator said they’d received assurances from the newcomers that they would not be displaced. Because FTZs are regulated by the federal customs agency, local elected officials don’t participate in the approval process. When asked how Arcis might affect this part of his district, City Councilman Bill Perkins grew aggressive, demanded more information, and directed questions to his predecessor, current State Assemblywoman Inez Dickens, who didn’t respond to requests for comment.
Lay and Sapienza can — and do — talk for hours about the building’s technical specs. If a storm surge were to occur, a protective envelope of panels made of insulated metal panels between its inner and outer walls would help protect it from the elements. Its power supply is uninterruptible, with every function intentionally redundant in case a power source goes out. The generators have backups located on the roof, which run on natural gas; in theory, they will keep the building going until any emergency is over. The faint whir of the air-conditioning system, which filters the air three to six times an hour, is a constant presence; otherwise, it’s completely quiet. “They’re not taking any chances,” says Lawrence Bovich, a partner at Mechanical Technologies, LLC, one of the firms that installed part of Arcis’ HVAC system. “These guys are many folds more riskaverse than any museum might be.” Arcis would be a great place to hide during a natural disaster, or allergy season.
Art is not a dutiable good. There are no duties on art in the U.S.,” he s a y s . “ S o w h a t ’s t h e point of a FTZ for art if there’s no duty in the first place and it’s designed to suspend duty?
In April 2017, Arcis was a sponsor of the Art Business Conference, a glitzy annual networking event for the fine art world, at the Time Warner Center in Manhattan. “Kevin and I both keep getting calls from people pushed from locations in Manhattan,” Sapienza told the crowd during a panel about freeports. “People wanted us to commit space. We have a warehouse reservation binder, with clients signing up for the space.” In the audience were Delaware Freeport founder Fritz Dietl and Crozier president Simon Hornby. Hornby says Crozier also consulted with advisors on the utility of an FTZ, and the benefits came up short. “Art is not a dutiable good. There are no duties on art in the U.S.,” he says. “So what’s the point of a FTZ for art if there’s no duty in the first place and it’s designed to suspend duty?” Even Dietl says the free port part of the Delaware Freeport saves little money. But branding something as a free zone or free port sends a powerful — if empty — message to potential clients. “It absolutely works because it’s a term that’s so widespread in the art world,” he says.
A freight elevator at Arcis. (Zoe Wetherall for Artsy)
Self-storage king–turned–fine art protector Steven Guttman says his team studied the possibility hard before they opened Uovo and found no significant benefits. “We did not take this lightly,” Guttman says. “We knew about this a long time ago and kept saying this makes no sense. I’ve been in the business for three years, and never heard a tenant request an FTZ.” He adds of Arcis, “They may be onto something just by confusing people.” Sapienza declined to comment on tax hypotheticals, insisting that it’s the client’s responsibility to obtain appropriate counsel and follow the law. Kevin Lay insists there’s some tax value to the FTZ — though that depends on how you define “art.” “Antique furniture that’s a hundred years old can be imported dutyfree, but if you have a lamp from 1921 that you bought in Paris at auction for $1 million, if you were to bring it here, you would avoid those duties,” he says. The idea is that the lamp could hang out in storage until duties weren’t due. Other valuables, like some jewelry, also carry duties. In those scenarios, an FTZ can also be useful to avoid or defer them. Herrick’s Jason Kleinman, whose job it is to help collectors manage (or as he puts it, “control”) their U.S. tax bill, says Arcis “doesn’t change anything for me or present me with any tax-planning opportunities.” Some of his clients were curious about Arcis, he says, but none had serious plans to relocate their assets. “I’d suggest anyone look at Arcis and apply to it criteria you’d demand of any other facility,” he says. In the end, the biggest draw might be to collectors looking to keep their art close to home, and eventually sell at a New York auction. If there’s one thing everyone can agree on, it’s that the less you move art, the better. And the taxaverse, art-collecting global elite? They’ll always have Luxembourg. Atossa Araxia Abrahamian is a journalist and the author of The Cosmopolites: The Coming of the Global Citizen. 2nd Quarter 2019 - 19
The true â€œvalueâ€? of art by Karolina Blasiak
The art industry attracts more and more HNWI in the allocation of their portfolios in art investments and art funds. One can only draw a conclusion that all is well and we thrive in the era of wealth and wonders. Yet in the political context charged with historic urgency we do have recourse to the transparency and moral standards that art embodies. An Art Advisor is to identify the right works at the right time and the right place and with the best terms and create the cultural and educational bridge between the collector and the piece of art.
wealth managers surveyed for the Art & Finance report, said they were looking to incorporate art into their overall wealth reporting, signalling a stronger focus on art as a viable asset class within the private wealth management community. Art-secured lending may be viewed as an effective way to enable collectors and investors to access the equity value in their artworks without having to sell them, and has a great appeal to many art collectors. As such, practitioners should familiarise themselves with the background and processes involved in the practice.
An artwork can sometimes be an asset with a value greater than a car, real estate or even an investment portfolio, so it can be helpful tool in terms of managing certain financial arrangements; we discuss this in detail in our article on art-secured lending. Recent findings from the Deloitte Art & Finance Report 2017 estimates global UHNWI art and collectible wealth to be $1.62 trillion, with the potential to grow to $2.71 trillion by 2026. 69% of 20 - Citizenship Navigation
Karolina Blasiak Rosemont Art AdvisoryMonaco email: email@example.com Instagram: RosemontArtAdvisory
Art-secured lending Until recently, wealthy individuals and families have mainly been investing by directly purchasing art pieces for their investment value, hence creating a need for • Appraisal: what is the lender’s appraisal process like? Find out if high-quality pictures and details will be required; if an appraiser will come to view the work first-hand; the price of any shipping if, for example, it is necessary to transport the piece to the lender. • Loan-to-value ratio: what percentage of the value of the artwork is to be made available as a loan? • Insurance policy: if the lender takes possession of the piece, make sure it remains properly insured; a specialist art insurer is advised. If arranged by the lender, take into consideration whether they charge extra for this. • Location and storage: will the lender allow the artwork to be held outside of a protected warehouse, and if not will the loan costs include storage costs? • Compliance and ownership: what will be extent of the lender’s documentary compliance requirements? Lenders will have differing requirements depending on the AML rules in their home jurisdiction, and on their own internal risk management. They may refuse the lend to beneficial owners based in high-risk jurisdiction.. They will look to identify the origin of the
funds used to purchase the artwork, as well as checking the paperwork to verify the ownership. Some lenders will insist on simple ownership structures with which they are familiar (personal ownership by one owner only, or a local “onshore” corporate vehicle). Other lenders will accept to lend to zero-tax corporate vehicles, partnerships or trusts, but they will need to ensure that they are comfortable with the legal structure and obtain the necessary supporting documents, which may be more or less cumbersome depending on this structuring. The lenders may require third party tax and/or legal opinions on the structure. • Fees: pre-payment fees and late fees may also add to the cost of the loan, so enquire with lenders about fee structures. • Default policy: Possibly the biggest thing to consider is the company’s default policy. With clients putting their prized artwork on the line, it’s important they fully understand the terms of a default, should it come to that. It was in 17th – century Holland when Baltic merchant Herman Becker had the idea to extend loans secured by pictures to Dutch artists like Rembrandt van Rijn and Jan Lievans. It has taken 350 years for this idea to mature into something you could begin to call an industry. A regulated, standardized art-backed lending industry will help grow the market and therefore the economy. The "value" of art is in our daily lives. It is, for example, an "information" followed to discover the strength of exhibitions. Indeed,
it is rewarding to have seen an exhibition, and more and more. The exact same value enters into the dimension of the general culture. More and more artists are part of the spectrum of the qualitative dimension of art. It becomes necessary to know them. The value of information is endless, social networks have maintained this dynamic. Take a look for ex. at the Instagram accounts of some Museums to understand the weight of the value of information on art (Louvre, Orsay, Tate Moma), not to forget those of art galleries. The qualitative value thus feeds the evolution of the prices of the art market. Quantitative value has become another form of news. We are witnessing the evolution of demand with new buyer profiles compared to those of the 90’s. If art is a show, it’s news is a barometer of our world. On August 21, 2018, the S&P500* announced a record of 2873 points. The same day, the US stock market recorded the largest bull market . The United States are doing very well, in any case the euphoria and confidence is present. The art market confirms it. The USA now holds 40% of the value of the auction market in the world. A notorious sight was in the recent event of the sale of the Rockefeller collection at Christie’s. At the same time, there is a return of American buyers around the world with an appetite for works priced over $ 1 million. Art does not lie, it is a mirror of our modern society. It continues to describe the behavioral evolution in society, it is flexible by it’s entries, it is a reflection of a purchasing power and an economy. Art is the new wealth. 2nd Quarter 2019 - 21
Global Citizen: Dr. Juerg Steffen CEO, Henley & Partners
If you are fortunate enough to secure some time in Juerg Steffen’s diary and have him regale you with an account of his professional journey to date, it is almost certain that you will walk away feeling very inspired — or possibly like an underachiever. From very early in his life, Juerg has cultivated a determined and ambitious approach to his work, which explains why, today, he is the CEO of Henley & Partners, a firm that is widely regarded as being the pioneer of the investment migration industry. When Juerg tells the story of how he and his close university friends organized a massive university party that was attended by a crowd of almost 12,000 and featured Run DMC as the evening’s entertainment, it is clear to see that this wealth planning expert has been entrepreneurial, business- savvy, and visionary from a young age. Born in Zurich, Switzerland, in 1970, Juerg is one of three children. While his siblings pursued medical professions — his twin sister is a dentist and their older brother a doctor — Juerg was quite certain that he wanted to pursue a career in private banking. To kickstart his banking career, a 19-year-old Juerg secured holiday employment at a local private bank while studying economics at university. Not quite satisfied with the idea of sitting in a lecture hall and being dictated to, Juerg’s ambitious streak prompted him to convince his superiors at the bank to take him on, on a part-time basis. He 22 - Citizenship Navigation
remembers fondly that his life was so consumed with his interest in banking work that in the evenings he preferred to study at the office.
I like pressure…especially the tasks that seem to be almost impossible
Investment migration programmes are growing in polularity both for investors and for states looking to strenghten and diversify their economies and create new opportunities for their people. During a year-long break from his economics studies, Juerg worked almost full-time assisting one of the bank’s board members and helping to formulate guidelines, policies, and regulations, an unlikely role for a new professional but one in which he thrived and found great pleasure. Having been impressed by Juerg’s contribution to developing important documents for the bank and noting his precision and attention to detail, Juerg’s boss suggested he continue with his studies and pursue law, which explains how Juerg returned to university at the age of 23. Shortly after, Juerg and a friend started a company with the aim of selling imported medical equipment, which — together with his party planning gig and part-time work at the bank — left him very little time to focus on his academics. The approach of his final exams was a startling wake-up call, inspiring Juerg to take seriously the
remainder of his studies — which he did determinedly. Upon graduating from law school, Juerg was invited back to the bank and, at 28 years old, took on the role of head of front office support, reporting directly to the CEO. He went on to stay for a total of almost 15 years at the bank, which included stints managing a subsidiary bank in Guernsey and establishing, as well as running, another in the Bahamas. Remembering his time there, Juerg reflects on the challenges he encountered considering the changing legal and regulatory landscape following the thenrecent 9/11 attacks and a world beset by anxiety and insecurity. Nevertheless, he persisted and established a successful business — a real testament to his resilient and ambitious nature. On a less serious note, Juerg also remembers very fondly his first few days in the country having to deal with no luggage, no electricity at his accommodation, and no confirmed office space from which to work — which meant calling clients from telephone booths in parking areas — as well as having to build credibility in the tightly knit community of Nassau, where trust was the order of the day and many outsiders struggled to break in. But all of this enthralled him immensely — Juerg says: “I like greenfield operations. I like to build up things. I am a builder” — and fueled his work habit that persists today, of which he shares mischievously: “I just love working…It’s like a hobby. I just love to make business and work.”
Juerg is pictured here with the former Minister of Tourism for the Government of Thailand, Kobkarn Wattanavrangkul
With his sunny Bahaman days behind him, in 2004 Juerg moved back to Europe, where Germany’s tax amnesty program had recently been established to encourage wealthy citizens with accounts abroad to repatriate their funds to the country. At that time, a significant portion of German wealth was held in Switzerland, where Juerg himself was based, which inspired Juerg to develop an onshore German product line for clients interested in leveraging the amnesty. But Juerg also felt the need to improve his wealth planning knowledge and set his sights on working for leading global wealth manager UBS. In the mid 2000s, “I went to UBS, knocked on their door, and said ‘I would like to work for you in wealth planning’, Juerg says. He chuckles as he tells this story and realizes the temerity of approaching a bank to hire him despite having “not much of a clue” about the sector he was interested in. Nevertheless, and rather surprisingly, UBS brought him on board, having been impressed by his charm and personality. The condition of his employment, however, was that he would have to complete a master’s degree specializing in wealth planning, which the banking giant funded and Juerg pursued during evenings and weekends. He speaks enthusiastically about his time at the bank, his face beaming and voice rising in an obviously passionate and authentic manner. “It was amazing. I never learnt as much and in such a short time anywhere else as with the UBS wealth planning team,” Juerg shares. It was a highly charged and inspired time
for the broader team too, with business doing exceptionally well. Juerg made great professional strides aided by his developing combined tax and legal expertise. “We were an amazing team… I did a lot of relocation and inheritance planning for the cross-border wealth management department and wrote financial plans for wealthy clients to help them optimize their wealth over the medium to long term.” Juerg developed an interest in relocation planning and, realizing that the literature on the topic was sparse, successfully convinced the professors of his master’s class to allow him to focus on this for his thesis. Indeed he did, and Juerg later published it as the book Relocation to Switzerland: An Introduction for For High Net Worth Individuals and Entrepreneurs. At the relatively young age of 35, Juerg was fast making a name for himself and caught the attention of one of Europe’s wealthiest families, with one of the largest single family offices and wealth of over EUR 20 billion at the time. The family approached Juerg to come on board and advise their members in Switzerland. Juerg moved to Austria a few years later for personal reasons and took on the job of head of the wealth planning department of the subsidiary of a leading Swiss bank that was eager to fortify its resources with an experienced senior banker from Switzerland. Once again finding himself in a position of needing to grow his local client base, Juerg commenced plans to publish another book, this time focusing on advising highnet-worth clients regarding relocation
to Austria. This saw him approaching and building relationships with several key expert peers, one of them being Dr. Christian H. Kälin, Group Chairman of Henley & Partners. Despite initial hesitation to leave the bank and accept an offer of employment at Henley & Partners, Juerg relented and soon found himself in Singapore setting up the firm’s Southeast Asia operations. He says: “It was very difficult at the beginning. I didn’t know anybody. I had never been in Singapore. But I survived and after a few months I had the first client.” Juerg relished the opportunity to start something from nothing, another greenfield endeavor, and is rightfully considered a catalyst of the firm’s continued success in the region. Now the CEO of Henley & Partners, Juerg has played a pivotal role in growing the firm and, indeed, the investment migration industry at large; Henley & Partners now has 30 offices worldwide and a staff complement of over 300. His leadership of the firm is highly praised as it navigates the choppy waters of industry growth, growing public interest, and increased media discussion about the value of residence- and citizenship-byinvestment programs generally. One thing is certain: with Juerg bringing over 30 years of corporate experience, a natural inclination to work hard, and a tenacious, ambitious, and entrepreneurial approach to handling challenges, Henley & Partners is in good hands.
2nd Quarter 2019 - 23
DESTINATION FOR DIGITAL NOMANDS (Freelancers, Entrepreneurs and the wealthy people)
Flag Theory for Digital Nomads Obtain Residency in a Tax-advantaged Country Becoming a resident of a tax-free country where your income earned outside the country is exempted from tax. The tax obligations in most countries are based on your resident status. Register your business in a tax haven Business is the best way to generate income for digital nomads (freelancers, entrepreneurs, wealthy people) because they can manage it from anywhere in the world. register your business in a country that offers lowest tax liability to your business. Following is a list of countries with favourable tax policies
SECOND RESIDENCY IN TAX-FREE COUNTRIES You might actually have tax liabilities elsewhere, either in another country you draw an income from, or your home country, If you ignore your responsibilities elsewhere you could end up stuck with hefty fines, or even legal action - so taking personalised tax advice from an experienced professional is a smart choice. These countries have zero income tax, plain and simple. That means you may not even need to bother filing a tax return. THE BAHAMAS As The Bahamas economy vehicle is based on tourism industry, foreign residents benefit no local & global income tax. The government application fee for temporary residence, renewable each year, is a mere $1,000. Purchasing $250,000 in real estate grants longer term or permanent residence. The country prioritizes investment and rewards wealth. The Bahamas passport qualification index ranks 26th in the world enjoying 154 visa-free travel countries with limited access to the United States. BVI (BRITISH VIRGIN ISLANDS) No taxes are levied on income, inheritance, sales, or corporate gains.
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Nomads joke that BVI is made up entirely of sexy, sophisticated words: “British”, “Virgin”, and “Islands”. While getting a work permit in the BVI can be rather bureaucratic, obtaining a residence visa as a self-sufficient person can be quite easy within a month. Showing bank statements of self-sufficient ability with a payment $1,000 surety bond grant limited new temporary residents each year. This tax-free country allowes foreign residents to be eligible for permanent residence in twenty years of almost non-stop living in the BVI and difficult to apply citizenship in this non-sovereign nation. THE CAYMAN ISLANDS Monaco of the Caribbean, destination for the prestige, the Cayman islands cost high for permanent settlement. The crown jewel of the Caribbean offshore world, the Cayman Islands don’t appeal to the middle class. To live on Grand Cayman, an annual income $145,000 with investment real estate $600,000 is required and in eight years eligible of permanent residence. MONACO The perfect zero-tax residency for the wealthiest people on earth. The European principality – bordering France and Italy – is part of the gorgeous French Riviera well connected via Nice international airport with Geneva, NY and the rest of Europe. Monaco requires that prospective residents invest at least €500,000 in Monaco but as the government weeds out « paper residents » to attract the global wealthy spending several million dollars just to get in. ST. KITTS AND NEVIS The pioneer of Caribbean CIU programmes, St. Kitts and Nevis offers foreigners to live there tax free. Main applicant with up to three dependents (for example, a spouse and two children): a non-refundable contribution of $195,000 is required. Investment real estate option for $200,000 (resalable after 7 years) or US$400,000 (resalable after 5 years) for each main applicant with additional government – due diligence fees, grants a passport in this sovereign country within a few months. TURKS AND CAICOS ISLANDS A quick and affordable access for a
residence permit. The rogue of the British Overseas Territories, it offers quick residence permits to foreign investors $300,000 (building a new home or remodeling a distressed property), or $750,000 in a company majority-owned by locals. VANUATU A former British and French Colony, Vanuatu remains a member of British Commonwealth. The only Pacific island nation with CBI programme enjoying visafree travel to more than 120 countries including the UK, Schengen Zone and Russia. An estimated 1.800 passports were issued via CBI programmes in 2018. Foreigners can invest about $90,000 for a one-year residence visa, renewable annually and more Invest longer residence visa. UAE The UAE races to the top as the Middle East region places tourism firmly on the agenda. Leading global efforts towards improved travel freedom is the UAE, which has gained access to eight new countries in 2018 alone: China, Ireland, Burkina Faso, Uruguay, Guinea, Tonga, Benin, and Honduras. Dubai does not levy an income tax on residents’ earnings in the same way that many other countries do. Salary 100% free of tax in Dubai if you are tax resident in the emirate and have no other obligation to any other state for the payment of tax on foreign earned and sourced income. As the advisory firm PKF International puts it, there are no taxes levied by the federal government on either the income or wealth of companies or individuals.
