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The comments are many.
It is just does not seem fair, many long-term residents have waited forever just to obtain the right to live here. Others have greatly contributed to the economy, but have no rights at all; they are just considered plain old guest workers. It is too overcrowded now the country is way too small. The scheme is, in effect, selling away our birthright. Who is going to pay that kind of money to come here and lord it over every else? The island is now for sale. I dont see how they (the wealthy) can provide any jobs for the existing residents. They will dilute the vote. It is possible that the programme could be invalidated if a different party is voted into power.
Of course, there are probably more comments, both positive and negative, written in the press and shared in the community. However, individual investor programs offered by various countries are all over the internet. So, while you may have thought so, now you realise that these comments and this information is not just about Bermuda, not at all. It is about Malta, in particular where pushback on the Individual Investor Program has been reported by the opposition party, but also the United Kingdom, Canada, Latvia, Portugal, Cyprus, Greece, Spain, Australia, Ireland, Bulgaria, Austria, Hong Kong, Singapore and others all offering various forms of Individual Investor Programs, and those who disagree with the concept.
What is included in these new golden passport / visa programs?
First of all, cash into the countrys coffers. Depending upon the country initiative offered, that amount can be anywhere from an estimated USD 25,000 to a USD three million or more. Varying opportunities for a new life and residence are offered to the investor who can afford these fees, among them:
n Repatriation of taxes from a foreign company and receive a substantial refund on the taxed income
n lower taxes on pensions if the investor also purchases a property with a minimum threshold value
n special tiered tax benefits for chief executive officers
n individuals who deem their home countries less than desirable from a personal safety perspective and want a calm stabile environment
right to live in the country, just part of the year, if so desired, with very minimal residency requirements
right to bring spouses and dependent children with the applicant, while some countries allow further extended family members for a price
right to a temporary visa for a certain period of time, generally, one five years with renewal rights
Portugal has been particularly motivated in seeking high net worth individuals to reside therein by transferring capital, creating jobs through supporting businesses, or purchasing real estate. Their programme is called the Golden Residence Permit for Investment Activity. It allows for family regrouping, gaining access to permanent residence and Portuguese citizenship according to current legal provisions, stated SEF, the Portuguese Immigration and Borders Service. According to the site Start-up Visa at December 02, 2013, Portugal has issued 318 Golden Visas and say that they plan on issuing about 400 per year.
Unemployment rates in Europe.
None of the current information perused in various European jurisdictions touting these aggressive investor programs mentioned joblessness in relationship to contributing to new businesses or tied to hiring individuals. The correlation between unemployment and new direct foreign investment programs seems pretty significant though and cannot be ignored from an overall perspective.
Eurostat, which is the Directorate-General of the European Commission, generates statistical information to the institutions of the European Union. It tracks various information relative to economic operations, particularly unemployment information. As at October 31, 2013, the European area unemployment seasonally-adjusted rate was stable at rate of 12.2 percent, of course, given that is an average, some EU Member States had much higher unemployment, particularly Spain 26.6 percent and Greece at 27.6 percent, while the more northern states of Germany, Austria and Luxembourg reported lower unemployment numbers (average around 5.0 percent) than even the United States. Greece, and Spain along with Portugal are aggressively pitching Individual Investor Programs. Portugals unemployment rate was lower at 16.4 percent, but when the under-25 year olds unable to find a job are accounted for separately, their unemployment rate stands at 39.3 percent. Almost 40 percent of younger Portuguese resident workers cannot find work.
Portugals Golden Visa programme started in 2012; thus, with 318 visas through early December of 2013 at EUR 500,000 per visa or possibly more if the applicant invests in Portugal, or creates a business employing ten jobs which equals a tidy new cash flow of somewhere between 160 and 300 million euros a year. That is a flat amount, not accounting for the multiplier effect as those new euros flow through the countrys economy.
Portugal has one more ace in the hole. A European Common Market passport for those who pass and contribute to the economy. Free movement among all members of the European Union.
How good can it get a second passport? Interest in these programs is reported to be high.
How can Bermuda compare to these initiatives? We are not going to offer Bermuda status, it appears given current feedback. What can we do to bring everyone on board, if we think a Golden Residence Program will work for us?
One thing we know, you cannot ignore the direct foreign direct investment numbers.
All cash, all upfront.
Sources: Matthew Vella, Maltas Golden Visa, Octoberb17, 2013
Laura Latham, European States Dangle Visas for Foreigners, NYT, October 10, 2013
Martha Harris Myron CPA PFS CFP (USA) JP is a Bermudian journalist and cross border financial planning specialist focused on offshore financial perspectives, particularly the challenges for international citizens living, working and straddling the North Atlantic pond: United States, Canada, United Kingdom, Europe, and the island of Bermuda, the premier international finance centre.
President: Pondstraddler Life ™ Consultancy
www.pondstraddler.com Contact firstname.lastname@example.org
The opinions expressed in this article are those of the author alone, and not The Royal Gazette. This article is intended for general educational purposes only and cannot be used for specific individual tax, investment, or retirement advice, nor can this article be relied upon for any personal financial planning purposes.
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Published Dec 14, 2013 at 8:00 am
(Updated Dec 13, 2013 at 5:46 pm)
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