Malta Citizenship by Naturalisation for Exceptional Services by Direct Investment – helping Maltese Citizens

Background

In 2020 the Maltese government updated the citizenship legislation relating to citizenship by; birth, registration, naturalisation, dual and multiple citizenships, and exceptional services by direct investment.

A new residency route which can lead to Citizenship in Malta, was the outcome.

What are the Details of this New Residency Route?

  • ‘Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment,’ provides foreign individuals and their families, who contribute to the economic development of Malta, a route to become citizens of Malta.

Malta is a member of the European Union as well as a Schengen Member State, and its citizens can travel, live, work, study and set up business in any of the member countries, with visa-free travel rights to more than 180 countries.

Community Malta Agency (‘Agency’), is the authorised Maltese Government Agency responsible for administering the processing of all applications leading to Maltese Citizenship.

What are the Criteria?

To apply for Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment, an applicant needs; to invest in the Maltese economy directly, make a donation and hold residential property.

Direct Investment

Applicants, who can prove residency status in Malta for 36 months, prior to the naturalisation, are required to make a direct investment of €600,000. Whilst applicants who can prove residency status in Malta for at least 12 months, prior to naturalisation, are required to make a direct investment of €750,000.

If the applicant is accompanied by qualifying dependants, a further investment of €50,000 per dependant needs to be made. 

An applicant cannot apply for a certificate of citizenship by naturalisation for exceptional services, before he/she has proved that he/she has become a resident of Malta for the minimum period required.

Philanthropic Nature of Direct Investment

Prior to the issue of a certificate of Maltese citizenship, the applicant must donate a minimum €10,000 to a registered philanthropic, cultural, sport, scientific, animal welfare or artistic non-governmental organisation or society, or as otherwise approved by the Agency.

In addition, the main direct investment made by each applicant will be used by the Government to finance projects coordinated by The National Development and Social Fund, across Malta.

Projects that Benefit from The National Development and Social Fund

The National Development and Social Fund agency (‘Fund’) was established to manage and administer 70% of the contributions received from the Individual Investor Programme of the Republic of Malta, set up under the Malta Citizenship Act Cap.188.

The Fund’s mission is to; contribute towards, promote and support significant projects and initiatives of national importance and of public interest, which are intended to develop and improve the economy, public services, and the general well-being of present and future generations.

Between July 2018 and June 2019, the total contributions, including property purchases, rents, and investments, collected through the Programme amounted to more than €271 million. This equates to approximately 2.11% of Malta’s GDP in the same period. The total amount collected, since the changes implemented in the 2020 citizenship legislation, exceed €930 million. Of these funds, approximately €515 million have been allocated to the National Development and Social Fund.

More Details about the Projects

The fund has invested in the following projects:

  • €10 million to upgrade eight health centres and 54 clinics. Previously, the Fund awarded a grant of €950,000 to Mater Dei Hospital’s Cardiology Department to upgrade its two catheterisation suites, and €5 million to Puttinu Cares to purchase apartments for cancer patients and their families in London.
  • In Feb 2019, a memorandum was signed to commit €50 million towards a social housing project. Five hundred new social housing units to be built, across 22 different sites. These sites are spread over 12 localities; Paola, Kirkop, Rabat, Żabbar, Mellieħa, Luqa, Żurrieq, Żebbuġ, Qormi, Siġġiewi, Qrendi and Marsascala.
  • In Ħamrun, a planned roof garden of around 500m2, with more than 2,500 trees, shrubs and plants including mature carob, olive and oak trees, will be featured in the square. This garden will absorb around 900 kilograms of carbon dioxide from the atmosphere, whilst producing 660 kilograms of oxygen.
  • Other investments allocated by the Fund include;  €1.5 million for Caritas, a €1.5 million investment in artistic heritage, and €3.5 million in Urban Green projects.

In 2020, the Fund received €27.8 million from Community Malta Agency, with the total proceeds received from inception being €599.8 million.

Investment in Education

An agreement was signed at the Wardija Resource Centre, part of the Maria Regina College, offering special education beyond the compulsory school age. With an investment of around €40,000, teaching will take place in a multisensory room, where skills related to students’ senses will be developed.

In addition, in collaboration with the University of Malta, a new garden will be planted to create a habitat for endemic butterflies and to enhance their reproduction chances. Another section is to have an apiary where students can learn and enjoy their free time.

