Making a business succeed in a foreign market can be challenging, but the potential rewards of trading on a global scale usually outweigh the difficulties associated with conducting business abroad. However, depending on your nationality, expanding a business globally can be made harder still.
Citizenship by investment may be the most efficient way for your businesses to expand abroad: providing a solution that does not require you to make sacrifices such as moving from your home or face the financial burdens that often come with most countries’ residency programmes.
What is citizenship by investment?
Many countries have some form of residency programme. In Europe, the UK, Portugal, and Switzerland are among the countries that offer residency to wealthy individuals for an investment in their country. Other countries offer work visas that can be turned into full citizenship after years of residency. However, these programmes are time-consuming and often incredibly expensive. Many businesspersons neither have the time nor the money to obtain second citizenship this way.
Citizenship by investment programmes differ as they offer individuals the chance to become a citizen without a lengthy process, mind boggling sums of money, or the obligation to move to that country permanently.
Second citizenship can offer visa-free travel
Having greater mobility to more nations will not only free up where you can take vacations, it can make working and investing in those countries easier too. Indian businesspeople wanting to travel and work in Europe, for example, need a pre-approved visa – a document that is only obtained after a lengthy bureaucratic process that doesn’t make doing business in these countries any easier. Similarly, citizens of Qatar can travel visa-free to just 70 countries.
Many citizenship by investment programmes offer greater international mobility in that second citizenship opens up visa-free travel to more countries. For example, having a St Kitts and Nevis passport ensures you can travel visa-free to more than 130 countries. Similarly, Grenadian citizenship allows you to travel visa-free to more than 120 countries including the People’s Republic of China – one of today’s most exciting business environments.
For businesses leaders, visa-free travel is important as it can ease the process of expanding into new markets. For example, Grenadian citizenship can help you gain access to the US by making you eligible for an E-2 Visa. This opens up investment opportunities in the world’s strongest economy. Moreover, with more travel options, businesspersons have the opportunity to meet with foreign clients face to face, making the process of building relationships much easier.
Citizenship programmes can open up new markets
Citizenship programmes can not only pave the way to markets where you can do business, they, in themselves, can be good investment opportunities. In developing countries with growing economies, citizenship by investment can be obtained through an investment in the local real estate sector.
The real estate projects on Caribbean islands such as Dominica and Grenada are government-backed. In Dominica, applicants can purchase authorised real estate from a minimum value of $200,000, including shares of what is projected to be some of the most luxurious resorts in the entire region. In islands with growing economies and thriving tourism sectors, hotel developments are worthwhile investments for businesses. The Caribbean building and construction industry is currently booming and GDP is up from 2.5% (2015) to 3% (2016).
Tax benefits of becoming an economic citizen
Depending on the country you’re from, and the country you become an economic citizen of, you may be open to a number of tax benefits. For example, many of the island nations that run citizenship by investment programmes, offer much lower tax rates than the more developed countries that offer similar programmes, such as Austria. They could, therefore, be ideal locations for you to retire in, and better enjoy the fruits of your hard labour across your working years.
In Malta, economic citizens who are not domiciled in Malta are taxable on a remittance basis only. This means that, as a Maltese non-domiciled resident, you won’t have to pay local tax unless you do live and work in Malta itself.