Moving overseas? High net worth community takes note

06 Jan

High net worth dual citizenOne of the listservs which I access, WealthManagement.com, recently published an article titled “In Trump’s America, a Second Passport May Be the Best HNW Insurance Plan.” For those not accustomed to the standard abbreviations, HNW stands for High Net Worth. The article was subtitled, “f clients are motivated to leave the U.S., attractive new destinations await them.” In other words, if you have enough money, you can leave the country.

The article cited the now well known news that, when reports broke that “business mogul Donald Trump” would become the 45th president of the U.S. the Canadian government immigration site crashed as thousands of Americans sought ways out of the country. It then proceeded to state that, even though Canada has become the go to destination for those who wish to flee the United States, high taxes and strict immigration policies might limit that option. The heart of the article went on to discuss a term referenced as a means to obtain second citizenship – that is, if you have money – known as Citizenship by Investment Programs.

Note that what follows is based on another’s research and would need to be verified independently. However, regardless what you think about leaving the country or the results of the recent presidential election, the concept of Citizenship By Investment is an intriguing one. Countries hard pressed for cash and wanting to bolster their economies might take the next step above and beyond reducing or waiving taxes or subsidizing foreign investment projects and go directly to attracting wealthy individuals by giving them a buy-in.

Countries noted in the article included Dominica and St. Kitts and Nevis, both Caribbean island nations. At first I thought Dominica referred to the Dominican Republic. It did not. There actually is a small island nation with population of about 72,000 named Dominica. St. Kitts and Nevis have a population of about 42,700. By comparison, Chester County has a population of over half a million. Both Dominica and St.Kitts/Nevis offer passports with visa free travel to multiple other countries including some in Europe. Dominica’s program begins at an investment of $100,000 US.

My further research revealed that, although Canada does not offer citizenship by investment per se it does have programs that fast track applications for Permanent Residency based on investment. Under the Canada Business Investor Fast Tract Program, if you currently own a business and establish a branch of the company in Canada and have sufficient business experience, you, as the owner of your company, can move to Canada with your family and do business there. The total minimum cost is $170,000 Canadian.

Under the Quebec Immigrant Investor Program for Permanent Residency the minimum investment needed is $800,000 Canadian which has to be invested on fully guaranteed interest free government term deposit for 5 years. The applicant must have net worth of $1.6 million Canadian. Once approved or on receiving Canadian permanent residency, you do not need to live in Quebec. Financing can be arranged.

Are there downsides? Sure. Who really wants to leave the country? You might or might not be able to have dual citizenship and you have been committed to American all your life. By the way, Social Security can continue to be paid to you overseas but not Medicare health insurance.

Also, there are financial obstacles if the others are not enough for you. Under FACTA, the Foreign Account Tax Compliance Act, banks worldwide are required to report to U.S. authorities on accounts held by Americans abroad. Americans as U.S. Citizens must pay their U.S. tax even if they live abroad. You could renounce citizenship to avoid taxes but that comes at a cost – both emotional, patriotic and financial as well. Also, the country you move to would have its own taxes, its own rules and regulations and may well be in distress or experiencing unrest of its own. Canada looks attractive to us because it is close and seems like a haven of peace after the turmoil we experienced over the past year with the presidential elections.

We wish you a Happy New Year. Hang in there. We need you maybe more than ever.

Janet Colliton, Esq. limits her practice, Colliton Elder Law Assocs, PC, to elder law, Medicaid, Medicare, benefits, life care, special needs, and estate planning and estate administration with offices at 790 East Market St., Ste. 250, West Chester, PA 19382, 610-436-6674, colliton@collitonlaw.com. She is a member of the National Academy of Elder Law Attorneys and, with Jeffrey Jones, CSA, co-founder of Life Transition Services, LLC, a service for families with long term care needs.

Tune in on Wednesdays at 4:00pm to radio WCHE 1520, “50+ Planning Ahead,” with Janet Colliton, Colliton Elder Law Associates, and Phil McFadden, Home Instead Senior Care. Live streaming is available at that time on www.wche1520.com.

Photo credit: catherinecronin via Visualhunt.com / CC BY-SA

Tags: , , ,

No comments yet.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.