Author: Fabienne Malkinson

Mr Elroy Boucher, President of the Public Service Union (PSU), says he hopes that the Unity Labour Party administration can come up with measures to relieve the tax burden on Vincentians.

Compared to the other independent Eastern Caribbean States, St Vincent and the Grenadines remain the only countries without a formal citizenship by investment (CBI) programme.

The governing political bodies, the New Democratic Party (NDP) and the Unity Labour Party (ULP), are divided by the sheer volume of opposed opinions towards the CBI programmes, which have an immense affect on the taxes for their citizens as well as the government budget.

Mr Boucher endorses the CBI programmes as do the NDP, agreeing that by supporting the programme benefits, not only the citizens, but helps fund a significant chunk of the national budget. In contrast to this, the opposing ULP argue that the programme enforces and encourages a higher rate of passports to be sold on the black market.

Mr Boucher voiced his support for CBI programme at a PSU press conference on Wednesday 28th February 2018, saying;

“… I’ve heard the opposition put forward the suggestion that the government can make use of the citizenship by investment programme. And I just can’t understand the reluctance to get involved. Every OECS country is using this programme and it is financing a great part of their budget,”

Followed by;

“St. Kitts is the leader, I think, in this regard. It is financing a great part of their budget. This programme has allowed these governments to lower the taxes on their people… St. Kitts has been voted the least corrupt country within CARICOM. The least corrupt and they are running this programme,”

As quoted by Mr Boucher, he is “mind-boggled” by the ULP’s stance on CBI programmes and continued to add;
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“ … we elect you to govern and govern in a responsible way to make our living conditions better.”

The PSU union leader continued to debate that rather than taking the advice of the opposition, the government;

“would rather find ways of taxing workers, the citizens. And I am of the view that a responsible government needs to listen to all of the ideas and see how best they can put policies in place to relieve the burden, the financial burden of workers and their families.”

In its “People’s Budget” response to the national budget in January, the opposition restated its support for a CBI programme.

The office of the regulator of the Individual Investor Programme of the Government of Malta issued its Fourth Annual report on the 20th of December 2017. For the 12-month period between July 2016 and June 2017, this report states and provides statistics for the Malta Citizenship by investment programme. The report highlights numerous factors including how many applicants were received, rejected and those naturalised. Additionally, the report offers a thorough breakdown routes to investment as well as citizenship status for the primary applicant, their spouses and other dependents.

As the report reveals, the Maltese programme is still attracting an influx of applicants, however, there has been a decrease by 17% when compared to the 12-month period above and the previous year before that. The exact amount of applications that were submitting during 2016/2017 fell to 377 compared to the 451-recorded applications during the previous period. From inception up to today, this brings some total amount of 1101 applications made.

The percentage of male applicants who submitted their applications as the main applicant made up 79% of the total applicants; making a mere 21% of the main applicant’s female. On average, per main applicant included three of their dependants. The statistics outlined the nine main regions where applicants applied for. Please see the table below:

When comparing the period between 2016/2017 to the previous, there are few similarities and differences of the applicants who applied. Similarly, most of the applications came from the European region. Although, in contrast to the previous year, there was an increase of the number of applications from the Middle East and Asia, while those from Africa and the Gulf decreased.

Even in other Citizenship by investment programmes, there is a common trend that can be seen throughout by the number of applicants who apply in addition to the region they are applying from. From the applicants who were approved in relation to the due diligence being positively concluded and a letter of approval was issued 422 times; those who were not approved was only 83. There has been a significant increase from the previous period of those approved that was 241 and the year before that, only 75. This figure represents the incline of how efficient application process is becoming.

