The passport to success

Buyers can take their pick of the perks of residency abroad, says

Ten years ago, if you were looking to invest in a foreign country to gain residency, pickings would have been slim. But today, upwards of 20 countries offer residency or citizenship through the acquisition of property.

Countries are looking to boost investment into their economies and, in some cases, encourage wealthy individuals in the hope that they will spend money, pay taxes, and perhaps set up businesses in the destination country – and are offering generous incentives.

But for Lucy Chuo, of law firm Stella Maris, for the buyers it is all about long-term financial security. “Individuals need to look at how their savings will be affected, and ensure existing assets f it into the tax regime of the country, including inheritance tax and succession laws. A brand new life can be a rewarding experience, but not without a secure exit strategy in place.”

So where are the best places if you feel like upping sticks, but don’t want to lose money?

Malta is a good choice for short-haul security. It was a British colony until 1963 and is one of the few eU countries where english is an official language. “The island’s favourable cost of living is another attraction,” says John Cutugno, MD of Maltabased real estate group Malta Property Agents.

Launched in 2013, the Malta Global Residence Programme reduces the minimum entry level for property buyers from €400,000 (£330,000) to €220,000 (£180,000). Foreign source income is taxed at 15 per cent. There is no inheritance tax, wealth tax or capital gains tax on a primary residence. Individuals are permitted to accept employment or establish a business in Malta, but such earnings will be taxed at 35 per cent. The scheme applies to individuals and families comprising a husband and wife, and dependent children up to the age of 25 years.

Further afield, Mauritius has the Integrated Resort Scheme (IRS) which grants residency status to foreigners purchasing residential property over the value of $500,000 (£300,000) which is specifically located in a resort setting of international standards. Individuals, spouses and offspring also qualify from tax benefits, including no Capital Gains Tax (CGT) or Inheritance Tax.

However, just a handful of IRS schemes have been govern- ment approved – new real estate product available includes twobed apartments at luxury coastal resort Anahita starting from £310,000. Severine Pieterson, of estate agents Seeff, says: “Mauritius arguably offers one of the safest internationally recognised legal formats to purchase offplan based on the French notary system. Moreover, corporate and personal income tax is set at a flat rate of 15 per cent and there’s no succession tax.”

Barbados is considered best for investment; newly revamped residency rules allow individuals with assets of $5m or more to gain an “indefinite special residency permit”, which is attractive to foreigners looking to reside on the island who earn their money elsewhere.

High net Worth individuals who purchase property (there is no minimum real estate value) and then opt to become tax residents through the scheme can claim a tax credit on income from foreign sources transferred to Barbados through the banking system of up to 93 per cent of the tax. This translates to an effective tax rate of 2.45 per cent for an individual whose income is solely from foreign sources.

Qualifying applicants who wish to run their worldwide business from Barbados can purchase an indefinite work permit with no additional requirements, all of which helps to make the relocation process more hassle-free. Spouses of the applicant also qualify to receive a residency visa for the same period as the applicant.

Retirees should perhaps look to Malaysia: the government’s “Malaysia My Second Home” initiative launched in 2002 now has UK applicants driving the programme. new threshold criteria from 1 January this year requires a minimum property spend of £190,000 in most states. To qualify, buyers over-50 must hold at least £95,000 in savings in a deposit account and offshore income of £18,000.

Successful applicants, provided that they do not work in the country, benefit from a “rolling” ten-year residency visa and are allowed to bring their spouses, unmarried children under the age of 21 and parents above the age of 60 as dependants.

A “tax-lite” regime also means no CGT, wealth tax or inheritance taxes. Further benefits include exemption from Malaysian income tax on pension and related income remitted into the country.