Economic Migration Programs
The Chinese authorities are getting even more serious (yes, that’s possible) when it comes to tax rules. On October 3rd, China's taxation authorities fined A-list Chinese movie star Fan Bingbing more than 479 million yuan (US$70 million) over tax evasion and ordered her to pay more than 255 million yuan in taxes.
Add to this, that from January 2019, new changes to the Chinese individual income tax laws come into effect. With a top rate of 45%, many are considering their options.
Popular options include but are not limited to -
- · The Philippines. Assuming you’re over 35, you can benefit from the Special Retiree's Resident Visa (SRRV). Enjoy permanent, non-immigrant status and money earned outside of the Philippines is free of Philippines tax.
- · In Malaysia, there’s Malaysia My Second Home (MM2H) which is similar to the SRRV.
- · In Singapore, there’s the Global Investor Program (GIP) which targets global high-net-worth personalities. You can have permanent residency in exchange for making a 2.5 million SGD investment.
- · In the UK, there’s the Tier 1 Investor Visa. Applicants must make an investment of at least £2 million in qualifying investments (excluding property related investments), and meet certain eligibility requirements. But do note that recent changes to the UK tax system make it less attractive than before.
- · In the US, there’s the controversial but popular EB5 program.
Regardless of where a HNI decides to reside, pre-immigration planning is a must. Planning to mitigate the more unwelcome aspects of host country taxation. There are two types of tax structures that countries adopt –
- · territorial tax and
- · worldwide tax.
If your future home nation has a territorial tax policy like Singapore, many Caribbean islands or Malaysia – then your international assets and investments are usually out of reach of your future home nation.
If your future home nation has a worldwide tax policy like the USA, UK or Australia, then your international assets and investments may be taxed by your future home nation
To make it more complex, some nations have death taxes in the form of estate, wealth or inheritance taxes. All too often, immigrants realize the unintended tax consequences of their move after the fact. Personally, I’m a big fan of structures that use a Trust. It is among the more powerful tools available in common law jurisdictions. For non-US persons, US Trusts are becoming particularly popular for both asset protection and estate planning.
Feel free to contact us at firstname.lastname@example.org or www.htj.tax if you have any questions. Time to get planning!