Considering how many applicants applied and reached the naturalization stage totaled to 386 applicants. This highlights that once again, there is a significant increase of those recorded from the previous period as it was only 137. Combining the two amounts together, by the end of June 2017, there was a total of 566 naturalized citizens. The Malta IIP has capped the naturalization of candidates, excluding their dependants, at 1,800. Since the Malta golden visa programme began in August 2015, it has already filled a third of its total capacity.
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Property investment, across the golden visa board, is the most favoured route to investment. 88% (340) of the contributor’s property investments were leased and the remaining 12% (46) were purchased. The areas in Malta that are seemingly more popular are in Sliema, St Julians and Swieqi. During the period of 2016/2017, €868,173.58 seemed to be the average amount spent on a single purchase of property. The rental value during the same period stood at an average of €21,128.53. Compared to most of the other investment programmes, the Maltese golden visa programme requires the main applicant to not only invest in property, but Government stocks and between June 2016 and June 2017, this amount totalled to €58,371,279.83. Please see more Maltese statistics below:
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Malta Citizenship Programme Statistics – Contributions Collected from July 2016 to June 2017

1st July, 2016 – 30th June, 2017 the financial contributions amounted to €194 million to the National Development and Social Fund;
€83 million to the Consolidated Fund;
€16 million to the Identity Malta Agency and;
€13 million to the concessionaire
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Per applicant of the IIP for this period the total estimate contribution stands at €10,584,600,000 which is equivalent to 2.74% of the GDP.

As we opened our new Lisbon office with Her Excellency, Kirsty Hales, British Ambassador to Portugal, our London team were astounded by the beauty that Portugal presented to them.

Lisbon, a capital city founded on wooden beams under the sea after the earthquake of 1755. Few capital cities are situated idyllically by the sea with backstreets leading to authentic Fado restaurants; the city is filled with tradition and culture; from Ginja shots served in chocolate cups to nata pastry stalls situated on every corner. No wonder, the Portuguese Golden Visa Programmes is one of the most attractive immigration investment routes there is today among the global elite.

Since being introduced in 2012, the Portuguese Golden Visa investment route has aided the country in receiving around €3.4 billion worth of foreign investments. Near to 6,000 investors with approximately 10,000 family members have qualified for a fast-track permanent residence in the country.
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In November 2017, it was recorded that €54.6 million were invested into Portugal via the Golden Visa route, which is a 14.6% increase compared to €47.6 million in November 2016. Figures expected to rise even higher in the coming years.

Both Lisbon and the rest of Portugal offer a different architectural structure compared to most of Europe and the world. With different hues of marble-stained in-built exterior walls, Juliet balconies and vibrant building colours, the purchase of property has remained the preferred choice when choosing to invest in Portugal.

Property investments have soared, just alone in November 2017, totalling €52.4 million while equity investments accounted for the rest of the €2.2 million.

Portugal consistently introduces essential changes to the programme, not only to keep it fresh with content, but to also offer a variety of options for investors to retain their preferred status of residence including routes such as equity investments.

Europe’s most popular Golden Visa Programme (GVP) has launched a capital transfer option, as of 26th November 2017, which allows applicants to obtain a “Residence Permit for Investment Activity” (ARI). So far, the GVP has raised over €3.3 billion of FDI (€2.9bn of which in real estate investment), since beginning in 2013. With the new capital transfer option set in place, the only requirement to obtain an ARI is an exchange of a €350,000 investment in new or existing companies, or in investment funds, as reported by Fonseca Santos & Associates.
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In the hopes of diversifying foreign investment in Portugal due to an overwhelmingly high interest from applicants investing in property via the GVP, Portuguese lawmakers have introduced these changes as they believe this will help stimulate investment in both new and existing private sector companies.
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According to Law 102/2017, which came into effect on November 26th, third-country nationals are eligible for Portugal’s Golden Visa under two separate capital transfer options:
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The transfer of capital amounting to €350,000 or more, for the acquisition of units of investment funds or venture capital funds for the capitalisation of companies, which are set up under Portuguese law, whose maturity at the time of the investment is at least five years and at least 60% of the value of the investments is carried out in commercial companies based in the national territory;

The transfer of capital amounting to € 350,000 or more, the purpose of setting up a commercial company with its head office in Portugal, together with the creation of five permanent posts or to increase the share capital of a company with headquarters in the national territory, already established, with the creation or maintenance of jobs, with a minimum of five permanent, and for a minimum period of three years.

