In today’s podcast I discuss various residency schemes by investment property and other ways.
I look at the fact that some countries have tightened their rules, whilst others are looking to stimulate the property market by making it easier.
If you have any questions or you are looking to invest, don’t hesitate to contact me or use the WhatsApp function below.
For your convenience, and to give credit to the original writers, I have included links to the articles I referred to and copied them below.
Thailand is giving condo buyers five-year residency visas for a THB10 million (USD 330,200) investment.
More foreigners are seeking Thai visas as they consider Thailand a “COVID-Free Paradise.” The country is one of the successful nations in managing COVID-19 outbreak.
The latest scheme throws a life-line to property developers who are drowning in unsold condos. However, investors must act quickly because the opportunity expires at the end of 2022. Moreover, foreign investment is an important driver of the property market in Thailand and helps support jobs, government revenue, and new development.
Somsak Chutisilp, managing director of real estate agency IQI Thailand, said: “Foreign buyers must have their Elite card when they purchase the property. A foreigner who already has an elite visa can upgrade to this new status simply by paying the difference. They do not need to pay the entire cost to upgrade. Your investment will give you to live in Thailand for 1 year and to renew every year for a total of five years. You will no longer have to make a dash to the border to renew your visa outside of the country.
“They will have to act fast, because the program will only be available for two years, from 1 January 2021 to 31 December 2022. The foreign buyer must choose a property that is already completed or can be handed over before the end of December 2022.
“This is what you need to apply for the card: your passport, a foreign exchange transfer to show the money used has come from overseas, the document showing that you own the property, and evidence that you are at least 20 years of age.”
The Thai government has rolled out a new 60-day tourist visa and a renewable special tourist visa. The government has also floated the idea of giving work permits to foreigners who invest at least USD1 million.
Thailand issued 2,398 Elite visas in the first three quarters of 2020, an average of about 266 per month.
Thai residency visas for foreigners who invest as little as three million baht ($100,000) in property is among five proposals being considered by the Ministry of Finance.
The proposals were put forward by Thai real estate associations in a bid to lift a property sector slumping under the impact of Covid-19.
The Housing Business Association, Thai Real Estate Association and Thai Condominium Association (TCA) sent the proposals to minister Arkhom Termpittayapaisith on December 9, TCA deputy chairman Chairat Thampeera revealed on December 17.
Under current rules, foreigners must spend at least 10 million baht on property to be eligible for a residency visa.
However, under the proposed three-tier visa system, foreign purchasers of condos worth three-to-five million baht would get a five-year visa.
Buyers of five-to-10 million baht condos would get 10-year visas, and those who bought condos for more than 10 million baht would be granted permanent residency.
The other four proposals are targeted at Thai property buyers. The first is to cut ownership-transfer and mortgage fees to the lowest rate until December 31, 2021 to reduce the cost of buying both new homes and second-hand houses.
The second is to relax government loan-to-value (LTV) mortgage enforcement to provide opportunities for people with purchasing power to invest in property. The real estate associations say home-loan providers already have strict LTV rules.
The third is to extend the land-and-buildings tax cut for another two years until the end of 2022 to help relieve ownership burdens.
The fourth is a cash-back campaign and credit increase from 50,000 baht to 100,000 baht per person until the end of next year to encourage first-time buyers to make their purchases.
Meanwhile, 30 real estate developers will offer foreign buyers five-year visas in exchange for investing at least 10 million baht in property, under the “Elite Flexible One” card scheme launched on January 1 next year.
Thailand Privilege Card (TPC), which operates the scheme, said Raimon Land has already signed up three luxury condo projects, expecting sales of about 200 Elite cards.
At least 30 more real estate developers have expressed interest in joining, said TPC president Somchai Sungsawang after launching the scheme on December 21.
The move is aimed at lifting a property sector slumping under the impact of Covid-19. “Most are large listed companies, with a lot of suggestions offered to increase customers and encourage more sales. The suggestions will be put to a [TPC] board meeting for further consideration,” said Somchai.
He said the purchasing power of foreigners is important to the tourism sector and related businesses in Thailand, which normally boasts the second-highest tourist volumes in Asia.
Relaxation of the travel ban is expected to see about 1,400 Elite Card members enter Thailand this year, he said. The TPC has set a target of 3,000 Elite Card entries next year.
About 70 per cent expressing interest in the scheme said they want to buy Thai property for residential use and long-term investment – with many choosing Thailand as a retirement destination.
Most have high enough purchasing power to buy Elite cards priced at 500,000 to two million baht. To be eligible for an Elite Flexible One membership card, applicants must spend at least 10 million baht on condo-style property under the scheme. Elite Flexible One cards will be issued for a period of two years, from January 1, 2021 to December 31, 2022.
In spite of safety concerns and travel restrictions, the market for so-called “golden visas”—programs that grant citizenship or residency to foreign nationals who make significant investments in a country, often in real estate—has thrived during the Covid-19 pandemic, with high-net-worth global buyers eagerly seeking out both physical and financial safe havens.
