Loading...

Investing in a second passport

Feb 09 2015 17:06

Cape Town - A new e-book examines the prospect of obtaining foreign residency and second citizenships by making an investment in any one of 28 selected countries.

Fin24 found out more about the subject from Johann van Rooyen, author of Residency and Citizenship through Investment: The 2015 Report for Emigrants, Expatriates and Investors.

Tell us more about the book.

This e-book examines the prospect of obtaining foreign residency and second citizenships by making an investment in any one of 28 selected countries.

It deals with economic emigration, in other words how to obtain residency by making an investment in another country. This could include buying a house, investing in foreign government bonds, starting a business, or even by making a once-off donation to a government institution.

This is a different from the regular emigration processes, which require emigrants to meet minimum points requirements, posses certain skills and sought-after qualifications, and can sometimes be used to disqualify applicants because of age and language ability.

The book explains how to live, retire and enjoy a good standard of living in exotic, sunny islands such Grenada, Antigua, St Kitts & Nevis, Bahamas, Dominica and Mauritius, tropical Central American states such as Belize, Costa Rica and Panama, EU-member states such as Spain, Portugal, Malta, Cyprus, Greece, Belgium, Hungary, Latvia and the UK and in perennially popular immigration destinations such as the US, Canada, Switzerland, Australia and New Zealand.

It is a guide for those looking for a comfortable and affordable country in which to retire or start a new life, away from government bureaucracies. It will also appeal to those who want to escape politically and financially unstable regions of the world and are prepared to make an investment to secure the right to settle in safe and welcoming countries, and enjoy the privilege of travelling with a second passport, unencumbered by rigid visa restrictions.

Tell us more about yourself.

I have a Ph.D from the University of Cape Town and am a former lecturer at Rhodes University and a guest lecturer at the University of Cape Town. I am also an author and businessman.

I moved to Canada in 2000 and focused on research in the fields of politics, business and migration.

My other published books include: Hard Right: the New White Power in South Africa; The New Great Trek: the story of South Africa's White Exodus and Renier van Rooyen - founder of PEP.

What need did you see for a book like this?

While millions of emigrants emigrate legally, based on their work skills and other attributes, investor–class economic emigration, in other words using one’s personal wealth to secure foreign residency, is a relatively new, but increasingly popular concept, embraced by counties eager to lure investors emigrants and their wealth.

While close to 1.5 million  South Africans have already emigrated, most of these have done so through their work, academic and other qualifications, many others who wish to emigrate or obtain a second passport do not qualify or do not wish to go through the lengthy and cumbersome points systems offered by countries such as Australia, Canada and the UK.

For them the option of investing in another country and in return to receive residency and a dual citizenship is an attractive option and forms the crux of this book.  

Who is the book aimed at?

It is aimed at all people who are considering relocating to another country and who wish to use their financial assets to facilitate the immigration process.

The majority of financial emigrants are from China, followed by Russia, India, South America, Africa and the Middle-East. Considerable numbers of retirees from Canada, the US and the UK are heading to Central America and the tropical islands of the Caribbean where they can live cheaper than in their own countries.   
 
What is the model of the book?

It is not a step-by-step guide on how to emigrate, but rather a broad overview of the investor-class immigration requirements of 28 countries, coupled with additional specialised information on 13 of these countries.

It covers living expenses, health care, crime, political stability, the economy, tax system, local newspapers, expatriate clubs and links to immigration lawyers, consultants and government departments.

It contains hundreds of colour photographs and country-by-country links to immigration departments, diplomatic missions, emigration and tax consultants, real estate agents, expatriate clubs, newspapers and tourists websites.

Won’t loopholes be closed that currently exist?

Most of the 28 countries discussed in the book openly encourage and promote investor  immigration and offer many incentives to lure wealthy immigrants. A few members of the European Union came under pressure over the past few years over concerns that they are making it too easy for investor class immigrants to obtain residency and European passports.

Malta and Cyprus came under scrutiny, but it did not stop their immigration programmes. However, Malta amended its rules, so that citizenship is only offered once new immigrants have been residents for at least one year and all applicants are more carefully screened.

Suggestions from the EU to limit the number of passports granted under this programme were rejected.

Which countries did you find to be the easiest and cheapest to get a second passport and which the most difficult and expensive?

The easiest countries are those which offer you citizenship and a passport without any residency requirements and for a relatively small investment. These include the Caribbean island of Dominica, which requires only a non-refundable payment of US$100 000 to the government per individual in exchange for citizenship, without residency requirements.

In Europe, Greece is offering non-EU investors permanent residency in exchange for an investment of €250 000 in a property in Greece for five years or if they own a ten-year time-sharing contract.

Panama allows retirees to become permanent residents under the category of "pensionados" if they have a pension of at least US$1 000 per month and are older than 60 (men) and 55 (women).

Another category in Panama is as a "person of means", under which non-pensioners, who do not plan to work or engage in business activities in Panama, are allowed to invest US$300 000 in a property in Panama or deposit US$300 000 for a fixed-term in a Panamanian bank.

Belize offers permanent residency for expats older than 45 who have an income of at least US$2 000 a month - expats who have lived in Belize for a full year, without leaving the country for more than 14 consecutive days during that year and can prove that they will not be a drain on Belize’s resources, can apply for permanent residency, and for citizenship after five years.