For some time, the programme has also offered qualifying alternative investment types at a discounted rate (none of which have been particularly popular), and which include:
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Acquisition of immovable property, the construction of which has been completed for at least 30 years or located in an area of urban rehabilitation and rehabilitation of acquired real estate, with a total amount equal to or greater than (euro) 350,000;

Transfer of capital amounting to (euro) 350,000 or more, which is applied in research activities carried out by public or private scientific research institutions, integrated into the national scientific and technological system;

Transfer of capital amounting to EUR 250 000 or more, for investment or support for artistic production, restoration or maintenance of the national cultural heritage, through direct central and peripheral administration services, public institutes, public foundations, private foundations with public utility status, intermunicipal entities, entities that integrate the local business sector, municipal associative entities and public cultural associations, that carry out assignments in the area of artistic production, recovery or maintenance of national cultural heritage

The three-month extension of the United States’ EB5 visa scheme ends on December 8, however, experts are of the view that the scheme, popularly known as the “Golden Visa”, is likely to be extended.

Introduced by the US Congress in 1990, the EB5 visa programme allows an individual to invest $500,000 in either of two Targeted Employment Areas (TEAs) – a high unemployment area in a US metropolis or a rural area outside of a metro – or $1 million in a non-TEA area that can create 10 or more jobs and get US citizenship in a shorter time than H1-B visa holders.

“Although the discussions over revising the EB5 visa programme have been long due, investors continue to apply as EB5 Visa offers an attractive path to permanent residency in the United States,” Jeff DeCicco, CEO and Chief Compliance Officer of CanAm Investor Services, told IANS in an e-mail interview.

Stating that the current US administration is “very active” in reforming immigration laws, Mr DeCicco said: “While it is highly unlikely the programme will be done away with, there is a high likelihood that the investment amount will be increased. In our opinion, the said increase will not be effective immediately. We feel Congress will give a 30 to 60 days’ notice prior to implementing the new laws.”

With US President Donald Trump calling for stricter norms for issuance of H1-B visas, largely availed by Indian IT firms, the EB5 visa has been in demand for the shorter route to citizenship it offered.

A private member’s bill was also introduced earlier this year in the US Congress by Democrat Zoe Lofgren which seeks to increase the minimum salary of an H1-B visa holder to a whopping $130,000 from the current minimum of $60,000.

At the same time, the EB5 visa programme has also come under controversy with critics saying that it puts up US citizenship for sale. However, the US Congress in September this year extended the scheme by three months.

Stating that authorisation for the EB5 programme has been carried on a temporary basis on Congressional spending bills since September 2015, Rogelio Caceres of LCR Capital said that key figures in the US Senate, Senate Judiciary Committee Chairman Charles Grassley and Senate Majority Whip John Cornyn, have been negotiating an EB5 reform bill “in good faith and have made considerable progress”.

“Based on discussions with our team in Washington, D.C., it is very possible that the principal negotiators will come to an agreement in principle in December, which, along with reforms, will likely provide the programme with a five-year reauthorisation,” Mr Caceres said.

Asked what it would mean for Indian applicants in case the EB5 visa scheme gets extended, Mark Davies of Davis and Associates LLC said that Indian applicants needed to be very mindful of two issues looming over the EB5 scheme: A likely price increase and retrogression.

“While most commentators believe the December 8 is a ‘red herring’, combined with these two issues make it highly desirable for Indian investors to make their EB5 move quickly,” Mr Davies said.

Asked about the demographic profile of Indians applying for the EB5 visa, he mentioned students studying in the US, workers on H1B visas already in the US, business owners looking to expand into the US and families looking to relocate to the US.

According to Mr DeCicco, the Trump administration has brought all visas under hard scrutiny.

“They have implemented tougher regulations on immigration and have increased the screening process of applicants under each category,” he said.

“In these times, we feel it is especially important for EB5 investors to work with experienced immigration attorneys and companies that have a long track record of successful EB5 ventures.”

However, Mr Caceres is of the view that the Trump administration supports the EB5 programme as it creates tens of thousands of new American jobs each year, all at no cost to the taxpayer.

“They are keen to see much-needed investor protection reforms instituted to help weed out the bad actors in the programme,” he said.