At St Paul’s Bay’s Primary School, a room dedicated to creativity and innovation will be launched with an investment of €35,000. Teaching will be undertaken in interdisciplinary ways, mixing; science, technology, engineering, and the arts to increase students’ scientific, literacy and critical thinking.

Finally, at Naxxar’s Senior School, an investment of around €30,000 will be used for new curtains and a mechanised projector for the school’s stage. This is to encourage students to participate in visual and artistic activities, as this will help them learn to think creatively and develop critical thinking, which can be applied in all areas of learning.

Quota for the New Residency Route

It is important to be aware that a maximum quota of 400 applicants per year has been set, with a total maximum number of applicants set at 1,500, for the entire scheme.

Additional Information

If you would like further information regarding Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment, please contact the Dixcart office in Malta: advice.malta@dixcart.com or your usual Dixcart contact.

Dixcart Management Malta Limited Licence Number: AKM-DIXC-22

Property Taxes in Portugal – The Importance of Getting it Right

Popularity of Portuguese Property

Portugal features as an all-time favourite with picturesque views of ancient and new buildings on the sunny hills of this new favourite European gem. A zoomed in view of these include glazed blue ceramic tiles, or azulejos, covering the exterior walls of buildings.

Property has recorded double digit percentage growth in various sectors listed by numerous real estate service companies in recent years and the expectation is that this will continue – with an increased demand and reduced supply than previously seen.

What is an interesting misconception is that property prices are driven predominantly by the Golden Visa program – in actual fact, the Portuguese Golden Visa accounts for an insignificant portion of property purchases, when considered in comparison to total property purchases in Portugal.

This reflects that there are various factors in Portugal influencing properties prices, including: the fact that Portugal is the new acclaimed California, the new European Silicon Valley, it is ranked one of the best places to live and work in the world, it is an attraction magnet for digital nomads, as well as offering a 10-year tax holiday for the affluent, and there is more.

Property has always been a favourable investment class for many – and that is no different now. This raises the importance of understanding the related tax consequences for holding property in Portugal.

Below Dixcart have summarised some of the tax implications applicable in Portugal.

What are the Tax Consequences for My Rental Income?

Rental income, for individuals is taxed at a flat rate of 28% – for both resident and non-resident Portuguese holders of property. It is worth noting that residents may use the marginal scale rates if lower – although it is unlikely they will be able to do so.

Qualifying expenses may be used to reduce the taxable income due – provided it forms part of the income producing activity.

Corporate tax rates for rental income depend on residency status: non-resident entities may be subject to 25% tax, whereas local Portuguese companies will be subject to tax at rates between 19% to 21% in mainland Portugal and 11.9% to 14.7% for properties located in the autonomous region of Madeira.

When is Stamp Duty Applicable?

Stamp duty is applicable on a variety of transactions in Portugal – this may occur when a property is inherited or when a property is purchased. Please refer below for more details.

What Inheritance Tax Implications Exist for Property (or is it Stamp Duty that Applies)?

Although inheritance tax is not applicable in Portugal, stamp duty does apply.

For the purposes of stamp duty, inheritance or gifts may fall into one of two categories – those which are exempt, and those taxed at a flat rate of 10%. Inheritances by close relatives, such as parents, children and spouses, are exempt from stamp duty. All other inheritances and gifts are taxed at a flat stamp duty rate of 10%.

Stamp duty is payable for the respective property, even if the recipient does not live in Portugal.

If you are a UK domicile, your Portugal property will form part of your UK estate for UK inheritance tax purposes.

Stamp Duty on the Purchase of a Property

Stamp duty on the purchase of a property is charged at a rate of 0.8% at the higher of the purchase price or VPT (the rateable value, attributed by the tax authorities). The VPT in most cases is much lower than the actual purchase price of the property.

The purchaser must pay this duty, prior to signing the final deed, and proof of payment will need to be provided to the notary.

VAT may be applicable on the purchase of new builds in particular situations.

Property Transfer Tax

Property transfer tax, namely IMT (Imposto Municipal sobre Transmissões Onerosas de Imóveis), is applicable each time ownership is transferred. The tax is required to be paid by the purchaser prior to the final deed of sale being signed (as the original copy of proof of payment needs to be shown to the notary at the time of the property exchange).

