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Far & away | Property investment programmes

Far & away | Property investment programmes

Looking to diversify your investment portfolio? We look at ten countries where international property acquisition may qualify you for the pick of residency permits.

With a growing number of countries vying to attract international property investors, the time has never been better to do a spot of ‘passport shopping’.

But, warns James Bowling, international CEO and founder of Monarch & Co, maintaining an investment in a foreign country isn’t the only requirement for residency or citizenship. ‘Investors can lose their residence or citizenship status if they don’t meet other requirements, such as a minimum stay,’ he says, noting, for example, that the United Kingdom requires investors to make the UK their primary residence by spending at least 50 per cent of their time there, while Malta residence holders can’t spend more than 183 days a year in another jurisdiction. And ‘Portugal requires you to visit for seven days in your first year and 14 days every two years [thereafter] in your path to gaining citizenship.’

When it comes to the ‘perks’, such as free education and healthcare, the rules are different for citizens and residents. Residency holders are entitled to receive free state education only in the country of residency, and should always be covered by comprehensive international health insurance, as they don’t receive free medical treatment.

Citizens, on the other hand, ‘have full access to free state education and healthcare facilities in their country of citizenship, should it be available in that country,’ says Bowling. ‘A citizen from an EU country and registered in the national healthcare system can attend any educational or healthcare facility in any other EU country.’

In Portugal, however, you need to be a citizen contributing to social security as a taxpayer living and working in Portugal to qualify for free healthcare and education, says Chris Immelman, MD of Pam Golding Properties International and Projects division, and adds that residency doesn’t provide holders with free healthcare or education, though they have access to it.

A useful caveat to keep in mind is that some countries, such as China, don’t acknowledge dual citizenship. Investors, therefore, would have to sacrifice their current citizenship in return for the new one. ‘South Africa recognises dual citizenship, so our investors don’t have to worry,’ says Bowling.

 

01. St Kitts & Nevis

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What’s the minimum amount I need to invest?

Purchase a designated property for a minimum value of $400 000. However, there’s a range of significant additional fees payable for background checks and application processing. There’s no requirement to reside in this Caribbean twin-island paradise and business haven. Citizenship via investment takes three months.

 

Are there good schools?

Education in Saint Kitts and Nevis is compulsory between the ages of five and 16. In St Kitts there’s a range of primary and secondary schools, including Estridge Primary School, Saint Anne Sandy Point Primary School and Beach Allen Primary School, as well as Cayon High School, Washington Archibald High School and Verchilds High School.

In Nevis, the primary schools available are Nevis Academy, Charlestown Primary School and Ivor Walters Primary School, while Charlestown Secondary School, Gingerland Secondary School and the private Nevis International Secondary School make up the high-school complement. Higher education is available at Clarence Fitzroy Bryant College, International University of the Health Sciences, Ross University School of Veterinary Medicine and the International University for Graduate Studies.

 

How do I get financing?

Residency and citizenship by investment programmes don’t offer financing options and the investment amount must be paid up front and in full.

 

How does income tax work?

Zero per cent personal and corporate tax rates if not doing business in Saint Kitts and Nevis. If trading there, then 35 per cent corporate tax and normal country personal tax rates. There’s no worldwide taxation if not a tax resident.

 

Do I lose my citizenship when I sell?

No, as long the property investment is held for a minimum of five years.

 

Useful Contacts:

 

Selling point

If you’re not doing business in Saint Kitts and Nevis, you pay no personal or corporate taxes

 

02. Grenada

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What’s the minimum amount I need to invest?

Invest a minimum of $350 000 in a qualifying property development or business.

 

Are there good schools?

Education in Grenada is free and compulsory between the ages of six and 14. There are numerous independent schools in Grenada, most located in or around the capital of St George’s. Primary and preprimary schools include Grenada Montessori and Preparatory School, L’Anse Aux Epines and First Choice Junior School, Sunny Side Private School, Limes Mennonites, Kay-Dees School, Grenada Junior Academy, Alpha Primary School, and 3 Rs Junior School.

St George’s University boasts 6 000 students from over 140 countries and offers faculties of medicine and veterinary science that are considered to be of the highest standard in the Americas. As a whole, the country has a very high literacy rate and a well-educated population. The University of the West Indies School of Continuing Studies is also available.

 

How do I get financing?

Residency and citizenship by investment programmes don’t offer financing options; the investment amount must be paid in full up front.

 

How does income tax work?

Only taxed on income generated in Grenada and/or untaxed income remitted into Grenada. Citizens pay no tax on worldwide income.

 

Do I lose my citizenship when I sell?

No. You may sell your investment and keep your citizenship status and passport, provided you hold the investment for the required four years.