SECOND RESIDENCY IN LOW-TAX COUNTRIES These countries tax the local source income of citizens and foreigners alike. Money earned from activity in a country is taxed there, while overseas income having nothing to do with the place is not. These low tax countries enjoy no global income tax outside of the residence country. Hiring global tax advisor is recommendable.
ANGUILLA Following significant damages from hurricanes the government launched Residence Programme for Tax Purposes ( RT P ) i n 2 0 1 9 a n d f o r e i g n e r s a r e required to pay lump-sum tax, purchase property and create genuine links with Anguilla such as holding bank accounts. A British Overseas Territory in the Caribbean’s Lesser Antilles, Anguilla also offers retirees who purchase property and provide bank statements as evidence of self-sufficiency to obtain a residence permit. It is in the unexplored waters now, literally plenty of offers to benefit. BELIZE Taxes in Belize are incredibly low. There are no capital gains taxes, and property taxes are assessed at just 1-1.5% of the unimproved value of the land. Income tax is charged at a flat rate of 25% for both individuals and companies, although the first $10,000 is exempt. The Qualified Retirement Program allows individuals aged 45 or above and their families to gain permanent residency in Belize. All the retirement income is exempted from tax. COSTA RICA Costa Rica, bordered by Nicaragua and Panama, is recognized as tax-friendly enough to have been referred to as the Switzerland of Central America. ... Costa Rica has long been the second residency of choice for American and Canadian retirees and investor expats living on « Tico time ». Te m p o r a r y R e s i d e n c y c a t e g o r y : Pensionados (Retiree) applicant must demonstrate a lifetime pension source of income of at least $1,000 per month, Rentistas (Income Based Residency) $2,500 per month of income in a permanent, stable and irrevocable manner for at least 2 years and Inversionistas (The Investor Program) by investment +$200,000 in Costa Rica). GEORGIA Possible tax residency and one of the most underrated countries on Earth, Georgia is fast becoming one of the world’s most free economies. Residents of Georgia are taxed on their worldwide income, whereas foreigners have to pay tax on their income derived from a Georgian source. An individual is considered to be a Georgian tax resident if she/he resides in the country for at least 183 days per year. The pro-business government slashed five percent income tax for all entrepreneurial expats.. No global income tax earned outside of Georgia. Georgia offers a 360-day tourist visa and qualifies real estate investor for residence. GIBRALTAR Gibraltar european jurisdiction offers residence visas to wealthy investors willing to pay an annually predictable flat
price to live there.The wealthy having $3 million may be eligible to become a resident of Gibraltar. Residents under the territory’s investor-friendly Category 2 visa pay a maximum tax of approximately £29,000 per year in exchange for resident permit.
afford Singapore. Malaysia’s MM2H ‘My Second Home’ program : for under 50 years old proof of $2,300 monthly income and deposit approximately $70,000 into a Malaysian bank are necessary. For over 50 years old, the bank deposit is cut in half.
GUATEMALA Getting residency is easy by a roof of $1,000 monthly income (but, in case certain long period’s absence Guatemala refuses to renew a visa) and the exotic culture worthy of exploring is guaranteed. If you crave the adventure of Mayan ruins and a life in Central America, Guatemala is one of four countries in the region that offer territorial taxation. Five years’ residing proof grants easily for citizenship.
NICARAGUA From the beaches of San Juan del Sur to the colonial charm of Grenada, Nicaragua is a great place to have a second residency… Obtaining Nicaraguan residency only requires proof of income about $750 per month — but you need to live there for six months each year or else your residence permit, and your territorial tax benefits, will expire.
HONG KONG Hong Kong recently “suspended” its Capital Investment Scheme which allowed residency permit with investment US$1.3 million. Obtaining second residency in Hong Kong by starting a business and opening a physical office there is subject to Hong Kong reasonable taxes. The offshore companies in Hong Kong are not taxed on its income that’s not earned within the country. It is also not subject to pay sales tax, VAT, and dividends taxes. LUXEMBOURG Luxembourg income tax rates for individuals are among the lowest in Europe, resulting in the country becoming known as a tax haven. Luxembourg charges foreign corporations an extremely low tax rate to send money into and out of the country. Corporations that funnel profits through Luxembourg are charged around 1%. Corporate income tax rates have stood at 18%. Start-ups are taxed at the lower rate of 15% if they have incomes of below €25,000. MACAU Macau has significant advantages to offer for its residents. It became the gambling center of Asia and it has also a growing offshore financial center. Macau companies are exempt from tax on the first MOP 200,000 (Macau pataca), or roughly EUR 23,600, and the next MOP 100,000 is taxed at 9%. Remaining income is taxed at 12%. Macau is an enigmatic and fascinating place In the shadow of Hong Kong. Zero tax on foreign earnings. The minimum amount to gain residency via investment in Macau was increased but impossible to apply citizenship by investment MALAYSIA Malaysia offers ideal second residency programs on earth, especially for entrepreneurs and investors who want to live in Southeast Asia full-time, but can’t
PANAMA Panama has some of Latin America’s s t r o n g e s t o ff s h o r e b a n k s a n d h a s become an open country for immigration. Panama’s Friendly Nations visa program offers instant permanent residence with a low bank deposit of $5,000 and one “economic tie”, usually a Panamanian company or the title deed to real estate. PORTUGAL In addition to the NHR regime (Non Habitual Resident), Portugal grants an exemption from gift and inheritance tax to beneficiaries in the direct family line (parents, children, and spouses), and this tax does not apply to foreign assets and transactions carried out external to Portuguese territory. Furthermore, there is no wealth tax in Portugal. In order to initiate the NHR process, one must first obtain a Portuguese taxpayer number first as a non-resident. This tax number can be used to rent or acquire a house (the purchase of a house in Portugal is not a mandatory requirement for the NHR status) or open a bank account in Portugal. SINGAPORE Singapore is no tax haven for entrepreneurs; not only is a company in Singapore far more costly to start and maintain than its Hong Kong counterpart, but tax rates are 0-17% on corporate profits and a flat 20% on the high personal salary. Investor of +$4 million can stay to enjoy no tax on bank interest, capital gains, or foreign profits. Low exchange-tax rates, the convenience of accessing your money are an ideal location for offshore banking. SWISS Obtaing residence card without job offer, mariage or descent is extremely difficult except lump-sum tax residence scheme of the wealthy people (+250 000 SFR per year). Non-residents are also taxed on certain Swiss assets or on the income from certain Swiss sources, such as from real estate, permanent business establishments or pensions. 2nd Quarter 2019 - 25
Asia Consolidates Its Passport Power
JAPAN - SINGAPORE - SOUTH KOREA
In a resounding demonstration of Asiaâ€™s growing power and influence on the world stage, Japan, Singapore, and South Korea now hold joint top spot on the Henley Passport Index, with a visa-free or visa-on-arrival score of 189. These latest results consolidate 12 months of Asian dominance, after Japan first climbed to the top spot in February last year. Germany currently sits alone in 2nd place, with a score of 188, while five countries now share 3rd place on the index, which is based on exclusive data from the International Air Transport Association (IATA). The UK and the USA look increasingly unlikely to regain the top spot they jointly held in 2015, with the UK now siting in 5th place with a visa-free/visa-onarrival score of 185, and the USA in 6th, with a score 26 - Citizenship Navigation
of 184. Afghanistan and Iraq remain at the bottom of the ranking with a score of just 30, a position one or both countries have occupied throughout the indexâ€™s 14-year history. The Henley Passport Index is the most rigorous and sophisticated measure of global access, providing an in-depth picture of travel freedom, including which destinations can be accessed visa-free or with a visa-on-arrival with which passport. This graph shows the countries that occupy the top and bottom five ranks on the 2019 Henley Passport Index. In certain cases, a rank is shared by multiple countries because these countries all have the same level of visa-free or visa-on-arrival access. The information provided here reflects the Henley Passport Index ranking on 26 March 2019
Japan Begins Experiment of Opening to Immigration While in Tokyo earlier this month, I couldn’t help but notice how the city has changed. Where once it was rare to hear any language other than Japanese spoken on the street, now it happens constantly. Most of this is due to the huge tourism boom — more than 30 million people now visit Japan every year. But obscured by that vast influx of guests is a longer-term trend. Tokyo is becoming a much more ethnically diverse city. I encountered black store clerks from the Netherlands and Africa, Chinese waiters at traditional Japanese restaurants, South Asian students staffing convenience stores, a white waitress at Starbucks, a Korean restaurant run by Southeast Asians. These are anecdotes, but there’s data to back them up. In 2018, 1 out of 8 young people turning 20 in Tokyo wasn’t born in Japan. That doesn’t even count the people who were born in Japan but aren’t ethnically Japanese. Although Tokyo isn’t close to becoming a multiracial metropolis like New York City or London, the word “homogeneous” no longer fits the city. Tokyo is an early harbinger of changes that are coming, albeit more slowly, to the rest of Japan. The capital city’s diversity is in large part the result of Japan’s increasingly open stance toward i m m i g r a t i o n . J a p a n ’s f o r e i g n - b o r n population is still small compared to most other rich countries — a legacy of the highly restrictive attitudes and policies toward immigration that prevailed in past years. But since Shinzo Abe became prime minister at the end of 2012, the number of foreign-born people working in the country has expanded steadily: The government reckons that there are now about 2.73 million foreigners living in the country — a 6.6% increase over the previous year, even as the overall population shrinks rapidly. In recent years, the Abe administration has adopted major changes that will probably sustain the influx of immigrants. In 2017 Japan implemented fast-track permanent residency for skilled workers. In 2018 it passed a law that will greatly
expand the number of blue-collar work visas, and — crucially — provide these workers with a path to permanent residency if they want it. These changes thus represent true immigration, as opposed to temporary guest-worker policies (despite the common use of the term “guest worker law” to describe the new visas). In time, it will mean a more ethnically diverse Japanese citizenry. Permanent residents are allowed to apply for Japanese citizenship after five years. Some foreigners will also marry Japanese nationals, and their children will thus be citizens as well. Since the new law prevents visa holders from bringing families with them to Japan, many of the new workers will likely be single people looking for spouses, making them more likely to marry locals.
While this new immigration will help keep Japan’s economy and pension system afloat, it will inevitably introduce social strains. Unlike the U.S., Canada and other nations whose populations are mainly a hodgepodge of the descendants of recent immigrants, Japan has little history of mass immigration. The one major recent episode of immigration was the movement of Koreans to Japan during the Japanese colonization of Korea and later during the Korean War. Due to Japan’s lack of birthright citizenship, the descendants of those immigrants have become a racialized minority, speaking no Korean but bearing Korean passports. Discrimination against these people, sometimes called Zainichi Koreans, was severe for decades, and though it has decreased substantially in recent years, a far-right fringe has emerged to persecute and slander the Zainichi.
Abe, despite being a conservative on foreign policy issues, has not tolerated these groups. In 2016 Japan passed its first law against hate speech, which is now being used to prosecute members of this group. But the episode shows that Japanese society probably won’t be immune to the waves of nativist populism that have rocked Western countries in recent years. If even ethnic Koreans — who are generally physically indistinguishable from ethnic Japanese people — face persecution, people of visibly different racial groups may encounter even more. An early sign of such tensions emerged in 2015, when a beauty-pageant winner who was ethnically half Japanese and half black became the center of an online controversy, with some criticizing her for not being Japanese enough and others leaping to her defense. For now, the racial purists have generally been shouted down, and a half-Indian woman won the Miss World Japan pageant in 2016 with little backlash. But as the number of mixed and minority people in Japan becomes more prominent, the rightists can be expected to return with fresh rage. More generally, Japan’s institutions are not used to coping with foreign and minority residents. Unlike in the U.S., where English as a Second Language classes are widely available, Japan has few classes to assist non-native speakers to catch up in Japanese fluency. Nor do Japanese cities have many official celebrations of immigrant culture or contributions. So Japan is beginning a major and unprecedented exercise, similar in some ways to the experiments embarked on by many European countries. Japan is still far from being a diverse country, but it’s no longer quite right to call it homogeneous. The next two or three decades will reveal whether the country’s culture and institutions will be able to learn from Europe’s experience and manage a smooth transition, or whether immigration will spark a nativist backlash that closes the country off once again. Bloomberg 2nd Quarter 2019 - 27
Euorpe’s Migration Lessons for Japan
by Irina Angelescu, International Affairs Specialist, USA
Japan's workforce is ageing fast and lawmakers are working to reform the country's immigration laws - what lessons can Europe teach Japan? Japan is in the process of changing its famously restrictive immigration laws. During the last few weeks, Japanese lawmakers have held an extraordinary session of the Diet to discuss the topic. They aim to bring in foreign workers to address the most severe national labour shortage in four decades while causing minimal disruption to society. This may prove difficult: in 2017, legal foreign residents comprised only 1.95 percent of the country’s population. What lessons can Europe – a continent with a long history of immigration – teach Japan? In light of the much-publicised migration crisis in Europe, many Japanese see the European experience as a cautionary tale rather than a model to emulate. Indeed, for those who oppose immigration, the rise in social unrest and populism in Europe that followed the migration crisis vindicates their stance. However, they have adopted a reductive view of a complex phenomenon. If Japan genuinely wants to address its migration challenges, as well as the challenges of a shrinking population, it needs to look beyond the migration crisis.
Japan’s pressing need for migrants
A glance at Japan’s demographic trends underlines the urgency of the migration issue. With approximately 25 percent of its population over the age of 65, the country is experiencing one of the fastest rates of ageing in the world. And with birth rates below replacement levels, the longest life expectancy in the world, and a baby-boom generation that is reaching retirement age, Japan is also facing challenges to its pension and healthcare systems. In the Japanese construction sector, for example, one-third of workers are older than 55 and only 11 percent are younger than 29. According to a report the Migration Policy Institute published last year, “immigrants would need to make up at least 10 percent of the overall population” to address these challenges effectively. Japan needs to resist the temptation to view Europe as merely an example of the negative socio-political consequences of immigration Until recently, Japan preferred to appeal to highly skilled immigrants and to use artificial intelligence to mitigate its labour shortage. Launched in 2012, the country’s Highly Skilled Foreign Professionals visa initiative is partly modelled on the Australian and Canadian points systems. Last year, Japan adopted measures to offer permanent residency to some highly skilled workers in
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as little as one year. Despite these efforts, the 2017 edition of the IMD World Talent Ranking listed Japan as the least attractive of 11 Asian nations as a destination for highly skilled workers. This suggests that there is a need for broader reforms.
Lessons from Europe
In this context, careful analysis of the European experience provides some helpful lessons. The first – and far from surprising – lesson is that boosting immigration helps offset the challenges of ageing and shrinking populations. The European Union projects that European countries’ acceptance of migrants should help them maintain their current population s i z e t h r o u g h o u t t h i s c e n t u r y. M a n y Western European states have fertility rates below replacement levels among native-born citizens but, unlike Japan, they have used immigration to make up the difference. In contrast, the populations of countries in central and eastern Europe – which generally experience high rates of emigration and very low rates of immigration – have shrunk in recent years. The second lesson is that immigration may well have improved Europe’s competitiveness and economic growth. The World Economic Forum’s annual Global Competitiveness Report consistently places European countries with high rates of immigration – including Switzerland, which has a foreign-born population of almost 25 percent – near the top of its rankings and, in some cases, above Japan. Despite the disruption of the financial and migration crises, the Eurozone has experienced positive (if modest) economic growth since 2015. The most economically successful European countries have actively courted foreign workers, offering both competitive salaries and optimal living conditions, including housing, language classes, and other benefits. A third lesson is that the gains discussed above will only be sustainable if the government implements effective integration policies in collaboration with civil society. Here, countries in Western Europe are by no means perfect but, in the Center for Global Development’s 2016 ranking of states’ immigration policies, they performed better than Japan. Integration is a multifaceted process that requires effort from both sides: immigrants working
to integrate into the host society, and that society reaching out to accept them. According to Harvard University’s recent study of perceptions of immigration in Western Europe and the United States, most people exaggerate the size and impact of the immigrant population in their country. Those who know immigrants are a notable exception. Boosting immigration helps offset the challenges of ageing and shrinking population These findings suggest that governments need to actively encourage open public dialogue on immigration and interactions with immigrants in host societies. The native population’s investment in the process should accompany policies that help immigrants find jobs, enter the housing market, and learn the local language. Another integral part of a successful integration policy is a healthy system of naturalisation. Here, Japan remains one of the few countries to implement a restrictive jus sanguinis policy (one based on parents’ nationality). Germany revised its jus sanguinis law in 2000 to make it easier for foreign residents to acquire citizenship. As a consequence, while Japan naturalises approximately 1,000 people every year, Germany naturalised 112,211 in 2017.
A new Japan?
Japan’s recent measures to boost labour immigration suggest that it is undertaking a series of ad hoc measures rather than implementing a coherent strategy. Prime Minister Shinzo Abe’s February 2018 statement that his government “has no intention of adopting a so-called immigration policy” supports this view. While it is right to proceed cautiously, Japan would benefit from an open public dialogue on immigration and national identity given many Japanese citizens’ perception of the country as culturally and ethnically homogeneous. Japan needs to resist the temptation to view Europe as merely an example of the negative socio-political consequences of immigration. By learning from the European experience, the country can enjoy the positive aspects of immigration. Moreover, Europe and Japan could both benefit from direct consultations with each other on the issue, using the forums for cooperation they created under their recent Strategic Partnership Agreement(SPA). Irina Angelescu is an independent consultant based in Washington, DC. Her work focuses on transatlantic affairs, migration policies, and EU-Japan relations. The views expressed in this piece are her own. The European Council on Foreign Relations does not take collective positions. This commentary, like all publications of the European Council on Foreign Relations, represents only the views of its authors.
JAPANESE CITIZENSHIP Naturalization to Japan by Hyong-Jin KWON
There are an estimated 700,000 dual citizens past the age of 22 living in Japan with uncountably numerous expats abroad. Dual citizenship is technically only legal in Japan until the age of 22, at which point an individual is required to make a “declaration of citizenship,” effectively asking dual citizens to give up their claim on at least one of their countries of origin. Some Japanese friends of mine living in Europe having European dual nationality are not willing to disclose their illegal passports to benefit local advantages outside of Japan like most chinese dual nationality holders as well as overseas born children. In Japan, citizenship is defined by the “right of blood.” called jus sanguinis citizenship for upholding birthright-transmission law of ethnicity and descent without respecting“right of soil”born in the territory of Japan. You are only a citizen if you have at least one parent whose blood can be classified as Japanese except some based on naturalization and refugee status. In 2008 conservative lawmakers proposed that DNA testing become part of the process necessary to determine Japanese citizenship, suggesting that biological markers could identify Japanese blood over foreign blood. It promotes a Japanese ethnostate, an ideal citizen composed of 100 percent racially Japanese. Japanese nationality refers more to the connecting characteristic of ethnicity based on‘blood’.
Koreans living in Japan without nationality The ethnic Koreans living in Japan, known as "Zainichi Koreans," (The word Zainichi refers to the ethnic Korean community that arrived in Japan during the 191045 occupation of Korea and stayed on after Japan's defeat in World War II) , are permanent residents with South Korean nationality and a South Korean passport, and "Chosen-seki" (Korean domicile) or those who have chosen not to have nationality. Chosen-seki is a status as being stateless or having an alternative nationality which can travel overseas by being issued temporary travel documents. In 1947, Japan ordered the Korean people in Japan to list their nationality as "Chosen (last kingdom of Korea)." Despite discrimination, Chosen-seki Zainichi in Japan said they stand solidly by their
Japan still accepts single nationality based on its restrictive immigration law. Its fundamentally competitiveness with demographic trends of aging and shirinking population needs to challenge adopting migrants and naturalization policies.
status. However, this status continues to be treated differently by the society that he belongs to. Between 1868 and 2015, 581,000 people have legally become Japanese. And, even today, thousands of people are naturalized each year. (www.turning- japanese.info). On a technical level, the Japanese requirements of citizenship are similar to those of many European countries : eligible based on sustainable economic independance with a stable source of income (any monthly salary above 250 000 yen approximately 2200 USD) as well as a certain language level in five consecutive years physically and legally in the country. And you must be willing to give up all your other nationalities.
