Wealthy South Africans Are Investing Offshore & Gaining Dual Citizenship Benefits
Many of the locations which offer these Citizen by Investment (CIB) programs are idyllic such as Mauritius and the Caribbean with strong tourism and rental markets. These are also destinations that South Africans aspire to travel to, she adds.
The investment required is often less than what you would pay for a luxury property in SA, and rather than eyeing second homes here, wealthy South Africans are taking the opportunity to invest in a second home in offshore destinations where they can obtain a second residency or citizenship.
Benefits of such a passport include visa-free travel access to countries that they cannot get to with a South African passport. Families want to be mobile in a global market and have access to international education for their children. There are also tax benefits and the peace of mind of having a “Plan B” is a big driver for many investors.
Apart from the capital retention that property offers, investors benefit from capital growth and can leverage rental income, adds Ms Read Thaele. This, in addition to the currency hedge by owning a USD-based asset. The property can be used for a luxury holiday or rental income while it continues to grow in value. The required holding period is usually around five years, but certain areas such as The Commonwealth of Dominica (Dominica) in the Caribbean only requires three years.
The entry level investment into property required varies from around EUR 350 000 (about R5.6m) for Portugal (residency only) and Mauritius (from USD 375 000) while the Caribbean countries are around USD 200 000 (R3m) (or a donation option from USD 100 000).
The Commonwealth of Dominica (Dominica) in the Caribbean, is a great choice for South Africans, she says further. It tops the Citizenship by Investment Ranking for “World’s Best Programme”, for the fourth consecutive year and is one of the most beautiful places on earth with natural beauty, lush, tropical scenery, pristine rivers and waterfalls and white and black sandy beaches.
There are beautiful properties and resorts to choose from and you can sell your investment after three years (five years if the next investor also wants to apply for citizenship). Their CBI programme does not restrict dual nationality and offers a second citizenship and passport with no mandatory visit or interview requirements.
Full citizenship can be achieved in three to five months. The passport offers visa-free travel to more than 136 countries including the UK, Schengen Countries and Hong Kong.
A stunning property choice is “The Residences” at Secret Bay which comprises of 42 architecturally stunning villas and villa estates within the gated confines of Secret Bay.
Secret Bay is a six-star all villa resort, spectacularly sited on a clifftop where the rainforest meets the sea. It has won numerous high profile accolades including being voted the “World’s Best Resort”, being among Fodor’s “100 Most Incredible Hotels in the World” and earning a rigorous Green Globe Certification for its green and sustainability efforts.
The luxury villas are spacious, and each is sited within its own secluded enclave. Built from sustainable tropical hardwoods, each villa features seamless indoor-outdoor living rooms, gourmet kitchens with top-of-the-line energy-efficient appliances and built-in purified drinking water. There are also stylish bathrooms with soaking tubs and rainforest showers and locally-crafted artisanal furniture designed with sleek modern lines, outdoor showers and private plunge pools.
The properties are equipped with high speed Wi-Fi, smart home technology and Bluetooth audio-visual systems. Owners also enjoy access to the luxury amenities of the resort including swimming pools, a spa, restaurants, a state-of-the-art fitness centre and kid’s club and services such as a concierge, pre-arrival villa stocking, management and upkeep of their property and access to adventure equipment including kayaks, stand-up paddle boards, yoga mats and snorkelling gear.
USD 208 000 will buy you an ownership interest in a villa and qualifies you (and your family) for the citizenship program, says Ms Read Thaele. Ten of the villas are completed and operational and most of these are already sold out. Secret Bay does not sell off-plan, only once the villas are ready. A full villa is priced from USD1 220 800. Current yields are around 2.95% net, although COVID will of course have an impact over the coming months on returns.
Owners also get membership of “ThirdHome”, a luxury travel club that lets members trade time in their second homes for stays in incredible places in over 90 countries.
She says further that Dominica has become a popular option as the program is very clear cut, and there are attractive real estate options to choose from.
While Dominica is currently one of the best priced destinations for South Africans to obtain a second passport, the window of opportunity is closing fast, as the government intends increasing the costs in 2021 to bring it more in line with other Caribbean citizenship programs.