Incentives for Immigration

08 Oct 2015

All countries encourage foreign investment, as international markets are an essential source of growth and globalization characterized by developing market integration. This has highlighted foreign investment as a domestic growth factor and helps to diversify the investment risk for national companies. Immigration policy, traditionally focused on the labor market situation, now takes into account the specific situation of the domestic labor market as well as its contribution to the economic growth of the country.

In order to attract foreign investment, many countries encourage immigration by granting residency permits to foreign nationals that culminate in citizenship in return for their investment. Those seeking to invest in a country and who wish to obtain a residency permit have several essential questions to consider:

• What type of investment must be made?
• How large of an investment is required to obtain residency?
• How long will it take to obtain a residency permit?
• How long will you have the residency permit?
• Is a minimum length of in-country residency required?
• What fees may be associated with obtaining a residency permit?

Several countries’ incentives and requirements for immigration and residency for foreign nationals are detailed below.

Panama has a unique “friendly nations” Permanent Residency Visa program. To qualify, the applicant must:

• Incorporate a company in Panama.  There are no requirements for investment or a formal business plan.
• The candidate must be citizen of one specified “friendly nations” and have a clean criminal record
• Show economic solvency by depositing funds in Panamanian personal bank accounts. $5,000 USD for the principal applicant and $2,000 USD for each dependent is required.  These funds need not remain in the accounts.

The applicant must be in Panama at the time the application is submitted, as business pertaining to the application must be completed in person at the Immigration Office.

The application review process is usually completed within 3 to 5 business days; a 1-year permanent residency visa is issued at the conclusion of the review. Approval of the permanent residency application is generally completed in 4 months and requires additional visit in person at the Immigration Office.

Mexico has classified foreign nationals seeking immigration into 2 groups:
• Freed nationalities, comprising citizens whose countries of origin include those of the European Union and Occidental Europe, Japan, Argentina, Chile, Venezuela, Colombia, Brazil, and Uruguay
• Restricted nationalities, comprising citizens of most countries of Asia and Africa, and Cuba, Ecuador, Honduras, and El Salvador Emigrees to Mexico from freed nationalities may enter without a visa and stay for up to 180 days under the status of “non-lucrative activity.” Conversely, emigrees from restricted areas will need a visa to remain in Mexico for the same 180-day period.

To obtain temporary residency, applicants from either foreign-national classification must be economically dependent, or a student, for a period of 4 years. Upon completing 4 years of temporary residency, the government may allow permanent residency on an individual or family basis, such as having children who were born in Mexico, or being married to a Mexican national for more than 2 years.

Those seeking residency in Canada mainly apply in an employment, business, or investment-related capacity. The Federal and Provincial Programs categorize immigration applicants into employment and business groups. The first group includes skilled workers and highly educated businesspeople, skilled tradespeople, and having recent Canadian work experience or recent graduation from a Canadian university. The Canadian federal government offers an Immigrant Investor Venture Capital Pilot Program. To qualify, applicants must meet the following requirements:
• A minimum personal net worth of CDN $10 million that must have been acquired through lawful, private-sector business or investment activities
• Attainment of a due diligence report at their expense, if requested, from one of the designated service providers as validation of the applicant’s past business or investment experience, source of funds, and personal net worth
• Able to make an at-risk investment of CDN $2 million in the Immigrant Investor Venture Capital (IIVC) Fund for approximately 15 years. Applicants must acknowledge that because the investment would be at risk, there would be no guarantee of a return and a possibility of losing some or all of the investment
• Proven proficiency in English or French in all 4 language abilities (speaking, reading, listening, and writing)
• Completion of a Canadian post-secondary degree, diploma, or certificate of at least one year; or a foreign equivalent as validated by Educational Credential Assessment

If an applicant is deemed inadmissible to Canada (involved in criminal activity, human rights violations, or organized crime), the application will be denied. Applicants seeking residency in Quebec may do so through the Quebec Immigrant Investor Program, for which the following Quebec-specific requirements must be met:

• Net assets of at least CDN $1,600,000, obtained legally, excluding amounts received by donation less than 6 months before the date on which the application was filed
• Management experience in a legally operated farming, comercial, or industrial business; or a legally operated professional business which the staff, excluding the investor, occupies at least the equivalent of two full-time jobs; or an international agency or government or one of its departments or agencies o Management experience is defined as the exercise, for at least 2 of the 5 years preceding the application for a selection certificate, of duties related to the planning, management, and control of financial and human or material resources under your authority. This experience does not include that acquired in the context of an apprenticeship, training, or specialization attested by a diploma
• Intent to establish permanent residency in Quebec
• Agreement to invest CDN $800,000  with a financial intermediary (broker or trust company) authorized to participate in the Quebec Immigrant Investor Program

Other factors upon which the application will be assessed include age; education, nature, and duration of profesional training; and language skills.

An attractive program to appeal to foreign investors was recently approved in Spain. The government will grant a residency visa to investors who:
• Create employment through the establishment and implementation of business projects
• Make relevant impact from a socioeconomic, scientific, or technological innovation; or a significant investment in business or a general-interest project
• Invest in properties located in Spanish territory in a quantity greater than €500,000 total minimum investment, which can consist of the purchase of several properties
• Take on public debt amounting to €2 million  or €1 million in Spanish bank deposits or Spanish company shares 

The residency visa will allow the applicant to stay in Spain for at least 1 year. Applying for a residency authorization period beyond one year is possible, provided that the applicant has travelled to Spain at least once within the authorized period and has kept the investment of at least €500,000. The longer-term Residency Authorization will allow the applicant to stay for 2 years; an application for an additional 2 years’ residence, to renew the Residency Authorization period, may also be obtained.