Dual citizenship in doublebelonging. This duplicity is the nature of citizenship to uphold humanity while simultaneously denying it. For the Roman philosopher Cicero, one of the first to consider the idea of the citizen, explained : In return for completing certain civic responsibilities (say, paying your taxes and following road signs), citizens are offered rights: protection from the state, the ability to claim nationality. More than a thousand years later, Hannah Arendt echoed this same sentiment by famously calling citizenship “the right to have rights.” In her view, citizenship was a necessary vehicle to deliver human rights. One needs a state to fulfill them. Taken backwards, this implies that without a g o v e r n m e n t ’s a c k n o w l e d g e m e n t o f citizenship, a person can be stripped of the rights inherent to their existence. In other words, if you’re not a citizen, you’re not fully a person. Contrary to USA, most European countries accepting dual citizenship,
Amsterdam grant the local franchise to noncitizens who reside in the metropolis for at least five years through their employment. These city-citizens are then entitled to have their interests and voices represented in citywide elections and to form political parties. The noncitizens gain political standing and the protection of the enabling locality without reference to their place of birth or bloodline. In this respect, the ‘jus nexi’ reform is informed by reinvigorated definitions of membership at the international and local levels…(view of Ayelet Shachar) This reconception highlights the value of an actual, real, everyday, and meaningful web of relations and human interaction. Japan started the working holiday programmes first with Australia in 1980. A working holiday visa is a special visa for young people of 23 countries between the age of 18 and 30 (25 in case of some countries), to stay in Japan for up to one year. Working holiday visa holders are allowed to work part time while staying in Japan. Of late, the annual number of the youth who obtain Japanese working holiday visas totals nearly 15,000. Foreign tourists in Japan set to hit record 30 million in 2018. Chinese and Vietnamese workers account for almost half the total number of foreign workers in Japan. There were 1,460,463 foreign workers in Japan as of the end of October 2018. As more and more humans cross more and more borders in search of jobs, security and a better future, the need to confront, assimilate or expel strangers strains political systems and collective identities that were shaped in less fluid times. As europeans have transcended the cultural differences of Greeks-French-Spanish-Germans, despite recently suffering a few million impovershied refugees and BREXIT issues, we hope that Europe can find a path enabling to keep the gates open to strangers without being destabilized by people who don't share its values. Perhaps this formula ‘jus nexi’ could illustrate Japanese new progressing immigration policies to share the cultural values of different races in the future. 2nd Quarter 2019 - 29
Where do Multi-Nationals call home?
Where do Multi-Nationals call home?... Anywhere they want to. Ta x r e s i d e n c y i s b e c o m i n g a n increasingly popular topic among wealthy “Multi-Nationals”, a term coined to describe people who truly live an international lifestyle, with family, friends, businesses, properties and wealth peppered throughout the world. As these Multi-Nationals begin to age and consider the significant wealth they have amassed over a lifetime, inheritance and estate planning become important issues for them and their family, leading many to consider where best to make themselves tax resident for that concluding chapter in their rewarding life. As many Europeans already know, nationality and tax residency are s e p a r a t e m a t t e r s . Yo u c o u l d , f o r example, be a German national but be tax resident in Cayman Islands or Anguilla. Indeed, this is an appealing concept for a growing number of wealthy Europeans who like to spend their summer months in the Mediterranean, yet flock to the Caribbean for the remainder of the year. And if it comes with significant tax advantages, then why not? 30 - Citizenship Navigation
Tax Residency The definition of tax residency is quite broad. Some countries outlined it in their tax code. Other jurisdictions have their tax authorities use a variety of criteria for handling the question on a case-by-case basis. Some places might not even define it at all, such as states that do not raise personal income tax, such as Qatar or the UAE. Others, like Hong Kong and Singapore, routinely tax certain localsource incomes but ignore everything else, e.g. what you earn from investments abroad. And yes, it is possible to be a tax resident in more than one country, but thankfully many governments have entered together into a DTA (Double Taxation Avoidance agreement) to ensure such residents are not be taxed on the same income twice. Where a person ultimately is a tax resident is often decided by factors such as the place of your permanent home(s), where the centre of your vital interests ultimately lies, the place of your “habitual abode”, how many days you physically spend in a country, etc. In today’s inter-connected world, with its growing number of Multi-Nationals with footings all around the globe, it is becoming more and more difficult for nations to determine where one’s vital interest ultimately lies, so this has
led to countries sharing information under a new regime called Common Reporting Standards (CRS). In an effort to combat tax evasion and protect the integrity of the international tax regime, governments around the world have introduced CRS, an information-gathering and reporting requirements for financial institutions. CRS is prompting an automatic exchange of information regarding bank accounts on a global scale. As such, this is further prompting anyone with multiple properties and assets in different countries to nominate a specific country as their primary tax residency. Fortunately, it’s not too challenging for some Multi-Nationals to shift their “centre of vital interests” away from their home country and bring it to a more “tax friendly” jurisdiction, such as Anguilla, Jersey, Guernsey or Singapore. Indeed, individuals who typically do not spend more than ninety (90) days per year in any one country can structure their lives around establishing a tax efficient residency base. As there is a need to self-certify under the CRS regime, a tax residence programme allows this profile of person to properly establish a tax residence and ensure they are compliant with CRS requirements.New
Citizenship-by-Investment Programmes with Eric Major, Ceo of Latitude Consultancy Tax Residency Opportunity Latitude is headquartered in Jersey, an island with a strong track record of attracting high net worth individuals to their shores. However, Jersey isn’t alone in the tax residency space. Guernsey, Jersey’s sister island, offers a similar tax regime, with no capital gains tax or inheritance tax. Even Italy created in late 2017 new provisions designed to attract foreign nationals in becoming tax resident in Italy, for an all-in annual tax collection of only €100,000 per year.
Latitude won a 10-year Public Service Concession with the British Overseas Territory of Anguilla to promote inward investment to the island and attract an international network of Multi-Nationals to their shores. Anguilla now offers wealthy individuals the opportunity to transition to a lowtax jurisdiction that boasts slower paced living, a clean and safe environment with a reclusively exclusive setting amidst a tropical climate, excellent food, people and beaches. Its new residence provisions will appeal to those who have busy lifestyles and spend less than 90-days in any other country yet desire an alternate country of residence for themselves and their family members for tax planning purposes. The location of Anguilla in the Caribbean
is an attractive solution for applicants from Latin America, Canada and Western Europe. It is quite common for these wealthy nomads to spend significant time in the Caribbean during the winter months. As such, the opportunity to make Anguilla their tax residence would fit into their lifestyle, especially as they will be required to spend a certain amount of days each year.About Latitude A new generation of wealthy elite have ambitions that reach far beyond the limitations of national borders. They live in a connected world, with a global outlook. Latitude's team of specialists offer leading insight and expertise to investors who are prepared to make an important economic contribution to gain residency or citizenship privileges in a selected country. Latitude also provides government advisory services by helping nations create residency and citizenship-by-investment programmes that attract this privileged segment of the world population to their shores. Our internationally recognised team have over 75 years of combined experienced in the Investment Migration industry. An unrivalled international network of clients and institutional relationships, combined with complementary ancillary services from our global financial services partner, provides a uniquely compelling proposition for our clients. But what makes us really stand out from the crowd is our approach: genuinely innovative products, competitively priced services and customerdriven, hands-on delivery. Our clients expect the world – we deliver it. Welcome to your world.
Why do you believe there has been a huge increase in people applying for citizenship programmes? A number of factors are driving demand for Citizenship-by-Investment Programmes (CIP). Certainly, the fact that more wealth exists today than ever before is helping to fuel this demand. The growth of both the Chinese and Indian markets is tremendous as they represent 1/3 of the world’s population alone. In addition, we live in an increasingly connected and digital world and there is a greater awareness and access to information about these programmes that enable a person to improve their lifestyle, travel freedom, access new business markets or top-tier education for their children. More than ever those with the financial means are no longer burdened by the limitations of where they were born. Many clients are looking ahead to the future while considering their tax planning, inheritance, and providing their children the mobility to study and work almost anywhere. They view this as part of their family’s global legacy and holding a second citizenship allows this. =>p.33 2nd Quarter 2019 - 31
EB-5 P R O GR A M
+84 121 4335357 Le Trieu Vy LetrieuvyGlobal@gmail.com
INVESTMENT AND IMMIGRATION PROCESS
CIVITAS TRADITION FUND III, LP Civitas EB-5 Capital manages Regional Centers throughout the United States. As a professional investment manager, Civitas performs rigorous institutional-quality financial analysis of each potential EB-5 project, screening a wide range of potential investments to ensure those we select meet stringent criteria. Civitas is one of the few regional center manager that has successfully help multiple investors obtain unconditional permanent United States residency and repayment of their investments. * *Making a qualifying investment alone does not guarantee a successful completion of the EB-5 program as there may be other independent grounds for inadmissibility to the United States.
EB-5 Investment Opportunity
Civitas Alternative Investments provides qualified individuals the opportunity to invest in a range of real estate assets with top-tier developers in the U.S., in categories like hospitality and multifamily. Some of the funds are conservative and income-oriented, others are more aggressive. All the funds are designed to target above-average returns on a risk-adjusted basis. To learn more, please contact us at LetrieuvyGlobal@gmail.com.
Civitas Texas Regional Center
p.31<= Where, in your opinion, is the most sought after citizenship programme and why?
Within Europe, the Malta Citizenship Programme is the most desirable option due to the high standards for acceptance coupled with a significant capital requirement, which make it a very exclusive programme. Once a client is a citizen of Malta, they have the right to live and work anywhere in the EU which also drives demand. The passport itself affords visa-free travel to over 180 countries including the USA – the only CIP with such access. Within the Caribbean, there are five Citizenship-by-Investment Programmes: Antigua & Barbuda, Dominica, Grenada, St Kitts & Nevis, & St Lucia. These programmes cost significantly less than the MIIP, but still offer many of the same benefits with visa-free access to as many as 151 countries.
What type of people normally apply?
We are seeing a shift in the market. Traditionally, it was wealthy Baby Boomers who were applying for these programmes. However, a new generation of wealthy elite have emerged with a growing number between 30 and 40 years old that are applying. Interestingly, there are many younger millennials applying from China and Europe vs. the North American market. We also see high demand from clients coming from countries with very little visa-free travel. For example, a Chinese passport affords visa free travel to 74 countries or even a South African passport is limited to 100 countries. For those who travel frequently it is very inconvenient to consistently be sending your passport away to obtain a visa. These CIPs solve that inconvenience while at the same me provide a Plan B in times of political or economic unrest.
What exactly does your company provide for people wishing to apply for a second residence or citizenship?
We provide a complete, comprehensive and customized client experience throughout the entire process to make it as smooth and easy as possible. When we first meet with a client, we listen to their needs to better understand their profile and motivations. From this, we present in detail the most compatible programmes and ensure they have a thorough understanding of their options. This allows them to make the most informed decision based on their unique circumstances. Prior to accepting them as a client, Latitude performs initial due diligence checks to ensure that there is nothing in their background that could negatively impact an applica on. By identifying any issues at the beginning, we can determine if they are a good fit for both our firm as well as for their country of choice.
Latitude’s CEO, Mr. Eric Major, is a pioneer in the industry and a trusted advisor to governments around the world. We also recently merged with RIF Trust, one of top investment migration firms in the UAE and Africa, who have been operating since 2014 out of their base in Dubai.
How do you see the future of this industry? Some programmes have been getting negative press on this in Europe – how do you see your company expanding over the next few years?
The future of the industry is very bright. More and more countries are realising that these programmes are a means to generate much needed revenue and attract the global elite to their shores. Many of these programmes, especially in the Caribbean, are significant economic drivers as they spur hotel and resort development. This in turn has a long- term benefit to the country as it creates solid infrastructure for growth in the tourism industry. Moreover, the government revenues generated from the programmes are a vital part of the country’s GDP. While some programmes have received negative press, it is important to recognise that these immigrant investors only represent a small percentage among all the other immigration streams. Malta is truly the gold standard when it comes to the vetting of their applicants and it is important other countries emulate this thoroughness and strict adherence to high standards. Further, it is important for government bodies such as the EU parliament to engage with the industry stakeholders, including the Investment Migration Council (IMC) which is the governing body that sets the standards and ethics for our industry. Latitude is the regional representative office in the Caribbean for the IMC and has been assisting with the harmonization of the region’s programmes. Latitude cotinues to grow at an incredible pace opening three new offices this year in Vietnam, Malaysia and South Korea. We will continue this expansion throughout Asia in the coming year. Addionally, Latitude was granted a mandate from the Government of Anguilla to establish both a residence and a tax residence programme and this will be launched in June 2019. (european businessmagazine)
*Citinavi global partnered with Eric Major for Japan, South Korea in 2019.
Assuming the client passes our due diligence checks, we move to the Client Agreement and, once retained, start to work on compiling their application. In Malta for example, the client can complete most of the application during their first visit with our team. Our team will even help to arrange the necessary medical check-ups and translations of documents. Once the application is comsplete, we submit it to the government body responsible for the programme and monitor it to ensure it is moving forward in a timely manner until the passports or residency cards are issued.
Do you offer a one stop shop for people looking to apply for these programmes or do you offer a specific service? Yes, whether the client is selec ng a contribu on (gov- ernment dona on) or real estate op on, we assist with all aspects of the residence or ci zenship applica on. We also have offices or partners in all of the des na on countries, so we are able to offer personalized support all the way through the process.
How long has your company been opera ng in this field?
Latitude officially launched in January 2018. While we are a relatively young company, our senior executive team have well over 75 years combined experience in this industry and is assembled from an elite group of former colleagues and other investment migration firms.
Eric Major, Ceo of Latitude Consultancy 2nd Quarter 2019 - 33
QUEEN MARY 2
At the heart of the Atlantic,
in the footsteps of a mythical crossing
34 - Citizenship Navigation
QM2 is the last survivor of the transatlantic liners: the "Queen Mary 2" is reviving to its passengers the glorious past of luxury cruises. The lucky ones who were able to rent a cabin to participate in The Bridge boarded Southampton and Cherbourg next day. Since the end of France in 1974, shipments for a transatlantic from a French port are counted on the fingers of one hand. This is, since its construction, the liner of all superlatives. The Queen Mary 2 may be the oldest of Cunard's three current ships (the Queen Victoria was launched in 2007 and the Queen Elizabeth in 2010), but is still the most famous and the largest. From your first steps on board, you are transported to the past. In the grand hall of Queen Mary 2 the pianist plays Chopin. In a window, the photos of the Titanic add a touch of nostalgia and thrill that will not leave us from the cruise . Yes, the greatest fortunes of the world sailed on this same sea route and sank with the Titanic in 1912. At the time, the richest man on board, the American John Astor, had disbursed the current equivalent $ 90,000 to occupy the largest suite. A century later, aboard the QM2, the equivalent room costs much less, only $ 30,000 for 209m2 duplex with outdoor terrace. Luxury is democratized. At the other end of the "liner", the room "first price" is proposed to $ 2600 for 2 people on a surface of 14m2 without porthole, without terrace, but the litter and the service, impeccable, are the same everywhere. On the Queen Mary 2, the 1st, 2nd and 3rd classes have disappeared, replaced by 30 room categories and many different prices. The VIP passengers still exist, they have their restaurant and a pool reserved for them on the upper decks, but the tables remain accessible to all passengers for a reasonable supplement ($ 39 USD extra for dinner, without wine) Twenty Four hours after departure, it is the traditional evening of the captain in the Queens Room. In this grand ballroom, the captain will deliver the welcome speech before dinner at the legendary Le Britannia restaurant.
Restaurant 1,347 places
Gastronomy holds a special place on board, especially at the Britannia restaurant, where up to 1,347 seats are served. Spread over two bridges and over the entire width of the ship (41 meters), it is served by a monumental staircase reminiscent of the most beautiful transatlantic era, Art Deco ‘Belle Epoque 1930’.
Extravagance in white gloves At the time of the Titanic, whose memory is omnipresent, traveling was an adventure in itself. Some 1st class passers crossed the river only to party and have a good time in sumptuous suites. No special purpose on arrival. The cruise ships then rivaled attractions such as the baths tricks, the winter garden and especially a program of entertainment sometimes extravagant. The grandiose parties succeeded the disguised parties to satisfy the whims of a wealthy clientele. At the apopee of the inter-war wars, the public figures: actors of cinema, sportsmen, politicians wanted all to taste the adventure of the great crossings. Their black and white photos still decorate the walls of Queen Mary 2, whose animations have been adapted to the taste of the XXI century.
The most luxurious big liner is today an accessible game .... Rest the game. That of feeling really rich the time of cruising. And to live outside the world, to the rhythm of the ocean and its desires.
The chic of the big liners: to live in a privileged world where the time is longer.
Today, 6 orchestras liven up the cruise: jazz, country rock at the Irish pub, musical at the theater and even a funky orchestra at the discotheque. In the evening, however, there are m a n y a b s e n t e e s , s u ff e r i n g f r o m seasickness. The sea storm diverted us to the Portuguese coast. Despite this change of course, the Queen Mary 2 faces, for this gala evening, winds of force 8 and waves of 7 m. Strange sensation of riding the Atlantic Ocean in evening dress, on the shoulders of a giant of the seas (345m) in the middle of a storm. The external decks are closed, we hang on in the corridors so as not to lose our balance. In the large dining room, the curtains dance; At the other end of the table, a native Dutch woman I met first night, telling me "under the sun there are often
rains, storms and winds. Asians say – the day tiger enjoys a smoking - it's a whim of the sea. I have an experience of cruising with even stronger winds. These ships are constructed for heavy weather.. What do you do in the middle of the Atlantic? For many passengers, the Queen Mary 2 is offering yourself the journey of a lifetime. And as the liner's commander reminds us, crossing is a journey in itself. In addition to the pools, the disco, the casino or the theater traditionally found on cruise ships, passengers on board the Queen Mary 2 can also spend time in the library, very comfortable with its sofas and armchairs, which contains more than 8,000 books. Or discover the works of art on board whose value flirts with the $ 5 million. Every day, there are around fourty appointments, from the floral art workshop, the bridle course, the kitchen visits, to traditional English tea with mini-sandwiches, scones and other muffins served in a state-of-theart fashion at Queen's Room, which turns into a posh, upscale ballroom at night. The service in white gloves is perfectly orchestrated. It is in this same room that dance enthusiasts can attend the ball given each evening. Women alone will not stay long: "taxi dancers"paid by the company, are there to waltz the ladies with courtesy. As is often the case on the Queen Mary 2, Her Majesty's subjects are in the majority on board: 2000 of the 3,500 passengers are English, 700 American, 300 French, European. To which are added 1300 crew members of some 50 nationalities. For this autumn cruise, we will learn that 17 dogs are shipped with beautiful cape signed QM2. They will not be seen from the trip, they will disappear on their deck in the back of the ship, closed to the public. Here we are in the heart of the Atlantic, far from the land. The speed is fast: between 20 and 25 knots, the wind is still strong, the air is warm and on the TV channel, the water temperature is 20 degrees! Europe is moving away and the New World is approaching. For us to progressively move to New York's time zone, clocks go back an hour every night. The days thus last 25 hours aboard the Queen Mary 2. It is also that, the chic of the big liners: to live in a privileged world where the time is longer. 2nd Quarter 2019 - 35
USA EB-5 project
Become an american movie producer & get your U.S. VISA! by KAT CONWAY
We bet you are not aware of statistics for the United States federal EB-5 (em-ployment-based fifth preference category) visa program regarding ROI (return on investment) in the cash-for-EB5-visa regional center investment sector? Neither is the USCIS (United States Citizenship & Immigration Services). Since the 1992 inception of the USCIS EB-5 regional center program did you know the amount of investment funds paid back is approximately 5%? “While there are no public databases with published data on this topic, and the USCIS does not publish repayment statistics, assuming that $10 billion out of the $27.30 billion of the EB-5 project funds raised are not due for repayment yet, one can estimate with a fair amount of certainty that the total amount of repaid funds is under $1 billion. This would imply that the amount of funds invested in projects that have been paid back is in the 5% range.” - Abteen Vaziri, JD, MBA
Regional centers focus on immigration benefits rather than maximization of financial returns 36 - Citizenship Navigation
American developer Robert Matthews of the $40M The Palm Beach Hotel EB-5 visa program project in alliance with the prestigious South Atlantic Regional Cen-ter (SARC) falsely marketed board members to include a former US President (not President Donald Trump) was arrested on fraud charges after lavishly spending the construction EB-5 investment cash-flow on personal expenditures such as a 151ft. yacht! In 2019, Matthews was arrested in one of his multimillion dollar estates, sailed away to jail and now awaits sentencing while his home was auctioned in foreclosure. One has to wonder was the yacht renamed “Ghost Ship”? 44 elite and smart EB-5 visa immigrant investors involved were presented flashy shiny marketing materials, promised blue-skies with full sails ahead, filed a law-suit against PNC bank, and more defendants, while the EB-5 regional center pro-ject The Palm Beach Hotel sank. Read about it here: https://therealdeal.com/miami/2019/03/18/44-eb-5investors-sue-pnc-bank-over-palm-house-hotel-losses/
To date, similar to the above EB-5 visa project, many other prestigious U.S. regional centers can abandon ship for a confluence of reasons, projects remain unfinished or continue to be in a state of legal quagmires. Not only did these EB-5 immigrant investors sink their investment, green cards never floated to the top. This is just one lawsuit shining a light on the dark side of EB-5 visa regional center programs. Google eb5 visa lawsuit and you will discover more! When EB-5 visa multibillion dollar developments never break ground, are partially constructed, bank loans denied, hurricanes or floods hit, defamation ensues (current problems sinking these projects) and more variables what do you think will happen to your EB-5 regional center investment? In the end there is no hard-product, other commercial entities reap the benefits and green cards are never executed.