The tax paid, is calculated on the higher of the purchase price or the VPT.

The property transfer tax rate is largely dependent on the ultimate use of the property and whether it is your first or second home, with the rates varying between 0% and 6%.

Annual Municipal Property Tax (IMI)

Annual municipal property tax, or IMI (Imposto Municipal sobre Imóveis), is payable by the person who is the property owner as at 31 December of the previous year, and is based on the VPT. The rate applied ranges from 0.3% to 0.8%, and is dependent on whether the property type is classified as urban or rural (classified by the Portuguese tax authorities based on the location of the property). Note that any investor or company located in a blacklisted tax jurisdiction, in accordance with the Portuguese tax authority, will be subject to a flat rate of 7.5% IMI.

An additional annual municipal property tax, namely AIMI (Adicional ao IMI), is chargeable for any VPT value exceeding €600,000, for all residential properties and construction plots, at a rate of 1%. Thus, the first €600,000 will be subject to the IMI at the respective IMI rate, and the excess value above €600,000 will be subject to AIMI at rates that vary between 0.4% and 1.5%.

Please note that AIMI is not only considered for a single property but considered per owner and therefore, if more than one property is held, the cumulative VPT needs to be considered. If the cumulative VPT value of all properties held by a single owner exceed €600,000, AIMI will be applicable on the value of the properties held, exceeding this threshold.

What Tax Consequences are Applicable Upon the Sale of a Property?

Capital gains tax is applicable on the sale of a property, unless purchased before 1989.

The tax consequences vary dependent on whether you are resident or non-resident. In addition, the use of the property and the way that the proceeds from the sale are utilised are paramount, as this may have a significant impact on the related tax consequences applicable.

The tax is calculated on the difference between the selling price and the acquisition value (adjusted for inflation rates, net of documented costs incurred when the property was acquired, coupled with any capital improvements within the last 12 preceding years of the sale).

As a Portuguese tax resident, 50% of the gain is required to be paid. If the property was held for a period of two years or more, inflation relief may also be applicable. Capital gains, on your property, are added to your other annual income and are taxed at marginal tax rates of up to 48%.

It is worth noting that gains resulting from the sale of a primary residence are exempt for residents, if you reinvest all of the proceeds (net of any mortgage on the property), in another main home in Portugal or the EU/EEA, before the property is sold (a window of up to 24 months), or within 36 months of the disposal of the property, provided you live in the new property, within 6 months of the purchase.

Capital gains are taxed at 28% for non-residents individuals and 25% for non-resident companies.

However, the tax consequences in Portugal are not the only consideration to bear in mind. One also needs to consider the double taxation treaty and local laws and regulations applicable in the country of tax residency.

A typical example of this for a UK resident, is the fact that UK tax residents also pay tax on the gain from the Portuguese property in the UK, however, under the double taxation treaty, any tax paid in Portugal may be credited against the tax due in the UK.

Is there a Preferred Structure to Hold Property in Portugal?

A topical query – what is the most preferred and tax efficient structure to hold property in Portugal?

Although the answer may vary dependent on objectives and circumstances from one investor to the next, as well as the purpose for such properties, it is worth noting that as a non-tax resident investor wishing to invest in property to earn rental income, holding such a structure through a Portuguese company may be more beneficial with tax rates varying between 19% to 21% and 11.9% to 14.7%, for properties located in Portugal mainland and the autonomous region of Madeira respectively, in comparison to the flat rate of 25% for non-resident entities.

For residents, holding a primary residence in their personal capacity, may be more beneficial from a capital gain point of view. Thus, each situation needs to be considered on a case-by-case basis.

Other considerations, however, need to be taken into account, such as the operational costs for running a company and ensuring appropriate substance exists. The cost of holding a property through a corporate structure may thus not exceed the benefit in all circumstances.

Alternative qualitative benefits may include the fact that corporate structures provide an extra layer of asset protection, which may be considered invaluable for many individuals located in jurisdictions exposed to considerable financial and other types of risk.

