According to the world’s largest investment migration consultancy Henley & Partners, Kenya experienced a growth of 116 percent in inquiries for citizenship by investment (CBI) from November 2019 for the next 12 months.
The recent trend with Kenya’s elite has been an interest in the CBI programs to the small Caribbean island nations of Antigua and Barbuda, Dominica, Grenada, Saint Lucia, and Saint Kitts and Nevis based on a CS Global Partners report which is also a global citizenship advisory firm.
With the global migration shift, the CBI programs of the Caribbean island nations have elevated their competitiveness. However, the main concern for wealthy Kenyans should be to determine how powerful are the Caribbean island passports are compared to the Kenyan passport. Do they have an alternative of acquire a stronger passport – say Schengen passport?
In the 2021 Passport Index, worldwide passports are ranked according to their mobility scores (MS) which is the sum of visa free nations and the visa on arrival destinations.
Each passport is assessed on the MS and visa required countries to determine a global power rank. Kenya has a passport power rank of 54, an MS of 61 is based on 31 visa free nations and 30 visa on arrival destinations, with 137 visa required countries.
Compared to the Caribbean Island nations there are marginal improvements. Both Dominica and Grenada have a passport power rank of 34, the same MS of 81, and both with 117 visa required countries.
The Dominica passport qualifies for 49 visa free nations and 32 visa on arrival destinations. The Grenada passport is approved for 51 visa free nations and 30 visa on arrival destinations.
Saint Lucia is very similar with a passport power rank of 32, an MS of 83 is based on 51 visa free nations and 32 visa on arrival destinations, with 115 visa required countries.
Antigua and Barbuda offers a slight improvement with a passport power rank of 28, an MS of 89 is based on 58 visa free nations and 31 visa on arrival destinations, with 109 visa required countries.
Saint Kitts and Nevis is nearly identical with a passport power rank of 27, an MS of 90 is based on 59 visa free nations and 31 visa on arrival destinations, with 108 visa required countries.
It is clear that the Caribbean island nation passports are an improvement to the Kenyan passport. However, is it really worth the investment for a relatively similar power ranking passport?
For the affluent Kenyans who prefer Europe, Portugal is globally recognized and accepted on a completely different level! According to the 2021 Passport Index, Portugal has a passport power rank of 3, an MS of 132 is based on 97 visa free nations (including the 25 Schengen countries) and 35 visa on arrival destinations, with 66 visa required countries.
Wealthy Kenyans would be able to travel to three times more visa free nations and experience less than half of the visa required countries compared to holding the Kenyan or Caribbean passport! In other words, elite Kenyans and their families would be able to two-fold increase their global mobility with more than double the freedom to travel.
Since the promulgation of the 2010 Constitution, Kenya permitted dual citizenship allowing the affluent to discover CBI programs and to conduct business globally, in countries offering more attractive healthcare, and international schools for their children.
Portugal ranked 3rd safest country worldwide and ranked the safest friendliest country in the European Union by the 2020 Global Peace Index. The country offers one of the most flexible and attractive CBI globally well known as the Golden Visa program.
According to the Portuguese Immigration and Borders Service (SEF), a total of 398 South Africans have invested in the Golden Visa program since the inception in October 2012 to March 2021.
The graph below shows that Portugal has been a top destination consistently for the past five years with an affordable real estate market and generous family benefits through the Golden Visa program.
Historically the fact is since 2012, 86 percent of families who invested in the Portuguese Golden Visa have selected the €500,000 EUR real estate investment option. Today, savvy investors are seeking for the best investment value and family benefits in the competitive global CBI market.
Currently, there are two very attractive oceanfront and ocean view approved projects qualified for the conventional €500,000 EUR Golden Visa investment option in the beautiful coastal town and greater area of Lourinhã.
Please visit the website of Elysium 8 Holdings Unipessoal LDA for our Ocean Villas project and for a full presentation of our Akoya Pearls oceanfront project.
Earlier this year the Portuguese government announced the extension of the existing Golden Visa program investment options until January 1, 2022. However, once the current investment options expire, oceanfront and ocean view properties will no longer qualify for the Golden Visa program. Therefore, NOW is the time to capitalize on the incredible investment value and generous family benefits while still available!
The Portuguese Golden Visa program offers the following immediate benefits to the main investor when the application is registered with SEF. In normal operating conditions, the initial Golden Visa would be issued in approximately 6 months. With the current COVID-19 pandemic, the projected issuance of the Golden Visa is 9 to 12 months.
The reason the Portuguese Golden Visa is one of the most flexible and most desirable CBI is that the stay requirements are only 35 days for the entire 5-year period! In the first issue of the Golden Visa, it is valid for one year with stay requirements of 7 days.