 

Useful Contacts:

 

Selling point

This ‘Spice Island’ has a high standard of living and a low crime rate. Education is free up to 14 years of age

 

Tip: Many single family homes cost significantly more than the minimum $400 000 investment, and larger homes can easily cost in the millions of dollars. However, this does lend an exclusive cachet to your overseas investment.

 

03. Seychelles

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What’s the minimum amount I need to invest?

Residency is limited to the purchase of property in Pangia Beach or the Eden Island marina development, where prices start at $450 000. Other costs include a professional fee of $1 000, a processing fee of SCR1 000 (converted into US dollars) and a permit application fee of SCR150 000.

 

Are there good schools?

Education is compulsory up to the age of 16, and free through secondary school up to age 18. Children are first taught to read and write in Creole; in Grade 3, English is used as a teaching language in certain subjects, while French is introduced in Grade 6.

There are two excellent schools in Victoria, Mahé, a five-minute drive from Eden Island. The fully fledged International School Seychelles follows the UK curriculum, while Ecole Française des Seychelles, a French school, is available for French-speaking investors. The University of Seychelles is situated a little farther away in Anse Royale, Mahé.

 

How do I get financing?

Mortgage finance is available through Barclays Bank, Nouvobanq and Mauritius Commercial Bank (MCB).

 

How does income tax work?

You’ll only be taxed on income or remuneration generated within the Seychelles (for example, income tax and companies tax). There will be no further taxes levied.

 

Do I lose my residency when I sell?

Yes. Residency is tied to ownership of the property, so residency would terminate on the sale of the property.

 

Useful Contacts:

 

Selling point

Mortgage finance is available through various banks. You’re only taxed on income generated within Seychelles

 

04. Mauritius

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What’s the minimum amount I need to invest?

Permanent residency permits for purchasers (including spouse and dependants) are automatically linked to ownership of freehold property within an approved Integrated Resort Scheme (IRS) or a new Property Development Scheme (PDS) with a minimum investment value of $500 000. A residency permit also entitles the resident to apply for an occupation certificate, which allows the resident to start a business or to become an employee of a company in Mauritius. After living in Mauritius for five years, the purchaser may apply for a Mauritian passport (discretionary) in addition to their residency permit.

 

Are there good schools?

The education system in Mauritius is based largely on the British system, since Mauritius was a former British colony. The north of the island has a number of good private schools, including Northfields, the International Preparatory School and Lighthouse. West Coast Private School is also excellent. Universities include Middlesex University London – Mauritius Campus, the University of Technology and the Open University of Mauritius. Monash has just secured a site for a new 5 000-student campus.

 

How do I get financing?

Access to finance is by application to the relevant banks. Typically, a loan of up to 50 per cent of the value of the property can be offered to foreign residents.

 

How does income tax work?

Mauritius offers a favourable taxation environment, with key tax benefits including a 15 per cent corporate and individual income-tax rate, double taxation agreements with 36 countries, and no capital-gains and inheritance tax on properties purchased.

 

Do I lose my residency when I sell?

Yes, unless you can prove that you are purchasing in another development. Residency status in Mauritius is linked to the purchase of a property for more than $500 000 within an existing IRS or RES (Real Estate Scheme) or new PDS.

 

Useful Contacts:

 

Selling point

A residency permit entitles holders to apply for an occupation certificate, allowing them to start a business

 

Tip: ‘As a South African investor, I would look for a new PDS (Property Development Scheme) project, because your tax rates (5% transfer tax and 5% government tax) will potentially be lower. The same investment criteria apply.’ Rob Hudson, MD, Hayes, Matkovich Developments

 

05. Malta

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CITIZENSHIP

What’s the minimum amount I need to invest?

A non-refundable contribution to the National Economic & Social Development Fund (¤650 000 for primary applicant, ¤25 000 for spouse and dependants under 18, ¤50 000 for dependants over 18), and purchase immovable property at a minimum value of ¤350 000, or rent for a minimum of ¤16 000 annually and invest ¤150 000 or more in stocks, bonds or debentures.

 

Are there good schools?

Standards are high at Maltese state schools, modelled on UK schools. After students pass their A-levels, they are free to start at the University of Malta (the oldest university in Europe; it offers undergraduate and postgraduate degrees and it’s entirely financed by the government) or the Malta College of Arts, Science and Technology.

 

How do I get financing?

Finance through the Bank of Malta can be arranged.

 

How does income tax work?

A flat tax rate of 15 per cent on income declared in Malta from overseas, subject to a minimum tax of ¤15 000. Normal country tax, if a tax resident, on a sliding scale. No worldwide taxation if not a tax resident.

 

Do I lose my citizenship when I sell?

No, provided you hold the investment for the required five years.

 

RESIDENCY

What’s the minimum amount I need to invest?

