The impact of Brexit in the migration industry

After more than three years of fierce negotiations in Brussels and political debate in the United Kingdom, Brexit has now become a reality. Without a doubt, it will redefine how Britain trades with the EU and the rest of the world.

While we look to a new era in UK-EU relations, let’s assess what options citizens have to maintain freedom of mobility in the long and short term.

Certainly, not everyone is fortunate to have family lineage from EU diasporas such as Ireland, Italy or Portugal, that would allow them to easily reclaim EU mobility and settlement rights. Luckily, however, there are a number of ways one can regain EU access and privileges in a post-Brexit world, including investment routes that will not only allow free movement but also provide tax advantages and succession planning strategies to shelter one from the uncertain decade that Brexit will most certainly bring.

Factors to consider are legacy, taxes and personal timeline. Interesting investment options exist within the EU but some investors may also like to look further afield to hedge their bets.

Traditionally many pensioners invested in real estate in Europe’s sunnier regions: France, Spain, Italy and Portugal. In a post-Brexit era, those investments will be less straightforward to acquire. Retirees, for example, will require proper residency status to enjoy their golden years in the sun.

With Brexit now underway, British nationals who continue to draw an income from their UK and international business operations will need to ready themselves for the harsher economic climate which the UK is likely to endure in the decade ahead.

How will the UK pay for its divorce from the EU and re-adjust to a new economic and political reality? Like in any separation, the journey will take time. First come the ‘extraction’ which is the hardest (and most expensive) part, followed by ‘re-alignment’ with its new trade arrangements and visa regimes. And when this ‘new reality’ begins to settle in and adjustments are finally made, we will be losing a decade.

However, resourceful clients need not fear, as there are a number of residency and citizenship solutions that can facilitate settlement rights in the EU. Indeed, within the European Union, a number of jurisdictions already offer solutions to non-EEA applicants. These will also become options for British nationals once the final stages of the divorce from the EU are in place.

Both Malta and Cyprus, for example, offer citizenship-by-investment programmes, that are the fastest and most expansive route to ensure EU settlement rights are retained. In Cyprus, the qualifying investment is 2 million euros with an additional requirement to make a government contribution of 150,000 euros. Malta’s Individual Investor Programme offers citizenship in return for a 650,000 euro government contribution, a real estate lease of at least 16,000 euros per annum or purchase of 350,000 euros, as well as a 150,000 euro investment in government bonds.

Similarly, Portugal offers the Non-Habitual Tax regime, which has been hugely popular with pensioners and retirees, by helping them shelters worldwide income for up to ten years. A less publicized but equally interesting offering for tax planning is available just 20km away from the French border in Jersey, a stunning island in the English Channel. Jersey residents pay a flat income tax of 20%, GST (Goods and Service Tax) is 5%. There are no capital gains, wealth or withholding taxes in Jersey, and corporate tax is 0% for most companies and only 10% for those in the financial services sector.

It is also worth considering Montenegro, a recent member of NATO and contender for accession to the EU as early as 2025. Their Citizenship-by-Investment Programme has launched requiring, depending on the selected region, a 250,000 euro to 450,000 euro investment in real estate and a 100,000 euro donation to the Government Fund of Montenegro. Residents can avail themselves of a special tax regime with 9 – 11% personal income tax, 5% tax on interest and 9% withholding tax on dividends and royalties for non-residents. Montenegro’s corporation tax is only 9%.

Further away, the British Overseas Territories of Anguilla and the Cayman Islands offer alternatives to those fearing adverse economic policies in the aftermath of Brexit. The Residence for Tax Purposes Programme in Anguilla entails an annual 75,000 dollars to fulfill worldwide taxation obligations. Anguilla does not levy tax on income, corporation, capital gains and inheritance. Additionally, the applicant must own and maintain real estate in excess of $400,000 and maintain links to the island with an annual administrative review process of the client’s status.

The Cayman Islands offers four options for residency by investment with the two most popular being via the purchase of real estate, however options via business investment are also available. The first option is a 25-year renewable residency permit for qualifying investors who purchase a property with a minimum value of $1.2 million in Cayman Islands real estate. This permit requires the investor to spend 30 days each year in the Cayman Islands. The second option is a permanent residency certificate. This requires one day of residency annually and the opportunity to apply for a British Overseas Territory passport after five years of residency. This option requires a minimum investment of $2.4 million in Cayman Island real estate.

The Cayman Islands is a tax-neutral British Overseas Territory – no corporate, personal, capital gains, inheritance, property, or sales (VAT) taxes. There are no restrictions on foreign ownership of land and no alien land holding licenses are required. The Cayman Islands feature modern infrastructure, over 55 nonstop weekly flights from the USA and Canada and one of the highest GDP per capita rates in the world.

More than ever, it is imperative to plan around the uncertainties that Brexit continues to bring and the sooner people accept this ten-year re-alignment, the sooner an exit to Brexit can begin.

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About the Author

Christopher Willis
Christopher Willis

Christopher Willis serves as the managing director at Latitude Consultancy, a global immigration advisory firm headquartered in Jersey, Channel Islands, with more than 20 offices across the world.

Latitude Consultancy provides immigration solutions to high net worth individuals who seek to relocate to Europe, North America and the Caribbean. The company also advises governments on the planning, marketing, engagement and management of residency- and citizenship-by-investment programs.

With 25 years of experience in the immigration industry, Willis spearheads the government advisory and program delivery efforts of Latitude. He currently focuses on residency and citizenship solutions offered by Caribbean countries.

Prior to joining Latitude, Willis served as a managing partner at Henley & Partners. He also worked as a director at Canadian Visa Specialist, where he advised on the visa applications and immigration process of Canada. He also founded Willis Brazolot & Co., an immigration consultancy concentrating on immigration and citizenship of Canada.

Willis is a member of the Immigration Consultants of Canada Regulatory Council and the Canadian Association of Professional Immigration Consultants.

Willis holds a bachelor’s degree from Concordia University. He frequently authors and presents on the topic of immigration.

Willis is fluent in English and French.

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