Pic credit: The Seychelles ranks 29th on the Henley Passport Index
WORDS: DEBBIE HATHWAY :: PHOTOS: SUPPLIED
Making a move overseas, whether for personal or business reasons, requires meticulous research and planning. With the options available to South Africans wanting to explore new horizons, it helps to fall in love with the destination on a visit for business or leisure. Today, Portugal, Mauritius and Malta are among those countries that appeal to local investors looking at foreign residency- and citizenship-by-investment (RCBI) programmes as an incentive to relocate.
“Most people who invest in government-authorised RCBI programmes do so to benefit from the flexibility and for additional benefits that are not currently available to them,” says Tim Mertens, chairman of corporate and trust service provider Sovereign Trust SA. “The most important thing is not to make life-changing decisions based on a friend’s recommendation. Take advice from experts who can unpack the various country and investment options available to you based on your needs.” For some, mobility will be a deciding factor. A good point of reference is the Henley Passport Index, which ranks passports according to the number of destinations their holders can access without a prior visa.
Countries offering CBI programmes hold strong on the list, with Malta leading the group in ninth place. Another useful reference is the Global Social Mobility Index 2020, designed by the World Economic Forum (WEF) to measure social mobility worldwide. Most economies are failing to provide the conditions in which their citizens can thrive, often by a large margin, says the WEF. Its report benchmarks 82 global economies according to social mobility and equality of opportunity with the aim of encouraging policy-makers to promote economic growth by improving both. The Netherlands ranks sixth on this index, whereas Malta ranks 17th, Portugal 24th, Cyprus 29th and SA 77th.
The benefits of living in Malta include ease of access and close proximity to mainland Europe, the UK and the US, as well as excellent infrastructure, lifestyle and climate. English is widely used in business. The cost of residency starts at €30,000, with an investment of €150,000 into government bonds that must be held for five years as well as property investment for €320,000 upwards. Cost of citizenship ranges from €650,000 to about €1m for a family of five.
Portugal is among the most popular destinations for South Africans who want to benefit from greater tax efficiency, investment and business opportunities, an improved lifestyle, more education options and greater freedom of movement. Real estate investment remains one of the easiest ways to get Portuguese residency, with a minimum investment of €350,000.
“The most important thing is not to make life-changing decisions based on a friend’s recommendation. Take advice from experts who can unpack the various country and investment options available to you based on your needs” Tim Mertens, chairman, Sovereign Trust SA
Meanwhile Mauritius continues to woo South African investors with its proximity to home turf, an attractive tax regime and a laid-back lifestyle. The island ranks 13th among 190 countries in the World Bank’s latest Ease of Doing Business report. This island nation also holds the top spot in Africa and ranks second among middle-income economies, behind Malaysia. In Mauritius you can invest in prime property from $160,000 or secure permanent residency for you and your immediate family with an investment of $500,000 or more.
Grenada is an idyllic destination with a tropical climate year round, pristine beaches and lush landscapes. Here CBI can be secured in under nine months. You don’t need to visit the country during the application, the processing fees are minimal and no physical residency is required. The Granadian programme requires a minimum investment of $220,000, and no interview, management experience or qualifications are necessary. The country has a source-based tax system, so citizens who are tax resident are not subject to Grenadian tax on their foreign income, nor do they pay wealth, gift, inheritance or capital gains tax.
In the Seychelles, the draw cards are award-winning beaches, lush tropical forests and an innovative approach to marine protection. The archipelago achieved 4.1% economic growth in 2017, ranked second out of 54 African countries for overall governance and has the highest GDP per capita in Africa. There is no capital gains tax, and no transfer duty or stamp duty on the purchase of new homes.
If you’re after that second passport, you’ll likely get it fastest (within six months) through the Cyprus CBI programme, which requires a minimum investment of €2.15m (€2m into real estate and two €75,000 donations to government funds). Dependent children up to age 28 and the investor’s parents qualify.
Citizenship is for life and passed down through descent. Cyprus is economically stable and politically secure. The lifestyle is similar to that in SA: golf courses are world-class and the countryside is beautiful.
There are 65 blue-flag beaches, the cleanest seas in the Med and a mountain range where it snows for three months. You can also get permanent residency within two months via the fast-track residency programme with a minimum property investment of €300,000. Three generations qualify (including children up to the age of 25 and both sets of parents) yet there is no requirement to live in Cyprus or be domiciled there for tax purposes. Permanent residency is for life and never requires renewal. Properties can be let in both instances.