Summary of Property Tax Consequences

To summarise the tax and costs applicable for purchasers, owners, sellers and others, as discussed above, please refer below:

Purchaser:Owner:
IMT (Property Transfer Tax)Stamp DutyNotary/Registration CostsLegal expensesIMI (Annual Municipal Tax)AIMI (in addition to IMI)Running costs (such as water and electricity)
Seller:Others:
Capital gainsCommission to real estate agencyInheritance tax

The related tax rates may be summarised as follows:

Individuals
 ResidentsNon-Residents
Capital Gains TaxPrimary residence may be subject to exemptionSecond property will be taxed at 28%28%
Rental IncomeLower of 28%; orMarginal tax rate.28%
Companies
 ResidentNon-Resident
Capital Gains Tax28%25%
Rental IncomeRespective company tax rate, namely: Madeira: 11.9% to 14.7%Portugal: 19% to 21%25%

Why is it Important to Engage with Dixcart?

It is not just the Portuguese tax considerations on properties, largely outlined above, but also the impact from where you may be tax resident and/or domiciled, that need to be considered. Although property is typically taxed at source, double taxation treaties and double tax relief need to be considered.

A typical example is the fact that UK residents will also pay tax in the UK and this will be calculated based on UK property tax rules, which may be different to those in Portugal.  They are likely to be able to offset the Portuguese tax actually paid against the UK liability to avoid double taxation, but if the UK tax is higher, further tax will be due in the UK. Dixcart will be able to assist in this regard and to help make you aware of your obligations and filing requirements.

How else may Dixcart Assist?

Dixcart Portugal have a team of experienced professionals who may assist with various aspects regarding your property; efficient tax planning, legal support (for the sale or purchase of a property), accounting and tax support and the incorporation and maintenance of companies.

Further to this, if you would like a deemed tax calculation to be performed, you may reach out to our offices in Portugal and/or Madeira for this information: advice.portugal@dixcart.com

Dixcart have helped many with this service and look forward to assisting you with your next property advice and/or transaction.

UK High Potential Individual (HPI) Visa – What You Need to Know

The High Potential Individual (HPI) visa is designed to attract top global graduates from prestigious universities around the work, who want to work, or look for work in the UK, following the successful completion of an eligible course of study equivalent to a UK bachelor’s degree level or above. The study must have been with an institution listed on the Global Universities List, the table of global universities that will be accepted for this visa route as awarding institutions, which is updated regularly.

The new High Potential Individual route, launched on 30 May 2022, is an unsponsored route, granted for 2 years (Bachelors and Masters holders), or 3 years (holders of a PhD).

Eligibility Requirements

  • The HPI is based on a points-based system. The applicant needs to obtain 70 points:
    • 50 points: The applicant must, in the 5 years immediately before the date of the application, have been awarded an overseas degree level academic qualification which ECCTIS confirms meets, or exceeds, the recognised standard of a UK bachelor’s or UK postgraduate degree. From an institution listed on the Global Universities List.
    • 10 points: English Language requirement, in all 4 components (reading, writing, speaking and listening), of at least level B1.
    • 10 points: Financial requirement, applicants must be able to demonstrate that they can support themselves within the UK, with a minimum cash fund of £1,270. Applicants who have lived in the UK for at least 12 months under another immigration category, do not have to meet the financial requirement.
  • If the applicant has, in the last 12 months before the date of application, received an award from a Government or international scholarship agency covering both fees and living costs for study in the UK, they must provide written consent to the application from that Government or agency.
  • The applicant must not have been previously granted permission under the Student Doctorate Extension Scheme, as a Graduate or as a High Potential Individual.

Dependants

A High Potential Individual can bring their dependant partner and children (under the age of 18) to the UK.

Staying Longer in the UK

The High Potential Individual route is not a route to settlement. A High Potential Individual is not able to extend their visa. However, they may be able to switch to a different visa instead, for example a Skilled Worker visa, Start-up visa, Innovator visa, or Exceptional Talent visa.

Additional Information

If you have any questions and/or would like tailored advice on any UK immigration matter, please speak to us at: advice.uk@dixcart.com, or to your usual Dixcart contact.

Switzerland – Could this be your Next Move?

Switzerland is an enchanting country, blessed with spectacular hiking and skiing trails, beautiful rivers and lakes, picturesque villages, Swiss festivals throughout the year, and, of course, the spectacular Swiss Alps. It appears on almost every bucket list of places to visit but has succeeded in not feeling over-commercialised – even with the tourists flocking to the country to try the world-famous Swiss chocolates.

Switzerland features almost at the top of the list of most attractive countries for high-net-worth individuals to live. It is one of the world’s wealthiest countries and is also known for its impartiality and neutrality.