United Kingdom
Despite strong anti-immigration rhetoric, particularly in the popular press, the British government still offers a number of schemes for foreign entrepreneurs and high net-worth individuals that eventually lead to British citizenship. For example, the Tier 1 Investor program requires high net-worth individuals to bring £1 million to the UK and invest £750,000 either in UK government bonds or in shares or loan capital of UK registered trading companies, but not primarily property companies. The Tier 1 Entrepreneur program allows proven entrepreneurs to enter the UK to start new businesses or join existing businesses with a financial investment of £200,000.  In addition, the UK immigration rules allow foreign companies to send one key individual, who is not the owner or majority shareholder, to establish a branch or wholly owned subsidiary of the parent company in the UK. 

Each of these routes currently leads to permanent residency rights in the UK after 5 years and full citizenship after 6 years.  In certain circumstances, permanent residence may be obtained through the Investor category after 2 or 3 years, with full citizenship after 5 years. Through the Entrepreneur category, permanent residence can sometimes be obtained after 3 years, with full citizenship after 5 years.

Malta boasts some of the world’s most stimulating migratory incentives. In July 2013, Malta launched the Global Residency Scheme (GRP), which replaced the former High Net Worth Individuals Scheme. This newly implemented residency and tax program provides favorable tax incentives and thresholds to prospective property buyers or renters in Malta and Gozo. For non-EU, non-EEA, and non-Swiss foreign nationals, an added benefit includes the ability to acquire a residency permit.

To qualify for residency under the GRP, the applicant must satisfy the following conditions:
• Property purchased must be valued at a minimum of €275,000 for Malta or €220,000 for Gozo or the southern region of Malta
• Rented property must have a minimum annual rental value of €9,600 (€800 monthly); in Malta / €8,750 (€730 monthly) – Gozo or in the South of Malta
• The applicant and any dependents must have health insurance coverage, as they will not be eligible for the Malta state healthcare system. 

Beneficiaries are not bound by minimum-stay requirements. There are multiple benefits to participating in the GRP:

• A flat rate of personal income tax of 15%, chargeable only on a remittance basis

• Foreign source income received in Malta is subject to tax only if remitted to Malta, while foreign capital gains are altogether outside the scope of tax in Malta
• Local source income arising from business, investment, or other economic activity held in Malta is subject to  a 35% tax rate
• Minimum tax of €15,000, covering all dependents.

The special tax system applied under the GRP Rules imposes the following non-refundable fees:
• For property in Malta: €6,000
• For property in Gozo or in the southern region of Malta: €5,500 

In Germany, the Immigration Act allows residency for skilled or highly qualified workers; graduates from German and qualified foreign universities; self-employed professionals such as researchers; family members; contract or guest workers; and seasonal workers. In the case of self-employed applicants, the following requirements must be met:
• Provide business acumen that aligns with Germany´s economic interests or regional needs
• Positive contributions to employment and national education, or contributions to innovation and research
• Viability of the underlying business idea
• Secured financing with a minimum initial investment

The first 2 conditions are considered fulfilled if the amount of investment is at least €250,000and 5 or more jobs will be created.

Non-EU citizens seeking a residency permit in Italy may obtain a visa specific to employees or for investors, entrepreneurs, and the self employed who wish to establish a business business in Italy. This type of entry is subject to a quota fixed by the Italian government pursuant to Legislative Decree No. 286/98, Article 21.

A non-EU citizen investor, entrepreneur, or business owner wishing to establish a business in Italy who does not exercise occasional self employment or immediately establish an industrial or commercial trade or business, or who wishes to establish a corporation, must request a visa directly from the diplomatic mission or Italian consulate in their home country. The exercise of these activities is subject not only to the issue of the order flow but also to the categories occasionally identified by the same flow decree. Consider that in the last 4 years, project workers and members of cooperative societies were excluded.

Per Legislative Decree No. 286/98, Article 26,  non-EU citizens who intend to establish business in Italy must:
• Have adequate resources for the business in Italy and meet other requirements imposed by Italian law for the exercise of individual business activities, such as registration rolls, registers, etc.
• Procure suitable living accommodations
• Have an annual income, derived from legitimate sources, at an amount higher than the minimum required by law for exemption from participation in healthcare

In order to attract foreign investments such as those highlighted in EXPO 2015, this decree established a unique possibility for non-EU investors, providing for the possibility of 2,400 inputs  (i.e., visa-holding persons) for the self-employed in the following categories:
• Entrepreneurs of companies carrying out activities of interest to the Italian economy who make a significant investment in Italy, which supports or enhances levels of income;
• Freelance operators who perform supervised or regulated jobs, office holders, and CEOs of non-cooperative companies expressly provided by law with regard to entry visas
• Artists of international fame, or other highly qualified professionals, employed by public or private bodies
• Foreign citizens for the establishment of "innovative startups" in accordance with Italian law December 17, 2012 n. 221, who meet the requirements imposed under the law and have established a working relationship with the autonomous nature of the enterprise. The legislation explicitly refers to innovative startups to highlight that the target does not match any new venture; rather, it focuses only on businesses strongly linked to innovation and technology
The visa application will require approximately 30 to 50 days to process. Upon arrival in Italy, you will be issued a residency permit that will allow you to stay for work activities. Visa applicants who are already employed in Italy can easily obtain residence permits for dependents.
After 5 years, you may apply for permanent residency, and after 10 years of continuous residence you may apply for Italian citizenship.

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