There is a surge in South African’s applying for an EU second passport.
On the 1st of March 2020, the South African government will begin enforcing tax changes leading many to seek the comfort of a second passport. There has been a 364% increase in interest in a second passport among South Africans since 2018, many referring to their prospective second passport as Plan B.
Specifically, European countries such as Cyprus, Greece, Malta, and Portugal are experiencing a jump in applications for immigration.
The country’s current tax law states that South African tax residents that are working abroad are entitled to a tax exemption from income earned offshore, as long as they are located outside of the country for 183 days during any 12-month period. Beginning in March of 2020, only the first R1 million (roughly USD 14,000) earned outside of the country will be tax-exempt under the same circumstances.
South African’s are looking to Europe as a place to study and work abroad, as well as the visa-free travel that is offered by holding a European passport. The key reason many are applying for a second passport is the opportunities, both personal and professional, are more attractive for many citizens and their children.
One of the main ways families are hoping to seek a second passport is through many of the residency by investment opportunities in Europe. In this article, we will explore the benefits of a second passport, how residency by investment works, and how to gain a second passport in Cyprus, Greece, Malta, and Portugal.
Benefits of a second passport
By earning a second passport, individuals have the added benefit of being able to flee in the event of political or economic instability in their home countries. Some countries have more stable and trustworthy government systems, economies, and remain non-controversial. These safeguards can be the perfect escape for you and your family.
With a second passport, you can take advantage of visa-free travel to different nations, working and living in a new country comfortably, business opportunities, safer business, and cultural exploration.
Citizenship also allows you to vote, leave the country for as long as you like, and everything else a person who was born in the nation can do.
There can also be benefits in the form of tax advantages, safer banking, and favorable investment opportunities.
A couple of the biggest draws to Cyprus for foreigners are the government incentives and tax benefits. Also, for those who are not ready to make a real estate investment on the island, rental prices are relatively low, which means individuals will be able to get more out of life as they are saving on housing.
One of the best things some expats can hear is that their country of choice has a residency by investment program. This adds to the appeal to this Mediterranean island country.
Residency in Cyprus may be more expensive, but it is worth it. A two-million-euro investment in Cyprus real estate, government bonds, a bank deposit in a local bank, or investment in a new company will gain you quick and easy citizenship into this EU country.
The investor must also own a 500,000 euro home in Cyprus as a residence. This is the government’s way of ensuring individuals seeking citizenship are not taking advantage of the government for an easy passport.
Greek authorities enthusiastically promote its very own residency by investment program that grants an entire family residency with a minimum investment of €250,000 per family. This residency allows for visa-free travel across the Schengen Zone.
In just sixty days, an entire family can have residency in one of the lowest cost entries in the whole European Union.
The investment options include a real estate acquisition, real estate lease, or timeshare of a minimum value of €250,000.
After ten years of residency, individuals may apply for dual citizenship through the country’s naturalization process.
The Golden Visa program in Portugal is the most popular route to citizenship in Europe. This visa offers investors flexibility and benefits. The program, launched in 2012, grants residency to those who invest €500,000 in Portuguese real estate. The residency is also extended to family members, including spouses and dependent children. The visa needs to be renewed every two years and only requires holders to stay in the country for two weeks every two years.
After five years, Golden Visa holders can apply for permanent residency and citizenship after six years. One of the biggest appeals to the visa is that the applicant never even has to have lived in the country to gain citizenship.
There are two types of residency foreigners can gain in Malta, ordinary residence and permanent residence. An ordinary residence is for EU citizens. Permanent residence is available to everyone, no matter what country they are coming from.
The Malta Individual Investor Programme (MIIP), is the citizenship by investment program that is directed at high net worth individuals who are willing to contribute at least €650,000 to the national development fund set up by the government. They must also invest €150,000 in government-approved financial instruments and commit to a residence in Malta for five years.
Seeking Plan B with Alpen Partners
There are a lot of other aspects of living abroad to consider as well. Banking offshore and how you will file your taxes will need to be considered.
Together, with respected law firms in various regions of the world, Alpen Partners is advising its clients on expatriation issues. In a world of increasing tax pressure and professional mobility, expatriation has become one of the most efficient tools for asset protection and estate planning. Moving abroad can come along with an abundance of benefits that can affect your taxes, your investment portfolio, the cost of living, and your lifestyle altogether. As the cost of traveling becomes cheaper, the benefits of expatriation for financial reasons are more easily obtained.
Taking the leap and leaving your home country can be a big decision with tons of personal and legal steps. The hassle of navigating the legal process of expatriation can be reduced with the guidance of Alpen Partners . Each step requires assistance, including getting the passport, making sure everything is completed correctly regarding taxes, acquiring work permits, making investments, and more. No matter what expatriation route is chosen, it can be a powerful tactic to allow clients to gain better control of their financial and personal lives.
No matter the problem, Alpen Partners will handcraft a solution for you. We know that there is no one-size-fits-all when it comes to financial success. Our approach involves working with our clients to make a unique plan to meet their needs. Rest assured that we will work hard to guide you through the process of meeting your financial and personal goals.
Contact us to enhance your financial plan today.