Why would you want to invest in a regional center project? It is not the job of the USCIS to manage your ROI or investment. The only goal for the USCIS is to provide two investment types: 1. EB5 “Regional Center” investments (a USCIS $500K requirement) 2. “Stand-Alone Direct” investments (a USCIS $1M requirement). Immigrant investors through one of these two types of investments may achieve U.S. citizenship status by meeting USCIS requirements — that is all. Did you know a proposed new regulation will raise the EB-5 Regional Center investment to $1.3M and the EB-5 Stand-Alone Direct to $1.8M? Read about it here: https://www.forbes.com : Immigration Leaders Sound Alarm About Possible Demise Of The U.S. EB5 Investor Immigration Program by Andy J. Semotiuk For your consideration, now is the time to invest, and a far more
calculated risk may be to choose an EB-5 visa “Stand-Alone Direct” investment project to eliminate unpredictable variables as other immigrant investors have done successfully.
AmericanFilmPictures.com (AFP) an EB-5 “Stand-Alone Direct Investment” film company! A USCIS “Stand-Alone Direct” investment allows immigrant investor(s) a leadership role with deep analysis and control over their investment and ROI (not possible with a USCIS regional center). AFP chooses to work with accredited foreign film investors. As an independent American film company AFP seeks strategic partnerships with resourceful Asian film company(s) and/or other related film entities in Asia to guarantee your initial EB-5 investment ROI, U.S. citizenship(s), and worldwide box office revenue! There is a gordian knot approach to the infrastructure of executing the film com-pany in compliance with USCIS requirements to guarantee your citizenship. This is explained in another published article which can be viewed on our website: AmericanFilmPictures. com, click on ‘EB-5 Films Information’, password: iwantEB5visa, read the article “Are You Ready to Become an American Film Producer?“ In short, we have established alliances with film projects in various stages of development to post production such as dramas, comedies, faith-based, psychological thrillers, and other genres. AFP does not produce horror, violence or pornographic films. We have golden relationships with film distribution companies, seasoned above-the-line and below-the-line talent, and our current business model top-sheet production budgets are $5M and under. Moreover, we do have projects available in the $5M-$50M as a film fund. We are also able to produce or co-produce your film ideas.
To achieve the above agreements with profitably we seek partnerships with sophisticated film colleagues whom have the ability to guarantee distribution deals in Asia or are you friendly with film powerhouses? This is a stable EB-5 investment. Our longstanding goals for AFP are to form permanent business relationships with accredited foreign film investors, produce a stream of projects for worldwide distributorship, have fun making movies together, generate lucrative profits, garner green cards for all, and influence the world positively by measuring performance with successful risk — ironically, an actual USCIS requirement (section 8 C.F.R. 204.6(J)(2).
Americans and their ancestors are immigrants from all around the world, just like you, and we all love movies! According to www.the-numbers.com/ glossary “Japan used to be the largest international box office market until the rise of China and it is barely ahead of the growing Indian market. That said, it is still an important market for a lot of films and one of the few markets where a movie can reach $100 million. It is also one of the few markets where home grown hits can do well in other international markets. In fact, Anime titles like “Your Name” have earned more than $100 million outside of Japan”. More Statistics, Reports & Articles: 1. https://issuu.com/iiusa/docs/iiusa-rcbj_ oct2018-digital/24 2. https://www.uscis.gov : 2018 USCIS Statistical Annual Report 3. https://iiusa.org/blog : 2018 EB-5 Visa Usage Statistics & Trends 4. https://www.reuters.com/article : Special report: Overselling the American dream overseas 5. https://fas.org/sgp/crs/homesec/R44475. pdf : EB-5 Immigrant Investor Visa 6. https://cbe.wwu.edu/files : Quantitative Assessment of The EB-5 Program : Economic impacts & contributions to the U.S. economy www.AmericanFilmPictures.com 877.711. FILM (3456) firstname.lastname@example.org 2nd Quarter 2019 - 37
Taxation of gifts under UK law by Dmitry Zapol
Tax liability in connection with a gift transaction revolves primarily around tax residence and domicile of the persons making and receiving the gift. Readers are reminded that UK tax residence is determined on the basis of the Statutory Residence Test (SRT). The test considers the number of days (midnights) a person spends in the UK during a tax year (6 April-5 April) together with a number of specific factors. These include having a home in the UK, family, work in the UK, as well as the length of time that the person spends in the UK in the previous tax years. Contrary to the popular belief, one can become UK resident even if they spend less than six months in the UK. HMRC have helpfully summarized the SRT in the brochure RDR3 (https://bit. ly/1NwfHop). Domicile is what determines how closely a person is connected with a particular country. It is a private law concept which under UK law determines availability of certain tax reliefs such as the remittance basis of taxation. People are born with domiciles of origin which can later be replaced by domiciles of dependence or choice. British citizenship is not necessarily an indicator of the domicile. Although, more often than not “British” people born in the UK of “British” parents have UK domicile. 38 - Citizenship Navigation
Ta x a t i o n o f g i f t s u n d e r U K l a w i s complicated and rather counterintuitive. It throws many surprises at the parties participating in a gift arrangement, particularly, since it’s the person making a gift as opposed to the one receiving it, who may be liable for tax. This article aims to shed light on the most common situations arising from making gifts between family members and third parties.
a UK tax resident who is receiving an apartment located in or outside the UK from their parents or an unrelated well-wisher, is not liable to tax nor is he liable to report the gift in his UK tax return.
Additionally, a person who has spent substantially long periods of time in the UK may acquire deemed domicile which from the tax point of view for most intents and purposes is equivalent to the more traditional domicile. To learn more about the concept, readers are invited to consult HRMC’s Chapter 5 of brochure RDR1 (https://bit.ly/1OSQCcw). Moving from the simple to the complex, it is better to begin considering the UK tax liability of the gift recipients who in most circumstances are not liable to any tax whatsoever. The absence of tax liability does not depend on whether the gift is received from a relative, an unrelated person or from a corporation. However, at the same time, this is only true provided that the gift is a bona fide gratuitous transfer of the object formerly belonging to the donor. Conversely (and logically), a donee who structured receiving their own income through the gift arrangement with the donor’s help will be liable to tax on the received amount under the usual tax rules. To illustrate these ideas, say a UK tax resident who is receiving an apartment located in or outside the UK from their parents or an unrelated well-wisher, is not liable to tax nor is he liable to report the gift in his UK tax return. At
the same time, say if the same person owns a foreign trading company whose shares he transfers to someone who is resident outside the UK, who then uses the dividends from the company to make regular cash gifts to the former, he is likely to have to declare the gifts to HMRC. Receiving a gift from a corporation is less frequent but not impossible. In the author’s experience, typically a non-UK resident parent with an offshore company would order it to pay for property to be acquired by his children, resident in the UK. The company could also finance the acquisition of other goods and services. It would be less rare for the company’s shareholder to receive distributions from the company in the form of a gift. Provided that the child in this example is neither a director (real or shadow) nor company’s shareholder, the receipt of the funds will not be considered income liable to tax or reporting. Conversely, if the donee in any way controls the company or provides any services for its benefit, the funds will be considered as a taxable distribution interpreted either as dividends, salary or director’s fees. As mentioned on a few occasions, because bone fide gifts are not considered income or chargeable gains, they are not liable to be reported in the person’s annual self-assessment report. However, a significant gift in the absence of declared income or gains may cause HMRC to inquire into its origin. Therefore, there is an argument in favour of notifying them of the donation in the “white space” in the person’s tax return. Also, significant gifts should be evidenced by deeds of gift. These might be requested by solicitors or banks that might inquire into the source of funds.
Most commonly, parents gift money to their children. Practically speaking, in most circumstances, non-UK resident parents can gift money to their UKresident children without any UK tax consequences, provided that the transfer is made between bank accounts opened outside the UK. One notable exemption is where the parents are domiciled or deemed domiciled in the UK in which case the gift might be considered a potentially exempt transfer (PET). The effect of the gift being considered a PET is that if the person making the gift dies within 7 years, its amount (or its market value in case of a non-monetary gift) will be included in their estate and, possibly, liable to 40% inheritance tax. If the parents in the above example transfer the funds from a UK bank account, it will be considered a gift of the UK situated assets which will be treated as a PET with the above consequences. Usually when the funds are kept in the UK, the easiest way to avoid the effect of the PET is to transfer them to the non-UK parents’ bank account prior to gifting them to their children, thus turning the subject of the gift to a non-UK asset. When gifting non-cash assets, it is necessary to consider CGT consequences. From the donor’s point of view, a gift is a disposal which may be treated in the same way as a sale. When the gift is between connected persons (for example, family members), the disposal is considered to be effected at the assets’ current market value. Put simply, the difference between the current market value on the disposal and the cost of the acquisition forms what may be liable to tax. Normally, non-UK residents only incur liability when gifting residential real estate located in the UK (also nonresidential real estate starting from April 2019) and are not liable to tax when gifting other assets. At the same time, UK residents making gifts are liable to UK CGT regardless of the location of the gift. However, if the donor is not domiciled in the UK and the assets are located outside the UK, they may claim the remittance basis of taxation in which case it is possible to avoid liability when making
The scope of the donor’s tax liability is significantly broader. Beside his residence and domicile, one should consider the object of the gift and its location. Taxes that may arise when making the gift are capital gains tax and inheritance tax. It is impossible to cover all different permutations and the following examples cover the most frequently arising situations.
such a gift. Of course, tax may arise if the recipient later brings the gift to the UK which might constitute a remittance. However, a detailed discussion of these rules falls outside the scope of this article. It is also necessary to consider IHT consequences when gifting property other than cash. A gift of UK real estate will always constitute a PET since naturally it cannot be moved outside the country prior to making the gift. The same applies to other UK situated assets such as shares in UK companies. Unless specific planning steps are taken in advance, for example taking out inheritance tax insurance, IHT liability may arise to donors who are resident in and outside the UK. Conversely, foreign real estate as well as other non-UK situated assets, for example shares of a non-UK registered company or family diamonds which were removed from the country before the transfer, most likely will not trigger any IHT consequences if their non-domiciled donor dies.
Liability to UK taxes when making gifts which depends on UK residence and domicile statuses as well as on whether the person is taxed on the remittance or arising basis can be summarised as a table:
There are a number of exemptions that minimize IHT liability. For example, gifts between spouses are not considered a PET (but transfers between spouses one of whom is not domiciled in the UK may be) as well as taper relief which reduces the amount of IHT in proportion to the time that passes between the gift and death. At the same time, it is necessary to consider various anti-avoidance rules. These include gifts with reservation of benefit (GROB), which apply in a situation where the transferor continues to benefit from the gift after having transferred it to the transferee, for example, continuing living in the gifted apartment. In this situation, unless the donor moves out of the property or starts paying market rate to the recipient, the 7-year term will not start running. UK
Liability to UK taxes when making gifts which depends on UK residence and domicile statuses as well as on whether the person is taxed on the remittance or arising basis can be summarised as a table: In conclusion, let’s consider a few additional examples. Non-UK resident parents who are resident and domiciled outside the UK normally can gift to their UK resident child without any UK tax consequences. However, if they gift property situated in the UK, they should consider possible non-resident CGT liability as well as IHT liability if they die within 7 years from making the gift or if they continue using the property. Although not covered in this article, other possible taxes may include stamp duty land tax (SDLT), if there is mortgage secured over the property, and pre-owned asset tax (POAT) if the parents become UK resident in the future and start using the apartment. A UK-resident non-UK domiciled child will normally incur no IHT consequences when gifting his non-UK resident parents his foreign real estate. However, if during the ownership period the cost of the property has appreciated (in £) he may face CGT liability, which can normally be avoided only subject to claiming the remittance basis of tax. Also, if in the near future the parents sell the property that they had received and gift the proceeds to the child from their non UK bank account they will avoid UK liability; however, the recipient of the funds may incur CGT liability as the original gain would be considered remitted to the UK unless he proves that the gift is a bona fide gratuitous transaction.
Author : Dmitry Zapol, tax advisor, ADIT (Affiliate) LL.M (Tax) LL.B (Hons)
res/dom dom/arising Real estate in the UK CGT, IHT CGT, IHT CGT, IHT Real estate outside the UK CGT, IHT CGT Other property in the UK CGT, IHT CGT, IHT Other property outside the UK CGT, IHT CGT Money in UK bank accounts IHT IHT Money in non-UK bank accounts IHT -
UK res/non- Non-UK
CGT, IHT CGT, IHT IHT -
IHT IHT 2nd Quarter 2019 - 39
WHAT IT TAKES TO BUIlD AN Efficient RCBI Programme by Stéphane Tajick
What’s your country’s economic need?
Eight of the ten countries with the worst Current Account Balance in the world have a CBI pro- gramme. This, of course, is not a consequence of the programmes, but rather the reason why a CBI came to be. 40 - Citizenship Navigation
For the past four years, I have been reviewing most of the world’s business migration schemes. Every year I analysed and dissected 100 such programmes for our database and our reports. database and our reports. All that knowledge enabled us to understand trends in the indus- try, mechanisms behind the programmes, and which nationals are drawn to what programme. It also allowed us to predict which investment migration programmes will be successful and which will struggle to gather momentum. In our latest Government Report , we wrote about how governments can use investment migration to strengthen their economy. The report spans 100 pages, but I will try to summarise it.
President and Chief Advisor of STC, highlights what governments should keep in mind when designing an investment migration programme.
It generally takes a large amount of political sacri ce to launch a CBI, but it can be justi ed when it substitutes drastic austerity measures. All investment migration programmes should be built based on speci c economic needs of a country. It is important to assess those needs and build a programme that makes sense. A high amount of government debt and high unemployment are the most common woes that governments want to tackle. In most cases, e cient RCBI programmes can help heal the country’s economy
if they are backed by logic and data. Understandably, CBI programmes have a greater impact in small countries, given that an additional revenue of $200m a year a ects smaller econo- mies more than larger ones. It is also important to consider regional needs within a country, since disparity can exist. Certain regions have stronger pull factors than others, which could a ect the goal of any policy. For example, in Spain the need for real estate investment was pressing after the 2008 financial crisis. The investor programme with a real estate option was created in 2013. However, over the years, the number one investment destination was Barcelona, the region that needed it the least, and where people today suffer from housing unaffordability. This means that assessing regional needs, and making sure that push and pull factors are addressed, is immensely important.
Every serious investment is tracked and as- sessed along the way. Investment in an RCBI programme should be no di erent, especially when it’s made to be an economic development policy. Tracking performance is not only important to assess if the policy is working, but also to optimise its impact and to make sure it doesn’t overheat certain markets. For example, an en- trepreneur programme created to address high unemployment should start lowering its output once unemployment starts approaching the desired number. The example of Barcelona and the Spanish investor programme showed that untracked performances could also have a nega- tive impact on the economy, because in this case the real estate market overheated. It should be noted that the Barcelona property market didn’t overheat because of the investor programme; nevertheless, the investor programme should prevent investment in overheated property markets. Therefore, tracking price indices is as important as implementing quotas, for the policy to have the desired e ect. Meanwhile, whatever your country is o ering in exchange of invest- ment must be competitive in the global market. A CBI programme of a country with a poor pass- port in terms of visa-free travel will not gather much revenue. At the same time, it will be hard for a country to attract innovative start-ups if it is not ranked high as a place to do business in.
High level of transparency and due diligence Investment migration has been under a lot of criticism in the last few years, most of which is un- founded and unfair. The EU parliament singled out RCBI schemes as a security risk, although these apply a higher level of due diligence than any other residence or citizenship pathway. It’s becoming a norm to have four-tier due diligence system applied to any programme. Transparency about the number of applicants and investment received should also become a norm. One thing we advise governments to do is to follow the Quebec model of adding an extra layer of defense by having solid intermediaries between the gov- ernment agency and the applicants. In the case of the Quebec Immigrant Investor Program, these are nancial intermediaries that serve the purpose of ltering applications, holding the investment funds in escrow and marketing the programme.
Pricing and market research
It’s important for every government to do its research on competing RCBI products
before launching their own programme. Like any product, it should be priced based on produc- tion costs and market
Consulting (sTC). sTC has become a leading provider of data and reports for the investment migration industry with detailed data from 150 world cities and reports covering over 200 immigration programmes catering to entrepreneurs and investors. Prior to setting up sTC, stéphane was involved in different sectors ranging from hospitality to retail.
price. Market price can be obtained by comparison with similar countries; after that it really depends on the production level – are you looking for 100 applicants a year or 1,000? But production costs are much more obscure when it comes to a RCBI product. There are direct costs associated with it, such as processing the application, marketing the programme, due diligence on les and so on. Then there are other costs that are more abstract, such as the cost of having an extra citizen. An easy estimate is to take the government budgets at di erent levels for the year and divide these by the population. That’s a high number, but it’s the benchmark I use for RCBI programmes that are supposed to have positive economic impacts. Factors such as whether a country is providing free university and health care also need to be taken into consid- eration when xing eligible ages for children and parent dependents.
to o er nanc- ing to investors, and by providing those services, they were able to earn signi cant revenue that made the programme particularly attractive to them. They were, in turn, able to commission immigration consultants that send them clients. Besides, for large rms scalability plays a role. Five to ten applicants are not enough to support the investment they need to enter a new pro- gramme, while the potential to duplicate admin- istrative and application processes is important. Entrepreneur and start-up programmes often lack this, since most of them require a custom- built business plan.
