Insights

How a real estate investment can change your life

Investors all over the world are looking for an investment that will not only grow wealth but also have added benefits. For this, many smart investors are choosing foreign real estate. Not only can foreign real estate be the perfect way to make a profit, especially in places with high rates of tourism and renters, but it can also be the ideal tool to gain residency in a new country. There are many reasons someone would want to earn a foreign residency. For some, the goal is to be to travel smoothly through different parts of the world. Having a second residency can mean visa-free travel, such as in the case of a Schengen residency. Others will gain residency through a real estate investment have the perfect vacation or retirement. Gaining residency through investment is one of the most popular ways to expatriate. Countries all over the world offer programs that allow individuals to make investments in real estate, the job market, reforestation, and more. In exchange, the investors will gain residency and, often, citizenship. Investors can use this freedom to escape from the high taxes of their hometown, find a retirement haven, or use a second passport to travel the world.

Investing in Foreign Real Estate

Residency is not the only reason investors are buying a foreign property. Diversification is the leading benefit. Modern Portfolio Theory says diversification is one of the cornerstones of a successful portfolio. It is no secret that a  diverse portfolio outperforms a concentrated one. With a large number of investments in more than one sector or asset class, investors can protect themselves from unsystematic risk, the risk that one encounters when investing in one particular company. An additional factor that draws investors to foreign real estate is the opportunity to expand their international options. Tapping into offshore markets can be a great way to strengthen a portfolio. There are also many tax benefits that come with investing in real estate offshore. It is one of the few ways that an American can legally keep some of their money offshore privately. When real estate is held directly in an investor’s name, as opposed to in a trust or LLC, the investment is not reportable. For many, the most crucial reason to invest in foreign real estate is to keep their wealth abroad. Owning foreign real estate allows investors to hold wealth offshore, which can be essential for asset protection and saving on taxes. There are also higher returns in the real estate markets of other countries.

Where to Invest

Many countries offer residency by real estate investment. Let us look at some of these jurisdictions. All jurisdictions will have varying regulations on who is permitted to purchase real estate and what kinds of investments will qualify for their residency by investment programs. In order to find the right investment for you and your needs, it is highly advised to seek the guidance of a professional. Monaco Monaco is often heralded as one of the best places for foreign investment and residency for wealthy individuals. It is widely considered a tax haven. Choosing a tax haven as your offshore investment destination is ideal. Monaco has been seen as such for years. The country ultimately did away with income tax way back in 1869. This makes Monaco Europe’s only sovereign zero-tax jurisdiction. In terms of residency by investment, Monaco’s program allows individuals to gain citizenship by placing €500,000 deposit into a bank account in Monaco. Portugal On October 6th, 2023, Portugal’s government enacted the “Mais Habitação Law,” significantly reforming the Golden Visa program by eliminating real estate investments as a pathway to obtaining a Golden Visa. Despite these changes, the program remains active with revised investment options, such as venture capital funds, job creation, and support for artistic production or cultural heritage. These shifts aim to address housing affordability issues and redirect investments towards broader economic and cultural benefits. Existing Golden Visa holders’ rights remain intact, including renewals, family reunification, and applications for permanent residency. New investment pathways include capital transfers of €500,000 or more in qualifying non-real estate venture capital funds, creating at least ten jobs, and investing in research activities. Additionally, investors can support artistic and cultural development through capital transfers of €250,000 or more, or by forming commercial companies with significant capital and job creation. These changes reflect the government’s intention to diversify investments into areas that can drive broader economic and cultural benefits. The Portuguese government also plans to reintroduce the “Non-Habitual Resident” scheme to attract skilled workers, offering tax breaks on Portuguese-sourced income and foreign income. This scheme, originally launched in 2009, was extended until the end of 2024 for those prepared to move to Portugal in 2023. While the “Mais Habitação Law” has altered the Golden Visa program by removing real estate options, it continues to offer viable investment pathways. Prospective applicants must navigate this new landscape with careful consideration of the revised investment criteria, as Portugal aims to balance attracting foreign investment with addressing housing market concerns. Cyprus 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. It’s the government’s way of ensuring those earning citizenship are not taking advantage of the government for an easy passport.

Gain Residency with Alpen Partners International

Are you ready to explore your offshore options? Alpen Partners International will help you every step of the way. Whether you are looking to diversify your portfolio with foreign investment or you want easy global residency options, our team is prepared to help. Together, with respected law firms in various regions of the world, Alpen Partners International 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, 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 International. 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. All investments involve certain risks. All investments carry the potential for financial loss, including the loss of the principal amount invested. Past performance should not be viewed as an indicator of future results. Market conditions and broader economic factors can significantly impact the value of investments. Investments in international markets are subject to additional risks, such as currency exchange fluctuations, political or economic instability, and variations in accounting practices. Alternative investments, including but not limited to hedge funds, private equity, and real estate, may be illiquid, speculative, and are not suitable for all investors. The above information should be considered before making any investment decisions. All posts and publications are for your information only and are not intended as an offer, promotion, or solicitation to buy or sell any financial instrument or perform any other financial transactions. All information and opinions expressed in posts and publications reflect our current views as of the date of the publication and may be liable to change without notice.