Switzerland offers an exceptionally high standard of living, first-rate health service, outstanding education system, and boasts a plethora of employment opportunities.

Switzerland is also ideally situated for ease of travel; one of the many reasons high-net-worth individuals choose to relocate here. Perfectly situated in the middle of Europe means moving around could not be easier, especially for individuals who regularly travel, internationally.

Swiss Residence

There are no restrictions imposed on permanent residence for EU/EFTA nationals and these individuals enjoy priority access to the labour market. Should an EU/EFTA citizen wish to live and work in Switzerland, they can freely enter the country but will need a work permit to stay more than 3 months.

Regarding EU/EFTA nationals who do not want to work in Switzerland, the process is even more straightforward. Individuals must show they have sufficient funds to live in Switzerland and take out Swiss health and accident insurance.

The process is a bit longer for non-EU and non-EFTA (European Union Free Trade Association) nationals. Those who wish to live and work in Switzerland are allowed to enter the Swiss labour market, but must be appropriately qualified (such as managers, specialists, and those with higher education qualifications). They will also need to be registered with the Swiss authorities in order to obtain a work visa, and they will need to apply for an entry visa from their home country.

Non-EU/EFTA nationals who want to move to Switzerland, but not to work, are divided into two age categories. Depending on which category the individual falls into (over 55 or under 55), certain criteria must be met (more information can be provided on request: advice.switzerland@dixcart.com).

Taxation in Switzerland

One of the greatest motivations for moving to Switzerland is the attractive tax regime available to individuals who choose to live there. Switzerland is divided into 26 cantons and each canton has its own cantonal and federal taxes that generally impose the following taxes: income, net wealth, and real estate.

A significant advantage of the Swiss tax regime is that the transfer of assets in Switzerland, before death (as a gift), or on death, to a spouse, or to children and/or grandchildren is exempt from gift and inheritance tax, in most cantons. In addition, capital gains are generally also tax free, except in the case of real estate.

The federal and cantonal tax laws of most cantons provide for a special Lump Sum Tax Regime for foreigners who move to Switzerland for the first time, or after an absence of ten years, and who will not be employed or commercially active in Switzerland. It is an extremely attractive tax regime as it enables individuals to manage their worldwide investments from Switzerland.

Individuals benefiting from the Lump Sum System of Taxation are not subject to Swiss taxation on their worldwide income and net wealth, but on their worldwide expenditure (living expenses). The minimum requirement for calculating income tax based on expenses for individuals with their own household, is the equivalent of seven times the annual rental value of their principle residence in Switzerland. In addition, a minimum taxable income of CHF 400,000 is assumed for direct federal taxation. Cantons may also define minimum expense thresholds, but the amount is at their own discretion. Some cantons have already stated their minimum threshold amounts and these will vary from canton to canton.

Living in Switzerland

Although Switzerland has a variety of beautiful towns and alpine villages to live in, expats and high-net-worth individuals are mainly drawn to a few specific cities. At a glance, these are Zürich, Geneva, Bern and Lugano.

Geneva and Zürich are the biggest cities due to their popularity as centres for international business and finance. Lugano is located in Ticino, the third most popular canton, as it is close to Italy and has a Mediterranean culture many expats enjoy.

Geneva

Geneva is known as the ‘international city’ in Switzerland. This is due to the high number of expats, the UN, banks, commodity companies, private wealth companies, as well as other international companies. Many businesses have set up head offices in Geneva. However, the main attraction for individuals, continues to be the fact that it is in the French part of the country, has a well-looked-after old town full of history and culture and boasts Lake Geneva, with a magnificent water fountain which reaches 140 meters into the air.

Geneva also has fantastic connections to the rest of the world, with a large international airport and connections to the Swiss and French rail and motorway systems.

In the winter months, residents in Geneva also have very easy access to the Alp’s best ski resorts.

Zürich

Zürich is not the capital of Switzerland, but it is the largest city, with 1.3 million people within the canton; an estimated 30% of the residents in Zürich are foreign nationals. Zürich is known as the Swiss financial capital and is home to many international businesses, especially banks. Even though it gives the image of high-rise buildings and a city lifestyle, Zürich has a beautiful and historical old town, and an abundance of museums, art galleries and restaurants.  Of course, you are also never too far from the lakes, hiking trails and ski slopes if you love being outdoors.

