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Why wealthy South Africans are opting for Caribbean passports

07 Sep 2018

The poor economic outlook, weak investment climate and concerns about property ownership are all reasons for wealthy South Africans looking for a second citizenship as a matter of priority.

Antigua and Barbuda is a popular holiday destination for celebrities purchasing holiday houses, which has greatly boosted real estate values. This passport allows visa-free travel to 140 countries, including UK and Schengen countries. Citizenship takes four to six months.

This is according to Nadia Read Thaele, Director of LIO Global, World Residence and Citizenship, who says this year has seen a notable rise in emigrations and high-net-worth individuals (HNWI) looking to shift some of their wealth into offshore destinations to secure a second residency or citizenship.

Read Thaele says many clients do not actually want to leave the country, but want a second passport as a security option. A second passport is also often sought as it allows freedom of travel - many of the top European and Caribbean programmes offer visa-free access to top international markets.

“While the UK, Australia and USA are top options for emigration, these have among the highest property prices in the world, and many other drawbacks for SA’s wealthy. It is also very difficult to get into these countries,” she says. Wealthy South Africans are therefore looking to ‘buy’ a second citizenship, either by a donation of sorts to the government or investment into property, or a combination , depending on what that government’s programme requires in order for investors to qualify.

For those who can afford to do so, Read Thaele Malta is a top choice for citizenship, but it requires a significant investment of at least EUR1 million (R16.4 million), of which a substantial portion is a donation. Cyprus is another great choice, but you would have to pay EUR300 000 (R4.9 million) for residence and EUR2 million (R32.7 million) for citizenship.

Grenada is one of the most attractive citizenship programmes, and the only Caribbean country with visa-free access to China. This passport allows visa-free travel to 140 countries, including the UK, China and Schengen region. Citizenship takes four to six months.

Read Thaele says that many South Africans are, therefore, turning to the Caribbean countries, especially Grenada and Antigua, as these programmes start at just US$100 000 (R1.4 million), and offer a cost-effective, fast citizenship route with minimal requirements. You also do not need to reside in the country, and there is no language requirement, however, due diligence is quite strict.

The Caribbean countries offer tax-friendly jurisdictions and attractive real estate investment opportunities which are fully managed and serviced. The idyllic setting and fabulous lifestyle are very attractive for wealthy South Africans, says Read Thaele. The route to citizenship is quick, between four to six months for a passport, which allows visa-free travel to sought-after destinations such as the UK and Schengen countries.

Programmes are now on offer from Antigua and Barbuda, St Kitts and Nevis, Grenada, Dominica and St Lucia, and since most are ex-Commonwealth, the passports offer visa-free travel to the UK and Schengen countries. Grenada citizenship also offers visa-free access to China, and in terms of the E-2 treaty ‘Investor Visa’ agreement with the United States, you could establish a business and reside in the US, making this a top choice among the Caribbean programmes.

When considering a second residency and citizenship, it is very important to know what you want to achieve and who you work with, says Read Thaele. There are many new programmes cropping up, and not all of the governments have the established infrastructure to manage programmes, making the application process very frustrating. So, it is important to do your research.

Read Thaele highlights the various Caribbean and Eurozone programmes:

Caribbean programmes:

1. Grenada

The benefits:

Grenada is one of the most attractive citizenship programmes, and the only Caribbean country with visa-free access to China. In terms of the US E-2 treaty ‘Investor Visa’, citizens are allowed to establish a business and reside in the US.

Visa-free travel to 140 countries, including the UK, China and Schengen region. Citizenship takes four to six months.

Programme requirements:

Donation: A non-refundable contribution of US$200 000 (US$150 000 for single applicant) to the National Transformation Fund (NTF).

Property investment: A property purchase of US$350 000 into a government-approved real estate development. Property is to be held for three years.

2. Antigua and Barbuda

The benefits:

Favoured over St Kitts for exclusivity and reputation, Antigua and Barbuda is a popular holiday destination for celebrities purchasing holiday houses, which has greatly boosted real estate values.

Visa-free travel to 140 countries, including UK and Schengen countries. Citizenship takes four to six months.

Programme requirements:

Donation: An economic donation of US$100 000, with additional amounts for a spouse, dependent children and parents. For a limited time ending 31 October 2018, Antigua has reduced the amount for the donation option to assist in their hurricane relief fund to US$100 000 for a family of four and US$125 000 for a family of more than four members.

Property investment: A real estate purchase of US$400 000 into a government-approved real estate development. The property is to be held for five years, but can be placed in rental pool offering investors a US dollar rental return. There is also a reduced option currently available, where two investors can share by paying US$200 000 each.

3. St Kitts and Nevis

The benefits:

St Kitts and Nevis is recognised for its well-known offshore banking sector and as a tourist hotspot.

Visa-free travel to 149 countries, including UK and Schengen countries. Citizenship takes six to nine months.

Programme requirements:

Donation: An economic donation of US$150 000, with additional amounts for a spouse, dependent children and parents.

Property investment: A real estate purchase of US$400 000 into a government-approved real estate development. The property is to be held for five years, but can be placed in rental pool offering investors a US dollar rental return. There is an option to pay US$200 000 if the property is held for seven years.

4. Dominica (Commonwealth)

Benefits:

Dominica offers one of the cheapest citizenship programmes, starting at just US$100 000 for a single applicant. Not to be confused with the Dominican Republic.

Visa-free travel to 135 countries, including the UK and Schengen countries. Citizenship takes three to five months.

Programme requirements:

Donation: An economic donation of US$100 000 for single applicant and US$200 000 for a family of four.

Property investment: A real estate purchase of at least US$220 000.

5. St Lucia

Benefits:

St Lucia is a recent addition and fabulous island location with reef-diving sites, luxury resorts, fishing villages and trails in the interior rainforest that lead to waterfalls.

Visa-free travel to 142 countries, including the UK and Schengen countries. Citizenship takes three to six months. Applicants must be in good health and have no criminal record.

Programme requirements:

Donation: An economic donation of US$100 000 for a single applicant and US$190 000 for a family of four.

Property investment: A real estate purchase of US$300 000 in a government-approved real estate development. Property is to be held for five years.

Enterprise project investment: An enterprise project investment of US$3.5 million, which must create at least three jobs.

Government bonds : Government bonds of US$500 000 for a single applicant and US$550 000 for a family of four.

Eurozone programmes:

1. Malta

Citizenship programmes in Malta start from EUR1 million. This is the combined financial requirement, including applicable government donation, bond investment, legal fees, citizenship application fees, etc. These costs will increase slightly depending on the family size. Twelve months’ residency is to be completed, as well as visits.

You will have visa-free travel to 173 countries, including the EU and USA, as well as full rights as any EU citizen to live, work and study anywhere in the EU.

2. Portugal

Starting from EUR350 000, Portugal’s Golden Visa is very attractive to South Africans as it offers an attractive route to EU residency and gives visa-free travel to all the Schengen countries. However, investors must be cautioned that this is a residency program and is not necessarily geared towards citizenship - however, investors can apply subject to meeting certain criteria including a language test.

3. Cyprus

Cyprus is an attractive option as it allows you to live, work and study in all 28 EU countries, and offers a fast and straightforward route to residency in two to four months, as well as visa-free travel to 171 countries around the world.

Residency starts from EUR300 000 in property investments, but citizenship from EUR2.5 million.

For more information, visit the website.

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