Special report
residency Who is theby investment survey about?
Wealth migration on the up Second passports are more popular than ever, but invest soon or risk missing the boat Some countries have tightened or even scrapped their residency- and citizenshipby-investment programmes in recent months. Russia’s war in Ukraine has also prompted EU lawmakers to set up new laws to clamp down on cashfor-passport programmes to control the flow of money into the region. That means investors looking for a plan B as a hedge against instability should act soon when considering their options as the requirements to qualify for a second passport may become more onerous. International property group Knight Frank has seen a strong uptick in demand for wealth migration programmes among global investors. According to its recent “The Wealth Report 2022”, globalisation and cross-border real estate investment rose last year — despite a 72% drop in international airport arrivals due to travel restrictions. Knight Frank’s annual investment survey among the world’s super-wealthy reveals that about 15% plan to apply for a second passport or alternative citizenship this year. The main reasons include safety and quality of living, tax incentives and ease of travel. Knight Frank’s survey found that 31% of SA’s high net worth individuals plan to apply for a second passport this year. The report says: “Traditionally South Africans would look to the UK or
Malta, but they are increasingly turning to the US and Portugal.” According to wealth migration advisory firm Henley & Partners’ inaugural “Henley Global Citizens Report”, about 30 countries still have a property-linked residence and/or citizenship-by-investment initiative in place — often called golden visa programmes. According to the report, the most successful schemes include those offered by the Caribbean islands of St Kitts and Nevis and European countries such as Malta, Austria, Montenegro and Portugal. Chris Immelman, head of Pam Golding International, says Portugal is now top of mind for rich South Africans looking for a plan B. In fact, he says, citizenship has now become a reality for the first group of SA investors who have gone through the fiveyear residency-by-investment process. The company has assisted close to 400 SA families to take advantage of Portugal’s golden visa programme, many of whom will soon be eligible to apply for citizenship.
Immelman says the prime reason South Africans are investing in Portugal’s programme is to access global opportunities for their children to study and work. Some are also viewing Portugal as a future retirement destination. However, he says no more than 10 of the 400 SA families have relocated permanently to Portugal. Other residency- and citizenship-by-investment destinations that are still gaining traction among SA investors include Mauritius and the US. Warren Rajan, MD of Mauritian developer Eiffel Property, says Mauritius is in demand among wealthy investors due to its double tax avoidance agreements with more than 50 countries. “The country is a maturing global hub that offers worldclass infrastructure, a respected and well-regulated banking jurisdiction with a vibrant and trusted business platform, and a highly skilled bilingual workforce,” says Rajan. Stuart Ferguson, director of American Dream and 12 Star Capital, the SA-based investment visa and alternative res-
Portugal is now top of mind for SA investors looking for a plan B
Supplied by Pam Golding International
idency specialist, says the US is firmly back on the radar of South Africans looking to obtain a green card. That follows last month’s update by the US Congress of the EB-5 immigrant investor regional centre programme. He says the scheme lapsed at the end of June last year, which created uncertainty about if and when the programme would be resumed. It was reintroduced last month. “We can now breathe a sigh of relief and get back to completing the final steps for our clients’ EB-5 applications, while we also look forward to helping new investors start the process,” says Ferguson. The updated scheme will be in effect until the end of September 2027 and allows foreign investors, their spouses and unmarried children under 21 to apply for permanent residence through a green card. To be eligible, EB-5 applicants must invest a minimum of $800,000 in real estate projects or other commercial enterprises in dedicated areas — known as targeted employment areas — across the US. The initial capital investment is typically returned to applicants after five to eight years. Ferguson refers to recent statistics from BrandMapp that suggest between 700,000 and 900,000 South Africans leave the country every year. “With the additional integrity measures working in investors’ favour, we expect to see a surge of families and individuals looking to explore alternative living and investment opportunities in the US,” says Ferguson. x
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Special Report residency ????? by investment Heritage Villas Valriche in Bel Ombre
Already a prime holiday destination among South Africans, the Indian Ocean island’s residency-by-investment scheme has had renewed interest in recent months due to the easing of pandemicrelated travel restrictions. In addition, legislation has been amended to make it easier and more affordable for foreigners to obtain residency through buying real estate. Richard Haller, director of Pam Golding Properties (PGP) Mauritius, says foreigners now qualify for permanent residency status if they invest a minimum of $375,000 in a residential property in approved developments. Permanent residency status applies to the purchaser, spouse and children aged under 24 years. Moreover, buyers are now allowed to bring their parents to Mauritius as dependants. Residents can also work legally in Mauritius and no longer have to apply for a work visa. “It’s the simplest residency-by-investment pro-