The Netherlands offers a three-year residency permit to foreigners who are willing to invest a minimum of €1.25m in a Dutch business, boost the economy and create jobs. After five consecutive years of permanent residency, applicants are allowed to apply for Dutch citizenship. However, they must be able to speak Dutch and are often required to renounce their original nationality.
WHAT DO THE PROPERTY EXPERTS SAY?
Citizenship in Europe is now a reality for those investing in Portugal’s Golden Visa programme, which offers residency via investment in property. “The first Portugal citizenship has just been issued, with more due to be granted in coming months,” says Chris Immelman, MD of Pam Golding International. “We have 340 South African families in the programmeat at the moment, so we are delighted with that news.” If you’re serious about the Golden Visa programme for Lisbon and Porto, you need to get going – it is not likely to apply in these cities from next year, but will continue in other areas of the country where government believes the market needs stimulation. “Our latest development is Prata Riverside Village in Lisbon,” says Immelman. It is designed by Renzo Piano, who designed the Pompidou Centre in Paris, and was named the best development in Portugal in 2019. Prices start from about €400,000.”
“Mauritius has proven to be a very strong offshore investment for South Africans who invested here five to 10 years ago,” says Pam Golding Properties (Mauritius) director Richard Haller. “For example, since the launch of Mont Choisy Le Parc Golf & Beach Estate, some villa owners have seen up to 60% growth at resale, while on average in Grand Baie we have seen 7% per annum capital growth over the past five years.” This development forms part of the planned Mont Choisy Smart City, which will link the villages of Grand Baie and Mont Choisy with a boulevard and a parkway. Meanwhile Moka Smart City is the residential and commercial investment hotspot for Mauritian and international property investors. Over the past decade, its annual rental office and residential yields have been 9% and 6.5% respectively, with capital gains on residences at 7% per annum.
Its recent Smart City certification makes Moka Smart City, developed by ENL Property, accessible to international investors. “Properties in the current residential sales phase are one- and two-bedroom apartments priced from $107,565, which don’t qualify buyers for residency because they’re below $500,000,” says Rob Hudson, ENL Property representative for SA. “However, these units are suited to South Africans looking for secure, affordable, high-performing offshore property investments as a retirement property or a home for their children studying at the likes of Curtin University, an Australian facility that already has a campus in the Moka Smart City.”
“Cyprus is a popular choice for investors because the property acquisition secures either permanent residency or a second citizenship thereby creating a real legacy,” says Jenny Ellinas, founder and MD of Cypriot Realty. “Rental demand is high in Cyprus thanks to the lifestyle, the low cost of living and access to Europe. There is no language barrier; it is one of the safest countries in the world and has a robust national health system. If a Plan B in Europe is on your radar, Cyprus is a country worth investigating.”
“The jewel in the crown of the Seychelles is Eden Island, a residential marina development just off the coast of Mahe. With more than 40ha of island paradise, 16ha of waterways and four secluded beaches, it is a perfect base for fishing, sailing and diving. It marries an attractive lifestyle with all the benefits of a sound offshore investment that offers purchasers proven capital growth and annual rental yields, with the bonus of enabling them to apply for residency,” says Pam Golding International projects sales manager Brian Gradner.
At Kimpton Kawana Bay, a 12-minute drive from Grenada’s international airport, sales have been brisk, with almost 200 transactions concluded in the first three phases of this five-star branded resort development. “The freehold condos are priced from $220,000 and comprise onebedroom units and studios, including two weeks’ free usage per year,” says Immelman. “Your property is put into the hotel rental pool for the remainder, earning an annual return on your behalf via Kimpton Hotels Intercontinental Group. Investors can disinvest after five years.”
HAVE PASSPORT, WILL TRAVEL
The Henley Passport Index ranks the world’s passports according to International Air Transport Association data by the number of destinations their holders get visa-free or visa-on-arrival access.
Here are the highlights:
1. Japan – 191
7. Portugal and the Netherlands, tied – 185
9. Malta – 183 16. Cyprus – 176
29. Seychelles – 151
32. Mauritius – 146
35. Grenada – 142
56. SA – 100