EXPONENTIAL growth continues in the Guernsey branch of Sovereign Trust with five new members of staff and an extension into a new office.
The global company opened its local operation in April 2010 with four members of staff at Sarnia House in Le Truchot. Only a year and a half later, the organisation now employs 27 people.
Staff moved to a larger office in St Peter Port House in Sausmerez Street earlier this year but the recent addition of five new employees necessitated an expansion into another office within the same building complex.
Since setting up in the island in 2010, Sovereign Trust has seen unprecedented demand for both international and domestic pensions services.
Managing director Rob Shipman said it had been a whirlwind couple of years and he saw no end to the expansion.
‘We are an independent company rather than being affiliated with a law, bank or accountancy firm, which means we give our clients complete freedom. We do not try to guide them towards any particular pension product.
‘Qualifying Recognised Overseas Pensions Schemes (QROPS) and Qualifying Non-UK Pensions Schemes (QNUPS) are services that have been very popular and we now enjoy a significant percentage of the market in those areas.
‘This as well as our expertise and commitment to providing a first class service is what I attribute our success to. We have taken on some very talented staff members and will be looking to hire more in the coming year,’ he added.
Sovereign Trust provides both internal and external training for new recruits and is determined to invest in their young people as they begin their careers.
‘It’s a very exciting time. It has been a huge success story and we are exceptionally pleased,’ said Mr Shipman.
Friday, March 23, 2012
Monday, March 12, 2012
Nationality by Investment
Countries who sell their passports are often frowned upon but the reality is that all countries try to encourage immigration by the wealthy by granting residency which leads to nationality, or nationality itself, in return for investment – it is just the price and timescale that differs. Many of you will recall the rush by Hong Kong persons to obtain the insurance of a right to abode elsewhere in the lead up to 1997. Canada and Australia were the favoured jurisdictions as they had relatively clear rules and a relatively modest level of investment required in order to grant foreign nationals a residency. And those new residents had to wait only a relatively short time before becoming eligible for, and normally being granted, citizenship. Many of those taking out these residencies did not necessarily want to emigrate but did want to know that they could do so if things didn’t work out for them in Hong Kong after 1997. In the end things turned out swimmingly and lovely and many of those who moved abroad came back or shelved any plans they might have had to move away. There are still many countries where the future is uncertain either politically or economically and this encourages their citizens to either emigrate or take out an alternative residency or citizenship as an insurance policy in case things get worse. There are many from the more troubled areas of the world who fear for the future and may more who have money to invest and choose to do so in countries which will give them some kind of formal status in return.
If you are considering a second residency or passport then there are factors worthy of consideration:1. How much do you need to invest to get residency (if anything) 2. How long does it take before you are eligible for citizenship? 3. Do you have to remain in the new country for a certain minimum number of days in order to be eligible for citizenship?4. Does your new country allow you to maintain your old citizenship or prohibit dual citizenship?5. Does your old country allow you to keep your existing passport or does it prohibit dual citizenship?6. Does the passport issued by your new country give you easy travel i.e. does it have arrangements with lots of other countries for visa free entry?7. Are there any requirements for national service (joining the army)?8. What are the costs of living including the tax rates and tax incidence?
Imagine being offered immediate citizenship by Rumbabwe only to find that they do not allow you to keep your old passport, their citizens are unwelcome everywhere else in the world so you need a visa to go anywhere and visas are not necessarily readily available because Rumbabwe freely offer citizenship to other nationalities, that you immediately have to sign up for the army and they are currently engaging war with Freestate and their taxes are 95% on worldwide income and capital gains with no planning opportunities to avoid those taxes.
One of the more interesting possibilities for immediate, well the process takes about 3 months, citizenship is currently available from St. Kitts and Nevis. They have run a successful “nationality by investment” programme since 1984 which allows citizens of other countries to become passport holders in St. Kitts and Nevis in return for a one off investment of US$350,000 in a qualifying property. Applicants must continue to own the property for 5 years or risk losing citizenship. After that they are free to sell the property if they wish. And there is no difficulty in financing the purchase so applicants need only put up about US$200,000 in cash with the rest of the purchase price being borrowed from a bank. There are conditions attached but they are not unattractive. One property developer even offers a scheme whereby applicants can buy a share in a company which owns property for US$400,000 and the developer will buy back those shares for the same US$400,000 after 5 years. This scheme qualifies the purchaser for citizenship. In all cases expect government and other fees of about US$100,000.
