Golden visas present a unique opportunity for individuals to obtain residency or citizenship in a foreign country through financial investment. This option allows people to establish their lives abroad, whether for work, retirement, or simply a lifestyle change. It also provides the possibility of relocating to a country with favourable tax regulations, either immediately or as part of a long-term retirement plan.
One of the significant advantages of golden visas is that you don’t need to be extraordinarily wealthy to benefit from them. These visa programmes offer various lifestyle and financial benefits, including the potential for citizenship after a certain period. In countries like Portugal, Greece, and Italy, for instance, applicants can seek citizenship after five, seven, and ten years, respectively.
In addition to offering a new way of life, golden visas often come with tax incentives. These benefits include reduced income tax rates for foreign investors and, in some cases, exemption from taxes on worldwide income. For example, Portugal’s non-habitual residency (NHR) programme exempts foreign-sourced income from taxation. There are also advantages regarding wealth and inheritance taxes, with some countries imposing little to no taxes on wealth, inheritance, or gifts. Golden visa holders may also benefit from reduced or no capital gains tax, making estate planning more efficient. Double taxation treaties further ensure that individuals are not taxed twice on the same income, which can be a significant financial relief.
Currently, more than 100 countries around the world offer golden visa programmes. Within the European Union, over 60% of countries have active golden visa schemes, including popular destinations such as Portugal, Spain, Greece, and Italy. Beyond the EU, countries like Australia, Canada, and the United States also provide well-known golden visa opportunities. The process can be complex, and seeking advice from professional advisors is highly recommended. Experts, such as those at nebaprivateclients.com or nebawealth.com, can offer personalised advice, help with tax planning, ensure compliance with legal requirements, and guide individuals through the process of obtaining citizenship, if necessary. These professionals can also help manage risks, such as changes in local laws, making the process smoother and avoiding potentially costly mistakes.
In many countries, one of the most common ways to qualify for a golden visa is through investment in real estate, often using a personal residence to meet the investment criteria. However, those with ties to the UK should keep the 183-day rule in mind, particularly after the abolishment of the UK’s non-domiciled status. It’s crucial to track the time spent in the UK to avoid becoming a tax resident again. Spending more than 90 days in the UK over four consecutive tax years could contribute to the re-establishment of residency, depending on other factors.
It is also essential to understand that merely spending time abroad does not necessarily change one’s domicile. Moving from the UK requires more than time spent away; it involves proving a permanent relocation to another country. Generally, spending three to five years abroad can help strengthen the case for a domicile change, but actions such as selling UK property, relocating personal and financial affairs, establishing ties in the new country, and making a will there all demonstrate the intention of a permanent move. Crucially, intent to remain in the new country indefinitely is a key factor. If there’s a plan to return to the UK, you may still be considered UK domiciled.
Holding a golden visa, while beneficial, does not automatically sever ties with the UK for tax purposes. Changing your domicile is necessary to avoid UK inheritance tax, which applies to the entire worldwide estate of UK-domiciled individuals. Although a golden visa is an excellent first step, further legal and financial steps must be taken to fully escape the reach of UK inheritance tax. Discussing your situation with experts, such as those at nebaprivateclients.com or nebawealth.com, can help you navigate this complex process.
While golden visas offer a path to residency and the potential for citizenship, they are also instrumental in tax planning and lifestyle changes. It is important to consult professionals to ensure that your financial and residency goals align with the legal frameworks of your chosen country.
TEAM plc (LON:TEAM) is building a new wealth, asset management and complementary financial services group. With a focus on the UK, Crown Dependencies and International Finance Centres, the strategy is to build local businesses of scale around TEAM’s core skill of providing investment management services.