Avoiding sudden changes A few years ago, the UK tier 1 investor pro- gramme was amended, and had its investment amount increased from £1m to £2m. This sudden price change led to a collapse in demand during the following year. It took a few years for the demand to recover, and this after an important loss in earnings. At this point, it should be said that the decision in itself to increase the amount is not subject to debate. Rather, it’s about how they went on to implement those changes. 21st century policymaking is not only about making the right policies, but also limiting the negative impact policies could have. In this case, other than the loss of earnings, there was a negative impact on the industry professionals that supply candidates to the programme. Due to signi cant drop in demand, their revenue su ered and sta were laid o ; rms that were in a fragile state most likely collapsed. This is why such changes must take place over time, and price changes should be phased in. Signi cant changes, such as a price drop, are only recommended if a gov- ernment wants to bring its programme back to life. Even if a government wants to close a pro- gramme, it’s recommended to phase it out, and government should announce its intentions long before. Otherwise, this might a ect the reputa- tion of the investment migration industry, and that of all other interconnected industries.
Someone needs to make money in order to sell your programme In order for the investment migration industry to promote a RCBI programme, it needs to be pro table for them. It’s not a question of greed; working on a new programme takes consider- able investment. The industry needs to know it’s going to be pro table for them to do so. This is a key aspect that was overlooked for many years, and makes a signi cant di erence in terms of the popularity of a programme. Commission is a possibility, but not the only one. The Quebec Immigrant Investor Programme, for example, allowed nancial intermediaries
Stéphane Tajick 2nd Quarter 2019 - 41
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GRENADA PORT LOUIS
2nd 1stQuarter Quarter2019 2019- -43 45
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Caribbean CBI Investment Programs E-2 Visa: Grenada to U.S.A. Grenadians can apply for enrolment into the E-2 visa program. The program allows individuals who come from countries that retain business treaties with the U.S. to migrate into the U.S. as investors. The foreigners are allowed to establish businesses in the U.S. so that they can employ skilled Americans and contribute to the U.S. economy. Through the E-2 visa program, Grenadians can remain in the U.S. as long as they renew their visas and continue to meet the qualifications of the visa program. Those who do not wish to extend their stay in the U.S. can return before the expiry of their visa. There are various steps that should be followed when applying for an E-2 visa in Grenada. You Are To Be Your Own Boss It is recommended that you first establish an enterprise in the U.S. before applying for the E- 2 visa. This is because you should have already invested in the U.S. prior to filing your E-2 visa application. The best approach as a Grenadian investor is to make escrow payments to a U.S. based bank. You cannot declare yourself as an investor if you are not able to show you have sufficient funds under your control. Attorneys can draft contracts that protect your investment monies. The contracts ensure the investment monies are held in an escrow account. The purchase of the business is not effective until the E-2 visa is provided. The Grenadians Petitioner Has To File An Application and Pay Visa Charges Any Grenadian citizen that wishes to relocate to the U.S. through the E-2 visa program should first obtain a passport from the relevant government office. An investor can only leave Grenada after their passport has been stamped by the consulate officials at the U.S. embassy in their home country. Moreover, the passport is used to support the nationality of the applicant so it can replace the national identity card. It is mandatory for all Grenadian visa applicants to fill form DS160.The form can be accessed through the consulate’s website which makes it easy to obtain. Every E-2 applicant in Grenada is required to pay an application fee to have their visa processed. Anyone that has not paid the visa application fee can’t be issued an E-2 visa. The E-2 Project Has To Be Profitable Every Grenadian who wishes to invest in the U.S. should ensure that their preferred enterprise can create considerable profits. This is because Grenadian investors are required to establish businesses that are sustainable and contribute towards the growth of the U.S.’s economy. The profits earned by Grenadians investor are usually measured by comparing the financial records and the size of the company in U.S. However, if the enterprise is a start-up, the owner has to provide cash flow estimations so that their project can be tested for projected profitability. Contracts should be written that ensure the investment funds are held in escrow. The purchase of the business cannot be completed until the E-2 visa is provided. The Investor Has To Make a Significant Investment Every Grenadian applicant is supposed to dedicate a substantial amount of money towards the business project in the U.S. For
your project to be considered worthy, its value has to be at least $100,000. If it is an acquired business, the consulate officers use the amount that was paid by the Grenadian investor to the previous investor. If it is a start-up business, the consulate officers will use the costs estimations contained in the business plan. How to Fund Your E-2 Business Every Grenadians should declare the source of their investment funds when filing the E-2 visa petition. This is because Grenadian’s can only fund their projects using money that they obtained lawfully. You can sell any of your assets in Grenada including inherited assets but the receipts that are used in the transactions must be enclosed in the petition. If a Grenadians applicant has sourced their funds from a wellpaying career in their home country, they must attach the pay slips of up to 5 years to justify the earnings. On the other hand, if the funds are owed to a successful business in Grenada the applicant has to submit tax return reports to verify its legitimacy. A Lawyer Increases Your Chances of Being Granted a Visa A Grenadians E-2 petitioner has a wide pool of immigration attorneys to choose from. They should settle for one who has a history of winning petitions. An immigration attorney can handle the all visa petition details on your behalf. The attorney can start their process after form G-28 is submitted. The lawyer’s contact details are also entered in this form so that there can be constant communication between the attorney and the consulate office in Grenada. Two Americans Must Be Hired A minimum of 2 jobs in the company have to be filled by Americans. The two employees are supposed to employed on a fulltime basis. It is also required that they be hired within the first two years of the business being started. The Grenadian employer has to document the hiring process because their salaries should to match with the standards that have been set by the U.S. department of labor. Spouse and Children Can Come To U.S. The Grenadians investor can enjoy being with their family in the U.S. because they are allowed to come as well, when the visa petition is approved. The spouse should be legally united with the Grenadian investor in marriage and their children can only accompany them if they are not older than 21 years of age. Children ages 21 and over will have to apply for independent visas. Aged parents can also visit the Grenadians investor occasionally using a tourist visa. 2nd Quarter 2019 - 45
NEW YORK MANHATTAN
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Portugalâ€™s Attractive Tax Regime for Newcomers
Rosa Freitas Soares, Partner, Deloitte, Portugal
Portugal has an efficient and favorable tax regime applicable to individuals who move to the country and who have not lived there during the five years preceding their move. The non-habitual resident (NHR) regime, created in 2009, is in fact a special tax regime that may apply for a 10-year period for individuals who become Portuguese tax residents. It provides for several exemptions from Portuguese personal income tax in relation to certain categories of income from a foreign source (for example employment income, pensions, dividends, interest, royalties, rentals, and capital gains on the sale of property) and a flat rate of 20% for Portuguesesource employment and self-employment income deriving from qualifying high-value-added professions (for example doctors, engineers, university professors, computer programmers, and artists). The requirements for becoming an NHR are straight- forward and objective (thus involving minimal paperwork) and the likelihood of enjoying a very efficient tax position for the duration of this special tax regime has attracted to Portugal thousands of individuals from all over the world, especially in the past five years. In addition to the NHR regime, Portugal grants an exemption from gift and inheritance tax to beneficiaries in the direct family line (parents, children, and spouses), and this tax does not apply to foreign assets and transactions carried out external to Portuguese territory. Furthermore, there is no wealth tax in Portugal. In order to initiate the NHR process, one must first obtain a Portuguese taxpayer number first as a non-resident.
This tax number can be used to rent or acquire a house (the purchase of a house in Portugal is not a mandatory requirement for the NHR status) or open a bank account in Portugal. If a visa is required to live in Portugal, this should be obtained prior to registering as tax resident. The NHR regime combines perfectly with the visa program or any other type of permanent visa. Once a visa (if required) and a Portuguese tax address (that of the rented or acquired house) is obtained, it is possible to apply for NHR status on the tax authoritiesâ€™ website. This should be granted within a matter of days, and the status backdates to the first day of tax residence. Portugal follows the concept of partial-year tax residence, meaning that in the first year of residence, the tax reporting period in Portugal applies from the first day of tax residence to 31 December of that year (the tax year corresponds to the calendar year). Tax returns are mandatorily filed in the year following that to which the income relates, between April and June. It is possible to leave the NHR regime at any time; the only requirement is to give up Portuguese tax residence and register this update with the tax authorities. There are no penalties or clawbacks envisaged for early leavers of this regime. Finally, the NHR regime has survived national governments from different political parties and is viewed as a respectable tax regime as it does not cover general income from listed tax havens and grants its beneficiaries access to the relevant tax treaties signed by Portugal (including the possibility of obtaining tax residence certificates and reduced treaty rates on dividends, interest, and royalties). 2nd Quarter 2019 - 47
POST OFFERING OBLIGATIONS FOR EB-5 ISSUERS “YOU CLOSED, NOW WHAT?” by BRUCE C. ROSETTO & BRACHA POLLACK, ESQ.
BRUCE C. ROSETTO SHAREHOLDER, GREENBERG TRAURIG
Congratulations! You have subscribed EB-5 investors, closed your o ering, and provided the EB-5 funds to the project. Now what? As a general matter, EB-5 investors are either non-managing members of a limited liability company or limited partners of a limited partnership. In either situation, the EB-5 investor has limited managerial and voting rights, yet does have protections under either the Operating Agreement or Limited Partnership Agreement (the “NCE Agreement”), as may be applicable. the rights provided to EB-5 investors under the NCE Agreement must be adhered to as a binding contract between the new commercial enterprise (the “NCE”) and the EB-5 investor. Likewise, under state law, the EB-5 investor has rights and protections under the limited liability company act or limited partnership act. Finally, under federal and state law, the NCE will have ongoing securities law obligations, which may require supplements or updates to the offering documents.
The NCE Agreement The first step in determining your obligations to an EB-5 investor is the examination of the NCE Agreement. The NCE Agreement should clearly state what actions you must take and what information that you must provide to the EB-5 investor. EB-5 transactions generally include similar deal terms. Examples of the obligations of management and the rights of an EB-5 investor pursuant to a generic NCE Agreement are as follows: BRACHA POLLACK A S S O C I A T E , • Provision of all relevant documentation for petition to GREENBERG TRAURIG USCIS to EB-5 investors; • Inspection of books and records of NCE; • Preparation and mailing of Schedule K-1s no later than 120 days after the end of the NCE’s fiscal year; • Voting rights concerning dissolution; disposal of NCE assets outside the ordinary course of business; amendment to NCE Agreement; redeployment; removal of and appointment of Manager; etc.; • The ability to provide management with advice concerning the business of the NCE, including the use of the EB-5 funds and other investments.
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Depending upon the terms of the NCE Agreement, the EB-5 investors may have additional voting or managerial rights. To the extent an issue arises that is not contemplated by the NCE Agreement, the duty owed to an investor may be contemplated under state or federal law, as discussed below. It is also a good idea to review the offering documents, as many times representations are made to EB-5 investors via the private placement memorandum as to the project, their rights, and the obligations of the NCE manager, which are not included in the scope of the NCE Agreement. It is important that the NCE manager is involved in
the early stages of negotiation and drafting of the NCE Agreement. Early involvement with corporate and securities counsel will focus the NCE Manager on the level of their involvement, their expected obligations, the obligations they wish to undertake, and what commitments the NCE can and will honor. Frankly, this is not a task that should be left to typical cookie-cutter Operating Agreements as such will surely fail to take into account the specific obligations that the NCE will be required to comply with or abide by in connection with performing and maintaining its EB-5 obligations as well as adhering to applicable law. The State Law Implied Covenant of Good Faith State law maintains rights for the protection of investors. Most states tend to have similar statutory constructs relating to investor rights, and the formation and operation of limited liability companies and limited partnerships. For the sake of convenience, we will focus our discussion to Delaware law relating to alternative entities, as many entities form in Delaware and many states follow Delaware’s lead. Delaware’s Limited Liability Company Act (the “Act”) provides for the “Implied Covenant” of good faith and fair dealing: “the member’s or manager’s or other person’s duties may be expanded or restricted or eliminated by provisions in the limited liability company agreement; provided, that the limited liability company agreement may not eliminate the implied contractual covenant of good faith and fair dealing...”1 The Delaware Revised Limited Partnership Act (“DRUPLA”) provides an almost2 identical concept. The legislative intent underlying the Implied Covenant was that “in some circumstances duciary duties not explicitly provided for in the limited liability company agreement apply. For example, a manager of a manager-managed limited liability company would ordinarily have duciary duties even in the absence of a provision in the limited liability company agreement establishing such duties”.3 is covenant of good faith and fair dealing may not be removed by contract. The Delaware courts, however, have narrowed the application of the Implied Covenant, particularly in situations where the investors are sophisticated and have waived certain duciary protections.4 The Delaware courts use the Implied Covenant to see if there is a gap that needs to be lled in the contract. Thus, if an operating agreement or a limited partnership ________________________________________________ 1 Del. Laws, c. 332, §18-1101(c). 2 Del. Laws, c. 332, §17-1101(d). 3 https://legis.delaware.gov/BillDetail/23082 4 Allen v. El Paso Pipeline GP Company, L.L.C., 2014 BL 173739 (Del. Ch. June 20, 2014), a ’d Del. Feb 25, 2015
agreement expressly cover a particular topic, then the court will not apply the Implied Covenant. If, however, the underlying agreements are lacking or silent on the issue, then the court will examine the documentation to see if the Implied Covenant will fill the gap.5 What does this mean, particularly, to an EB-5 investor? As the Delaware Chancery Court noted, “[d]espite the appearance in its name of the terms “good faith” and “fair dealing,” the covenant does not establish a free-floating requirement that a party act in some morally commendable sense.6” us, while there is no moral or equitable requirement under the law that the Delaware courts would examine, they would, however, look to the contract itself and what the parties would have agreed upon if the issue had arisen upon execution of such agreement. Therefore, in the event that the NCE Agreement is silent as to a particular issue (we have found that this comes up fairly often concerning redeployment), its best practices to put yourself in the shoes of the EB-5 investor, to determine what rights they would have wanted as to such issue had it arose upon execution of the NCE Agreement. It is important to realize that there can be other obligations and duties for the NCE and its management, such as the duty of care and/or the duty of loyalty, if formed in other states. For example, in Florida, each manager of a manager-managed limited liability company, and each member of a member-managed limited liability company owes fiduciary duties of care and loyalty to the members.7 Florida also maintains a conditional duty to disclose in a manager-managed limited liability company whether a member has a right to vote or consent.8 The specific duties and obligations vary state by state, with differing obligations and levels of protection. Thus, at the initial formation process, NCE management should consult with corporate counsel as to the advantages and disadvantages of forming the NCE in a particular state.
_________________________________ 5 Express Contract Terms and the Implied Contractual Covenant of Delaware Law, 38 Del. J. Corp. L. 1, 19 (2013); see also, Oxbow Carbon & Minerals Holdings, Inc. v. CrestviewOxbow Acquisi- tion, LLC, Del. Supr. No. 536, 2018 (Jan. 17, 2019), see footnotes 110 to 113 and accompanying text. 6 See, Allen at 22, referring to Gerber v. Enter. Prods. Hldgs., LLC, 67 A.3d 400, 422 (Del. 2013), overruled in part on other grounds by Winshall v. Viacom Int’l, Inc., 76 A.3d 808 (Del. 2013), at 418. 7 Fla. Stat. §605.04091. 8 Fla. Stat. § 605.0410(3)(d).
Given the importance of an EB-5 investor’s petition(s) with USCIS, acting
in good faith and fair dealing not only relates to complying with terms of the NCE Agreement, compliance with state statutes, providing inspection rights, tax reporting, other reporting obligations and the like, but has a particular emphasis upon and sensitivity to immigration related issues. For example, project updates, updates regarding changes to immigration law, and changes to the regional center should all be communicated to the EB-5 investor on a regular basis. In addition, any other information that could impact an EB-5 investor’s immigration petition or communication with USCIS should be promptly provided. Securities Law In the event of a material change in the terms of the investment made by the EB-5 investors that was not disclosed as a possible risk in the o ering memorandum, the EB-5 investors may have a right to rescind their investment or make a new investment decision to retain their investment despite the material change. In that case, the NCE would be required to provide written disclosure of the change in terms of the investment and request the EB-5 investors to con rm or rescind their investment. In general, the following, to the extent that they trigger an investment decision by the EB-5 investor, would require a supplement to the EB-5 investors: • Material change of the scope and nature of project; • Material change to project ownership structure; or • Use of EB-5 investor funds di ering than as represented in o ering documents. However, if a project experiences a delay, or an increase in costs, or a change in financing, if the offering memorandum discloses that such delays, cost increases, or changes in financing could occur, and these changes did not jeopardize the immigration status of investors, then this would not be considered a material change in the terms of the offering, and there would be no need to offer a right of rescission to investors. In that case, the NCE manager might send a progress report explaining the change to existing investors, but there would be no need to provide a supplement to the offering memorandum (assuming that the offering had been completed), because the investors would not have a right to make a new investment decision. Even if a change of circumstances does not rise to the level of a material change requiring the offering of a right to rescission to investors, there could be many other reasons that necessitate a notice to EB-5 investor. The EB-5
investor is different from a typical investor in an alternative vehicle, given the significance of their (and their family’s) immigration petitions. Therefore, its best practices to inform the EB-5 investor of any change that could impact their petitions. Of particular importance is the sale or refinancing of the project. As a general matter, the EB-5 investor may have a voting right upon such occasion. If so, then the manager or general partner ensure that the proper voting procedures are followed. Upon a sale, refinancing, or redeployment of EB-5 funds, the manager or general partner must first look to the organizational and funding documents to ensure that such sale, refinancing, or redeployment is contemplated and the borrower/developer has complied with representations, covenants, and warranties, and if they have not been complied with, act to preserve its legal rights and remedies. Concerning redeployment of EB-5 funds into a different project following the sale or re nancing of the project, or upon the maturity of the EB-5 nancing, it is possible that the organizational documents are silent as to the issue, or they may re ect that a particular project, purpose, or qualifying investment that is contrary to or dissimilar from the original project, purpose or qualifying expenditure. In such situation, amendments to the documents, and possibly a vote of the EB-5 investors, is necessary to validly authorize the redeployment. Conclusion Every EB-5 project is a living, uid, and ever- changing organism. ere are events and contingencies that you cannot control or contemplate. If you ignore these facts, and believe that merely because the o ering is complete, then you do so at your own risk and can substantially increase your liability exposure. At the initial dra ing stage, building both exibility and project speci city into each NCE Agreement is key, so that NCE management has the ability and understanding to deal with changing circumstances through the life of the investment and the EB-5 project. As noted above, the EB-5 investors need, at a minimum, to be treated in good faith, and in accordance with the provisions of the documents, as well as complying with any obligations under federal securities laws and state statutes. Someone in your organization must be given authority and responsibility, along with outside counsel, to review, monitor and report to EB-5 investors on a regular basis, to ensure compliance with the governing documents, as well as state law, and potential ongoing securities, immigration, and tax issues. 2nd Quarter 2019 - 49
C L U B
developments 48ha Horse- Golf - Castle ChĂ˘teau Verneuil-sur-Indre
48 hectar developments : - Castle -Golf - Horse riding sports school -Dungeon hotel - Cottages -Luxurious apartments - SPA Hammam - Cycling - Gym (2 hours from Paris)
50 - Citizenship Navigation
Luxurious apartments of castle prices : 40m2 (220.500E), 90m2(360.000E) Guarantee : 5% per year CountryClubLoches@gmail.com YouTube : French Castle Golden Visa WhatsApp : +33 750521847 (en/fr/jp/kr) +44 7466 782323 (en/jp) Japan Desk Mobile +33 634 10 54 47 (en/ch/fr) China WeChat : parisneko
French Castle Golden Visa
Family residence card (4 years) by investment EUR 300.000
To read the detailed legal provisions for the “Personal Passport” residence card, please visit the official website of the French government, Legifrance. Click on the hyperlink above to reach the website : www.legifrance.gouv.fr
FRANCE THE NEW STAY "TALENT PASSPORT" Consulate General of France. Visas.The law of March 7, 2016 has changed in depth the right of foreigners. One of the central provisions of this law is the creation of the residence card "talent passport" which aims to attract and simplify the procedures of highly qualified people and international talent. This residence permit, which is normally for 4 years, is issued upon first admission to French territory but can also be issued to foreigners already present on the national territory. For the employees, the duration of the residence permit corresponds to that of the employment contract which justifies its delivery. For other cases (such as entrepreneurs, performers, etc.), the duration will normally be 4 years unless the Administration has reservations about the quality of the project, and in this case, " a title of two years may be issued to avoid a refusal of residence permit and verify the effective implementation of the project at renewal. (Circular of November 2, 2016) Businessman touching TalentFor employees, the advantage of the residence permit "passport talent" is not to have to apply for authorization of prior work with the foreign labor services of 1.DIRECCTE. In addition, members of the family of the holder of this residence permit will be able to benefit from a specific residence permit of a duration equal to that of their spouse (or parents) with a right to work. _____________________________________________________________________ 1.