St. Kitts and Nevis allows dual nationality and is an UK commonwealth country which many think makes the place rather credible. Their passport gives visa free access to around 190 countries and allows visa free travel within Europe as it has signed agreements with the Schengen countries which is all of Europe apart from the UK. The UK allows visa free access for all Commonwealth citizens. This seems pretty attractive.
The only equivalent programme that we can find is the Economic Citizenship programme run by the Commonwealth of Dominica (do not confuse this with the neighboring Republic of Dominica) where they will offer immediate citizenship in return for an investment in government bonds of US$75,000. Unfortunately the visa free access is much more limited. This programme that has been running quite successfully for quite some time but has recently fallen out of favour as St. Kitts has gained favour.
No other countries seem to legitimately offer the same immediate citizenship program. From time to time I have been approached by others purporting to represent countries which are now offering economic citizenships but the first question to them is to show us the clause in the nationality law which allows citizenship by registration in return for investment. Frequently the laws do not allow it so the scheme seems to rely upon something rather more sinister and should be avoided at all costs.
Other countries offer a swift route to residency in return for a relatively modest investment which in time will lead to citizenship. Canada continues to attract new immigrants under its investment program which requires US$800,000 in investment. This can be financed so the cash contribution is only US$200,000. Citizenship should follow within five years.
Bulgaria has recently announced an interesting program. Bulgaria is full member of the European Union and will grant residency in return for an investment on BGN 1,000,000 which is about US$500,000. Once residency has been granted it is relatively easy to travel freely within Europe. Citizenship should follow 2 years after residency and once granted the EU principle of free movement of labour and right of establishment should allow the new immigrant to live and work anywhere within the European Union without further authorization. This could be very attractive and has attracted many non-EU immigrants. The US, of course, still has many different ways to enter. Each year, 50,000 immigrant visas are made available through a lottery to people who come from countries with low rates of immigration to the United States. None of these visas are available for people who come from countries that have sent more than 50,000 immigrants to the United States in the past five years. Anyone who is selected under this lottery will be given the opportunity to apply for permanent residence (a Green Card). If permanent residence is granted, then the individual will be authorized to live and work permanently in the United States. Successful applicants are allowed to bring their spouse and any unmarried children under the age of 21 with them. The number of places are awarded according to quotas for each country but they treat it as a form of foreign aid so award different countries different quotas depending on their close connection with the US and then the perceived need to help their citizens. One of the biggest recipients is the Philippines so if you are a Philippine citizen you have the biggest chance of winning a green card if you enter the lottery. It is free to enter although many offer to assist with the entry process for substantial fees.
Thursday, March 8, 2012
The financial impact of considering residency abroad
It may seem that I have written nothing but doom and gloom stories – the state of the global economy or the crisis in the eurozone – during the past few months. And we have all seen government announcements across many of the industrialised countries about increased rates of personal taxation or savage cuts in public spending.
As just one example, our neighbours in Spain are going to have to get used to a top income tax rate of 55% - one of the highest in Europe. And it’s not much better in the UK – we are told that the highest income tax rate of 50% is likely to stay until at least 2015 and a recent study showed that up to a third of the population has, at one point or another, considered leaving the country.
Whilst accurate information is difficult to obtain, it was estimated in 2010 that some 200 million people were living as expatriates around the world. Of course for most people, leaving their home country is just not economically or politically viable but, for those who are in a position to do so, the financial impact of any such move is likely to be the most critical factor in any final decision.
In my day job -–when not penning magazine articles, that is – I have to deal with these issues on a regular basis; in recent months it is noteworthy how much more frequently I am being asked for advice and practical help. So for readers who might be considering Gibraltar as one of the places where they could live, what suggestions could I make from a financial perspective? And indeed, what are the alternatives?
It’s no secret that I am an avid supporter of Gibraltar and of course I moved here myself more than seven years ago. So how does Gibraltar compare to other jurisdictions around the world seeking to attract new residents? It’s not all about tax and the other financial implications of moving of course, but that’s the area where most people require advice.
Most people probably daydream about just “upping sticks” and moving somewhere else. After all, the grass is always greener. But how practical is it and what must be taken into consideration? As always, the answers will depend on the personal circumstances of the individual concerned, as well as what they are trying to achieve.
