Interview with FINWEEK/Fin24

Buying residency or a passport with offshore property

Jun 05 2017 11:47, Glenda Williams

The attention of twitchy South Africans, reeling from the latest political fallout and credit rating downgrades, is once more turning to the safety net of residency or citizenship abroad.

Passport investment programmes or the “buying” of citizenship often comes at too high a price for the majority of global citizens, the mostly prohibitive outlays only within reach of the uber-rich.

Affordability constraints, though, have provided countries around the world an opportunity to attract investment and revenue through somewhat less expensive property-linked residency investment programmes.

Nadia Read Thaele is the CEO of LIO Global. (Picture: Supplied)

Nadia Read Thaele is the CEO of LIO Global. (Picture: Supplied)

The appeal of these programmes for South Africans is multi-faceted: offshore hedging as a means of safeguarding or growing wealth outside SA; the safety net that a second residency or citizenship and home elsewhere offer; and expanded global travel freedom.

“Many families are buying into these programmes to provide their children with international opportunities and the option to study abroad. Most of the programmes require minimal visits and physical stay and this is what makes them so attractive to investors,” says Nadia Read Thaele, CEO of LIO Global, a specialist firm in residence and citizenship-by-investment planning.

Property-linked residency programmes like those offered by Mauritius and the Seychelles have offered an attractive route to second residency for many locals.

Today, Mauritius’s $500 000 residency-only investment might not be as tempting as a $300 000 investment into, for example, Grenada, which affords the investor citizenship.

“Mauritius does not offer additional travel benefits. And Caribbean countries like Grenada or Antigua are cheaper. These countries also give you citizenship and a passport in four to six months and allow visa-free travel to the Schengen-zone countries, the UK and many others,” says Read Thaele.

While residency programmes do not afford holders the same level of security and benefits that citizenship and a second passport does, they are often a more affordable means of acquiring residency elsewhere and at the same time moving assets offshore.

Access to the EU

Property-linked residency and citizenship programmes offered by EU countries have been on locals’ radar for some time. In the EU alone, more than half of the member states now have dedicated residence-by-investment programmes, most linked to property investment.

Popular because of their “affordability”, they allow EU residency and freedom of travel in the Schengen zone.

Cyprus Residency program

Cyprus: The Mediterranean island’s property investment requirement of €300 000 plus VAT offers the same benefits as most EU residency programmes, the strong uptake from South Africans courtesy of the ex-British colony’s offering for family members. Children under 25 and both sets of parents can be included.

Greece: One of the more affordable EU residency programmes, a €250 000 property investment can be made anywhere in Greece and into multiple properties provided they make up the minimum amount. The programme includes spouse, dependent children to age 21 and parents.

It is possible to gain citizenship after seven years of physical residency and sufficient knowledge of Greek, reports LIO.

Malta: Malta’s residency programme has been an attractive one for those wanting to reside on the mostly Catholic and picturesque Mediterranean island. The Malta Residency and Visa Program (MRVP) offers EU residency with a €320 000 property investment (€270 000 if in Gozo/South Malta) plus a €250 000 investment into government bonds held for five years. Applicants could also elect to lease property (€12 000 annually) for five years.

Portugal: One of the more popular programmes among South Africans has been Portugal’s. It is, says Chris Immelman, managing director of PGPs International & Projects division (PGP), one of the best and most affordable programmes with the least risk.

“The process is rather simple and the conditions are not onerous at all – coupled with the fact that Lisbon and surrounds offer sound investment opportunities.

Portugal’s Golden Residency Program with its qualifying property investment of €500 000 offers visa-free access to all Schengen countries and allows investors and their families to live, work and study in Portugal. Requirements are an average stay of seven days annually and properties can be rented out.

The residency permit is valid for one year, renewable thereafter. Permanent residency can be applied for after five years.

While there is no guarantee of citizenship, it can be applied for one year after permanent residency and a Portuguese language test.

Spain: Spain’s Golden Visa Program is very similar to that of neighbour Portugal. One difference is that the €500 000 investment can be made into multiple properties, provided that collectively the minimum amount is met.

“Spain has a good programme but it does not allow for the possibility of applying for citizenship – unless you decide to live there for 10-plus years,” says Immelman.

“Apart from Portugal, other popular countries are Mauritius, Malta, Cyprus and some of the Caribbean countries – of which we prefer Grenada as the best option,” says Immelman.

Caribbean citizenship by investment

The Caribbean islands

The number of citizenship-by-investment (CBI) programmes in the Caribbean islands has grown and all offer property investment as an affordable and direct route to citizenship and a passport.