Lugano and the Canton of Ticino

The canton of Ticino is the southernmost canton of Switzerland and borders the canton of Uri to the north. The Italian-speaking region of Ticino is popular for its flair (due to its proximity to Italy) and fantastic weather.

Residents enjoy a snowy winter but in the summer months, Ticino opens its doors to tourists who flood to its sunny coastal resorts, rivers and lakes, or sun themselves in the town squares and piazzas.

In Switzerland, four different languages are spoken, and English is well spoken everywhere.

Additional Information

I hope this article has inspired you to visit Switzerland and to consider this incredible country as a place of residence. No matter which canton draws your attention, or which city you decide to settle in, the rest of the country, and Europe, is easily accessible. It may be a small country, but it offers; a diverse range of places to live, a dynamic mix of nationalities, is headquarters to many international businesses, and caters to a large range of sports and leisure interests.

The Dixcart office in Switzerland can provide a detailed understanding of the Swiss Lump Sum System of Taxation, the obligations that need to be met by applicants and the fees involved. We can also give a local perspective on the country, its people, the lifestyle, and any tax issues. If you would like to visit Switzerland, or wish to discuss moving to Switzerland, please do get in touch: advice.switzerland@dixcart.com.

Moving to Switzerland and Want to Work? The Benefits of Forming a Swiss Company

If you are looking for a high quality of life in one of the world’s most economically and politically stable countries, living in Switzerland could provide you with the ideal answer. Not only will you find yourself at a central hub for travel to over 200 international locations, but you will also have access to the beautiful scenery of the Alps and picturesque lakes.

There are two options for moving to Switzerland – but the main question is do you wish to work once you have moved?

If the answer is yes, the procedure is made easier for both EU/EFTA nationals and non-EU/EFTA nationals, if the new resident forms a Swiss company and is employed by it.

This article explores the following:

  1. Why Switzerland?
  2. Who Can Move to Switzerland?
  3. Forming or Investing in a Swiss Company
  4. Criteria for Forming a Swiss Company
  5. How to Invest in a Swiss Company?
  6. Benefits – Tax and Residence
  7. Living in Switzerland

1. Why Switzerland?

Switzerland is an attractive jurisdiction to start and operate a business, as a location for individuals and for family protection and safety. 

Advantages include:

  • Located in the centre of Europe.
  • Economic and political stability.
  • High regard for personal privacy and confidentiality.
  • Most ‘innovative’ and “competitive” country in the world with various strong industries.
  • A well-respected jurisdiction with an excellent reputation.
  • A high quality and multilingual local workforce.
  • Low rates of corporate tax for Swiss companies.
  • Premier destination for international investment and asset protection.
  • Major commodity trading centre in the world.
  • Hub for HNWIs, international families and a wide variety of professionals including lawyers, family offices, bankers, accountants, insurance companies.

2. Who can Move to Switzerland?

  • EU/EFTA nationals: enjoy priority access to the labour market. They can freely enter the country but will require a work permit. The individual will need to find a job and the employer must register the employment before the individual can actually start to work.
  • Non-EU/EFTA nationals: are allowed to enter the Swiss labour market if they are appropriately qualified, for example managers, specialists, and those with higher educational qualifications. The employer needs to apply to the Swiss authorities for a work visa, while the employee applies for an entry visa from their home country. The work visa will allow the individual to live and work in Switzerland.

3. Forming or Investing in a Swiss Company and Becoming a Director or an Employee of the Company

The establishment of a Swiss company is one of the most popular routes for individuals relocating to Switzerland. This is because EU/EFTA and non-EU/EFTA nationals can form a Swiss company, be employed by it, reside in Switzerland, and benefit from the attractive tax regime.

Any foreign national can form a company and therefore potentially create jobs for Swiss nationals. The owner of the company is eligible for a residence permit in Switzerland, as long as he/she is employed by the company in a senior capacity.

4. What are the Criteria?

In principle, non-EU/EFTA nationals need to form a company which must:

  • generate an annual minimum turnover of CHF 1 million, and
  • create new jobs exploiting new technologies and/or the development of the region and contribute to the economic development of the country.

The company must produce a business plan detailing how the amount to be invested will generate a turnover of CHF 1million or more per annum, in the ‘near’ future. The business plan also needs to show that the company will achieve this turnover in a specified number of months, not necessarily in the first year, particularly if the company is a start-up.

