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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 help@htj.tax or www.htj.tax if you have any questions. Time to get planning!
