Our Opinion: 2014
The falling price of an EU passport
In our autumn newsletter, we reported that many are trying to protect their future by securing the right to live permanently in an attractive destination, in case of need.
You can establish residency in Greece (albeit limited to five years) for a mere €250,000 investment in a property. In Portugal, you can obtain citizenship in six years if you spend €500,000 on a holiday home.
The UK Government has made it a priority to attract high value immigrants, citing its world-class education system, superb global communications and a well regulated, flexible market. Most importantly, perhaps, is the UK tax system that continues to offer favourable treatment to ‘non domiciled individuals.’ This means that those moving to the UK are unlikely to have to pay tax on their income and growth overseas for at least seven years and, with careful planning, indefinitely. In addition, its scheme provides permanent residency – regardless of where applicants actually choose to live. To secure permanent UK residency, one needs to invest £1m in the UK for a period of five years. This reduces to three years for those investing £5m and to two years for those investing £10m.
When Governments need cash, they get desperate. Malta has just announced that it is effectively selling passports for €650,000. You don’t need to have visited Malta or have any connection to it. You simply need to prove you aren’t a terrorist or money launderer, pay your money, and have access to all 28 EU member nations. Extra passports for family members cost just €25,000.
Many would argue that the UK scheme offers better value. There is no cost; just a requirement to invest and you should get your money back, with reasonable growth, depending on the investment strategy adopted. However, I suspect many will be attracted to the ability to buy safe haven residency in a hurry.
This could start a bit of passport price war or, perhaps an argument over whether free movement between EU states really works. Is a Maltese passport as ‘gold plated’ as a British one?
Knightsbridge Wealth works with a number of immigration lawyers and investment professionals to give the best advice to all those looking for assistance in this crucial part of financial planning. We have undertaken extensive due diligence on providers and will be launching our new proposition early in the New Year.