Purchase immovable property for €270 000 (south of Malta or Gozo) or ¤320 000 (north of Malta); or rent a property annually for €12 000 (north Malta) or €10 000 (south of Malta). In addition, investors must contribute ¤30 000 and make a qualifying investment of €250 000 in a form determined by Identity Malta.

 

Are there good schools?

Yes (see above).

 

How do I get financing?

Finance through the Bank of Malta can be arranged.

 

How does income tax work?

Flat tax rate of 15 per cent on income declared in Malta from overseas, subject to a minimum tax of ¤15 000. Normal country tax, if a tax resident, on a sliding scale. No worldwide taxation if not a tax resident.

 

Do I lose my residency when I sell?

Yes. The investment needs to be held indefinitely.

 

Useful Contacts:

 

Selling point

You won’t lose your citizenship if you sell; for residency, however, you need to hold on to your investment

 

06. USA

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RESIDENCY

What’s the minimum amount I need to invest?

$1,2 million in a new commercial enterprise or $800 000 in a ‘targeted commercial area’. In return, the US Citizenship and Immigration Services may grant conditional permanent residence (a Green Card) for two years to meet certain requirements. If achieved, conditions will be removed and the investor granted full permanent residence.

 

Are there good schools?

The United States offers high standards of state and private educational institutions from pre-primary to secondary level. Among the top tertiary institutions are Harvard, MIT, Stanford, Princeton and Yale.

 

How do I get financing?

Residency by investment programmes don’t offer financing options, and the investment amount must be made in full up front.

 

How does income tax work?

Once the Green Card has been issued and the investor decides to stay in the US, they’re required to register as a tax resident. There’s a dual tax treaty between South Africa and the US.

 

Do I lose my residency when I sell?

No but Green Card holders must hold an investment in a regional centre for at least five years.

 

CITIZENSHIP

You have to first get a Green Card (see at left).

 

Are there good schools?

Yes (see above).

 

How do I get financing?

Citizenship by investment programmes don’t offer financing options, and the investment amount must be made in full up front.

 

How does income tax work?

There’s a dual tax treaty between South Africa and the US.

 

Do I lose my citizenship when I sell?

Not if the investment is in a regional centre for a minimum of five years, which forms part of the EB-5 Immigrant Investor Programme.

 

Useful Contacts:

 

Selling point

The USA has a mixed economy that’s fuelled by abundant natural resources and high productivity

 

Tip: ‘In the past 10 years, Florida has become a top investment destination, largely due to it being a key tourist and retirement region, both locally and globally.’ James Bowling, Founder, Monarch & Co International

 

07. Portugal

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What’s the minimum amount I need to invest?

€1 million in a Portuguese company or into a Portuguese bank fixed deposit, or the acquisition of real estate with a minimum value of €500 000.

 

Are there good schools?

Portugal boasts the public research University of Lisbon as well as the University of Porto. It offers good international schools, including the English and American International schools in Estoril, and all Portuguese educational facilities supply students with a daily lunch.

 

How do I get financing?

Banks will lend up to 50 per cent to foreigners (naturally, applicants have to qualify). The Golden Visa Programme requires that the first ¤500 000 be paid in cash.

 

How does income tax work?

Normal country tax if a tax resident, on a sliding scale between 0 and 35 per cent. No worldwide taxation if not a tax resident. If the holder of the Golden Visa does not stay in Portugal for more than 183 consecutive days, he/she won’t be required to pay taxes for income generated outside Portugal. Rental income and income arising from capital (such as interest and dividends) taxed at a rate of 28 per cent.

 

Do I lose my citizenship when I sell?

No. You may sell your investment and keep your citizenship status and passport, provided you hold the investment for the required five years.

 

Useful Contacts:

 

Selling point

‘There’s a renaissance taking place in Lisbon, which is being compared to Barcelona 20 years ago,’ says Chris Immelman, PGP

 

Tip: ‘I can’t give better advice than to seek the best possible local help. I’ve made it my business over the years to engage with sound local partners.’ Chris Immelman, MD, Pam Golding Properties International

 

08. United Kingdom

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What’s the minimum amount I need to invest?

Invest £2 million or more in UK government bonds, share capital or loan capital in active and trading UK-registered companies (excluding real estate companies).

 

Are there good schools?

In the UK, schools are either provided by the local government authority (state schools) and are free for all pupils, or are independent schools and charge fees. Independent schools have an excellent reputation for high standards of teaching and learning, and almost all pupils go on to prestigious universities such as Cambridge and Oxford when they leave. Scholarships to state schools can only be offered to students from countries in the European Economic Area (EEA). Other universities include Imperial College of London and University College London.

 

How do I get financing?

