Citizenship & Residency
Freedom and mobility is important for many of our clients.
Being able to choose your country of residency can be a key factor in a tax planning strategy or can simply be a way of improving your life by providing more personal freedom, privacy and security.
In today's ever-changing world, having a Plan B with a second or third citizenship can offer peace of mind and added security and may of course also facilitate your international travels.
With our expertise in residency and citizenship planning, we can help you navigate the process of obtaining alternative citizenship or residency, allowing you to make informed decisions for your future.
Residency
Generally, the right to reside in a country is determined by your nationality or citizenship. If you are holding the passport of one of the countries being part of the European Economic Area (EU, Iceland, Liechtenstein, Norway and Switzerland) you can take advantage of the freedom of movement and relocate to another EEA country relatively easily.
For individuals with a non-EEA citizenship or to establish a residence outside of the EEA, a residency by investment program may be the solution. There are around 30 countries which offer a Residency or Citizenship by Investment Program. These programs will allow you and your family to obtain residency in a foreign country by investing in its economy which may lead to citizenship after a certain number of years of residency.
These programs are a great way to access to benefits, privileges and rights in a second country while avoiding the traditional and lengthy naturalisation process.
Tax Residence
Most countries use residence as the key criterion for personal income taxation. Normally, various tests are applied to determine a person’s tax residence, for example physical presence, available accommodation, or center of vital interests. In addition, your personal tax residence may have an impact on the residency of companies you manage or trust structures you have settled or benefit from.
Inheritance Tax
A change of residence usually also has a major impact on the situation regarding applicable inheritance laws and inheritance taxes. A client may well be tax resident in a jurisdiction that levies no inheritance tax, but upon their death, another country may claim that they were in fact still domiciled in that country and consequently subject their worldwide estate to inheritance taxes.
Exit Tax
Many countries have introduced specific measures to discourage the emigration of individuals through various forms of exit taxes. Such taxes may have considerable implications for the tax aspects of a client’s relocation plans.
Is reducing tax the main motive?
It is important that your international residence planning follows your business and personal situation. There are many situations where a change of residence fits in well with a client’s business and family situation, and in these cases, a change of residence can also become an element of their legitimate tax and estate planning.
Health Insurance
Health insurance is a small but important element in residence planning that is often overlooked by both clients and their advisers. When a person moves abroad, their current health insurance policy will in most cases not be continued, and they are usually left with a choice of finding another local insurer in the new country of residence or turning to an international health insurer
Citizenship
Citizenship by investment programs provide families with the privilege of acquiring an alternative citizenship, which in turn gives them the right to travel freely to various destinations and to settle in another country. Over 100 countries in the world have some form of investment migration legislation in place. Of these, about 30 residence and/or citizenship by investment programs are running successfully.
These programs are a great way to access to benefits, privileges and rights in a second country while avoiding the traditional and lengthy naturalisation process.
Dual Citizenship
It is important to note that you can become a citizen of another country without losing your current citizenship only if the laws of the country of your current citizenship allow dual citizenship.
While many countries have no restrictions on dual citizenship, and while there is an international tendency to move away from strict single-citizenship policies, there are still important exceptions.
Passport and Citizenship
A passport is a personal identification and travel document for international use issued by a sovereign state or a UN organization. Generally, only passports that are issued on the basis of a person's citizenship are of any interest and use.
How to obtain a citizenship
Principal grounds for acquiring citizenship are birth within a certain territory, descent from a citizen parent, marriage to a citizen and by naturalization. The conditions under which the privilege of grant of citizenship or naturalization is given vary from state to state, but family relationships or lengthy periods of residence are usually essential, besides character and other requirements such as knowledge of the national language.
The Citizenship by Investment programs allow an individual to become a full citizen but by investment instead of by marriage or birth. There are currently only 11 countries that offer citizenship programs, which provide a direct route to citizenship based on investment
Important elements to consider
Other important points to consider when intending to become a citizen of choice include the geographic location of the chosen country, its official language, political and economic stability, its legal system, the banking and business environment, visa-free travel availability for passport holders of that country, the reputation of the country and the passport, and of course initial and future overall costs.