‍Dani van Vuuren, a consultant at Sovereign Trust SA

We’ve previously discussed how South Africans can use Financially Independent or Passive Income Programmes, Tax Residency programmes, or starting a business to acquire a second residency or citizenship. In this article, we focus on the opportunities offered by Residency by Investment (RBI) programmes.

Residency by Investment (RBI) programmes – better known as ‘Golden Visas’ – have long been a popular avenue for South Africans looking for residency or citizenship options abroad. But make sure you do your homework, as residency and citizenship options are constantly evolving and changing.

One recent change saw both Ireland and Portugal scrap their Golden Visa schemes earlier this year, with Spain recently submitting a bill to congress to repeal the country’s golden visa programme. This comes in a bid for the European Union to clamp down on citizenship by investment schemes.

However, there are still numerous RBI schemes available to South Africans either looking for a ‘Plan B’, or simply wanting to benefit from greater tax efficiency, investment and business opportunities, improved lifestyles, education options and greater freedom of movement, says Dani van Vuuren, a consultant at Sovereign Trust SA.

RBI programmes are popular because they provide individuals and their dependents with a residence permit and a variety of associated benefits in exchange for a wide range of investment and donation options. These programmes also typically have low minimum stay requirements.  

“Correctly planned and implemented, RBI programmes provide a solid foundation that enable individuals and families to build comprehensive, flexible and tax efficient wealth management strategies,” said Van Vuuren.

Created for highly qualified professionals and entrepreneurs, the Portugal HQA Residency Visa Programme is a business incubation programme available to those looking to support research and development and provide strategic direction to an innovative business in Portugal. For qualifying applicants, it’s an excellent alternative to the Portugal Golden Visa, with a lower minimum investment requirements and faster processing times.

Other popular RBI destinations for South Africans include Cyprus, Guernsey, Malta, Mauritius and the United Arab Emirates, while options are also available in Spain, Thailand, Bahamas and the Cayman Islands.

However, navigating the range of RBI options can be a daunting task, as requirements differ for each country.  

For example, you can get residency in Cyprus by investing E300,000 in property or a business. You only need to visit the island once every two years to maintain your residency. On the other end of the spectrum, Guernsey requires a E750,000 investment, with the requirement to spend 183 days a year in the jurisdiction.

It’s also important to realise that there’s no one-size-fits-all approach. Everyone has different requirements and objectives, which means that alternative residency should be approached holistically.

“There are so many points to consider before deciding which programme, and which country, is right for you and your family’s needs. These include succession and estate planning; personal, commercial and health insurance; and investment and retirement planning,” says Van Vuuren.

“Second residencies may influence how your wealth and estate is handled and taxed at death, how a country taxes your pension, the inheritance laws applicable to that country, as well as the need (or lack thereof) for change of insurance. Do the smart thing: get professional advice, and do your homework before jumping into potentially life-changing decisions.”