Residency and citizenship by investment programmes don’t offer financing options, and the investment amount must be made up front and in full.

 

How does income tax work?

Normal country tax if a tax resident, but can be non-domicile if they keep assets separated prior to settling in the UK and thereby only pay tax on income generated from new assets/capital generated from that point on.

 

Do I lose my citizenship when I sell?

No. You may sell your investment and keep your citizenship status and passport, provided you hold the investment for the required five years. Investors will have to make the UK their primary home (spending more than 50 per cent of their time there). The initial Investor Visa lasts 40 months and can be extended thereafter if conditions have been met.

 

Useful Contacts

 

Selling point

The initial Investor Visa lasts 40 months. It can be extended thereafter, provided certain conditions are met

 

Tip: ‘Our exclusive partnership with Seeff gives South African buyers access to some 150 000 property listings worldwide including prime areas such as the UK, Portugal, Cyprus, Malta and even the USA. There are about 400 000 South Africans living in London and a further 100 000-odd across the UK countryside. In 2014, in London alone, there were as many South African buyers as Americans purchasing UK properties and this is set to grow.’ Alasdair Hedley, Head of International for Hamptons

 

09. Cyprus

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CITIZENSHIP

What’s the minimum amount I need to invest?

A single property investment of minimum €2,5 million or a multi-property investment of minimum €3 million. Dependent children up to age 28 qualify for citizenship, and citizenship is passed on by descent, offering a legacy to future generations.

 

Are there good schools?

Yes. Education is compulsory for all children aged five to 15. Public schooling, including higher education, is paid for by taxes. Accredited independent schooling is also available. Top universities include the European University Cyprus, Frederick University, Neapolis University and the University of Nicosia.

 

How do I get financing?

The citizenship by investment programme doesn’t offer financing options, and the investment amount must be paid up front and in full.

 

How does income tax work?

Normal country tax if a tax resident, on a sliding scale between 0 and 35 per cent. There’s no worldwide taxation if not a tax resident.

 

Do I lose my citizenship when I sell?

You may sell your investment and keep your citizenship status and passport, provided you hold the investment for the required three years and you retain a property of minimum €500 000.

 

RESIDENCY

What’s the minimum amount I need to invest?

A single, secure real-estate investment of €300 000 or two adjacent apartments or townhouse units for a total minimum value of €300 000. Dependent children up to age 25 qualify for residency. The residency permit automatically renews, and is for life.

 

Are there good schools?

Yes (see above).

 

How do I get financing?

You can get financing for the residency programme. Only two-thirds of the purchase price needs to be paid before the fast-track residency application process can be started. All resales need to be cash.

 

How does income tax work?

Normal country tax, if a tax resident, on a sliding scale between 0 and 35 per cent. No worldwide taxation if not a tax resident.

 

Do I lose my residency when I sell?

After three years you may sell your investment and keep your residency status, provided you hold an investment of minimum €300 000 indefinitely.

 

Useful Contacts:

 

Selling point

‘Passports are issued in three months, making it one of the quickest citizenship programmes,’ says Jenny Ellinas, Cypriot Realty

 

Tip: ‘Take the time to go on a property inspection trip to look at the properties yourself, and only deal with organisations with a solid reputation here in South Africa and in Cyprus. Do your research, get as many referrals and recommendations as you can, and meet them in their place of business – that way you can be assured they are reputable.’ Jenny Ellinas, Cypriot Realty

 

10. Antigua & Barbuda

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CITIZENSHIP

What is the minimum amount I need to invest?

Investment in a qualifying property development or citizenship-by-investment-approved business to a minimum of $400 000.

 

Are there good schools?

Yes. There are a number of high-standard private and public schools. Education is compulsory from age 5 to 16. The University of Health Sciences Antigua is well regarded.

 

How do I get financing?

This programme doesn’t offer financing options and the investment amount must be paid in full up front.

 

How does income tax work?

Normal country tax, if tax resident, on a sliding scale from 0 to 25 per cent.

 

Do I lose my citizenship when I sell?

You may sell your investment and keep your citizenship status, provided you hold the investment for the required five-year period.

 

Useful Contacts:

 

Tip: ‘Work with a company that not only has a proven track record but one that can offer you a wide variety of investment options to best suit your requirements’ James Bowling, founder, Monarch & Co International

 

Definitions:

RESIDENCY & CITIZENSHIP

RESIDENCY is the legal right to live, work, travel and study in a country, subject to certain conditions. Typically you wouldn’t give up citizenship in your own country.

CITIZENSHIP, on the other hand, means the person is a legal citizen of another country with, for example, the right to vote. Residency can be revoked, whereas citizenship typically wouldn’t be. Some countries allow for dual citizenship, but others do not.

 

Text: David A Steynberg
Photographs: iStock

 

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