“Clients are diversifying,” said Andres Gutierrez, an investment immigration consultant with CSB Group in Malta. “In a pandemic, clients have realized that [citizenship by investment regulations] give an edge against geopolitical risk and volatility. They want investment stability, they want options for their children.”
With economies across the globe suffering from the ongoing fallout of the pandemic, some governments have also expanded their visa offerings over the past year to make up for lost tax revenue, a phenomenon also seen in the wake of the 2008 financial crash.
Since 2012, Portugal has been home to one of the more popular and well-known golden visa programs, launched to attract investment and tax dollars to struggling markets in Lisbon as well as smaller cities. The policy was an overwhelming success, attracting more than €5 billion (US$6.10 billion) in investment over the past eight years.
But the program was perhaps too effective at driving up prices and demand, and in early 2020, Portugal’s government recommended that golden visas should no longer be available to investors buying in Lisbon and Porto. The move is designed to tamp down speculation and keep prices accessible in the nation’s major cities, as well as to encourage investment in lower-density parts of the country
Portugal is hardly the only nation considering new restrictions on its investment-by-residency programs.
In October, the European Commission threatened both Cyprus and Malta over their respective golden visa regulations, and Cyprus’s program was suspended following an Al Jazeera documentary that showed Cyprian politicians agreeing to aid a fictional foreign businessman with a criminal record.
“There’s this kind of trade-off going on between local governments who want to be able to attract investment and boost their economies, and overarching bodies like the European Union trying to keep a close eye on market transparency,” Ms. Everett-Allen said.
Malta’s regulations currently still allow paths to residency and citizenship for investors, with painstaking due diligence and background checks, Mr. Gutierrez said. Malta also offers a significant logistical advantage for investors looking to buy in the midst of a pandemic.
Unlike other countries where investors apply for residency after the purchase of a property, in Malta, the application happens before the purchase, meaning there’s less uncertainty around the initial investment, and crucially, that buyers can begin the process without having to travel to visit a property first.
“Once the application is approved is when the applicant has to travel,” Mr. Gutierrez said. “There are many clients we have been advising that have started this process in the pandemic. There are a lot of things they can do while they’re at home.”
In order to qualify in Malta, buyers must contribute €650,000 (US$791,405) to a national development fund and make €150,000 in government-approved investments, in addition to a €350,000 property purchase.
The program is one of the more expensive options in Europe, but offers a clear path to a Maltese passport, and a foothold in the EU, a factor that holds significant appeal for families relocating from abroad.
“If you’re a non-EU purchaser and want your child to maybe attend university in the EU, you now have the ability for your child to move around studying,” Ms. Everett-Allen said. “You’ve got that sort of bonus.”
For foreign investors, Spain’s appeal is similar to that of Portugal or Malta in terms of both lifestyle and flexibility of movement within the European Union. It also offers a high level of stability in terms of governmental and financial infrastructure, as well as brass tacks logistical convenience.
“Outside of Lisbon and Porto, we’re talking about small cities with not very good [transportation] connections,” said Alejandra Vanoli of VIVA Sotheby’s International Realty in Spain. “In Spain, you have excellent connections flying to Madrid, or on the coast, Levante, Seville or Andalucia.”
The citizenship process for investors is longer than in many countries, however, and after their initial minimum property investment of €500,000, buyers must wait 10 years to be able to apply for citizenship. The lag time doesn’t seem to have slowed interest from buyers.
“Last year was a record for golden visas, we had 8,000 people who bought properties with the idea of creating a permanent residence here,” Ms. Vanoli said. “They’re looking at the advantages. You don’t have to live here 180 days a year [as required by some visa programs], and you have the chance of sending your children to many international schools, whether that’s French, American or British. It’s really very convenient.”
Spain’s investment market may see a further influx of interest early next year after the deals of the U.K.’s exit from the European Union are finalized.
“We’re still waiting on confirmation on this, but after Brexit on Jan. 1, British citizens will be non-EU residents and therefore could potentially apply for golden visas for the first time,” Ms. Everett-Allen said. “We could see more interest in markets like Spain that are particularly popular with British second-home buyers.”
For buyers willing to consider options that are technically outside the European Union, Montenegro’s citizenship by investment options have been growing in popularity since they were introduced in 2019.
(Montenegro is a part of the Eurozone, and is a candidate for future EU membership in 2025. Currently, a Montenegrin passport allows for travel to 125 countries, including those in the EU Schengen Area.)
The Balkan nation represents a relative bargain compared to other many other golden visa programs, with an opportunity to obtain a Montenegrin passport within three months of purchasing a €250,000 property in a government-approved development project in the northern mountain region, or a €450,000 property in a development project on the coast. (In both cases, buyers must pay an additional €100,000 government fee to qualify, on top of other assorted application fees and expenses.)
“Life costs are much cheaper here than in the European Union, and you’re getting a lifetime citizenship,” said Niko Laković of Montenegro Sotheby’s International Realty. “It’s a very beautiful lifestyle and we’re a maximum two-hour flight from major European cities. And you’re getting an actual passport three months after starting the process.”