For the first renewal, the Golden Visa will be valid for two years with stay requirements of 14 days. In the second renewal, the Golden Visa will be valid for the final two years with stay requirements of another 14 days. The total stay requirement of 35 days is essentially only one week for each year during the 5-year Golden Visa.
Moreover, Golden Visa holders may take advantage of unlimited residence status within the 25 Schengen countries in Europe. In other words, entrepreneurs may capitalize on the immediate visa free business travel to conduct business in Europe.
At the end of the 5-year Portuguese Golden Visa, there are generous long-term benefits for the immediate and extended family. On the same application, Golden Visa investors are granted the right to family regrouping which may include the main investor’s spouse or legal partner, children under 18 years of age, dependent children under 26 years of age who are single or enrolled as full-time students, parents of either spouse over 66 years of age or 55 years of age and dependent, and siblings under 18 years of age from either spouse or partner if legally responsible.
The most exciting part of the journey is when Golden Visa holders may choose to apply for permanent residency or they may apply for the valuable Portuguese citizenship issuing the powerful passport after only 5 years!
During the COVID-19 pandemic, many law firms were forced to adapt operations to offer remote services. Our partner Caiado Guerreiro International law firm has global offices and language support in key Golden Visa markets including the Portuguese speaking countries in Africa and all sub-Saharan Africa.
Caiado Guerreiro lawyers will offer expert assistance and guidance in partnership with an experienced lawyer in local law firms in Africa. They will handle initial procedures such as applying for a Fiscal Tax Number (NIF) and opening a bank account in Portugal so as to help accelerate the Golden Visa application process. Please note that the application process can be prepared without traveling to Portugal. The only required travel to Portugal will be two; for Biometrics Identification appointment and interview with SEF.
Once the Golden Visa application is submitted and approved in approximately 9 – 12 months, the residency card fees are required to be paid and the cards of all family members are normally issued within 4 weeks.
The SEF fees for application of the Portugal Golden Visa residency cards are €5,336.40 EUR per family member. Renewal fees every two years are reduced to half the fee at €2668.20 EUR per family member. In addition, there is a processing fee on the application and renewal of €533.90 EUR for the main applicant plus €83.30 EUR per family member.
The Golden Visa program is a fast track to the Portugal non-habitual resident (NHR) tax regime which allows investors to take advantage of substantial tax savings!
Moreover, a main attraction of Portugal’s NHR tax regime exists in its connection with Double – Taxation Agreements (DTAs) which permit most groups of income to be taxed in the country of source.
Currently, Portugal has signed DTAs with 79 nations and the Organisation for Economic Co-operation and Development (OECD) model tax convention may be applied in the absence of a DTA. Therefore, Portugal will not tax most foreign source income earned by NHR investors under the NHR tax regime since the income may be taxed overseas.
In addition to the minimum €500,000 EUR Golden Visa investment and SEF fees, there are property transfer taxes and closing costs.
When real estate is purchased in Portugal, two taxes are applied along with the Notary and registration fees. First, the Property Transfer Tax (IMT), applied on the transfer of ownership of property, is precisely 5.6082 percent which is €28,041 EUR calculated on the minimum €500,000 EUR investment for investors who will have residency status through the Golden Visa.
Investors who will not have residency status in Portugal must pay an estimated additional €1,000 EUR of IMT. Second, there is a stamp duty (IS) of 0.8 percent which is €4,000 EUR. The total costs of the property deed, Notary, and property registration are €1,000 EUR. Annual land tax rates in Portugal vary from 0.3 percent to 0.8 percent depending on property type, location, and age.
In Lourinhã the land tax rate is only 0.35 percent! Please note that these fees and taxes may be subject to change although the current expiry is January 1, 2022.
The Golden Visa application submitted to the SEF is recommended to be prepared by experienced legal firms. Professional fees vary from company to company but investors should budget an estimated 1.5 to 2 percent of the property price for their legal fees.
As mentioned, Elysium 8 Holdings’ strategic partner is Caiado Guerreiro international law firm with many partner law firms in the Portuguese speaking countries in Africa and all sub-Saharan Africa.
For young affluent Kenyans planning to have children, the Portuguese government approved citizenship to children born in Portugal (known as Jus Soli) to foreign nationals IF one of the parents have been a legal resident in Portugal for only one year.
This means when a family invests in the Golden Visa investment program with the minimum €500,000 EUR submitted with their application, the legal resident status begins once SEF approves the application and issues resident cards.
Golden Visa holders can take advantage of the additional benefit by granting citizenship to their children born in Portugal only one year after investing in the Golden Visa program.
In other words, children born in Portugal would receive citizenship before their parents. Therefore, this new citizenship law would be very valuable for younger wealthy Kenyan couples planning their future in Portugal through the Golden Visa investment program.