Buy a passport: the 10 most popular citizenship programs for investment
According to Knight Frank, a third of capital owners over $ 30 million have a second passport, and another third plan to purchase it in the future. Tranio talks about…

Continue reading →

International investments in the Mediterranean hotel property
International investments in hotel real estate in the Mediterranean are on the rise. This is indicated by the results of an online survey conducted in 2018 jointly by Tranio and…

Continue reading →

Russian "Haynets" are adapting to new orders: the results of a joint survey of Tranio and Adam Smith Conferences
For the first time in history, more than 50% of wealthy Russians began to notify Russian tax authorities of their accounts in foreign banks and controlled foreign companies. This assessment…

Continue reading →

OECD tightens banking checks for investment citizenship and residence permit participants

On November 20, the Organization of Economic Cooperation and Development Countries (OECD) published a list of countries whose investment citizenship or residency programs it considers to be risky. The OECD recommends that banks carefully check clients who received a passport or residence permit under these programs, in particular, documents confirming the physical presence of investors in a particular country. This applies not only to new customers, but also to owners of particularly large accounts, which hold amounts from 1 million euros.

What programs are considered risky?
The OECD identified two main criteria by which it defined investment programs as risky: low income tax on financial assets in the country that issued citizenship or residence permit, and the absence of requirements for the investor to reside in its territory.

Country Residence permit or citizenship program for investment, which is on the list of risk in the opinion of the OECD
Antigua and Barbuda
The bahamas
Bahrain
Barbados
Cyprus
Dominica
Grenada
Malaysia
Malta
Qatar
Panama
Saint Kitts and Nevis
Saint Lucia
Seychelles
Turks and Caicos
UAE
Vanuatu

What is the OECD initiative connected with?
In 2016, an agreement on the automatic exchange of financial information (Multilateral Competent Authority Agreement, MCAA) was concluded – an international agreement binding banks, brokers, investment structures and insurance companies of countries that signed the agreement to send information on non-resident accounts to local tax authorities. Those, in turn, transfer the collected data to the tax authorities of those countries whose residents are account holders. More than 100 countries have joined the agreement: states of territorial Europe, Canada, island states (BVI, Saint Kitts and Nevis, Bahamas, etc.), some Asian countries (for example, the United Arab Emirates and Saudi Arabia).

OECD believes that investment residence permit programs can become a loophole for those trying to escape from taxes. As stated in the report of the organization, since the investment residence permit and citizenship programs do not control the issue of tax residency, this can lead to violations in the reporting within the framework of the Common Reporting Standard (CRS).

What violations are we talking about?
Investment citizenship and residence permit schemes can be used to conceal the real tax residence of the investor. For example, when the investor does not actually live in the country, but declares that she is her tax resident, and provides the bank with the relevant documentation: a resident card or a passport received as part of the program.

The OECD recommended that bank employees check more carefully those who claim to be tax residents in designated risk jurisdictions. In particular, banks will find out the grounds for obtaining citizenship or a residence permit, the right to reside in other countries, may request tax returns for the past few years or ask to confirm the reality of the client’s residential address.

Cross-border commercial real estate transactions: how is the global market changing?
Although North America remains the largest volume of transactions in the commercial real estate market, only 15% of their number is with foreign investors. At the same time, in Europe,…

...

Retirement homes - an investment in perspective
Over the last 15 years, investments in non-traditional types of commercial real estate in Europe have increased by an average of a quarter annually. One of such assets is the…

...

Russian-speaking investors in profitable real estate abroad: an analytical study of Tranio
In early 2018, Tranio once again investigated the behavior of Russian-speaking investors abroad. We relied on the results of an online survey, which involved 476 real estate market leaders from…

...

Investment in rental business in Greece: European residence permit and high profitability amid rising prices
The Independent Public Revenue Authority of Greece (AADE) announced the launch of a digital registry for those who rent out Greek property for short-term rent through online platforms: for example,…

...