Did you know that there is a $4bn industry dedicated to helping individuals looking to give themselves freedom of movement and lifestyle choices to establish citizenship and residence? We hosted a seminar with a panel of experts to look at the issue in more detail and have summarised the main points in this q and a.
Why choose to relocate?
There are numerous reasons why our clients choose to relocate. The principle ones are as follows:
- To have a better lifestyle
- To relocate from countries with an unstable political or economic climate
- To increase personal security
- To achieve a better quality of life
- To enhance freedom of travel
What factors should I take into account with regard to my choice of location?
- Life objectives such as children’s education or retirement
- How assets, income and estate will be taxed
- Where accrued wealth and property is located
- Previous and existing connections
- Future events and contingencies
How can I obtain the right to live in a different country?
- Citizenship by investment
This is essentially obtaining a passport by buying it. It is a possibility for countries in Europe (e.g. Cyprus, Bulgaria, Montenegro, Malta, Turkey) and the Caribbean (e.g Grenada, St Lucia, St Kitts & Nevis, Antigua and Barbuda) at a cost of anywhere between around $100k and $3-4million. The more visa-free jurisdictions the citizenship gives you access to and the more the passport enables freedom of movement to other places in the world, the more expensive the investment will be. Eastern Europe passports, for example, are generally cheaper but don’t give the access to the US and the UK which more expensive passports will.
- Residence by investment
Residence by investment involves purchasing a property that will give you residence in the jurisdiction where the property is located. This doesn’t always give citizenship and passport rights immediately but after a period of time, often five years, residents can apply for citizenship and passport rights. Popular choices are Greece, Malta, Ireland, the US, Portugal, the UK, Canada, Italy, Australia, the Netherlands and Spain.
How do I work out the best country to relocate to?
You need to first establish your life, retirement and estate planning objectives. A good place to start is to assess the situation by looking at your country of origin and the tax legislation that relates to it. The UK for example, operates on the concept of domicile and other countries operate a similar system known as ordinary residence.
How will authorities in my country of origin know about my financial situation?
In recent years there have been many changes in global reporting and tax rules which have affected expats around the world, especially as countries seek to increase the scope of tax and taxation of worldwide assets is becoming the norm. The Common Reporting Standard (CRS) and FATCA are methods of exchange of communication which facilitate open disclosure between countries and make it very difficult for anyone to fly under the radar and not be visible to the tax authorities where they should report for tax and where they will be liable to inheritance tax on their estate. Over 100 countries are linked to the CRS.
I am looking to reduce my tax burden, where should I relocate to?
There is no one-size-fits-all solution. What will work for you and your family will depend on your personal requirements and circumstances. Sensible planning can often reduce both income tax and estate tax liabilities so it is vital to analyse the tax consequences and implications on worldwide assets. Your financial adviser, in conjunction with relevant specialists, can offer a full review of your objectives and your tax position in the light of the issues highlighted here to work out how to find the location that is best for you.
Infinity can put you in touch with the right people. We work in tandem with various partner companies to offer help with citizenship and residence by investment to expats in Asia who are looking to make efficient and cost-effective decisions on where to base themselves. If you are at the start of that decision-making process, do reach out to your financial adviser who can get the ball rolling to access the information you need to make the right evidence-backed decision and help you implement it.
Infinity would like to thank the experts who contributed to the webinar from which the information above is taken: Andrew Dobson, Founder and Business Development Manager at QB Partners, Neil Byrne, UK Chartered Tax Adviser at TFO Tax and Philip Cartwright, Senior Business Development Manager at Abacus.
A leading provider of expat financial services and wealth management services across Asia.