Looking for residency abroad?

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SIMON BROWN: I’m chatting with Dani van Vuuren, business development consultant at Sovereign Trust (SA). Dani, I appreciate the time. One of the issues these days is looking for residency abroad, and of course the old-fashioned way is get a job and the like and sort of do it in terms of emigration.

But there are easier ways, perhaps, financial ways one of them – a financial independent or passive-income programme. [From] having a look at the data you sent out, some of these numbers aren’t particularly high either.

There is a difference between your digital nomad visa and that of someone who is financially independent or receiving some kind of passive income from rental agreements.

DANI VAN VUUREN: Hi, Simon. Thank you for having me. You’re absolutely correct. I think one of the biggest misconceptions in the residency and citizenship space is that the only real option for me is to find some kind of employment abroad, perhaps take out a large amount of capital and purchase a property.

We’ve come to learn – and of course many South Africans have realised – that there are different routes. These are categorised in three main categories, one of them being financial independence or the passive-income route, which is quite popular because it means that I don’t have to take out a lot of capital. I’ve got some passive income that I can transfer monthly or annually to prove that I could look after myself in that jurisdiction, and I don’t have to be [that] invested in case I do want to come back.

SIMON BROWN: And importantly, this is passive income. So this wouldn’t be, as I understand, remote work. This would be proceeds, perhaps dividends from shares I own or something.

DANI VAN VUUREN: Absolutely. There is a difference between your digital nomad visa and that of someone who is financially independent or receiving some kind of passive income from rental agreements. Perhaps they have income from their business. So again, it also is geared predominantly towards clients who are looking to retire, and they’ve some investments that allow them to do that.

SIMON BROWN: Looking at them – and again you’re looking at Cyprus, Portugal, Greece, Spain, Mauritius, Thailand – they’re fairly generous. You can bring a spouse; that’s not unexpected. You can bring children, and some of them with some Ts and Cs if they’re older. But even parents. And in some cases very few, Portugal even, [include] the right to take local employment.

DANI VAN VUUREN: Absolutely. I think ‘generous’ is a good word to use there, Simon, because in many different retirement or visa applications for clients, they tend to say, Dani, we would need to look at what we do with my parents. Can we take employment? What about the children? So anyone who is whatever part of their lives at the moment in terms of residency and looking to go abroad. They are not just looking for themselves. They are looking for their families, their parents. They are even looking in terms of employment. They have staff here perhaps, or they would like to expand their business abroad, and that would allow them to do so because, like you said, Cyprus, Portugal, Greece, Spain, Mauritius, wherever we go, they do allow for that.

Of course you’re right, terms and conditions do apply, but they are really lenient and, again, progressive.

SIMON BROWN: We are talking of retirement here; we’re using that as an example, but it isn’t necessarily age-specific.

DANI VAN VUUREN: Absolutely. It’s not. And you’ll see with younger clients who perhaps have businesses, have interests, they want to go abroad, they want to have that residency option. [Among] the popular destinations of course [are] Mauritius or Portugal. They want to be able to work abroad. They [don’t necessarily want to] invest in that country; they’d rather have their investment somewhere else, maybe even locally, but they would like the opportunity to live there, work, perhaps even later get citizenship through their physical presence there.

SIMON BROWN: The other [thing] is the tax residency programme, which I had absolutely never heard of before. This is essentially where you give up as a taxpayer in South Africa – that’s a process, and again there are some Ts and Cs – and you become a taxpayer in one of these other markets. Malta, Portugal, Cyprus, for example, you sent out. And that again gives you the ability without necessarily the requirement to go and buy an expensive property.

DANI VAN VUUREN: Absolutely. And you’ll see that some of those options do include the opportunity to actually take local employment. So it might not necessarily be geared for someone who is in a retirement stage of their life. It could be for anyone who’s saying, I would like to live abroad, I want to be a tax resident somewhere else. I don’t necessarily want to exit as a South African tax resident, but I of course have the opportunity to, and I’d love to benefit from a more favourable or neutral tax jurisdiction where I can invest, live, and perhaps even stay for the rest of my life.

SIMON BROWN: What about potential changes to these? I know that there’ve been a lot of changes to the golden visas. If there are changes, is it fair to expect a person to be grandfathered? In other words, ‘You came in under a set of rules, and we’ll keep those rules for you’.

Some of those options do include the opportunity to actually take local employment.

DANI VAN VUUREN: It would depend. And first of all, you are correct in terms of the changes. It is something that we have to keep very close to as a group to ensure that we are ahead of the times when it comes to the changes. Because again, it’s at the behest of the government. So if that local government feels – like in Portugal they’ve had that major change recently – if they feel they want to make a change, we need to understand that and the clients need to be made aware of that.

But in terms of residency versus citizenship, that is important in terms of differentiating between those two, because residency is more of a temporary nature and that would be the golden key into getting that citizenship, perhaps, if that is allowed by the government. There are rules around that.

And then once you have that citizenship, you could of course extend that to your family and your dependants.

SIMON BROWN: How long is the application process? Different per country, I imagine, but [what is it] broadly, because I know someone who emigrated to Australia, and it was a multi-year process.

DANI VAN VUUREN: It does happen, Simon. I think it also depends [on] the extent of the people who you’re including, as in terms of your dependants. If you have a lot of dependants, the process might take longer. If you have a lot of business or financial interest in South Africa, perhaps abroad, that would also impact it. And of course we’re dealing with multi-jurisdictional governments at this point. So we would deal with how long it takes in South Africa to get what we need sorted, and how long it take if we go, for example, to Malta or to Cyprus. And for that, again, you could look at anything from four months to two years.

SIMON BROWN: Okay. So it can be a little bit chunky. But I take the point that there are multiple authorities involved. In terms of the actual process, I’m imagining there is a fair chunk of paperwork and expertise. Hence the likes of you and your team coming in, because I look at this and it looks simple on a piece of paper, but I imagine, particularly with the paperwork, dealing with governments is not quite so.

DANI VAN VUUREN: It’s not simple. I think the most important role is for us to have a consultation with a client to understand their long-term planning, Simon, because although you want to initiate an application to an authority abroad, it might not necessarily work in terms of your long-term strategy, your long-term planning. A lot of time is spent consulting with clients to ensure that this is what they want to do. Do they understand the long-term effect? And how can we ensure it’s as flexible as possible if there are any changes.

SIMON BROWN: That’s Dani van Vuuren, business development consultant at Sovereign Trust (SA). Dani, I appreciate the time.

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