Early in 1992, citizenship of the European Union (EU) was introduced by the signing of the Maastricht Treaty in the Netherlands. This concept of EU citizenship, which has been in force since late 1993, does not require you to emigrate and comes with a range of benefits including right to free movement, settlement and employment across member states of the EU.
“The governments of all EU countries work together for mutual economic and social gain, and, even though each EU country maintains its own government structure, EU membership guarantees certain rights and benefits to both citizens and businesses,” explains James Bowling, CEO of Monarch&Co - a market leader in facilitating residence, property and investment options in hand-picked territories around the globe.
Bowling notes that a citizen of any EU member country, whether they reside there or not, automatically becomes an EU citizen, allowing them to capitalise on all of the union’s benefits including unrestricted travel and preferential student status. “This is due to the fact that the rights of all EU countries are reciprocal, which means that a citizen of any EU country can live, work, and study in any other EU country with the privileges of a citizen.”
Bowling says that it is these reciprocal rights that South African investors into European citizenship programmes find to be a major draw card. Without having to emigrate at any point, Bowling highlights five of the biggest advantages and benefits of EU citizenship:
A lifestyle hedge
Many people are looking to hedge their lifestyles by applying for a second residency or citizenship. “The lifestyle advantages that investors could reap by becoming a European citizen could include better access to basic services such as health and education as well as more select criteria such as sporting facilities, natural environment and the like. Safety and security aspects also factor into lifestyle decisions,” says Bowling.
A financial hedge
An offshore investment is a good rand hedge. “Many South Africans are looking for investment options that allow them to financially hedge against future uncertainty and the volatile rand. Citizenship by investment programmes allow investors to do just that, mostly through a specific business or property investment at a prescribed minimum fee, which then entitles them to citizenship and all the other benefits that includes.”
Freedom of travel is one of the major benefits of EU citizenship. By obtaining citizenship in an EU country, the investor is entitled to carry that country’s passport, which can allow them unrestricted travel benefits throughout the 26 EU member states. “Many of our clients incur huge travel inconveniences when travelling abroad owing to the conditions set on them by virtue of the passport that they carry. Visa applications are both costly and time consuming and generally an irritating nuisance. Through citizenship programmes, investors can gain travel benefits through obtaining another citizenship that has fewer travel restrictions and visa requirements,” says Bowling.
Bowling points out that by gaining a second citizenship, investors are also able to enjoy tax breaks as well as the possibility of improved personal and corporate tax exposure. “The extent of these benefits would depend on the new jurisdiction’s offering and incentives as well as where the client makes their primary tax residence.”
Investors who are looking for better schooling opportunities for their children, a safe environment in which to raise their families, or just a better quality of life, are attracted by the benefits the EU citizenship by investment offerings provide in this regard. Investors in citizenship by investment programmes qualify for a second passport, and more often than not, their spouse and minor children will also qualify. “However,” says Bowling, “depending on circumstances and the country of application, they may be subject to a separate qualification or application process.” He notes that all applicants will need to pass a strict screening process before citizenship is granted.
“There are many reasons why EU citizenship appeals to many investors, but mostly it revolves around the second passport, which is their key to a world of free movement, greater flexibility, and legal tax reduction,” Bowling concludes.
For more information contact:James Bowling at Monarch & Co on 011 883 9018 or visit www.monarchandco.com