In recent years, we have seen an increasing number of predominantly younger people moving abroad for work reasons. And once the initial break with a home country is made, it is so much easier to remain abroad. We all know people who have made the “expat life” a permanent feature of their existence. Indeed having left my home island of Jersey over 25 years ago and lived in several countries since, I am a prime example – although if my boss is reading this, I should emphasise that I am very settled here in Gibraltar!
But there are also many people who are not just considering their next career move. They could be retired and looking for a different lifestyle or, having enjoyed commercial success in their home country, they may be seeking new challenges, markets and horizons. There is clear evidence that more people in their forties and fifties are now looking at where they want to live in a different way and it is generally people in this demographic that I am called upon most often to assist.
What is driving this and how do I advise such people when they start making enquiries? Without doubt, TV and other media play their part. The 24-hour news culture tends to focus on the negative aspects of social and economic landscape, while at the same time programme makers churn out endless programmes on travel and overseas property. All of this whets the appetite of the northern European who may well be seduced by images of 365 day-a-year sunshine, sangria and a low tax existence. Add to that the seemingly inexorable rise of low cost flying, especially here in Europe, and one can easily believe that moving abroad is easy. Everyone else seems to be doing it, so why not take the plunge?
The fact is that uprooting one’s life and moving abroad is just not for everyone and the reality is often very different from the media images. It’s one thing for the super rich who can simply globetrot from one of their homes to another as the mood suits, but for most of us a serious reality check is normally to be prescribed.
But when it becomes more serious and someone really wants to take the idea forward, what should they consider? It’s tempting to say that the tax rate is so high in one’s home country that they are being “forced” to move overseas but there is much, much more to it than that – family, work, assets, income, healthcare, pensions, language, culture, living costs, banking and legal systems, and the ever present currency risks, will all need to be carefully considered.
European law permits EU citizens to live in any one of the 27 countries that make up the Union. With a combined population far greater than the US, Europeans tend to forget that despite the EU’s problems we do all enjoy these rights – unparalleled in the rest of the world – to live in any of the diverse nation states that make up our continent. But in fiscal terms, there is often little to choose between them so other factors must come into consideration.
Instead, let us consider a couple of countries that actively encourage inward immigration by using specific residency rules. In Gibraltar high net worth residents – defined as those with assets of at least £2 million – can apply for a special “Category 2” status. In addition those with special skills not commonly available may also live here under the HEPSS rules, again where taxation is capped.
Other countries in Europe offer alternative solutions including the Channel Islands and the Isle of Man. Malta’s residency rules were tightened up during 2011 but remain attractive. It is possible but becoming more difficult to take up residency in Switzerland, whilst property prices in Monaco put that principality out of reach of most ordinary folk. Both in Europe and further afield, there are many other places one might consider.
For example, tempting alternatives exist in the Caribbean. St. Kitts & Nevis offers citizenship with a passport to incoming residents who invest a minimum amount into the economy. Depending on personal circumstances this can be extremely useful. Moving across oceans rather than within Europe won’t suit everyone, but such opportunities exist across the world.
Readers will expect me to conclude that there is nowhere better to live than Gibraltar. I happen to think that might be true, especially for British expatriates. After all we have the sun, familiar legal and banking systems, a common language and, compared to other European countries, very low taxes (or none at all) on succession, capital gains etc. – and there’s no VAT. But the Rock may not be for everyone and there are many alternatives available, as I have set out above.
As always though, it’s the overall picture that counts and professional advice should be sought at the outset. Although the rewards can be outstanding, moving to a new life overseas can also be extremely challenging and potential émigrés should always proceed with caution. However, given the current state of the world this might very well be the time to consider taking the plunge.
As just one example, our neighbours in Spain are going to have to get used to a top income tax rate of 55% - one of the highest in Europe. And it’s not much better in the UK – we are told that the highest income tax rate of 50% is likely to stay until at least 2015 and a recent study showed that up to a third of the population has, at one point or another, considered leaving the country.
Whilst accurate information is difficult to obtain, it was estimated in 2010 that some 200 million people were living as expatriates around the world. Of course for most people, leaving their home country is just not economically or politically viable but, for those who are in a position to do so, the financial impact of any such move is likely to be the most critical factor in any final decision.