Here, citizenship starts at $200 000. Aside from the tax perks offered by this jurisdiction, benefits include visa-free travel access to Schengen countries, and because most of these English-speaking countries are ex-Commonwealth nations, that also includes the UK. However, these passports do not grant the holders the right to live in the UK or Europe, says Read Thaele.

Antigua and Barbuda: Perhaps the more exclusive of the twin islands, Antigua is a popular holiday home destination for celebrities and this has greatly boosted property values.

The CBI programme requires a donation of $250 000 or property purchase of $400 000, providing citizenship and a passport in four to six months. Additional donations for spouse and dependent children are required.

Renting of the property is allowed. “And,” says Read Thaele, “after five years you are free to sell the property and retain your citizenship.”

Commonwealth of Dominica: The most affordable of the Caribbean CBI programmes, Dominica (not to be confused with the Dominican Republic) offers the option of a $100 000 economic donation or property purchase of $200 000. The island offers limited approved property developments. Applicants can gain citizenship after around nine months.

Grenada: Dubbed the “Spice Island”, Grenada offers an attractive citizenship programme and is the only Caribbean country with visa-free access to China. Citizens of Grenada are also eligible to apply to the US for a non-immigrant visa.

A property purchase of $350 000 into a government approved real estate development or a non-refundable $200 000 contribution to the National Transformation Fund affords citizenship in three to four months.

St Kitts and Nevis: Back in 1984, St Kitts and Nevis was one of the first countries to offer a CBI programme that now boasts 30 000 investors.

The dual-island state’s investment requirements and benefits mimic Antigua and Barbuda’s, with one exception – applicants can only gain citizenships after a slightly longer period of between six and nine months.

St Lucia: The newest kid on the Caribbean CBI block promises a speedy three-month processing time. It offers four investment options of which an economic donation of $200 000 or property purchase of $300 000 are the most affordable. Applicants need a minimum net worth of $3m.

Antigua & Barbuda

Antigua & Barbuda


Can you fund the property with a local bond?

“The initial minimum amount has to be in cash; for example in Portugal, should you buy property for say €800 000, the first €500 000 has to be in cash. So you could gear €300 000,” explains Chris Immelman of PG.

“These programmes were created to bring foreign investment into the countries and stimulate growth, so investors are required to purchase the properties by bringing that capital into the country,” says LIO Global’s Nadia Read Thaele.

Are family members included in the residency programmes?

“Most, if not all the programmes, allow for applicants to include their spouses and dependent children. The age range varies by country. For example, the Caribbean countries, such as Antigua, allow dependent children up to the age of 25 to be included provided they are dependent on the main applicant,” says Read Thaele.

“Malta and Cyprus are especially lenient in their citizenship programmes, allowing children up to the ages of 26 and 28 respectively to be included. In many cases, dependent parents over the age of 55 or 65 can also be included, again provided the applicant can prove dependency.”

Red flags

Research and due diligence is paramount. “It is absolutely critical to ensure that you are working with honest, reputable developers or real estate agents. We have made it our business to forge relationships with just such people in the various jurisdictions and even then one needs to be careful!” says Immelman.

“Investors should be wary of companies marketing residency and CBI programmes through the promotion of a particular real estate project or development. We have seen this happen in China where property in the Algarve in Portugal is marketed and sold for €500 000 (to qualify for the programme), when in fact the properties were worth much less,” Read Thaele tells finweek.

“There are many new programmes coming up each year but it is important to do due diligence and tread cautiously. We prefer programmes that have a clear legal framework and have been running successfully for a period of time.”


Offshore allowance for South Africans

South African individuals are permitted to take R10m out of the country annually in addition to their R1m discretionary allowance.

The difference between residency and citizenship

Residency generally allows the holder the right to live, work and study in the country of residence. However, residency may be subject to renewal and rules could change.

Aside from a passport and added freedom of movement, citizenship allows the holder full rights, security and benefits afforded to the country’s nationals.

Retaining SA citizenship

To prevent losing SA citizenship, an application for retention of SA citizenship must be made to the department of home affairs prior to acquiring citizenship of another country.


Tax implications to be considered include property transfer taxes, annual property taxes, capital gains tax, and personal tax liability.


Individuals in residency programmes are unlikely to have access to national healthcare and private healthcare insurance is often required.

Note: Investment costs quoted exclude government, administrative and legal fees. For example, total costs for the St Kitts and Nevis real estate option can be expected to be around $492 000 for a single applicant.  


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