BEAUTY

MONEY TALK
FINANCE COLUMN
IT'S PERMANENT
Investing in a foreign country
in exchange for citizenship
Sven Roering is a Managing Partner at Tenzing
Pacific Investment Management. He holds an
Economics Degree from Rhodes University in
South Africa, and is a candidate in the Chartered
Financial Analyst (CFA) program, having
successfully completed level 1 and
is currently working towards the level 2 exam.
Dear Sven,
I am a 40-year-old South African who’s been working in Vietnam
for the last three years. I have been an expat for the last 10
years and have around 40 percent of my wealth sitting in South
Africa and the rest is held offshore. My contract with my current
company will come to an end in 22 months. I am not interested
in moving back to South Africa after my contract expires and am
interested in permanently immigrating to another country. I have
a high net worth and have been told that certain countries would
offer me permanent residence in exchange for investment into
specific projects. Is this true and, if so, could you explain?
YES, IT’S POSSIBLE
to obtain residency in certain
countries through investment into
their designated projects. Many
governments, in the quest to attract
foreign investment, have instituted
programs where foreigners, in
exchange for citizenship, can invest
into projects designated by a state
with the express purpose that those
funds will be used to create jobs
(usually 10 or more) and contribute
to the economic well-being of the
region. Popular programs are: the
US EB-5 program, Portugal’s Golden
Visa, Australia’s provisional investor
and investor retirement visas, and
I believe that Canada has a similar
program. Additionally, many European
nations offer residency in exchange
for purchasing a certain amount of
government bonds. You will also be
happy to know that as a South African
there is a service run by a company
called Cashkows who will assist you
with full financial emigration from
South Africa, as well as your tax
returns, while you are living abroad.
Since you are an English speaker,
and for the sake of simplicity, I will
provide brief details of the US EB-5
program as well as the Australian
provisional investor and retirement
visas. The US EB-5 program allows an
immigrant investor to qualify through
a USD1 million investment into a
commercial enterprise in the US. If
the investment is made into a targeted
employment area (an area suffering
from considerable unemployment),
the minimum investment will drop to
USD500,000. Basically, you will have
to invest into a property development
or, in some cases, a business center.
Because it’s the US, the process can be
quite stringent and you will be given
a “conditional” green card upon initial
investment, which will be upgraded
to an “unconditional” green card,
which gives you permanent residency
(i.e. the rights belonging to all US
citizens except for the right to vote)
approximately two years after the
initial investment. You will be able to
apply for citizenship five years after the
issue of the unconditional green card.
A great project set aside for this
specific program is the Brooks City
Base in San Antonio, Texas. The project
is an old air force base that is being
converted into a community with
apartment complexes and hotels. A
company facilitating these investments
is Hong Kong-based Ironwood
Advisors who make trips to see
investors in Vietnam on a regular basis.
Australia has two similar programs,
one designed for retirees (aged 55 or
older) and one for individuals 45 years
old or younger. Australia’s provisional
investor visa offers a gateway to
permanent residency, and after a
minimum of two years after initial
investment you will be eligible to apply
for a permanent business skills visa.
You will have to prove that you are
able to invest AUD1.5 million within
a reasonable amount of time into a
designated investment. The big bonus
is that your family will be able to
accompany you and will have access to
work and study rights.
Australia’s investor retirement
visa requires you to be 55 years or
older, have no dependents, and you
will need AUD750,000 which will
need to be transferred to Australia
within two years. You will also need to
prove you have access to net income
of at least AUD65,000 annually. I
couldn’t find any information relating
to how this will provide a path to
permanent residency, but you will be
able to extend the visa after the initial
four-year term upon proving that a
designated investment of AUD200,000
can be maintained.
The most important fact about the
programs discussed above is that these
are not investments in a traditional
sense. What I mean is that when you
invest the required capital you cannot
expect a return of say 10 percent per
year with the option of selling and
realizing profits whenever you please.
The liquidity of many of these projects
is often ambiguous. You are trading a
certain amount of capital with a state
in exchange for residency and a path to
citizenship, so you will have to think
about residency first and returns on
investment is secondary.
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