Outside of the European market, numerous Caribbean islands offer popular residency programs, and the Cayman Islands remain the gold standard both in terms of lifestyle and financial convenience.
“There’s no restriction at all to foreign ownership of land here, whereas there is some in European nations,” said James O’Brien of International Realty Group Ltd., an affiliate of Luxury Portfolio International in the Cayman Islands. “And obviously there’s no direct taxation at all, whether that’s property taxes, personal income, inheritance. It’s very difficult to find any jurisdiction that ticks all the boxes that the Cayman Islands does.”
The Cayman Islands currently offer two paths to a certificate of permanent residency for investors, the most popular of which requires a property investment of at least $2.4 million in any of the three Cayman Islands, Mr. O’Brien said.
“That certificate of permanent residency will give you a path to Cayman citizenship,” Mr. O’Brien said. “Five years from the time you’re granted residency, you can apply and become a Caymanian citizen, which entitles you to a British Overseas Territories passport. That’s been very appealing to investors from the U.S. and Canada, as well as Asian and Middle Eastern investors.”
The second option requires a lower overhead investment of a $610,000 property purchase as well as certain financial investments and a minimum annual income, but only confers a 25-year renewable residency certificate, Mr. O’Brien said, with no path to citizenship.
“It’s a little bit more complicated in terms of what you need to have invested, but in simple terms, it’s half the dollar entry value of the [certificate of permanent residency] program,” Mr. O’Brien said. “The residency certificate allows you to reside in the Cayman islands, but very importantly, you cannot work, and you can never become a Cayman citizen or British Overseas Territories citizen.”
With ease of travel to the U.S. and London, as well as a strong local economy, infrastructure, and education system, the Cayman Islands offer many of the same benefits sought by buyers in Europe.
“We have great connectivity to the mainland in both Canada and the U.S., and Miami is less than 90 minutes away,” Mr. O’Brien said. “We’ve also got direct nonstop flights to London and sophisticated infrastructure. Quality education is one of the real key things that’s attracting full relocation for high-net-worth families, as well.”
While no two countries have residency programs that are exactly alike, savvy buyers can start to identify key features in potential investments and assess their options accordingly.
“It comes down to personal preference, ultimately, and lifestyle is critical,” Ms. Everett-Allen said. “It’s often also an insurance option, and there’s been a large increase in American applications for second passports over the last few months. It’s a backup plan to have greater mobility, diversify assets, and have something in the back pocket to make use of and be able to move more quickly.”
In the answers below I focused on:
- How can somebody accumulate the first million? What are the top two or three strategies for doing so?
- What are some lessor known strategies for building up wealth? Why is implementation so important in the digital age where everything is available online?
- Why do people who make $100,000 a year feel poor in some situations? Is it only that they are living in high-cost-of-living countries, or are there other considerations at play?
To give you a preview of the post, I have copied part of the article below:
Itis quite a broad question, and in reality there are many routes to this.
Firstly, there is luck.
This could include:
- Winning the lottery
- Marrying into wealth or marrying somebody who becomes wealthy
it isn’t good to rely on luck though, nor does it usually work out for people to make decisions about who to marry based on wealth solely.
Moreover, most wealthy people are now self-made:
The above statistics also tend to be true for people who are millionaires as well.
So there are two more routes which are common
- One way people can get wealthy slowly is just to invest every month for decades
- By leveraging time, people don’t need to invest that much either
- Numerous studies have shown that in developed countries at least, the majority of self-made millionaires are millionaire next door types, who have became rich slowly by just holding onto assets like ETFs for a very long time.
- Take the below statistics. It shows that the majority of millionaires in the US are above 40, and I have seen similar statistics for the UK, Germany and other countries:
- That doesn’t mean you can’t do it sooner, but your income needs to be high and your spending habits decent to have a chance to produce a big enough surplus to get to millionaire status in your 30s and especially 20s.
- An estimated 14% of the world’s millionaires are in education, which shows you don’t need to have a super-high income to become wealthy.
- I imagine that a lot of the 1.78% who become millionaires young, as alluded to on the last point, have started their own business. Or, alternatively, they are paid on performance and not hourly.
- This is a different route to success. The process is more high-risk/high-return than getting rich slowly as per the first point. The failure rate is much higher as well.
- As the internet has made it easier for people to start businesses with less money, expect to see more successes and failures in the years to come. In another 10–20 years, we can expect to see more young millionaires, as more people try working for themselves, but also more failures.
Of course, in the real world, people also often combine these two elements.
Many people sensibly diversify from their core business, and still invest privately, regardless of how well things are going.
Covid and lockdowns have once again taught us the importance of managing risk.
In terms of habits to cultivate for either option, I would focus on:
- Reading a lot. Getting good ideas from that and associating with the right people. So, getting rid of toxic influences and people and finding positive ones.
- More importantly than having good ideas, is implementation. Ideas don’t pay the bills
- Don’t procrastinate. Execute. Set up that investment account. Start that business if it really makes sense.
- Don’t just scale your spending as you earn more (lifestyle inflation). Many people earn more but can’t invest more.
- Take calculated risks, especially when you are young enough to take them.
To read more click below