In my day job -–when not penning magazine articles, that is – I have to deal with these issues on a regular basis; in recent months it is noteworthy how much more frequently I am being asked for advice and practical help. So for readers who might be considering Gibraltar as one of the places where they could live, what suggestions could I make from a financial perspective? And indeed, what are the alternatives?
It’s no secret that I am an avid supporter of Gibraltar and of course I moved here myself more than seven years ago. So how does Gibraltar compare to other jurisdictions around the world seeking to attract new residents? It’s not all about tax and the other financial implications of moving of course, but that’s the area where most people require advice.
Most people probably daydream about just “upping sticks” and moving somewhere else. After all, the grass is always greener. But how practical is it and what must be taken into consideration? As always, the answers will depend on the personal circumstances of the individual concerned, as well as what they are trying to achieve.
In recent years, we have seen an increasing number of predominantly younger people moving abroad for work reasons. And once the initial break with a home country is made, it is so much easier to remain abroad. We all know people who have made the “expat life” a permanent feature of their existence. Indeed having left my home island of Jersey over 25 years ago and lived in several countries since, I am a prime example – although if my boss is reading this, I should emphasise that I am very settled here in Gibraltar!
But there are also many people who are not just considering their next career move. They could be retired and looking for a different lifestyle or, having enjoyed commercial success in their home country, they may be seeking new challenges, markets and horizons. There is clear evidence that more people in their forties and fifties are now looking at where they want to live in a different way and it is generally people in this demographic that I am called upon most often to assist.
What is driving this and how do I advise such people when they start making enquiries? Without doubt, TV and other media play their part. The 24-hour news culture tends to focus on the negative aspects of social and economic landscape, while at the same time programme makers churn out endless programmes on travel and overseas property. All of this whets the appetite of the northern European who may well be seduced by images of 365 day-a-year sunshine, sangria and a low tax existence. Add to that the seemingly inexorable rise of low cost flying, especially here in Europe, and one can easily believe that moving abroad is easy. Everyone else seems to be doing it, so why not take the plunge?
The fact is that uprooting one’s life and moving abroad is just not for everyone and the reality is often very different from the media images. It’s one thing for the super rich who can simply globetrot from one of their homes to another as the mood suits, but for most of us a serious reality check is normally to be prescribed.
But when it becomes more serious and someone really wants to take the idea forward, what should they consider? It’s tempting to say that the tax rate is so high in one’s home country that they are being “forced” to move overseas but there is much, much more to it than that – family, work, assets, income, healthcare, pensions, language, culture, living costs, banking and legal systems, and the ever present currency risks, will all need to be carefully considered.
European law permits EU citizens to live in any one of the 27 countries that make up the Union. With a combined population far greater than the US, Europeans tend to forget that despite the EU’s problems we do all enjoy these rights – unparalleled in the rest of the world – to live in any of the diverse nation states that make up our continent. But in fiscal terms, there is often little to choose between them so other factors must come into consideration.
Instead, let us consider a couple of countries that actively encourage inward immigration by using specific residency rules. In Gibraltar high net worth residents – defined as those with assets of at least £2 million – can apply for a special “Category 2” status. In addition those with special skills not commonly available may also live here under the HEPSS rules, again where taxation is capped.
Other countries in Europe offer alternative solutions including the Channel Islands and the Isle of Man. Malta’s residency rules were tightened up during 2011 but remain attractive. It is possible but becoming more difficult to take up residency in Switzerland, whilst property prices in Monaco put that principality out of reach of most ordinary folk. Both in Europe and further afield, there are many other places one might consider.
For example, tempting alternatives exist in the Caribbean. St. Kitts & Nevis offers citizenship with a passport to incoming residents who invest a minimum amount into the economy. Depending on personal circumstances this can be extremely useful. Moving across oceans rather than within Europe won’t suit everyone, but such opportunities exist across the world.
Readers will expect me to conclude that there is nowhere better to live than Gibraltar. I happen to think that might be true, especially for British expatriates. After all we have the sun, familiar legal and banking systems, a common language and, compared to other European countries, very low taxes (or none at all) on succession, capital gains etc. – and there’s no VAT. But the Rock may not be for everyone and there are many alternatives available, as I have set out above.
As always though, it’s the overall picture that counts and professional advice should be sought at the outset. Although the rewards can be outstanding, moving to a new life overseas can also be extremely challenging and potential émigrés should always proceed with caution. However, given the current state of the world this might very well be the time to consider taking the plunge.
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