A World Of Opportunity

Loggerhead Partners


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We offer multi-family office services such as corporate structuring, tax planning and estate planning, for private individuals and institutional clients. Our Dubai-based specialized entity, utilizes the zero tax regime of the UAE to execute tailor-made solutions involving a UAE entity structuring, residency planning and all the adjoined administration services.
As the world has become both increasingly globalized and volatile, the need for greater travel freedom and improved safety and security has steadily grown.
United Arab Emirates Tax
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By Jacopo Zamboni
Head Of Zurich Client Advisory Team, UHNW, Henley & Partners Switzerland AG

A World of Opportunity

As the world has become both increasingly globalized and volatile, the need for greater travel freedom and improved safety and security has steadily grown. Entrepreneurs, investors, and families seek to gain access to business opportunities and better education.

Alternative residence and citizenship represent the most direct routes to global mobility and overall stability, since individuals who have residence permits or passports in multiple jurisdictions benefit from each country's best practices and are less vulnerable to their risks and shortcomings.

When it comes to alternative residence, ultra-high-net-worth individuals (UHNWIs) have increasingly turned to the UAE, as Loggerhead Partners have outlined on many occasions.

We will cover:

  • A refresher on the key differences between residence- and citizenship-by-investment, as well as fiscal residence
  • Why alternative citizenship is used in combination with the UAE fiscal residency
  • What the options and requirements are

It is important to note these questions just scratch the surface as other elements will impact the selection process significantly, such as the applicant's country of origin, the age of dependent children or family members, the source of funds, and whether an applicant has already been granted citizenship by investment in the past.

Terminology: Residence, citizenship, and fiscal residency

It is important to clarify the terminology as there is often confusion among various stakeholders as to what residence, tax residence, or citizenship-by-investment mean.

In its most basic form, residence for investors denotes the process whereby qualified, vetted candidates are granted temporary residence in a country of their choice. The typical case in the UAE is when investors are given residence via the setup of a company, free zone, or an onshore company.

Citizenship-by-investment denotes a similar process, but candidates in this case are granted full citizenship in exchange for their substantial economic contribution to the passport-issuing state.

There is no hierarchy between residence and citizenship programs. Each type of program has its unique advantages and meets the needs of particular individuals and families.

Residence-by-investment programs, for example, give UHNWIs the option of physically relocating to a favorable jurisdiction - either now or during retirement - and becoming tax residents of that jurisdiction. Furthermore, residents of a country have full legal rights, except for the right to vote.

Citizenship-by-investment programs, on the other hand, provide wealthy families with the privilege of an alternative passport, which affords them all the internal rights enjoyed by citizens, as well as the broader right of travel, trade, and settlement abroad.

A further point to clarify is the difference between residence and tax residence. Many jurisdictions offering residence or citizenship by investment do not oblige applicants to reside there for a significant amount of time, meaning that being accepted as a resident or a citizen does not automatically trigger any tax liability for the applicant (that is, they are residents, but not necessarily tax residents).

It is important to stress that UAE residence does not physically require individuals to live in the UAE - they have the right but not the obligation to reside. This flexibility is ideal for entrepreneurs with business interests in the region and elsewhere who don't want to be bound to a specific country. In addition, UAE residence can lead to fiscal residency.

According to the latest article published by Loggerhead Partners, a fiscal residence is the country that one claims as their 'fiscal home'. Therefore, fiscal residents pay tax according to their fiscal home's tax laws. The fiscal residence is what we often refer to as 'tax residence' and it therefore needs to be chosen wisely. With its unique zero-tax regime, the UAE offers one of the most attractive residence schemes in the world.

The typical trend that we are seeing is a combination of UAE tax residence with citizenship by investment in another country.

Alternative citizenship that complements UAE residence - What are UHNWIs opting for?

Statistics of those who migrate to the UAE show that a significant number of UHNWIs are relocating from non-European jurisdictions. Based on experience, these are global entrepreneurs with businesses that span multiple jurisdictions.

The Henley Passport Index shows that about 50% of non-European citizens are able to travel to fewer than 90 destinations worldwide, which can be problematic for many UHNWIs.

Even though UAE fiscal residence does not provide the same visa-free travel options of an alternative citizenship, it does offer one of the best options available for alternative residence. For savvy investors, a major trading country with zero tax and with no exchange of tax information taking place can present a unique opportunity for asset diversification and confidentiality. Other benefits investors see include:

  • Attractive tax rates at a corporate and individual level
  • A dynamic environment for businesses across a variety of sectors
  • Nations interested in attracting and fostering talented entrepreneurs

As such, a combination of tax residence in the UAE and citizenship by investment in another jurisdiction provide the best of both worlds without the need for individuals to fully relocate.

Leading citizenship-by-investment programs that continue to attract significant attention among entrepreneurs located in the UAE include:

Montenegro Citizenship-by-Investment Program

Situated on the Balkan Peninsula in Southeastern Europe, Montenegro is known for its magnificent and unparalleled natural beauty. Montenegro boasts untouched expansive peaks, shimmering lakes, and a 629,000-strong population that is known for its warm hospitality. The majestic Mount Lovcen is the heart of the country and the enchanting Adriatic Coast spans 273 km, is indented with pristine sandy beaches, and features the elite Porto Montenegro, one of Europe's increasingly popular luxury destinations.

In order to qualify for citizenship, an applicant is expected to contribute EUR 100,000, designated for the advancement of local under-developed, self-government units, and invest at least EUR 450,000 into an approved real estate development project in Podgorica or in the coastal region of Montenegro. Alternatively, an investment of at least EUR 250,000 into an approved real estate development project in the northern or central region of Montenegro, excluding Podgorica, will suffice.

The key advantages applicants should consider are:

  • Visa-free or visa-on-arrival access to 124 destinations including Europe's Schengen Area, Russia, and Turkey
  • Citizenship in a country that is an official EU candidate
  • Full citizenship granted to the applicant and included family members

St. Lucia Citizenship-by-Investment Program

Situated in the tropical waters of the Eastern Caribbean, St. Lucia is a member of the UN and attracts foreign business and investment, especially in its international banking and tourism industries. Tourism is St. Lucia's main source of employment and its manufacturing sector is the most diverse in the region. The island's many attractions include national parks, a UNESCO World Heritage Site, and a drive-in volcano.

There are various criteria in order to qualify for citizenship, but applicants often consider the following: a purchase of real estate with a minimum value of USD 300,000, which must be held for a minimum period of five years, or a non-refundable contribution of USD 100,000 to the National Economic Fund

The key advantages applicants should consider are:

  • Visa-free or visa-on-arrival travel to 146 destinations, including Hong Kong, Singapore, the UK, and Europe's Schengen Area
  • No residence or visitation requirements
  • Attractive program and processing costs

Malta individual Investor Program

Malta is a progressive European nation that is steeped in tradition. The beautiful island nation has a wealth of architectural treasures, while simultaneously being a highly developed and respected European business center. Malta has one of the strongest passports in terms of travel freedom, offering visa-free or visa-on-arrival access to 184 destinations worldwide.

Approved applicants are expected to make a non-refundable contribution to the country's National Development and Social Fund and meet certain other requirements such as real estate ownership or lease, and an investment in a selection of Maltese financial instruments.

The key advantages applicants should consider are:

  • Visa-free or visa-on-arrival travel to 184 destinations including the USA
  • Citizenship that is transferable to future generations
  • Citizenship in a well-respected and stable EU country

Originally published May 26, 2020

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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