Antigua and Barbuda offers citizenship to qualified investors who are prepared to make an investment of US$250 000 in the National Development Fund or buy real estate of at least US$400 000.

Mauritius offers expats the opportunity to obtain residency and citizenship through an investment of US$500 000 in an approved resort scheme or in a qualifying business activity - investors can obtain citizenship and passport after approximately five years of residence.

Cyprus provides residency to applicants who have an annual income that will allow for a decent standard of living on Cyprus and can transfer about €300 000 to a Cyprus Bank on a fixed deposit for three years.

Among the more difficult and pricy countries to enter as investor class residents are the Australian "significant investor visa", which requires an investment of A$5m in approved investments.

In Europe Austria offers residency and citizenship to persons who have "exceptional talent", or who will make special contributions to Austria, or to those who can make a once-off donation of €2m to €3m to an approved arts, education or sports project.

Another Austrian option is to make a recoverable minimum investment of €7.5m in the economy of Austria, excluding investments in government bonds and real estate.

What did you find in your own personal experience?

If you are committed to obtaining a second passport, first decide if you want to formally emigrate and live permanently outside of South Africa, or whether you simply want to become a dual citizen and maintain your presence and residency in South Africa.

Either way, make sure that you apply for permission from the SA government before acquiring dual citizenship, otherwise you will forfeit your SA citizenship.

If you decide to leave permanently, find a country you will be comfortable with in terms of language, culture, climate, business and job opportunities, the quality of medical and educational systems, housing affordability and levels of crime and security.

See whether the required investment amount is within your budget and ensure that you have sufficient financial resources to pay for everyday living expenses. Speak with tax lawyers and emigration consultants to ensure that your tax affairs are in order and that you meet all the residence requirements for a specific country, and contact the host country’s immigration authorities to verify the process independently.

Lastly, visit the country and get a feel for the lifestyle and suitability before deciding.

Why would people want a second passport?

Almost 1.5 million South African expatriates are living outside of South Africa, many having left before the African National Congress came to power in 1994, while others left afterwards because of crime, corruption, mismanagement and uncertainty.

Not all South African emigrants leave because of politics, violent crime or economic uncertainty. Many simply want the freedom to travel, to work and to live abroad as expatiates, until they decide to return to South Africa.

Millions in countries in the Middle East and North Africa such as Syria, Iran, Iraq, Egypt and Libya are emigrating because of violence and civil war and they fear not only the collapse of political structures, but also the loss of their assets and even their lives.

Tens of thousands of Russians have left for London, Cyprus, Portugal and Spain to escape the ravages of sanctions, a crashing rouble and increasing authoritarianism.
 
For others the motivation is the possibility of getting a "better" passport than the one they have and the "freedom" that it offers.

The passports of most developed states and even those of some smaller stable countries eliminate the onerous visa restrictions of the Schengen area and other first world countries. For example, Chinese citizens can travel without acquiring a visa to only 44 countries, South Africans to 94, Russians to 95, Indians to 52, Iranians to 40 and Egyptians to 47.

On the other hand, a Canadian passport offers visa-free travel to 170 countries, a UK passport to 173, Portuguese to 170 and Maltese to a 163 countries. South Africans who have had to put up with the frustration and ludicrous bureaucracy when applying for a Schengen, UK, US or Canadian tourist visa, can only dream of travelling visa-free to Europe for up to three months.   

How have attitudes from people in these popular second passport countries changed towards immigrants? How can you put it in perspective, for instance, the benefits for the receiver countries?

Refugees and asylum seekers and even skilled workers often experience a hostile reception because of the perception that they will be a burden on the host country or that they will compete for local jobs.

However, investor-class emigrants are generally welcomed and are sought after by the 28 countries discussed in the book, partially because they make up relatively small numbers, are financially independent and will not be a burden on the host country and are expected to import their capital.  

Why would this investor-class economic emigration appeal to South Africans who do not qualify for regular emigration or do not want to go through the lengthy skills and points immigration schemes?
 
South African emigrants are allowed to take with them R4m per adult per calendar year or R8m per family unit per calendar year and a travel allowance of up to R1m per adult.

Even when not emigrating, the South African Reserve Bank allows citizens to invest money overseas, currently up to R4m per calendar year (approximately $350 000) per individual or $700 000 per couple, as long as they live overseas on a temporary basis or remain in South Africa.
 
Many of the countries described in this book only require a modest investment in a house to allow the investor to receive permanent residency and eventually, a passport, mostly well-below the amount that can be invested by a South African investor or emigrant per year.
 
Even for those South Africans who do not wish to leave the country permanently, it is possible to get a second passport without formally emigrating or residing abroad. South Africa allows its citizens to carry two passports, as long as this permission is obtained beforehand.

For example, St Kitts and Nevis in the Caribbean requires no residency and only a $400 000 investment or a $250 000 contribution (not refundable) to the Sugar Industry Diversification Foundation (SIDF), to obtain a passport.

Spain also has no minimum stay requirements or a requirement to become a tax resident.

Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers. Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

investments  |  money  |  immigration

NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
5 comments
Comments have been closed for this article.
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

What toys are you buying this Christmas?

Previous results · Suggest a vote

Loading...