Linked by globalisation and increased connectivity, a growing number of people are interested in the vast opportunities presented outside their birth country.
This interest to potentially consider greener pastures is intensified by national and international political shifts, unstable markets and the accelerated ecological changes taking place all over the world.
Individuals looking to access markets or seek a political landscape that is more aligned to their current and prospective needs, rather than just migrating to another country, prefer ‘dynamic investment migration’ options.
To help prospective migrants get a better handle on their options, Bastien Trelcat, managing partner of Harvey Law Group (HLG), talks through the top 7 factors you need to know about investment migration.
1. Normal migration VS investment migration
Normal or traditional migration typically involves migrating for distinct reasons such as employment, studies, family reunion, refugee status and so forth. It incurs fewer upfront costs, is a shorter process, has significantly less red tape, and generally results in a temporary residency within the given country.
To convert this temporary residency to a more permanent status – or even citizenship – the applicant is required to spend a substantial amount of time within the country.
Investment migration, which can be divided into residency, permanent residency or citizenship-by- investment programmes, is designed to attract foreign capital and business people by providing them a corresponding migration status in exchange for a dedicated investment.
The investment may be through a contribution to a dedicated government fund, real estate investments, injecting capital into a local company, or creating a new venture, for instance. Currently, over 100 countries are offering a form of investment migration programme to willing candidates.
2. Investment migration is all about family
Investment migration is the fastest way to become a resident or citizen of the desired country.
It often does not impose stringent residency requirements and therefore tax exposure, but also typically includes a wider scope of dependents such as children, spouse, parents, grandparents – and even siblings in some countries – compared to traditional migration channels which often focus on a very narrow definition of dependency.
3. Application duration
The time it takes for successful applications varies significantly depending on the country chosen. As a tentative estimation, investment migration programmes in the Caribbean take around 2 – 6 months from the moment of the submission of an application.
In Europe, Spain takes around 2 – 4 months, Portugal 12 – 24 months, and Cyprus between 6 – 12 months.
Other Commonwealth countries such as Canada, with its Start-up Visa program, can take around 9 – 14 months. While New Zealand, who registered a 300% increase in migration interest during the pandemic, now has an average processing time way above two years.
Lastly, Vanuatu, being Asia Pacific’s only citizenship-by-investment program, has an expedited approval process of 1 – 3 months.
4. Popular destinations for South Africans
South Africans looking to move abroad, find countries such as New Zealand, Canada, Portugal and Spain highly appealing. And for those simply considering a stronger passport and more mobility globally, the citizenship-by-investment programmes of Grenada, Dominica, Vanuatu and Cyprus remain preferable among our clientele.
5. Immediate benefits of being a resident or citizen of a new country
Investment migration also comes with other benefits and these depend on the country and its migration status. For countries offering residency or permanent residency-by-investment programmes, candidates receive benefits such as the right to live, work and study, and to enjoy social benefits within the country.
For citizenship-by-investment programmes, successful applicants are entitled to all the above, in addition to extensive travel benefits and relocation options in other countries. Applicants for European citizenship programs for example can relocate and enjoy a myriad of benefits within any other European Union country.
6. Exclusion clause
Not everyone can qualify for investment migration. Each country has different laws, regulations and therefore, exclusions. Applicants with extensive criminal records, serious health conditions, dubious sources of income, or a Politically Exposed Person status, will be unlikely to pass our due diligence process and therefore will not qualify.
7. Work with someone with a proven track-record
When considering migrating, candidates must use an accredited service provider, bound by Anti-Money Laundering regulations that can assist with local support, including tax advice, financial and legacy planning, but also corporate restructuring.
Trelcat concludes, “Due to the complexities of dealing with a foreign government, certain legislative requirements must be met. It is the task of the service provider such as HLG, to be transparent and to discuss the appropriate migration strategy related to the investment, elaborate on the tax exposure, if any, and submit the application on time.
“Investment migration is a popular concept for people looking for a fresh start or seeking to leverage opportunities not available in their home country.”
According to the United Nation’s dataset, the number of South African-born persons residing outside of South Africa increased from 330,000 in 1990 to 900,000 in 2017 to way over a million to date.