DIRECCTE: les Directions régionales des entreprises, de la concurrence, de la
consommation, du travail et de l'emploi * Disclaimer : French immigrant investor program by direct real estate investment does not exist, the expectations remain undefined and highly personalized in terms of commercial development project 'Country Club Loches'. French Castle Golden Visa is not french government program but easy designation. we exclude any liability for the accuracy of information contained here.
Advantages of Talent Passport Residence Card There are no hard academic and language requirements for the investor (the main applicant); - Valid for up to four years! As long as the investor has been holding an investment project (original project or new project) in France, the residence card can be renewed; - Investors' dependents (subsidiary applicants: spouses and children under 21 years of age) can obtain the same "Talent Passport - Family Members" residence card; - Investors and their families can integrate into France’s social security system and enjoy social benefits; they have the right to study, work or do business in France; - After the investor and his family have resided in France for five years, they are eligible to apply for a permanent card or passport.
Immigration Act Application conditions for “Personnel Passport” residence card ? - Applicants must be at least 18 years of age; - The applicant needs to issue a detailed personal resume and a “No bankruptcy record statement” to prove that it has the ability to implement and manage the investment project; - The applicant needs to invest in a commercial project in France. The investment project should meet the following conditions: • The real estate investment should be greater than 300,000 Euros; • Create or retain jobs; - The applicant needs to issue a "tax payment certificate"; The applicant needs to issue a "Certificate of Source of Funding"; - Applicants and family members need to issue a certificate of no criminal record
2nd Quarter 2019 - 51
-Further informationWhat'sApp Jp/En +44 7466 782323 En/Fr/Jp/Kr + 33 75052 1847 firstname.lastname@example.org
BREXIT: THE FREEDOM TO END FREEDOMS? by Malcolm Dowden
The UK government interpreted the 2016 referendum as an instruction to leave not only the political institutions of the European Union (EU), but also to leave the single market and customs union. The UK government also adopted a narrow interpretation of key provisions in the European Economic Area (EEA) agreement, concluding that leaving the EU would automatically end the UK's membership of the EEA. Taken together, those conclusions mean that the UK would be separating itself from the "four freedoms" that underpin the EU: free movement of free movement of goods, capital, services, and labour. While that would end the UK's role as a business gateway to the EU, those advocating a "hard" or "clean break" Brexit argue that it is necessary for the creation of a "global Britain", with freedom to enter into free trade and regulatory agreements with countries and blocs around the world. In essence, the Brexit gamble is whether the freedom to trade globally will outweigh the benefits that flow from the EU's "four freedoms".
CLOSING THE GATEWAY?
Beginning with Mrs Thatcher in the 1980s, successive UK governments have sought to attract inward investment and talent by emphasising the UK's advantages as a globally-attuned jurisdiction with strong institutions and infrastructure, and with the crucial ability to offer direct access to the EU's single market. That offer proved attractive not only to the banking and financial services sectors, drawn to the City of London, but also to manufacturers, chemicals processing industries and service sector operators, many with parent companies in South-East Asia. Until May 2019 the UK's Brexit debate focused on the Withdrawal Agreement and Political Declaration (WA), signed off by the EU Council in November 2018. On 24 May 2019, Prime Minister Theresa May acknowledged that she would be unable to reverse the three House of Commons defeats suffered since January, and secure approval for the WA. That announcement triggered a Conservative party leadership competition, against the background of an electoral surge by the newly-formed Brexit Party. The result is a sharpening distinction between those seeking a "no deal" or "hard" Brexit, and those on the opposition benches and in Scotland arguing for revocation of the UK's Article 50 notice, and "no Brexit". A key result of that sharpening division is the significantly increased possibility of a "no deal" Brexit when the current extension period expires on 31 October 2019.
OPEN FOR BUSINESS?
A "no deal" Brexit would require businesses to navigate a newlyestablished UK customs and border control regime, together with separate regimes running in parallel with the EU on matters such as the import of chemicals and hazardous substances, the testing and labelling of electrical and electronic goods and controls on "dual use" goods with potential military or terrorist applications. In relation to customs, HM Revenue and Customs (HMRC) evidence to Parliamentary committees suggests that up to 150,000 businesses operating in the UK, and dealing only with the EU/EEA, would for the first time have to deal with customs declarations and other export or import formalities. Pressure on both physical and administrative resources at ports and within HMRC create a risk of significant delays and backlogs. Mitigation steps taken or considered to date include the award of contracts to ferry and freight operators using crosschannel ports other than Dover, and a strong recommendation that businesses should seek "authorised economic operator" or "trusted trader" status to minimise the risk of delays. For non-EU businesses, including those trading from South-East Asia, practical considerations include potential reconfiguration of shipments. For example, goods destined for the EU27 market might be routed to a port such as Rotterdam or Antwerp, while goods bound for the UK market might be routed directly to UK ports, potentially simplifying administrative procedures.
However, that approach might not be readily available for components or materials requiring further processing. Consequently, supply chain and process-mapping has been a priority for businesses with manufacturing and distribution operations extending both to the UK and EU27 states. In those cases, priority tasks include identification of customs and trade reliefs and facilitations that might be required post-Brexit. Examples include applications for "inward processing relief" and close analysis of the processing activities permissible within special customs procedures such as storage or warehousing. Support for supply chains might also be available from regional authorities, port operators and trade bodies within the UK. For example, organisations in the North-East of England have been actively exploring the potential benefits of free port or free zone status, made possible by the Taxation (Cross Border) Trade Act 2018. Those explorations also extend to the possibility of "virtual" free zones, using technologies such as blockchain and distributed ledgers to track assets through a supply chain and processing activities rather than being limited to a physically-defined area. In either case, the UK is paying close attention to lessons that can be learned from experience of free ports, free zones or special economic zones around the world â€“ not least China, Malaysia and India. Different, but equally pressing, concerns apply to financial and service sectors. A "hard" Brexit would end automatic "passporting" rights for businesses operating across the UK and EU27. However, temporary permissions were put in place to minimise the disruption that would have flowed from a "no deal" Brexit on 29 March 2019 (the date when the UK's Article 50 notice was first scheduled to expire). It remains likely that temporary permissions would be available if a "no deal" outcome were to follow on 31 October.
OPEN TO INDIVIDUALS?
The EU and UK are markets, but they are also places in which people from around the world come to live, study and work. Brexit should not preclude those activities, but it may well introduce additional procedures and complexity when it comes to moving between the UK and the EU27. For example, a sales representative living in London and taking samples to a trade show or business meeting in Paris after Brexit would have to declare those samples as "merchandise in baggage", or in some cases rely on an ATA Carnet to facilitate temporary export and re-import. UK universities will continue to reach out to overseas students. While policies have yet to be finalised, there have been indications that student visas might allow greater flexibility after Brexit, potentially allowing students to remain and work in the UK for a period after graduation. However, it would not follow that UK visas would allow freedom to travel around or to work in Europe during or after any period of study. Individuals seeking to stay and work in either the UK or EU would be likely to face separate procedures.
NO DEAL: A TEMPORARY STATE?
While much of the Brexit debate has focused on the question of "deal" or "no deal", it is essential to remember that "no deal" would be unlikely to describe a permanent state of affairs. If the UK were to leave on a "no deal" basis on 31 October 2019, then there would be significant and immediate pressure on both the UK government and EU institutions to address practical problems and to streamline procedures. Faced with the possibility of a "no deal" Brexit on 29 March 2019, temporary solutions were put in place to address issues such as financial sector "passporting". Many businesses also resorted to a "self-help" approach, analysing their supply chains and technological solutions and, in the process, identifying areas for improved risk management and cost-savings. From that perspective, Brexit might present a challenge, but not an insurmountable barrier to business continuity. Malcolm Dowden, Legal Director. Womble Bond Dickinson (UK) LLP. 2nd Quarter 2019 - 53
Sovereign Equity: A Paradigm Shift
by Dr. Christian H. Kälin
Sovereign Equity: A Paradigm Shift Dr. Christian H. Kälin, Editor in Chief, Global Citizenship Review Group ChairmaAcore premise of investment migration is to enhance a country’s economy in exchange for residence or citizenship rights for individual investors. This is a good description of a classic ‘win-win’ formula. However, it is clear that the benefits of residence- and citizenship-by-investment programs for host nations go far beyond extra funding for the national treasury or increased foreign direct investment (FDI). One of the industry’s unique and most positive attributes is its ability to endow nations with a considerable resources such as hydrocarbons or minerals, their ability to reduce debt, increase revenue, and attract investment is extremely limited. Debt financing is helpful and often critical in times of crises. But as Dominica showed in the aftermath of two consecutive hurricanes in 2017 and 2018 that destroyed large parts of the country’s infrastructure and devastated entire villages, citizenship-by-investment was a lifeline that enabled the government to rebuild infrastructure and source of sustainable revenue without them having to increase debt and thereby burden future generations. This capacity to expand a state’s ‘sovereign equity’ by increasing the number of citizens who actively contribute to its future wellbeing also has the invaluable capacity to reduce a key aspect of inequality within as well as between states – a phenomenon that is uniquely facilitated by investment migration.
Sovereign Equity in Practice Sovereign equity is a means for governments to improve public finances and support economic growth and employment creation without increasing their debt – meaningfully addressing the growing imbalances and inequalities inherent in traditionalsovereign debt financing by engaging with the global community of high-net-worth investors. There are many sovereign states around the world that lack the traditional capacity to raise sufficient revenue and that may even at times be locked out of financing through capital markets or international lenders.1 Countries can thus 54 - Citizenship Navigation
find themselves trapped in a pattern of negative debt and short of discovering natural resources such as hydrocarbons or minerals, their ability to reduce debt, increase revenue, and attract investment is extremely limited.2 Debt financing is helpful and often critical in times of crises. But as Dominica showed in the aftermath of two consecutive hurricanes in 2017 and 2018 that destroyed large parts of the country’s infrastructure and devastated entire villages, citizenship-by-investment was a lifeline that enabled the government to rebuild infrastructure and provide support to those affected. 3 Outside of a crisis, when countries find themselves lacking fiscal autonomy they lose the ability to operate as truly sovereign states, forfeiting the gains from their economies to pay off creditors.4 Countries also lose the ability to invest sufficiently in core infrastructure, education, and health services that enhance the lives of their citizens. 5 This can lead to a scenario in which society’s best and brightest leave to pursue opportunities elsewhere, depriving the country of their skills, which in turn diminishes the prospects and quality of life ofthe general population.6 Investment migration is arguably the single most effective means of addressing this dilemma. As a direct injection of liquidity into a country’s economy, it relieves stress on the national treasury without tying the country into debt-based obligations. Moreover, it is not only a source of income, but also a proven driver of FDI streams. This twin dynamic is extremely effective in mitigating the problems brought about by sovereign debt and limited inbound investment – ultimately providing greater national autonomy and prosperity for all citizens.
Investment Migration, Fiscal Autonomy, And Freedom Prudently managed residence and citizenship programs with stringent due diligence on applicants and transparent structures are able to drive investment that meets the needs of countries without adding to the burden of debt. Such funding can be used either to pay off existing debt or to create societal value through strategically targeted gov- ernment spending. This provides governments with
sig- nificantly increased fiscal autonomy – a key factor in how sovereign a country can be. Investment migration programs also act as remark- ably successful FDI platforms to attract capital and skills to an economy far beyond the specific investment requirements of each residence or citizenship program. The numerous material benefits of FDI are clear7, but it is in the beneficial social impact created by this type of investment that real human value is found. Increased investment drives employment opportunities for citizens at all levels, from architects and construction workers, to manufacturing and technology companies, and to the tourism sector and other service industries. The result is more business activity and new employment, leading to an overall more dynamic and positive socio-economic environment.8 The natural consequence of this is to alleviate pressure on government spending, further increasing fiscal autonomy and ultimately establishing greater prosperity.
Proven Socio-Economic Benefits In the aftermath of the 2008 financial crisis, Malta’s economy, for example, like all of Europe’s, was weak. Just years after the launch of the citizenship program in2014, the country had one of the highest growth rates and one of the lowest unemployment levels of any EU member state. It is now the best performing economy in the EU by almost any measure.9 Furthermore, since 2017, Malta has been able to report an annual budget surplus for the first time in decades.10 By the end of 2018, Malta had raised almost EUR 600 million in direct revenue, seen property sales exceed EUR 110 million, earned EUR 70 million in rentals, and received investments of over EUR 120 million in government bonds.11 Results like these are virtually impossible to achieve using traditional ways and means of public finance. In the Caribbean, a similar success story has been unfolding over the past ten years. Since the reform and relaunch of the St. Kitts and Nevis Citizenship-by-Investment Program in 2007, the subsequent investment boom in this country, and in several other Caribbean countries that launched or enhanced programs, is remarkable and unprecedented in the region’s history.12
In Antigua and Barbuda, the country’s citizenship program, created in 2013, now constitutes approximately 15% of the government’s annual revenue and is responsible for substantial investments in the construction sector that have helped to create a sustainable tourism and leisure industry. In addition, investment migration has been a major driver in the country’s transition to renewable energy. Thousands of solar panels have been successfully installed on government buildings and land throughout Antigua to produce electricity, in significant part paid for by the citizenship-by-investment program. The program was also essential in providing the necessary capital to support recent efforts to rebuild Barbuda after a recent tropical storm devastated the island, forcing the evacuation of the entire population. On the macro level, the liquidity injected onto the sovereign balance sheet, combined with the long-term income streams created by new businesses and their associated tax revenues, has helped the island nation to pay off its entire external debt to the International Monetary Fund (IMF) — over USD 320 million — built up after the economy shrunk by one quarter during the global financial crisis. Overall debt is down from a challenging 104% of GDP to a more sustainable 72%. When the IMF conducted a review of the Antigua and Barbuda economy, it found that the inflows of capital provided by investment migration had significantly helped to boost public and private sector construction, improving economic growth and pulling the country out of a deep recession.16 In Moldova and Montenegro, where the two most recent European citizenship programs were launched in 2018, the positive impact can be expected to be similar. In addition to boosting fiscal health and economic growth, the enhanced inflow of much needed investment will enable both countries to become more competitive and their economies to become more sustainable,
which will result in their greater autonomy and being better able to steer their own futures. This sovereign equity will result in them being less dependent on foreign lending and able to drive national resources to where they are needed most. For ordinary Montenegrin and Moldovan individuals, the benefits of a new debt-free revenue stream will be felt directly in economic growth, employment opportunities, better social services, and improved infrastructure and education.17
Following independence from Britain, the Federation of St. Kitts and Nevis witnessed a decline of its sugar industry. It simply became unsustainable to produce sugar in the country and to compete on world markets. This resulted in a massive annual deficit, threatening to undermine the entire economy.13 It is thanks to its citizenship-byinvestment program that the country was able to restructure its economy away from loss-making sugar production and raise hundreds of millions of dollars in FDI geared towards providing a sustainable transition and laying the foundations for future growth and development.14 Today constituting 30% of national annual revenue, investment migration is, according to Prime Minister Timothy Harris, “a pillar in the foundation of the country’s unique future and prosperity.”15
In Antigua and Barbuda, the country’s citizenship program, created in 2013, now constitutes approximately 15% of the government’s annual revenue
Sovereign Equity Represents the Beginning of a Global Trend The concept of sovereign equity is both self-evident and revolutionary. It has the potential to bring about a paradigm shift in how sovereign states approach sovereign funding, attracting investment from abroad, and public finance. Sovereign equity is also a means of addressing persistent global inequality. FDI has already shown to be essential for developing, transitional or recovering economies, but it can also be critical for regional development in large and advanced economies.18 Sovereign equity, made possible through investment migration, will support ongoing economic growth and prosperity. The benefits of sovereign equity enable countries to turn away from debt and dependency towards fiscal autonomy, stability, and independence. Investment migration represents one of the most important opportunities for growth and economic development for those countries able to offer it — creating considerable societal value and persuading productive members of the community to stay and contribute to their country rather than to emigrate. In short, investment migration is a long-term positive solution, one that injects new liquidity into an economy, creates sustainable income streams that can support public financial needs, and attracts muchneeded FDI.
1 Stephen Park and Tim Samples, “Towards Sovereign Equity” (2016) Stanford Journal of Law, Business, and Finance 21 (No. 2) 2 International Monetary Fund, “Global Debt Database” (IMF.org) imf.org/external/datamapper/ datasets/GDD accessed 13 February 2019 3 Government of the Commonwealth of Dominica, “Hurricane- Proof Dominica: Investors Join Forces and See the Caribbean Country Flourish” 22 October 2018, cbiu.gov.dm/2527/ 4 Martin Guzman, José Antonio Ocampo, and Joseph E. Stiglitz (eds) Too Little, Too Late: The Quest to Resolve Sovereign Debt Crises (New York: Columbia University Press, 2016) 5 Ibid. 6 Prachi Mishra, “Emigration and Brain Drain: Evidence from the Caribbean,” IMF Working Paper WP/06/25 (January 2006) 7 OECD, “Foreign Direct Investment for Development: Maximising Benefits, Minimising Costs” (2002) 5 8 Theodore Moran, Holger Gorg, Adnan Seric, and Christine Krieger-Boden, “Attracting Quality Foreign Direct Investment in Developing Countries” International Growth Centre (October 2017) 9 “Fourth Annual Report on the Individual Investor Programme of the Government of Malta” Office of the Regulator, Individual Investor Programme (November 2017) 10 Government of Malta, Finance Department, Budget 2019. 22 October 2018. mfin.gov.mt/en/The-Budget/ Pages/The-Budget- 2019-G5J3D1.aspx 11 ‘Fifth Annual Report on the Individual Investor Programme of the Government of Malta’, Office of the Regulator, Individual Investor Program (October 2018) 12 X Xu, A El-Ashram, J Gold, ‘Too Much of a Good Thing?: Prudent Management of Inflows Under Economic Citizenship Programs’ IMF Working Paper WP/15/93 (May 2015) 7 13 JC Okwuokei and B van Selm, ‘Debt Restructuring in the Caribbean: The Recent Experience’ in, (ed) Trevor Alleyne, Inci Otker, Uma Ramakrishnan, and Krishna Srinivasan (Washington DC: International Monetary Fund, 2017) 165 14 J Gold, A Myrvoda, ‘Managing Economic Citizenship Program Inflows: Reducing Risk and Maximizing Benefits’, 131 15 ‘PM: CIP could make up 25 per cent of govt’s revenue’, Antigua Observer (Antigua and Barbuda), 18 June 2015, antiguaobserver. com/pm-cip-could-make-up-25-per-cent-of- govtsrevenue/ 16 J Gold, A Myrvoda, ‘Managing Economic Citizenship Program Inflows’, in Unleashing Growth and Strengthening Resilience, 132 17 J Gold, A El-Ashram, ‘A Passport of Convenience’, 52 no 4, (December 2015) 48 18 Bipartisan Policy Center, ‘EB-5 Program: Successes, Challenges and Opportunities for States and Localities’, (September 2015)
Dr. Christian H. Kälin, Editor in Chief, Group Chairman, Henley & Partners, Switzerland 2nd Quarter 2019 - 55
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Proposed Changes to Bulgarian Citizenship Law Would Make Program Similar to EB-5 by Ivan Petrov – NBLO Sofia
On Friday, 22 March 2019, the Bulgarian Government published a draft Bill with proposed changes relating to Bulgarian citizenship by investment (CBI). The draft may change significantly before it is finally law, or may indeed be rejected, leaving the law as is. Legislating in Bulgaria takes up to several months, and as above, some bills are ultimately turned down. Our view is that the Government proposal is very likely to pass but at least some of the routes to citizenship slated for removal may be added back in. Fast track citizenship by investment to stay The draft Bill concerns citizenship and not permanent residence applications. It also retains the concepts of a “fast track” and a “standard track” to citizenship. Investors will still be able to obtain permanent residence by making an investment in bonds or shares in a listed company. Should investors be interested in Fast Track Bulgarian citizenship – which, in our view, will virtually always be the only suitable option – they will now need to make their second investment in a “priority investment project” as defined by the Encouragement of Investments Act (EIA). Proposed eligible investments Broadly, the investments proposed to be eligible for the Fast Track will make a Bulgarian CBI programme somewhat similar to the US EB-5 programme. Fast Track Option 1 Investors can still choose to make the first investment of €513,000 in government bonds or shares of a listed company. However, the second investment (i.e., post permanent residence) will need to be made “in the capital” of a company running a “priority investment project”.