The types of economic development objectives for the company, which are regarded positively in Switzerland, include: opening up new markets, securing export sales, establishing economically significant links abroad, and the creation of new tax revenue. Precise requirements vary by canton and more information can be provided on request.

Alternatively…

5. Investment in a Swiss Company

Alternatively, EU and non-EU/EFTA applicants can choose to invest in a company which is struggling to expand, as it lacks the necessary funding.

For non-EU/EFTA applicants this new funding should then enable the company to create jobs and assist the Swiss economy to expand. The investment must add economic value to a particular Swiss region.

6. Benefits – Tax and Residence

  • Taxation of Swiss Companies

Swiss companies can enjoy a zero-tax rate for capital gains and dividend income, depending on the circumstances, and Trading companies are taxed as follows:

  • The effective cantonal and federal corporate income tax rate (CIT) is between 12% and 14% in most cantons. The Geneva corporate tax rate is 13.99%.

Swiss Holding Companies benefit from a participation exemption and do not pay tax on profits or capital gains arising from qualifying participations. This means that a pure Holding Company is exempt from Swiss tax.

Withholding Tax (WHT)

  • There is no WHT on dividend distributions to shareholders based in Switzerland and/or in the EU (due to the EU Parent/Subsidiary Directive).
  • If shareholders are domiciled outside Switzerland and outside of the EU, and a double tax treaty applies, the final taxation on distributions is generally between 5% and 15%.

Double Tax Treaties

Switzerland has an extensive double tax treaty network, with access to tax treaties with over 100 countries.

For more information about Swiss Companies, please read our article: Formation of a Swiss Company.

  • Taxation of Individuals

Each canton sets its own tax rates and generally imposes the following taxes: income, net wealth, real estate, inheritance, and gift tax. The specific tax rate varies by canton and is between 21% and 46%.

In Switzerland, the transfer of assets, on death, to a spouse, children and/or grandchildren is exempt from gift and inheritance tax, in most cantons.

Capital gains are generally tax free, except in the case of real estate. The sale of company shares is one of the assets, that is exempt from capital gains tax.

7. Living in Switzerland

Switzerland ranks among the top countries in the world in which to live due to its high quality of living and reputation as a centre of international trade and finance. It is one of the world’s wealthiest countries and is also known for its impartiality and neutrality.

Switzerland is blessed with spectacular hiking and skiing trails, exclusive swimming spots in the many rivers and lakes, picturesque villages, Swiss festivals throughout the year, and, of course, the Swiss Alps which look spectacular during any season.

Switzerland offers an exceptionally high standard of living, first-rate health service, outstanding education system, and boasts a plethora of employment opportunities.

Switzerland is one of 26 countries in the ‘Schengen’ area and a Swiss residence permit will enable you to enjoy full Schengen travel rights. It is therefore ideally situated for ease of travel; one of the many reasons high-net-worth individuals choose to relocate here. Perfectly situated in the middle of Europe means moving around could not be easier, especially for individuals who regularly travel, internationally.

Although Switzerland has a variety of beautiful towns and alpine villages to live in, high-net-worth individuals are mainly drawn to a few specific cities. At a glance, these are Zürich, Geneva, Bern, and Lugano. Geneva and Zürich are the biggest cities due to their popularity as centres for international business and finance. Ticino is the third most popular canton, as it is located close to Italy and has a Mediterranean culture.

Additional Information

If you would like additional information regarding moving to Switzerland and forming a Swiss Company, please contact Christine Breitler at the Dixcart office in Switzerlandadvice.switzerland@dixcart.com.

St Kitts & Nevis Economic Citizenship: How and Why?

Relocation or Second Passport?

A primary reason to apply for St Kitts & Nevis citizenship is a desire to move to this Caribbean Island.

An alternative objective may be to hold a second passport. Finally, there may be an initial need to hold a second passport with a longer-term objective of potentially moving to St Kitts & Nevis.

Background

Individuals and families are becoming increasingly mobile and the ability to hold a second passport, such as a St Kitts and Nevis passport, is becoming more relevant. The Caribbean is an attractive destination for a number of reasons, including the relaxing lifestyle, beautiful scenery and the climate.

Dixcart is a licensed Service Provider for the St Kitts & Nevis Citizenship by Investment scheme and can assist with all aspects relating to an application.

