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Global migration in Asia and the need for greater financial privacy

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This is a sponsored article from Henley & Partners.

Global mobility is on the cusp of massive change. Travel bans, visa restrictions and growing support for nationalisation are some of the trends emerging from recent shifts in the global political, economic and business landscape. Amidst all the uncertainty clouding global mobility, Asia is seeing an increase in wealthy individuals looking towards alternative options on residency and citizenship as a sustainable investment in family planning, and to reduce exposure to risk.

The recent introduction of the Common Reporting Standard (CRS) regime by the Organisation for Economic Co-operation and Development (OECD) has raised real concerns over who will ultimately have access to the information exchanged under CRS and what will be done with that information should it fall into the wrong hands. As such, each year, hundreds of wealthy individuals and families seeking alternative options in more tax-secure jurisdictions rely on the expertise of Henley & Partners as a global leader in residence and citizenship planning and a host of services that are essential to protect and grow your wealth.

The shifting migration map

Traditionally, countries such as Canada and the U.S. topped the list as primary options for international investors and wealthy families. With recent geopolitical events such as Brexit and the US administration under President Donald Trump posing possible limitations to global mobility, there has been a significant shift in popular destinations. More and more wealthy individuals are turning to countries such as Cyprus and Malta to leverage their wealth for future family estate and succession planning.

Secure tax jurisdictions — Cyprus and Malta

The investment migration programs in Cyprus and Malta offer the highest amount of flexibility to high net worth individuals. Both Cyprus and Malta are members of the European Union (EU), therefore they provide their citizens with the same rights as any EU national, including legal, protection and settlement privileges throughout all 28 EU countries and Switzerland. These programs effectively provide 29 EU-based tax residence options and, therefore, much greater comfort in terms of the security and confidentiality of the information that will be shared as part of the Automatic Exchange of Information.

Driven by its reputation for stability, predictability and security, Malta has become one of Europe’s leading investment locations. Malta provides numerous financial incentives for residence, with a tax regime that encourages economic growth. As a former British colony, Malta inherited a remittance-based tax system that provides foreign individuals who become a tax resident with beneficial tax treatment. To be considered a tax resident, individuals must spend more than 183 days per year in the country.

Cyprus has been a full member of the EU since 2004 and its location at the crossroads of Europe, Asia and Africa plays an important role in its development as a financial centre. Cyprus offers a corporate tax rate of just 12.5%, with access to an investor-friendly tax regime that is underpinned by double taxation protection agreements with 60 countries. Individuals are considered a tax resident if they spend more than 183 days per year in the country. In July 2017, however, a Cyprus tax law amendment added a second test — the ‘60-day rule’ — for the purposes of determining Cyprus tax residence for individuals. As from tax year 2017, an individual will be considered a tax resident if the individual satisfies either the current ‘183-day rule’ or the new ‘60-day rule’ for the tax year.

Strategy for a secure future

By consulting with professionals, experienced in both tax planning and residence/citizenship planning, wealthy individuals can make informed decisions regarding the future of their financial security and growth.

This is a sponsored article from Henley & Partners.

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