The UK has traditionally been one of the main immigration destinations of Europe. As the first European country offering a citizenship-by-investment programme, it is a reputed option among investors interested in having a second nationality.
However, it is costly too. End-2014 the minimum investment amount was increased from GBP1 million to GBP2 million, now equaling a minimum of Dh11,511,128. Added to that are a set of requirements that single out a select few eligible candidates.
If you do want to be in the vicinity of the UK and enjoy similar rights, but are unable or unwilling to live up to the requirements stated above, the Channel Islands may be an option.
An archipelago in the English Channel, these Crown Dependencies have their own jurisdiction and offer a residency programme that is more accessible than that of the UK.
The main advantages of the residency programme on the Channel Islands are the costs, the taxation scheme and the application procedure, pointed out Eric Major, Group CEO of Henley and Partners at Jersey.
“The investor programme on the Channel Islands requires an investment only half the cost of the investment required for the Tier 1 programme in the UK.”
The minimum investment amount that is required to gain residency on the Channel Islands is GBP1 million in the local economy of one of the bailiwicks Jersey or Guernsey.
The applicant must make the bailiwick where the investment is made his main home.
After five years of residing on the Channel Islands the applicant will be able to apply for indefinite leave to remain, and after one year of having this status citizenship may be acquired. The same can be done for dependents of the applicant.
“The application process is extremely fast,” said Major. “There are no English language requirements until the end of the five year of residency, and there is no business experience required.”
Especially the latter advantages form a stark contrast with the UK investor programme, where the candidate must demonstrate a number of skills in order to be eligible for the programme.
What do you earn?
Although the Channel Islands are Crown Dependencies, a resident of the islands does not earn the same right as a UK resident would.
Most notably, visa free access in the Schengen zone does not come with the residency on the Channel Islands.
“A resident will gain unrestricted travel within the Common Travel Area (CTA), which includes the UK, Ireland, and The Isle of Man,” said Major.
The resident does, however, gain access to UK schools and universities, a stable economy and excellent lifestyle conditions. Moreover, the Channel Islands has an attractive taxation scheme, he added.
A standard rate of income tax applies with 20 per cent, and there is no capital gains tax, no wealth tax and no withholding tax.
Corporate tax is 0 per cent for most companies, with the exception of regulated financial services companies (10 per cent) and property income companies (20 per cent).
On the downside, residents of both bailiwicks are taxed on their worldwide income. In Jersey the investor must apply for a High Value Residency status in order to purchase property, after which he is taxed 20 per cent on the first GBP625,000 of worldwide income and 1 per cent on whatever is earned in addition to this amount.
Guernsey has a tax cap of GBP110,000 on non-Guernsey income, and a GBP220,000 cap on worldwide income, including Guernsey income. However, a 5 per cent Goods and Services Tax applies on this bailiwick, explained Major.