Advantages of St Kitts & Nevis Citizenship

  • Passport holders enjoy full Schengen privileges and do not require a visa to visit the UK. A St Kitts & Nevis passport enables travel to approximately 156 countries worldwide either on a visa free or visa on entry basis.
  • The ability is available to reside in another CARICOM country, as listed below: Antigua & Barbuda, Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Saint Lucia, St Kitts & Nevis, St Vincent & Grenadines, Suriname and Trinidad & Tobago.
  • The following taxes are NOT levied in St Kitts & Nevis: personal income tax, gift tax, death duties, estate taxes, inheritance tax or capital gains tax on worldwide income.
  • A single application can include dependent children up to a maximum age of 30, dependent parents with a minimum age of 55, and unmarried, dependent siblings up to the age of 30.
  • There is a fast track process which enables applicants to receive a St Kitts & Nevis passport in 45 days.
  • The St Kitts & Nevis citizenship by investment scheme Is one of the oldest citizenship by investment programmes in the world and is recognised as being platinum standard.
  • The application process is simple and Dixcart can assist with the collection and completion of the various forms and information. Please follow the link below to access details of the initial information required:  Dixcart/Nevis-CBI-information-needed

Advantages Relating to a Second Passport

There are a number of reasons why holding a second passport can be advantageous.

This may offer insurance against political, economic or fiscal change in the individual’s country of origin.  

In addition, international travel might well be made easier. Nationals of many countries have to endure lengthy waiting periods to obtain visas for travel. This may be because they are nationals of a developing country or there may be animosity between their country and another.

In addition, holding a second passport might present new opportunities for the tax structuring of personal tax affairs. Generally, an individual’s residence and citizenship are the ultimate basis for the majority of taxation rulings.

St Kitts & Nevis Citizenship by Investment – Two Routes

There are two major investment routes:

1. Sustainable Growth Fund (SGF) Contribution

  • A single applicant can make a one-off contribution of US$150,000 to the Sustainable Growth Fund (SGF).
  • For a family of four, the required contribution is US$195,000.
  • Additional dependants (children or parents); the contribution requirement is US$10,000 per dependant.
  • The addition of a sibling under the Sustainable Growth Fund, is US$20,000 per sibling.

2. Real Estate Investment

There are two options available for applicants seeking to qualify for citizenship by investing in real estate: by investing in a pre-approved real estate development or, through the purchase of a qualifying private residential property.

Approved Property Development

  • Investment of a minimum US$400,000 in an approved property development. The property must be held for a minimum of 5 years after the citizenship has been granted.

A registration fee is payable by the applicant and additional fees are required for the spouse, children under the age of 18 and additional family members over the age of 18. The addition of a sibling is US$40,000.

If this route is selected, the Dixcart office in Nevis can also help source management services for the property, which can be sold on after 5 years.

Luxury Real Estate

  • Investment of a minimum US$200,000 in new luxury real estate. The property must be held for a minimum of 7 years after the citizenship has been granted.

A registration fee is payable by the applicant and additional fees are required for the spouse, children under the age of 18 and any additional family members over the age of 18. The addition of a sibling is US$40,000.

Dependants

Key information:

  • Unmarried, dependent children who are older than 18, but younger than 30 may be included in the application.
  • Dependant parents aged 55 or above may also be included.
  • Siblings may be added to the application if he/she is the brother or sister of either the main applicant or his/her spouse, is unmarried and childless, under the age of 30, and dependent on the applicant for financial support.
  • Citizenship can be passed on to future generations by descent.

Fast Tracking

The processing time for either of the two routes above, to gain St Kitts & Nevis Citizenship is approximately 3 months. For an additional investment, however, the application can be fast-tracked and the passport received in approximately 45 days.

Sponsorship

There is the ability to sponsor applicants. A direct relative can sponsor another direct relative and a common law partner can sponsor another common law partner. Further information can be provided on request.

Additional Information

Dixcart is a licensed Service Provider for the St Kitts & Nevis Citizenship by Investment programme and can provide comprehensive details of the alternative application routes available, any additional fees that might be required, and assist with the coordination of applications.

If you would like additional information regarding the St Kitts & Nevis Economic Citizenship Programme, please contact: John Mellor at our office in Nevis: advice.nevis@dixcart.com or your usual Dixcart contact.