As for the kind of investments made by Indians under the EB5 programme, Mr Caceres said: “Seventy-four per cent of Indians select real estate projects, as do most other nationalities. Certain areas of the country are also very interested in restaurant franchises and hospitality industries.”

Since the failed coup in Turkey in July 2016, more and more Turks want to leave the country. According to recent reports from Deutsche Welle, Germany’s public international broadcaster, many prosperous and affluent Turkish citizens are purchasing real estate property in Greece. Turkish nationals acquire free movement in Europe and thanks to the Golden Visa Programme, Greece (alongside other European and Commonwealth countries), offer foreign investors full EU (and non-EU) residency (and for some citizenship) rights when investing into property.

As each programme is unique and tailored to the country’s requirements, the Greece government via the golden visa programme offers access for non-EU nationals who are seeking a pathway in Europe to acquire such rights by investing €250,000 and upwards into real estate.

The residence permit is secure for five years from which it is then renewable from thereafter. For the foreign investor, this residence permit extends to their immediate family and gives them the right to work, live and study in Greece in addition to moving freely around EU member states.

The German report states that:
“Many Turks regard Greece as a safe haven from the uncertainty that prevails in their homeland. By paying the corresponding price, they can ensure a “fire exit” to the EU. The “golden visa” is their security for the worst circumstance,”

And continues with:
“Greece is not the only country to grant a “golden visa” into the EU, but it is the most inexpensive. Portugal, for example, has a similar program, but it foresees a minimum investment of 500,000 euros. Cyprus gives citizenship directly, but the investment must be 2 million euros,”

In 2016 there were such 30 cases reported of Turkish nationals applying for the Golden Visa Greece Programme, however, an astounding total of 170 residence permits were given in November 2017.

The SEF announced this month that 12 of its regional offices would begin accepting submissions from Portugal golden visa applicants regardless of region. But with numerous other factors causing significant processing delays, will this change be enough to reduce the current backlog?

For investors who have spent at least €500,000 purchasing property in Portugal, they must first arrange an initial meeting with the SEF to begin processing their golden visa application. The Portuguese Foreigners and Borders Service (SEF) handles all immigration issues and has a number of offices across the country.

Previously, applicants could only arrange an appointment with the SEF office situated in the same region in which they have purchased property. This had placed continual pressure on SEF’s offices – particularly in Lisbon since it is one of the most popular areas for real estate investment in Portugal.

Thanks to the capital’s thriving property market where house prices increased by a massive 35% in the four-year period to 2016, and prime city centre real estate is just a quarter of the price of comparable properties in London, Lisbon is the ideal gateway to European citizenship for foreign investors.

But with no appointments available with the SEF more than three months in advance, no waiting list system in effect, and no announcement made when new appointments are released, golden visa applicants are left with little choice but to contact SEF every day in hopes of securing an appointment.

Once appointments are released, due to overwhelming demand they are often filled the same day as they become available – sometimes within just an hour or two. There are currently no available appointments left for the remainder of 2017.

In a bid to make these initial appointments more accessible to golden visa candidates, the SEF has launched a pilot project at a dozen of its regional offices. These select offices including Porto, Faro and Coimbra will accept residence permit submissions irrespective of the location of the applicant’s property investment.

By trialling this, the SEF hopes to begin accepting submissions from golden residence permit candidates more swiftly. Although speeding up this process is a welcome improvement to the programme, applicants will continue to experience delays unless the procedure for processing the permit is also made more efficient.

The SEF’s legal team confirmed that it is currently struggling to clear a backlog of around 4,000 pending cases. These delays have been widely blamed on staff shortages, increased process complexity, and the ever-increasing popularity of the golden residence programme.

Reports from newspaper Diário de Notícias suggest that many specialist staff were sent to Lisbon airport from SEF offices in spring, which has caused waiting times across the board to increase further.

Several amendments to Malta’s Residence and Visa Programme (MRVP) recently came into effect through the announcement of Legal Notice 189. This is the first update to the regulations of the visa programme that was first introduced in 2015.

The three main changes to the MRVP that are already in effect are as follows:

Adults of any age that are unmarried and financially dependent on the main applicant are now eligible to be considered a dependant of the main applicant for residency purposes.