gramme around. There are no visitation requirements and no language tests. You simply purchase the property and move over whenever you want,” says Haller. Warren Rajan, MD of Mauritian developer Eiffel Property, says Mauritius’s status as a residency-byinvestment destination has been boosted by its attractive tax regime, which includes double tax avoidance agreements with more than 50 countries, no capital gains tax, and VAT, income and corporate tax fixed at 15%. There are four types of property developments that qualify for the programme: integrated resort scheme; real estate scheme; property development scheme; and smart city scheme. Rajan says the smart city scheme — a live, work and play concept — has become a popular choice for foreigners. “Smart cities are consolidating Mauritius’s position as a global financial hub and investment platform as they are
Portugal’s golden visa still on offer Portugal’s government has implemented changes to its residency-by-investment scheme, but that doesn’t mean the country is no longer on the radar of SA investors. In fact, Portugal remains the most popular destination among South Africans looking for a plan B to secure a second passport as the scheme is more affordable 54
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and accessible than ever, says Pam Golding International MD Chris Immelman. In the past, foreign property buyers could qualify for residency by buying a property anywhere in Portugal for €500,000 or more. From January 1, foreigners only qualify for the residency scheme via the outright purchase of a residential property
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Supplied by Pam Golding Properties
SA investors flock to Mauritius
mixed-use real estate developments that integrate residential, commercial, educational, medical and leisure facilities.” Eiffel Property will launch Bijou Residence off-plan at the end of April at Unicity, a 350ha smart city development on the west coast. Bijou offers a mix of luxury two- and three-bedroom apartments priced from $450,000, three- and fourbedroom penthouse suites from $760,000 and four-bedroom villas from $1.15m. Rajan says the development is suited for buyers looking for holiday or retirement homes, buy-to-rent or permanent relocation. PGP recently launched phase four of Mont Choisy Golf & Beach Estate in Grand Baie. Haller says more than half the 34 apartments in phase 4 have already been
sold. Prices range from €432,000 for luxury twoand three-bedroom apartments to €2.18m for a fourbedroom penthouse. Haller says some investors who bought at Mont Choisy estate six years ago when the development was launched have realised a hefty 30%35% capital growth on recent resales. PGP is also marketing Heritage Villas Valriche in the Bel Ombre area near the airport. More than 170 of the 288 villas available in the low-density development have been sold. The development includes a Peter Matkovich championship golf course as well as two five-star hotels. Villas with generous terraces and rim-flow pools are priced from $1.3m. Buyers can also purchase a plot from $367,000 and design and build their own homes. x
in interior regions or those that lie outside the borders of key cities and tourist hotspots. In addition, the minimum investment amount has been lowered to €280,000. There is a caveat: foreign investors who buy in dedicated hospitality developments — irrespective of where they are — can still qualify for a golden visa for their family. These products are dedicated schemes — new or regeneration projects — approved by the Portuguese government, that allow investors to become partowners of the development.
They are mostly to be linked to hotel brands such as Marriott and Hilton, with a minimum investment of €280,000 for a purchase in an approved rural hospitality development and €350,000 for an urban scheme. Immelman believes hospitality products are a much easier route to residency and EU citizenship than buying an apartment outright in a rural area where maintenance and management of the property can be cumbersome. Buyers in a hospitality scheme are passive investors as their units are managed by
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Special Report ????? residency by investment the hotel. Typically, developers will offer buyers a free stay of seven days a year — the amount of time investors need to spend in Portugal to qualify for citizenship. “Approved hospitality products also offer investors an automatic exit strategy as the developers sign a pre-emptive right to buy the unit back once investors obtain citizenship,” he says. Immelman cautions that it takes longer these days to obtain residency. “In the past, investors often received their residency cards within three months. It now takes, on average, 18 months.” But, he says, once investors receive their residency cards,
Supplied by Pam Golding International
Lagos Marina near Porto de Mós beach on Portugal’s Algarve
they are free to work and live in Portugal and travel visafree in the rest of the EU. After five years, residents can apply for citizenship. The latter allows one to work and live anywhere in the EU. Pam Golding International is marketing various residency-linked investment opportunities. The group has partnered with Canadian
developer Mercan Group on two developments: Marriott Lagos Beach & Sports Resort, close to Porto de Mós beach on the Algarve, and the Lisboa Park by Moxy Marriott in Lisbon’s Alfragide. Lagos Beach is a new fivestar leisure resort concept. Lisboa Park is aimed at business travellers as it is located in one of Lisbon’s largest
business hubs. An investment of €280,000 is required for Lagos Beach and €350,000 for Lisboa Park. Both projects will guarantee a full return of investment after five to eight years, depending on when citizenship is obtained. x Written by Joan Muller Advertising executive: Lyn Hill
BECOME A
United States citizen INVEST IN THE EB-5 INVESTMENT PROGRAMME WITH $800 000 With the reauthorisation and reform of the US Region Centers, you can secure your route to living the American dream. With a minimum investment of $800 000, you will be able to live, work, study or build a business anywhere in the United States and gain Green Card status with permanent residency for you and your immediate family, including children under the age of 21. Enjoy access to the finest educational and healthcare facilities in the world with visa-free travel to over 160 countries.
Contact American Dream to facilitate this application process. WWW.AMERICANDREAMEB-5.COM | (+27) 87 012 5560
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April 28 - May 4, 2022