The Belgian Option
Times are tough for the wealthy, with the taxman in hot pursuit of those hard-earned millions. But if you have them, and the right consultant, you can get around a little local difficulty by acquiring residency status in a country that’s proud to count you in and eventually make you a citizen. Belgium for example: a moneybags who went for the Belgian option would probably get citizenship within three to seven years of residency.
Smart people take expert advice, or just throw some dosh around, which is where Henley & Partners, ‘the world’s leading specialists in international residence and citizenship planning’, come in. The company has its headquarters in Jersey and 18 other offices around the world, including Hong Kong, Dubai, Liechtenstein, Malta and Dominica, which facilitate the purchase of citizenship.
Buying citizenship in another country, Henley points out, can protect you from terrorism. Maybe you’re a Dane travelling in places where they didn’t like those cartoons about the Prophet. So become Vietnamese – why not? It also makes it easier to travel without a visa. Above all, it allows you to ‘plan’ your tax arrangements:
There is a growing tendency for many countries to follow the lead of the United States in taxing even non-resident citizens. Alternative citizenship is therefore increasingly important as an effective tool for international tax planning. As a national of two or more different states, you generally have more planning options open to you, and also enjoy more privacy in banking and investment.
Remember the Norman Tebbit test of loyalty for immigrant stock in Britain? (‘Which side do they cheer for?’) Now forget it and think of Belgium. Key advantages, in Henley’s blurb, include ‘attractive residence conditions for non-EU citizens’, ‘attractive corporate and private taxation’ and ‘one of the EU’s most attractive jurisdictions for holding companies’. In Belgium, too, there are arcane tests of a citizen’s belgitude, although they lack Tebbit’s bodyline approach. Dyed-in-the-wool Belgians, as far as I can tell, are the ones who’ve transferred their seething VHS tapes of the following crucial events onto a DVD, which they play once a fortnight: the 1986 World Cup semi-final in Mexico; the funeral of King Baudouin.
But who cares any more about the musty old autochthones and whether or not you’re a Maeterlinck or a Plastic Bertrand? These days anyone can be a Belgian if they have the money. Or almost. Johnny Hallyday, an assiduous tax ‘planner’, made a bid for Belgian nationality in 2005, failed to abide by the residency requirements and got turned down in 2006. He should probably have gone to Henley & Partners for advice, but he went to Gstaad instead. He could just as well have tried St Kitts and Nevis: here you can buy full citizenship rights for $250,000 without ever setting foot on the islands, and even if you did, you’d be lucky to find a single copy of Johnny’s 1961 album Salut les copains!
A fascinating file from Reuters explains how these payments work and how much is expected. In St Kitts you make a quarter-of-a-million cash donation to a private charity for retired sugar workers or if you’d rather, you buy a piece of property approved by the government for a minimum of $400,000.
Maybe you prefer the idea of Austria, where citizenship is also for sale. Austria is a good place to be spotted with the talent, dead or otherwise: all the von Trapps, the Terminator (Arnie Schwarzenegger has dual citizenship), plus, say, Mahler and Karl Kraus. But even in Vienna, there’s no such thing as free association. Henley’s benchmark for an Austrian identity is a minimum $10 million investment. Once the money’s down or pending, citizenship comes as a quid pro quo for ‘extraordinary services’ to the state.
No knock-down prices for second-hand citizenship on eBay just yet, but wait till the going gets tough. Kim Dotcom, aka Kim Schmitz, founder of Megaupload, bought about $8 million worth of New Zealand government bonds in return for citizenship in NZ – where he’s just been refused bail on charges of profiting from internet piracy. How long before there are affordable resale deals for his original nationality and the one he acquired? And which will fetch the higher price: a used German or a dodgy Kiwi? The market could go either way.