Previously, only children up to the age of 26 could benefit from residency as a dependant. Even if they were 26 or younger at the time of application, the residency rights of dependant children were revoked once they turned 27. Now, there is no age limit for adult dependants. The main applicant can even choose to include any future spouse and/or children of an adult dependant on their visa, for a €5,000 fee per person.

There is no longer any obligatory requirement for the main applicant and any dependants to reside outside Malta for a continuous six months, or for 10 non-consecutive months within a five-year period.

The MRVP originally stated that anybody who is considered a long-term resident of Malta cannot receive the benefits of the programme. A foreign national who has resided in Malta for a continuous period of five years is considered a long-term resident. The only way to avoid this is to either reside outside Malta for at least six months in a row, or ten months in total within this five-year period. With the recent visa changes, applicants and their dependants are no longer required to leave Malta for any amount of time.

The parents and grandparents of either the main applicant or his/her spouse are now eligible to be included in the visa application.

For a non-refundable fee of €5,000 per person payable at the time of application, parents and grandparents can join the main applicant and/or his or her spouse in Malta as dependants.

Though these are minor amendments and do not alter the way the programme fundamentally works, it is hoped that a greater number of foreign investors will be attracted to Malta. Allowing more of the main applicants’ family members to reside in Malta makes the programme much more accessible.

However, under this programme there is still no option for investors and their family members to eventually become citizens of Malta, and dependants are not permitted to work with this visa. Other golden visa or citizenship by investment programmes are more appropriate for this purpose.

Despite this, the Malta Residence and Visa Programme remains one of the best and most popular residency programmes in Europe. With a five-year investment in government bonds worth €250,000, a property lease worth €12,000 per year and a one-time contribution of €30,000, investors and their families can reside indefinitely in Malta and travel visa-free within the Schengen area.

Many countries offer residence and citizenship via investment, whereby an investor invests funds into specified fields and they thus acquire immigration status in that country. Such schemes are often referred to as “golden visas”. Countries that offer schemes like this do so because they want to encourage inward investment and economic stimulation.

One of the most popular of these schemes is the Portuguese “Golden Visa” programme. This is a scheme which offers to successful applicants both a Portuguese residency visa and a Schengen visa.

The Portuguese residency visa is issued for an initial period of one year and after that it is extendable in two-year periods. It permits the visa holder and their family members to live in Portugal for the relevant visa period without any further immigration permission. After five years the visa holders – assuming that the investment has been maintained – may be able to apply for permanent residence in Portugal (ie the right to live there indefinitely) and after one further year they may be able to apply for Portuguese citizenship.

The residency visa entitles the holder to stay in Portugal for an unlimited maximum number of days per year – they can stay there for 100 per cent of the time if they wish. And there are only very small limits on the minimum time they must spend in Portugal: at least seven days per year during the first year and at least 14 days per two-year period subsequently (ie an average of seven days per year over two years).

The Schengen visa entitles the visa holder to travel throughout the Schengen area, which includes most countries in Western Europe and some in Eastern Europe.

So the Portuguese Golden Visa holder is able to live in Portugal without restriction and is also able to travel easily throughout much of Europe.

There are various different options for the investment for the Golden Visa: the investment can be in funds, in property or in job creation. If the investment is in funds the required amount of investment is between 250,000 Euros and 1,000,000 Euros, depending on the type of investment. If the investment is in “artistic and cultural activities” the amount of investment need be only at least 250,000 Euros; if it is in “research activities” it needs to be at least 350,000 Euros; if it is for capitalisation of small and medium-sized companies it needs to be at least 500,000 Euros; otherwise it needs to be at least 1,000,000 Euros.

If the investment is in property which is more than 30 years old or is located in an area of urban renovation the investments needs to be at least 350,000 Euros; otherwise it needs to be at least 500,000 Euros.

If the investment is in job creation the investment only needs to create at least ten jobs in Portugal; there is no set financial amount.

So the Portuguese Golden Visa scheme is a relatively simple and very flexible one, and the amount of investment required is lower than that required by many other countries for such schemes. It is not therefore surprising that it is one of the most popular of such schemes.