The projects may be either existing ones previously approved under the EIA, or new ones, perhaps even set up by the investor him- or herself. Fast Track Option 2 Investors can apply for permanent residence, having acquired shares in a company proposing to invest in an EIAcertified project of any type again. They can apply for citizenship at any point after holding a permanent residence permit on that basis, subject to making a second investment. The investment at this stage would need to exceed a threshold variable depending on location and sector. What do the projects certified under the EIA look like? Since 2004, more than 130 projects have been certified by the Bulgarian Government under the EIA. Sectorally, the majority are industrial, but there are also real estate projects, technology, and trading businesses. Only seven are certified priority investment projects. Of these, three are real estaterelated and the remainder industrial and technology-related. New project certification applications are currently proposed or awaiting approval. The risk profile of these projects is likely to be similar to investments in equity or private companies, which have been an eligible investment class to date, but they are naturally likely to be seen as much riskier than investing in government bonds. Bulgarian CBI-investors have historically overwhelmingly preferred the lowrisk bonds, but there has also been an appetite for higher returns, which such certified investment projects are more likely to give a chance of in comparison
to the modest returns sovereign fixed income instruments generate. EB-5 projects in the U.S. have been very popular with investors despite their higher risk, and they may have indeed accumulated considerable productive capital stock and created employment. Consequences Investors who have held a permanent residence for more than a year and apply before any change in the law will be dealt with under the old law. Investors who have already obtained permanent residence status, but who have not submitted their citizenship applications, would need to carefully consider the proposed changes. More generally, whether and when the new provisions are successful will continue to depend on the free market. Unlike Malta and Cyprus, the Bulgarian government does not directly support its CBI programme with resources and promotion. The founders of the certified investment projects and professional service providers will need to do that j o b . H o w e v e r, l e t t i n g a t h o u s a n d certified investment flowers bloom will be relatively unique in the EU in our understanding and will be a direct analog to the U.S. EB-5 but without the limits on the nationality of origin of the applicants which that programme has.
Ivan Petrov – NBLO Sofia 2nd Quarter 2019 - 57
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Malta, The Blockchain Island – Then and Now
by Chris Borg & Dr Chris Agius
Malta was amongst the very first group of jurisdictions which opted to create an ecosystem for DLT related projects to flourish and grow. However, the objective was not that of simply putting in place a framework which would provide a legal back-bone for operators and issuers to seamlessly carry out their activities – an approach taken by many other countries vying to become the ‘place to be’ for anything having to do with blockchain and cryptocurrencies. The legislator instead focused on putting in place a long-term strategy – one which would also put the safeguarding of investors and general public at the top of its agenda. The consummation of these efforts was in the enactment of three important pieces of legislation, namely the Virtual Financial Assets Act, the Malta Digital Innovation Act and the Innovative Technology Arrangements and Services Act. Together, these Acts provided the necessary framework for the regulators to step in and work on putting in place a functional system in which operators, be it issuers of tokens or service providers, would be able to register their whitepapers or obtain a licence to render such a service respectively. This was no easy task by any stretch of the imagination. Contrary to several other jurisdictions which opted to allow for their existing legislation to cater for such an industry; Malta created a completely new and separate framework which would address this sector in a holistic manner. This is in its own right, recognises the fact that this industry, still in its infancy, requires an ecosystem which would allow it to put its primary focus on innovation, without then having to worry about the uncertainty surrounding the legal position of its activity. This is one of the issues emanating from jurisdictions that have alternatively attempted to amend their existing legislation to provide a quick solution in order to attract international investment. The complexity which surrounds such innovative technologies makes it impossible for existing laws to coincide without leading to discrepancies, as a result of the legislator not being aware of such an industry at the time of drafting the same.
Where is Malta now? Since 1st November, 2018 – the date on which Malta promulgated the above three Acts, the regulators have been working endlessly to ensure that what is sought out under these laws is put into effect. The MFSA following such date has embarked on the process of vetting and registering several VFA Agents. The latter will be at the forefront of the industry, ensuring that all issuers of VFAs and service providers are fit and proper to carry out such an activity and thus, safeguarding the integrity of this new emerging sector. The VFA Agents will be responsible for liaising on behalf of the applicant with the MFSA, and to advise the applicant in relation to all the responsibilities and obligations which arise from the law. It is expected that the first batch of VFA Agents will be registered in the next few weeks. CS Fintech Services Limited, which forms part of CSA Group, was amongst the first to submit its application to become registered as a VFA Agent. Once the VFA Agents will be registered, the MFSA will then go on to start accepting applications for VFA Service Providers, as well as allowing issuers to register their whitepapers. Following the enactment of the aforementioned Acts, persons in Malta were not allowed to carry out such activity, bar for a number of exceptions which were put in place by the legislator. This includes those service providers which would have been granted a 12-month transitory period, as well as certain issuers which would have started their public offering prior to the coming into force of VFA Act. The regulator has also indicated that a policy is being worked upon which would also provide some clarify in relation to Security Token Offerings, refer to those public offerings of DLT assets that would qualify as a financial instrument through an assessment carried out under the F i n a n c i a l I n s t r u m e n t Te s t . I n t h e meantime, Malta’s traditional laws have continued to cater for issuers wanting to carry out a private placement of DLT assets or exempt public offerings, with the latter not having to register a prospectus with the Registry of Companies.
The MDIA has also been formed and it has opened its doors for the submission of applications by persons keen on becoming licensed System Auditors. The latter would be responsible for expressing opinions on whether the description of a technology arrangement would be fairly represented by its Client, and whether the controls included in the same description would be suitable designed to meet the applicable criteria. The System Auditor will also be allowed to issue a Reasonable Assurance Report containing the same opinions as expressed above, but which would also include an opinion on the operating effectiveness of the controls during the period covered by the audit. The System Auditor will play a crucial role; both when persons are interested in having their technology arrangement certified by the MDIA, as well as when issuers and service providers would be required to provide assurance that their infrastructure and technology arrangements meet certain criteria during their registration or licensing process respectively. Scerri & Concise Limited, which forms part of CSA Group, has submitted its application to become a licensed System Auditor. Until then, it is still able to provide the services indicated above under the Acts, as well as additional ones such as the development of technology arrangements including smart contracts and dApps.
Chris Borg, Partner | Tax and International client services Director CS Fintech Dr Chris Agius, Director CS Fintech 2nd Quarter 2019 - 61
renounciation US Citizenship Is Divorcing Uncle Sam Right for You? By Alexander F. Marino A. INTRODUCTION The billionaire co-founder of Facebook, the only American member of Monty Python, a civil rights leader with a PhD from Harvard, the founder of Carnival Cruise Lines and owner of the Miami Heat NBA franchise, and arguably the best chess mind to ever live have more in common than you might think. What do Eduardo Saverin, Terry Gilliam,1 W.E.B. Du Bois, Ted Arison, Bobby Fischer have in common? The answer is that all five have renounced their U.S. citizenship. These individuals are not alone! Record numbers of U.S. citizens living in Canada and around the world are in the process of renouncing. Why would a country like the United States, with a seven to ten year wait list to acquire citizenship, have so many citizens headed for the exit? The reason is that three letter word that no one likes to hear: TAX. The United States is the only major country in the world that taxes the income of its citizens and permanent resident status holders regardless of where they live.2 With the U.S. tax filing deadline seemingly always right around the corner, U.S. citizens living in Canada and across the globe are annually faced with the burden and cost of meeting their IRS filing and reporting obligations.3 The recurring nightmares of 1040s, FBARs, and other information returns are causing increased blood pressure and heartburn to U.S. citizens who don’t call America home. In addition to the filing and reporting obligations, U.S. citizens living abroad must also deal with the consequences of the U.S. estate and gift tax regime during life and at death.4 To make things even more stressful, the Foreign Account Tax Compliance Act (“FATCA”)5 went into full effect on July 1, 2014. This dragnet, enacted to catch non-compliant U.S. taxpayers with funds located abroad, is causing many U.S. citizen expats sleepless nights in anticipation of a notice from the IRS asking why they have not been filing U.S. tax returns or reporting all their non-U.S. assets. But wait my fellow U.S. expats living abroad – don’t lose hope quite yet. There is a silver lining in this doom and gloom story and it comes in the form of renouncing your U.S. citizenship. However, hold your applause until the end because when things appear too good to be true, they usually are. Renouncing one’s U.S. citizenship is riddled with potential pitfalls along the way. While renouncing may work for a Facebook co-founding billionaire, any individual U.S. citizen considering this action 62 - Citizenship Navigation
must decide if it is right for him or her and be properly advised along the way. The million dollar question U.S. citizens living abroad must ask themselves is whether their U.S. citizenship “juice” is “worth the squeeze.” In other words, “do I need my U.S. citizenship and, if so, what are its benefits”? Clients are often emotionally and financially drained after becoming U.S. tax-compliant through a voluntary disclosure program, staying U.S. tax-compliant, and continuously planning for cross-border tax issues. Not only can the filing and reporting costs seem ludicrously expensive and intrusive, but the penalty regime for noncompliance can be catastrophic if not dealt with properly. Add those factors to FATCA’s arrival to the cross-border compliance party in 2014, and more and more U.S. citizens living abroad are looking for a way out. Who could blame them? It is important to remember that renouncing your U.S. citizenship is permanent and there are a number of U.S. immigration and U.S. tax landmines along the way. There are no mulligans once a Certificate of Loss of Nationality (“COLN”)6 is issued and the only way to regain your U.S. citizenship is through the long and difficult process of naturalization under current U.S. immigration law. If you manage to avoid these landmines, renouncing your U.S. citizenship will relieve you of your yearly filing and reporting obligations,7 as well as worldwide estate and gift tax exposure.8 Even so, renouncing is not for everyone.
B. BENEFITS OF U.S. CITIZENSHIP A U.S. citizen living abroad who is considering renouncing his or her U.S. citizenship should first ask a very important and logical question: “What am I giving up by renouncing my U.S. citizenship?” Or, put more selfishly, “What is my U.S. citizenship doing for me?” If the benefits of your U.S. citizenship outweigh the compliance and potential tax costs that come with it, then renouncing may not be best for you. Philosophical and patriotic reasons aside, there are a number of general benefits afforded to every U.S. citizen no matter where they are located in the world. The following are some of the main benefits of retaining U.S. citizenship that should be considered by anyone thinking of renouncing.
1. Protection of U.S. Citizens Abroad: Protection abroad may be an issue for U.S. citizens who find themselves in politically unstable parts of the world. Generally for U.S. citizens living in Canada, this is not a determinative factor when considering retaining U.S. citizenship. Outside of a natural disaster or health epidemic in Canada, U.S. citizens will rarely need the U.S. armed forces to keep them safe in a sticky situation abroad (though if they do, it would be difficult to discount the comfort of knowing the United States, with its 11 active aircraft carriers and SEAL Team Six, is on call).9 2. Consular Services Offered to U.S. Citizens Abroad: Consular services are available to U.S. citizens living abroad and include assistance in situations of detainment by foreign governments, with passport issues, and with cross-border legal affairs. 3. The Right to Vote in U.S. Elections: Many individuals holding U.S. citizenship feel strongly about exercising their right to vote and with U.S. citizenship comes a constitutionally-granted privilege to participate in U.S. elections. Renouncing citizenship eliminates this privilege. 4. Access to the U.S. Job Market: This may be the most important factor to consider when renouncing U.S. citizenship, especially for younger individuals. U.S. citizens are legally able to live and work anywhere in the United States. Giving up citizenship closes off the U.S. employment market without going through the proper immigration channels to obtain visas and work permits. 5. Travel to the United States: U.S. citizens are able to travel into and out of the United States at their leisure. More details in reference to potential travel restrictions after renouncing are discussed below. These benefits of retaining U.S. citizenship should be taken into consideration when deciding if renouncing is right for you.
C. BENEFITS AND CONSEQUENCES OF RENOUNCING U.S. CITIZENSHIP Having covered some of the main benefits of U.S. citizenship, it is only logical to cover some of the main benefits of renouncing your U.S. citizenship, as well as the consequences that accompany that decision. Some of the main benefits and consequences of renouncing are: 1. U.S. Tax Filing and Reporting
Obligations (Benefit): Once you have renounced your U.S. citizenship, you will be issued a COLN effective on the date that you appeared at the U.S. Embassy or Consulate General, took the oath of renunciation, and completed the exit interview. A timely-filed U.S. tax return is still due for the year in which you renounced, though it is a partial year return that reflects from January 1 to the date the oath of renunciation was taken. Once you have been issued a COLN, you will generally no longer have U.S. reporting and filing obligations past the day of your renunciation.10 2. Eliminated Exposure to Future U.S. Tax Law Changes (Benefit): Despite pleas from U.S. expat groups, Congress declined to create a residence-based tax system for individuals in its December 2017 tax reforms. In fact, though the Tax Cuts and Jobs Act11 represented the most comprehensive overhaul of the U.S. tax code in over three decades, for many U.S. expats the situation got worse. Congress imposed a one-time “transition tax” on controlling U.S. owners of non-U.S. corporations, taxing “earnings and profits” of these corporations at 15.5 percent or 8 percent.12 Congress also created the ongoing concept of “global intangible lowtax income” (“GILTI”), a type of income which is both immediately includible in the income of certain U.S. shareholders who control non-U.S. corporations and broadly defined. 13 Both the transition tax and GILTI regime may prove very expensive for certain U.S. shareholders of non-U.S. corporations. The particulars of those taxes are beyond the scope of this article, but the changes underscore the continued possibility of unfavorable and sudden shifts in U.S. tax law as well as a trend of U.S. lawmakers (from both major political parties) remaining unwilling to provide tax relief to U.S. citizens abroad. 3. Reduced or Eliminated U.S. Estate and Gift Tax Exposure (Benefit): U.S. citizens and certain residents are subject to estate tax on their worldwide incomes and are afforded the full unified credit available.14 Assuming an individual who successfully renounces his or her U.S. citizenship is not considered a resident for U.S. estate and gift tax purposes,15 he or she will not be subject to U.S. estate tax on his or her worldwide assets at death, but only on any U.S. situs property.16
can result in double tax to a U.S. citizen even after accounting for the U.S. foreign tax credit system and relief available under the Canada-United States Tax Treaty.17 Notably, for example, Canada does not tax capital gains on the sale of a principal residence while the United States only allows a $250,000 USD exclusion on this gain.18 Likewise, Canada allows an inflation-indexed lifetime capital gains exemption ($866,912 CAD for qualified property in 2019) while the United States does not.19 Other common situations in which a Canadian-resident U.S. citizen can owe U.S. tax because he or she paid reduced or no Canadian tax include estate freezes, receipt of stock options, gambling or lottery winnings, contributions to a non-group RRSP, receipt of capital dividends, and certain charitable contributions.20 5 . Tr a v e l t o t h e U n i t e d S t a t e s (Consequence): After successfully renouncing U.S. citizenship, traveling into or through the United States may become difficult.21 Individuals who suffer from certain communicable diseases or who have committed crimes of moral turpitude in the past may be denied entry into the United States if they do not obtain permission before traveling.22 If flagged for these reasons, the renounced individual can be denied boarding of a plane en route to the United States or physically detained (and even arrested) if the individual attempts to cross a U.S. ground border. 6. Statelessness (Consequence): Persons intending to renounce U.S. citizenship should be aware that, unless they already possess another nationality, they may be rendered stateless and, thus, lack the protection of any government. This may create enormous problems regarding travel, employment, and housing. 7. Name and Shame Game (Consequence): Every quarter the names of individuals who lose U.S. citizenship are published in the Federal Register. This includes individuals who renounce U.S. citizenship. Over the last decade, the number of individuals losing U.S. citizenship has increased dramatically from 742 recorded in 2009 to 5,133 in 2017 (numbers for 2018 were not finalized at the time of writing).23
4.End to Risk of Double Taxation on Common Canadian Transactions (Benefit): While most U.S. citizens resident in Canada do not end up owing U.S. tax because they can claim credit for Canadian taxes paid, this is not true in all cases. There are a number of differences between Canadian and U.S. tax law that Znd Quarter 2019 - 63
With global tax reporting and FATCA, the list of the individuals who renounce keeps going up drastically
THE PROCESS OF
RENOUNCING YOUR U.S. CITIZENSHIP AND § 877A: TAX ISSUES If you decide to proceed with renouncing your U.S. citizenship, the proper precautions must be taken to avoid the imposition of the U.S. exit tax. 24 Section 877A of the Internal Revenue Code was enacted in 2008 under the Heroes Earnings Assistance and Relief Act. It established a more stringent exit tax regime applicable to the “covered expatriate.” 25 Section 877A classifies an expatriate as a “covered expatriate” when the individual meets any portion of a three-part test (discussed below) and renounces his or her U.S. citizenship or loses U.S. residency26 after June 17, 2008. A covered expatriate subject to the exit tax under § 877A will face a “markto-market” exit tax regime, which treats the covered expatriate as having sold all of his or her property for its fair market value the day before the “expatriation date.”27 The “expatriation date” is the date that the taxpayer renounces citizenship or ceases to be a lawful permanent U.S. resident.28 The mark to market exit tax regime applies to unrealized net gains in excess of $725,000 USD.29 The mark-tomarket rules deviate in application to any deferred compensation items,30 specified tax-deferred accounts,31 and interests in non-grantor trusts.32 The three-part test of the statute will classify an individual as a “covered expatriate” if any of the following statements are true: 1. the individual had a net worth of $2 million USD or more at the time of renunciation (Net Worth Test); or 2. the individual had an average annual net income tax liability of more than $168,000 USD in the five years ending before the date of expatriation (Tax Liability Test); or 3. the individual failed to certify on Form 8854 that he or she had complied with all U.S. Federal tax obligations for the five years preceding the date of expatriation (Compliance Test). 33 64 - Citizenship Navigation
There are two main exceptions to the exit tax regime for expatriates looking to renounce. The first exception is largely limited to dual citizens who were born in and continue to live in the country of their other nationality. The second is even narrower and is limited to citizens who did not live in the United States for more than ten years before the age of eighteen and a half. As minors are generally not allowed to renounce their U.S. citizenship, this exception effectively allows only a six-month window for such individuals to avoid the imposition of § 877A’s exit tax regime. The following are the two exceptions to § 877A’s exit tax regime: 1. An individual is exempt from the exit tax regime if he or she: a) files Form 8854; b) became a dual citizen at birth and continued to be a citizen and tax resident of the other country (i.e., Canada) at the time of renunciation of citizenship; and c) was a resident of the United States for no more than ten of the fifteen tax years ending with the tax year during which the renunciation of citizenship occurred.34 2. An individual is exempt from the exit tax regime if he or she: a) files Form 8854; b) renounces his or her U.S. citizenship before the age of 18 and a half; and c) was a resident of the United States for no more than ten years before the age of 18 and a half.35 In the practical application of these two exceptions, a renouncing individual who qualifies under either will not be subject to the Net Worth Test or the Tax Liability Test. Every renouncing individual, whether qualifying under the exceptions or not, will always be subject to the Compliance Test. Form 8854 is filed with a renounced individual’s final year return. On Form 8854 the renouncing individual must affirm, under penalties of perjury, that he or she is compliant with U.S. tax and filing obligations for the period of five years preceding expatriation. Thus, taking the proper steps to avoid the exit tax regime of § 877A requires that
the renouncing individual be U.S. taxcompliant in all circumstances. Another common question regarding the renunciation of U.S. citizenship is whether a minor child, parent of a minor child, or guardian of a minor child is capable of renouncing. To renounce one’s U.S. citizenship, the renouncing individual “must voluntarily and with intent to relinquish U.S. citizenship: 1. appear in person before a U.S. consular or diplomatic officer; 2. in a foreign country; and 3. sign an oath of renunciation.”36 The U.S. Department of State then reviews the renunciation, and, upon its approval, a COLN will be issued. 37 The position of the U.S. Department of State is that citizenship is a status that is personal to the individual U.S. citizen. Therefore, a parent may not renounce the citizenship of his or her minor child.38 Similarly, parents and legal guardians may generally not renounce the citizenship of individuals who are mentally incompetent. Minors seeking to renounce their own U.S. citizenships must demonstrate to a consular officer that they are acting voluntarily and that they fully understand the implications and consequences that accompany the renunciation. 39 The renouncing minor will have to convince the officer that he or she is not subject to duress or undue influence and that he or she voluntarily wants to renounce.40
E. THE PROCESS OF
RENOUNCING U.S. CITIZENSHIP: IMMIGRATION ISSUES Assuming that the proper tax compliance steps have been or will be taken to avoid the imposition of the exit tax under § 877A, the actual process of renouncing one’s U.S. citizenship also creates immigration issues of which to be wary. Congress amended the Immigration and Nationality Act41 with provisions to deny re-entry into the United States if the U.S. Attorney General determines that a former citizen renounced his or her U.S. citizenship for the purpose of avoiding U.S. tax.42
This provision became known as the “Reed Amendment” because of its introduction by then-U.S. Representative Jack Reed of Rhode Island. Although it appears that this law is seldom enforced, there is no guarantee that it will continue to be in the future. Under this provision, an individual who is found to have renounced for U.S. tax avoidance purposes will be denied access into the United States and will be considered “inadmissible” for immigration purposes. The Reed Amendment is intended to prevent a tax-motivated expatriate from returning to the United States. Representative Reed, in proposing the amendment stated: In an instrumental way, I would hope in the future if those very slick and smart tax lawyers advising their clients about how to avoid their taxes suggest expatriation they should also indicate very clearly that the consequences are you cannot return at will to the United States.43 What is important to remember is that the burden to prove that there was a tax avoidance purpose in renouncing lies with the U.S. government. Consequently, what is said at the exit tax interview is critically important. Other categories of individuals on this same “inadmissible list” include known terrorists, members of the Nazi party, and international child abductors.44 Avoiding this determination and classification is vital for those individuals who still desire to visit and travel through the United States after renouncing. The process of renouncing U.S. citizenship is a multi-layered procedure of immigration filings and tax compliance submissions that come to a crescendo with an interview administered at a U.S. Embassy or Consulate General. During this interview the renouncing individual will: 1. be asked to confirm his or her desire to renounce; 2. be given a statement of understanding concerning the consequences and ramifications of renunciation or relinquishment of U.S. citizenship; 3. affirm or swear that this decision is voluntary with no outside influence; 4. be instructed as to the irrevocability of renouncing U.S. citizenship; 5. be asked to read the oath or affirmation of renunciation of nationality of the United States; and 6. be individually questioned regarding the purpose and intent of the decision to renounce. Answering these questions honestly and in one’s best interests is critically important. 45 The answers to particular questions can have far-reaching consequences for both the renouncing individual and his or her family. The
answers to particular questions can have far-reaching consequences for both the renouncing individual and his or her family. As a result, many individuals pursuing the renunciation process request that a U.S.-trained and licensed attorney accompany them for the interview. If properly admitted and approved by the particular Embassy or Consulate, U.S. legal counsel may accompany the renouncing individual to the hearing. The presence of competent and qualified legal counsel can provide a great deal of comfort to what can be an intense, emotional event.
