EU education: a big driver for citizenship-by-investment programmes
By Chris Buchanan
THE subject of global citizenship a.k.a. dual citizenship or alternative residence is occupying more and more column space in financial media as South Africa spirals into economic uncertainty and socio-political tension. Chris Buchanan talks to Nadia Read of LIO Global about the real benefits of these schemes and one or two blind side possibilities that could cost you dear.
A recent article on Traveller24 listed the 97 counties South Africans can visit on their passport alone, no visa required. The comments made for interesting reading, generally slating the fact that of the 97, not many were worth the trouble for a holiday, never mind a second home or business possibility. If you want to do business globally in the economies that won’t bury you in red tape but will give you access to important markets, you will need expand your business out of Africa and into a country with credibility.
NADIA READ says the following about the importance of having options when entering global markets, “For business owners who travel extensively, a second citizenship can open many global doors. Freedom of mobility and travel allows flexibility and ease of movement, as visa restrictions become more stringent and restrictive to South African businessmen and women. Establishing companies as well as bank accounts is easier, less hoops to jump through.
Big names like Elon Musk and Mark Shuttleworth, despite having moved abroad have done wonders for brand South Africa. A second passport allows not only freedom of movement but also access into EU, US, UK, etc.”
Barriers to entry will differ extensively from country to country and bear in mind the first and most significant of those barriers – the Rand/Euro/Dollar/ Sterling exchange rate. Suddenly you’re dividing your capital by 11, 12 or 19 so whether it’s an investment in government bonds, a start-up business or a property investment, your wheelbarrow full of Rands is an envelope of Dollars. European markets are also more sophisticated and competitive – they do business differently, less start-up red tape but more strict on corporate governance and fiduciary duty.
You have the cash and you’re ready to make the move to the EU which will give you the option of Cyprus, Malta, Portugal, Greece and Hungary. The details of each programme are well documented on the LIO Global website www.lio-global.com, but most important if you want your money well spent is to know the difference between what an EU Residence vs Citizenship can offer you.
READ says the following points should be considered when looking at the options:
• EU Residence gives travel access to Schengen zone countries for 90 days only. You can only live, work, study in country of residence – not anywhere in EU. Only EU citizenship gives the right to live, work and study anywhere in the EU .
• EU residence can change and is less secure than EU citizenship. Once you are a part of the EU, you are protected by EU law. Citizenship is much more secure in the long term.
• Most countries allow you to pass your citizenship or residence on to future generations. Eg. Malta, your kids can pass on to their kids, therefore establishing legacy plan for your future generations
• EU residence means you can only travel to 26 countries in the Schengen zone. With citizenship, eg. Malta or Portugal you can travel to over 160 countries worldwide. Malta also allows visa free travel to US and many other countries making it one of top 10 passports you can have.
ANOTHER potential pitfall says Read is understanding the benefits and risks to holding dual citizenship as a South African.
• You will need to complete a retention of citizenship with home affairs, otherwise you can lose your SA passport and you must notify them before you get your new passport.
• Make sure you get naturalisation certification in your new country of citizenship in order to allow you to renew your passport.
• Be clear on where your new freedom allows you to travel and other benefits such as reduced EU education rates – this can mean a massive saving depending on how many kids.
• When you travel, always leave on your SA passport.
• There’s an ease of opening international bank accounts, for example you can open an account in France even though have Maltese citizenship.
• Get yourself full understanding of the tax implications of a second citizenship.
MAYBE it’s a time zone thing or maybe it’s the ‘jet-set’ tag but the Caribbean is often overlooked as a citizenship option but offers some of the most successful and popular citizenship by investment programmes. Read says there are some really good reasons to consider the land of the Calypso with convenience being top of the pile:
• St Kitts and Nevis has been running program successfully since 1984 and have over 30 000 individuals who have acquired citizenship (includes children, dependents etc.).
• Fast and straight forward application process (very strict due diligence) with very limited, if any travel requirement to visit.
• Short processing time: St Kitts 6-8 months to get passport, Antigua 4-5 months.
• St Kitts and Antigua passports open no-visa travel to over 130 countries including the UK, the Schengen zone. They are commonwealth countries and form part of Caricom (The Caribbean Community).
• Antigua is an up and coming celebrity destination pushing property prices up and stimulating the economy. It is a beautiful and rustic tropical island, good holiday location and popular yachting destination.
• In short, passport application is straightforward and fast.
BUT if it’s the EU you’re set on then Malta is your best bet says Read and you need to start enquiries fast. Malta offers one of Europe’s most exclusive investor programmes, offering full EU citizenship in just over 12 months, problem is It’s capped at 1800 investors and will cost you over one million Euro. There’s no free lunch in life or business and gaining global access for you and your family to hedge yourself against uncertainty and instability, comes at a price. Your best ally in any citizenship by investment programme is doing your homework and using credible consultants to walk you through the process. There were a few investors who got hurt recently in EU property schemes and making an investment mistake is costly enough in Rand, do the multiplication and your loss is elevenfold. www.lio-global.com
~ Chris Buchanan Prestige