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Coastal: Where to buy off-shore

Global wealth migration is accelerating and governments offering investment migration programmes are attracting a number of high-net-worth South Africans

TEXT Debbie Hathway, Tracy Ann van Blerk and Kim Maxwell PHOTOGRAPHS Supplied

Global wealth migration is accelerating, and governments offering investment migration programmes are attracting an increasing number of high-net-worth South Africans. Some of the most popular countries are Portugal, Mauritius, Greece, Malta and Grenada.

Globally, about 108 000 high-net-worth individuals (HNWIs) migrated last year, compared with 95 000 in 2017, according to the AfrAsia Bank Global Wealth Migration Review 2019, in which research partner New World Wealth presents insights on wealth trends in 90 countries. Australia attracted the most HNWIs in 2018, followed by the US, Canada, Switzerland, the UAE, the Caribbean, New Zealand, Singapore, Israel, Portugal, Greece and Spain, in that order. “Based on our estimates, about 3 000 HNWIs have left South Africa over the past 10 years,” says Andrew Amoils of New World Wealth. “Most of these individuals have gone to the UK, Australia and the US. Switzerland and Portugal are also popular destinations.” Global investment migration firm Henley & Partners notes that Brexit, Bolsonaro and the anti-government protests in Hong Kong are all contributing to a significant spike in interest in the Portugal Golden Residence Permit Programme and the Greece Golden Visa Programme.

Amanda Smit, managing partner and head of South, Central and East Africa, says investment migration programmes are designed to manage the combination of risk and opportunity. “On the one hand, they create security: reliably diversifying risk through greater protection from volatile markets and political instability. On the other hand, residence- and citizenship-by-investment programmes permit access to an expanded suite of opportunities for travel, investment and influence. In both cases the benefits that accrue from having multiple citizenships and/ or residencies create significant value for the investor, going beyond simply providing political risk insurance.”

BEST PROSPECTS

Portugal remains the top destination of choice, with the capital, Lisbon, having been voted Europe’s best investment prospect for 2019. Head of Pam Golding International Chris Immelman says: “Ranked ahead of Berlin, Dublin, Madrid, Frankfurt and Amsterdam in the Emerging Trends in Real Estate: Europe 2019 report, Lisbon is one of the smaller newcomers to the top 10, vying with the tried-and-tested markets in terms of ‘quality of life’ and ‘leadership’.” Since Pam Golding International began marketing property in Portugal a few years ago, it has concluded real estate transactions with nearly 300 South Africans. Lisbon and Porto are the most popular locations so far. “Over the past few months there’s been an uptick in enquiries and sales, mainly for properties in the price band between €500 000 and €1 million, to meet the minimum investment criterium,” says Immelman.

In special circumstances, the entry level may be lowered to €350 000 for investment in units in renovated buildings that are at least 30 years old in historically significant locations earmarked as urban regeneration areas. Porto’s Hotel Belas Artes and The Rebello Luxury Hotel Apartments are examples. Property investors can achieve net yields of more than 4%. With capital growth of 10.1% YTD, this positive trajectory is set to continue thanks to improvements to infrastructure, low levels of unemployment, a booming tech industry and competitive pricing against other European cities. Martinhal Residences in the Parque das Nações neighbourhood near Lisbon International Airport has a luxurious family living environment, concierge services and superb amenities. The project offers guaranteed 4% yields for six years. Prices range from €265 000 for a 38.76m2 studio apartment to €1.05 million for a 161.5m2 four-bedroom apartment.

SAFETY AND SECURITY

Mauritius ticks many boxes for those looking for motivation to move to a new country for the benefit of permanent residency, an appealing tax regime, economic prospects and a generally safe environment. Not to mention the sheer beauty of this Indian Ocean island and its relaxed lifestyle. Mauritius is one of the wealthiest countries in Africa (in terms of average wealth per person), a status it is expected to maintain for the foreseeable future – and tops the log for ease of doing business in Africa.

“Mauritius has proven to be a very strong offshore investment for South Africans who invested here five to 10 years ago,” says Richard Haller, director, Pam Golding Properties (Mauritius). “For example, since the launch of Mont Choisy Le Parc Golf & Beach Estate in the north of the island, some villa owners have seen up to 60% growth at resale. On average in Grand Baie we have seen 7% per annum capital growth over the past five years.” More and more South Africans are making Mauritius their second home, in response to actions by a stable government, steady economic growth, and international schools and retailers.

English is one of the official languages, which makes it even easier to settle.

LEAST EXPENSIVE

The least expensive way to get a residence permit in the EU is via the Greece Golden Visa Programme. The minimum property investment is €250 000, with citizenship possible after seven years of residence. “With the current tourism boom, acquiring real estate in Greece is now one of the most profitable types of investments, with ample opportunities for capital appreciation in a depressed real estate market,” according to Henley & Partners. “From being on the brink of bankruptcy a decade ago, Greece is quickly becoming a leading destination for entrepreneurs, remote workers and digital nomads due to its exceptional and relatively low cost of living.” Successful applicants and their families are able to benefit from visa-free access to Europe’s Schengen Area within two months of applying. They are allowed to let their property and hold shares and receive income from the dividends of a company registered in Greece (but they may not be employed in Greece). Residence applies the whole family (married spouse, children under 21 and parents of the main applicant and spouse) and there is no requirement to live in Greece.

The residence permits do not have an expiry date.

FIVE-STAR RESORT

Kimpton Kawana Bay is the leading citizenship-by-investment (CBI) project in Grenada. A five-star resort located on Grand Anse Beach, named USA Today’s best Caribbean beach in 2018, Kimpton Kawana Bay offers deeded freehold real estate at the minimum CBI investment amount of US$220 000. “With a low investment from just $220 000 for a suite, clients are able to become shareholders in a financially sound resort operated by the reputable Kimpton brand, which is part of the InterContinental Hotels Group,” says Geoffrey Crow, global head of marketing for Kimpton Kawana Bay. Adds Immelman: “It has a transparent revenue-sharing model and hassle-free ownership with no additional cash outlay requirements. Its one-bedroom suites and studios are for sale as freehold condominiums and properties can be resold after five years to buyers who are also eligible for Grenadian citizenship.” Grenada’s CBI programme gives global access rights that other CBI programmes around the world simply cannot rival. Citizens who are tax residents in Grenada are not subject to pay Grenadian tax on their foreign income, nor do they pay any wealth, gift, inheritance or capital gains tax.

NEED TO KNOW

PORTUGAL

Why: Visa-free travel in the Schengen Area; the right to live and work in Portugal; EU residency How: Invest a minimum amount of €500 000 in real estate

GRENADA

Why: Visa-free travel to more than 140 countries, including the UK and Schengen Area How: Donate from US$150 000 as an individual or invest US$350 000 in a government-approved real estate project (US$220 000 in select cases); additional fees apply

MALTA

Why: First proven European destination where you can get citizenship rather than just residency How: Residency costs start at €30 000 plus investment of €150 000 into government bonds (to be held for five years) and property investment of more than €320 000

GREECE

Why: The Greek property recession is over; low real estate prices and high demand mean higher returns How: Qualify for residency when you buy real estate for more than €250 000; seven years of residency in Greece qualifies you for citizenship

MAURITIUS

Why: Mauritius is the perfect all-rounder, particularly for South Africans How: Get permanent residency for you, your spouse, and children under the age of 24 when you buy residential property for US$500 000 upwards

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