F. C O N C L U S I O N : F I N A L THOUGHTS In the end, renouncing your U.S. citizenship is a decision that comes with a number of variables that must be carefully considered. With U.S. immigration and tax pitfalls scattered throughout the process, understanding the repercussions of renouncing and proceeding carefully is imperative to a smooth departure from the U.S. club and all its membership fees. By Alexander F. Marino, JD, LLM (U.S. TAX)
_________________________________________ 1 When asked why he renounced in 2006, Mr. Gilliam replied, “The reality is, when I kick the bucket, American tax authorities assess everything I own in the world— everything I own is outside of America—and then tax me on it, and that would mean my wife would probably have to sell our house to pay the taxes. I didn't think that was fair on my wife and children.” 2 I.R.C. § 7701(b)(6). Lawful permanent resident, otherwise known as “green card” holders. 3 June 15 for filers abroad. You may be allowed an automatic two month extension of time to file your return and pay any federal income tax that is due. You will be allowed the extension if you are a U.S. citizen or resident alien and on the regular due date of your return you are living outside of the United States and Puerto Rico and your main place of business or post of duty is outside the United States and Puerto Rico, or you are in military or naval service on duty outside the United States and Puerto Rico. 4 I.R.C. § 2033 and Treas. Reg. § 20.01(b)(1). 5 Foreign Account Tax Compliance Act, Pub. L. No. 111147, 124 Stat. 71, 97 (2010).
6 A COLN is issued by the Bureau of Consular Affairs of the U.S. Department of State. 7 It is important to note that an individual who successfully renounces U.S. citizenship could still have filing and reporting obligations moving forward under the I.R.C. § 7701(b) definition of resident. Even though not a U.S. citizen, an individual whose days spent in the United States for the tax year at issue exceed the allotted days under the substantial presence test, then that individual has the same reporting and filing obligations as a U.S. citizen. 8 I.R.C. § 2033 provides that the gross estate of a decedent who was a citizen or resident of the U.S. at the time of their death, shall include all of their assets no matter where situated. Residency for estate tax purposes is different than residency for income tax purposes. Residency for estate tax purpose is a domicile test (see Treas. Reg. §20.0-1(b) (1)). Thus, a renounced individual could still face estate tax exposure if considered domiciled in the U.S. 9 Charles P. Rettig, “Evaluation of an IRS Undisclosed Offshore Account IDR”, Tax Notes, November 2011. Tip of the hat to Chuck for this illustrative reason for retaining one’s U.S. citizenship. 10 Contingent on not being classified as a U.S. resident for income tax purposes. See substantial presence test referenced, supra note 11 Pub. L. No. 115-97, 131 Stat. 2054 (2017). 12 I.R.C. § 965 (2018). 13 I.R.C. § 951A (2018). 14 $11,400,000 USD in 2019 (indexed for inflation). Estate tax rate is 40 percent. 15 Residency for estate and gift tax purposes is a domicile test. Residency for income tax purposes is a separate test. Referenced supra. 16 I.R.C. § 2103. 17 Convention with Respect to Taxes on Income and Capital, U.S.-Can., Sept. 26, 1980, as amended most recently in 2007. 18 Income Tax Act, RSC 1985, c.1 (5th Supp.), s. 40(2)(b) (as amended); I.R.C. § 121 (2018). 19 Income Tax Act, RSC 1985, c.1 (5th Supp.), s. 110.6 (as amended). 20 See Roy A. Berg and Kim G.C. Moody, “US Citizens Resident in Canada – Common Circumstances Where US Tax May Be Payable,” Moodys Gartner Tax Law LLP Blog (14 December 2011), https://moodysgartner.com/ us-citizens-resident-in-canada- common-circumstanceswhere-us-tax-may-be-payable. 21 This is in addition to the difficulties facing individuals born on U.S. soil traveling on a Canadian passport. 22 8 U.S.C. § 1182 (2011). Crimes of this nature include theft, DUI, and drug-related offenses. 23 See http://www.intltax.typepad.com/. 24 I.R.C. § 877A. 25 I.R.C.§ 877A(g)(2) provides that an “expatriate” means any U.S. citizen who relinquishes his or her citizenship and any long term resident of the U.S. who ceases to be a lawful permanent resident of the U.S. Long term resident defined in I.R.C. § 877A(g)(5). 26 I.R.C. § 877(e)(2). An individual is deemed a long term permanent resident if he or she held a U.S. green card for eight of the previous fifteen years. 27 I.R.C. § 877A(a)(1). 28 I.R.C. § 877A(g)(3) and (g)(4). 29 2019 amount (indexed annually for inflation). I.R.C. § 877A (a)(3); Rev. Proc. 2018-57. 30 I.R.C. § 877A(d)(4). 31 I.R.C. § 877A(e)(2). 32 I.R.C. § 877A(c). 33 I.R.C. § 877(a)(2). 34 I.R.C. § 877A(g)(1)(B)(i). 35 I.R.C. § 877A(g)(1)(B)(ii). 36 See U.S. Dept. of State, Renunciation of U.S. Citizenship (Feb. 1, 2008), https://travel.state.gov/content/ travel/en/legal/travel-legal-considerations/us-citizenship/ Renunciation-US-Nationality-Abroad.html; 8 U.S.C. § 1483(b) (2008); 22 C.F.R. § 50.50 (2008). 37 8 U.S.C. § 1501 (2008). 38 See http://travel.state.gov/law/citizenship/ citizenship_776.html. 39 Id. 40 Id. 41 8 U.S.C. § 1182 (2011). 42 8 U.S.C. § 1182(a)(10)(E)(2011). (Any alien who is a former citizen of the United States who officially renounces U.S. citizenship and who is determined by the Attorney General to have renounced U.S. citizenship for the purpose of avoiding taxation by the United States is inadmissible.) 43 Mark-Up of Immigration Legislation: Hearing Before the H. Comm. On the Judiciary, 104th Cong. (1995) in Fed News Services (1995). 44 8 U.S.C. § 1182(a) (2011). 45 There is a $2,350 USD fee for renunciation of U.S.
2nd Quarter 2019 - 65
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Japanese Visa Business Manager
<Purpose> This visa is for people who are seeking for setting up business, operating or managing international trade or other areas of business within a public or private organization in Japan. <Key Requirements> - Applicant is well experienced and has relevant skills to manage business - Applicant has realistic business plan - Applicant has a physical office in Japan - Applicant set up a company in Japan with at least JPY5mil capital < Visa Validity> 1, 3, 5 years depends on stability of business and circumstance. No restriction for renewal as long as applicant keeps operation for appropriate business < Advantage> Eligible to hire a housekeeper under certain conditions. * In order to set up your business and obtain this visa, we provide complete support, in cooperation with other specialists, for business registration, accounting and tax support, and social insurance and labor laws for the successful launch of your business. * If you wish to come to Japan first and then expedite your business activity in order to start your business at particular ‘National Strategic Special Zone’ there is another option called ‘Start-up Visa’ under the same Business Manager category. 2nd Quarter 2019 - 67
A Qualified Difference The development, or rather the apparent lack, of global standards has become one of most pressing issues facing investment migration. Many believe the recent criticism of EU institutions and international organisations will only become louder as the industry continues on its growth trajectory. The main concerns surround the lack of transparency, weak due diligence processes, possible tax evasion, money laundering, and other misuses of existing schemes. While such criticism may seem overwhelming and even unfair to honest players in the investment migration industry, the lack of global standards, which would protect those acting in good faith, takes its toll. It also makes it an easy target for criticism. This is why the Investment Migration Council (IMC) believes that global standards, education and qualifications for those working in the investment migration industry will contribute to a well-respected industry. A Platform for Education Bringing together the leading stakeholders in the field of investment migration with nearly 500 members, the IMC may be used as a platform to gather all areas of the industry together to help establish professional standards, benchmarks, competencies, codes of conduct and best practices for those working in or associated with the industry. To that end, the global IMC Education and Training (IMCET) division has been established. IMCET will provide education and training for all levels of staff and experience. The core objectives of IMCET include the following: • Development of professional competencies and standards for those working in the investment migration industry; • Certificated learning opportunities that lead to IMC professional status; • Education and training for all levels of staff; • Delivery of professional training and ongoing competency development. The educational and training programmes offered by the IMC and the resulting qualifications will build solid
ground for further professionalisation and responsible growth of the industry. There will be three different levels of qualifications: Certification in Investment Migration; Diploma in Investment Migration; and Post-Graduate Diploma in Investment Migration. The Certification in Investment Migration is an intermediate level course to be studied over six months. This practical introduction will lead to a professional status with the IMC and is benchmarked at Associate level for those working in the investment migration industry. The course is taught online through IMC’s learning management system and offers a total of five compulsory modules. Those who successfully complete the programme will be awarded the IMC Certification in Investment Migration. The Diploma in Investment Migration will be a course to be studied over a 12-month period. This programme will lead to Professional status within the IMC and will be the benchmarked professional level for those working in the industry. This will be the first global investment migration course of its type at this level. Therefore, specific entry requirements will apply. Those who successfully complete the programme will be awarded the IMC Diploma in Investment Migration. Finally, the IMC Postgraduate Diploma in Investment Migration will be a specialist qualification designed for senior practitioners working in, associated with or who aspire to work within, the investment migration industry. It will be studied over a 12-month period. This will be the flagship qualification of the industry. It will combine academic rigour with a practical and applied approach. It is designed for those senior managers who will lead the industry into its next phase of development. Therefore, more strict entry requirements will apply. On completing the Postgraduate Diploma, applicants will be awarded the highest level of professional membership awarded by the IMC: Fellowship. For more information visit: investmentmigration.org/ education
investmentmigration.org/education Contact: email@example.com 68 - Citizenship Navigation
Rationale for Taking the Certification
Provide verifiable evidence of competency (knowledge, skills and behaviours) Provide a practical focus and benchmarking of your work in the industry Help you to reduce risk in your firm and enhance the firm’s reputation Enhance your career prospects Keep you abreast of developments in the industry
The IMC Certification is a groundbreaking initiative designed to prepare participants for work in a new and vibrant industry where high professional standards, values and enhanced competencies are required. This certification will:
Programme Structure / Course Format Module 1
Citizenship and Residence by Investment
Ethics, Conduct and Professional Standards in Investment Migration
Industry Overview Understanding Citizenship and Residence Ways of Acquiring the Status of Citizenship The Concept of Residence Development and Characteristics of Investment Migration Citizenship and Residence by Investment: Assessing the Arguments
Ethics Codes of Conduct Corporate Culture and Values Integrity Competence Transparency Marketing of Citizenship & Residence by Investment Programmes Practical Application of the IMC Code Whistleblowing
Module 3 Anti-Money Laundering (AML) and Financial Crime Prevention (FCP)
Investor Migration — Know Your Customer (KYC) and Customer Due Diligence (CDD) Generic KYC and CDD
Nature of AML, Terrorist Financing (TF) and Sanctions
Customer Due Diligence
Types of Due Diligence
Politically Exposed Persons
Key International AML and Sanctions Bodies
Customer Risk Rating
Suspicious Activity Reporting
CDD Gone Wrong – Regulatory Action
Concept of Risk Management Bribery and Corruption
Citizenship by Investment and Residence by Investment – the need for CDD
Minimum Standards for Agents
Module 5 Personal Data: Management and Protection What is Personal Data? Principles of Data Protection
Risks Associated with Inappropriate Management of Personal Data 2nd Quarter 2019 - 69
Arun Bose, IREIS project manager Abu Dhabi, July 02, 2019
The 11th edition of the International Real Estate and Investment Show (IREIS), a leading investment platform and the only real estate event in Abu Dhabi is all set to take place at the Abu Dhabi National Exhibition Centre from October 30, 2019 until November 1, 2019. IREIS will also host the 5th edition of ‘The International Residency and Citizenship expo Pavilion’ to highlight the Dual Citizenship and Visa-Free travel for major countries across the globe. The Expo will offer superior expertise in the complex decision-making process necessary to gain the right citizenship and residency option. As countries tighten their borders to immigrants, the second-citizenship industry is working and growing to bypass those restrictions and move into peaceful regions. International events including the decision by Britain to leave the European Union, Policy changes of USA and legal restrictions on travelling to other regions are driving new interest to second passport industry. The UAE, which hosts more than 8 million (88%) expatriates, is an ideal hub for second citizenship and residency prospects for countries in Europe, America, Canada, the Caribbean and Australia –who attract wealthy investors and skilled immigrants through business and investment immigration programmes offered to boost their economic growth. The UAE residents from Syria, Yemen, Lebanon, Saudi Arabia, Bahrain, Kuwait, Oman, India and Pakistan have increased demand for Caribbean citizenship to 51 per cent, especially to St. Kitts & Nevis, Dominica, Grenada, Antigua &Barbuda and St. Lucia – the highest in the world according a report released The 11th edition of the International Real Estate &
Investment Show (IREIS 2019), targets investors and Consumers rather than trade visitors, will feature a dedicated pavilion to help visitors aspiring for dual Citizenship, residency and international investment opportunities gain the right advice and information from leading immigration experts. Arun Bose Associate director exhibitions says that International Residency and Citizenship by Investment Expo’, will offer professional guidance and consultancy for those looking to buy 2ndcitizenships in return of investing in properties or donating abroad through government bonds. Citizenship and Residency Expo Pavilion at IREIS 2019 is set to help the large number of High-Net-Worth-Individuals (HNWIs) from around the world in finding their dream destination and investment opportunities. Ever since the introduction of the segment in 2016 the show has grown with major exhibitors throughout the Globe promising dedicated services to potential investors As part of the event agenda, IREIS 2019 will host International Conference to discuss various Citizenship Opportunities. Organized by Dome Exhibitions, the three-day event is expected to bring under one roof regional and international real estate investors, brokers, and developers from the Middle East, Europe, and Asia Pacific to showcase their wide spectrum of property developments alongside an array of immense investment options as well as consultation and financing opportunities. The exhibition is taking place as the much-awaited Expo 2020 Dubai draws nearer. Expo 2020 has boosted the economic activities in Dubai and the UAE, further driving key local industries such as the real estate sector. After the country won the right to host Expo 2020, local property developments have expanded exponentially in anticipation of the arrival of millions
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Alternative residence and citizenship investorimmigration
500.000€ 300.000€ “Talent Passport-Residence “Quality investors“ card of 4 years, renewable ” Resident Visa *3 million € in a management www.CountryclubLoches.com and investment structure COUNTRY
C L U B
PORTUGAL 350.000€ property Golden Visa-5 years
GERMANY CITINAVI global
firstname.lastname@example.org - www.citinavi.net +33750521847 What’sApp Paris-London-Luxembourg
Solingen investor visa-3 years
(property + regional development funds)