Finer points of investment immigration: a seminar on alternative citizenship and tax residency in the era of automatic exchange of information On April 12, 2018 in the Ernst & Young office at Sadovnicheskaya Nab. 77/1, a seminar was held on the theme “Alternative citizenship and tax residency in the era of automatic exchange of information”. Speakers at the event were Milan Cimbolinec (First Vice-President of Discus Holdings Ltd.), Anton Ionov (a Partner at Ernst & Young, Director of the tax services group for private clients) and Elena Marinicheva (Managing Director at 5 Stars Estates). Today having a second passport is no frivolous luxury, it is a smart investment for a wealthy person for their future, their family’s, and their company’s. Businesspeople with sufficient capital place their bets on citizenship or residency abroad, seeing this quite rightly as a step to protect themselves from economical and social risks in a time of extreme economic instability. While the number of investment programs offering this is continually expanding, the number of experts who can develop a solid strategy and help to choose the most suitable program is not growing at the same impressive pace. Guests at the “Alternative citizenship and tax residency in the era of automatic exchange of information” seminar had a unique opportunity to get answers to their questions on investment immigration, tax planning, and “smart” investments in real estate from professionals in these fields: First Vice-President of Discus Holdings Ltd., Milan Cimbolinec, Ernst & Young Partner Anton Ionov, and Managing Director of 5 Stars Estate Elena Marinicheva. Attendees could hear firsthand about the best paths to citizenship-by-investment. They could learn about how the concept of the “ideal investor” has changed in just a few years. They could also better understand why the traditional investments in villas and castles no longer bring the desired results – unlike citizenship-by-investment in general, which not only works but is becoming ever more in demand in business circles. For attendees’ convenience, the seminar was divided into three thematic sections which were tightly interlinked, but each of which dealt with a certain set of issues related to obtaining citizenship-by-investment, tax planning, and “smart” investment in real estate, respectively. After opening remarks by Anton Ionov (Ernst & Young), Milan Cimbolinec (Discus Holdings Ltd.) shared his thoughts in a talk with the title “Alternative citizenship and residency: hidden rocks, risks, the right choice, and what is advisable”. After drawing the distinction between citizenship and residency, Mr. Cimbolinec focused on which countries are most worth considering for “tax immigration” and why. In talking about investment, he noted that it is extremely important to determine not only the location but also the investment path, whether it be a donation to the state (Vanuatu, the Caribbean), investment in government securities (Luxembourg, Saint Lucia), real estate (Cyprus, the Caribbean) and business (Austria, Slovakia), or a combined investment (Malta). “Malta is the only country in Europe that gives investors the chance to receive permanent residence directly and bypass the temporary residency stage”, Mr. Cimbolinec said in mentioning the special advantages of this country. These advantages also include anonymity and security for the investment, a guaranteed return on the investment and the chance to obtain financing for it, a favorable tax regime, the lack of any requirement to live in Malta, as well as the ability for one’s whole family – even children and elderly parents – to receive permanent residency. The matter of CRS – the common standard for the exchange of tax and financial information between countries – was also discussed by Anton Ionov (Ernst & Young) in his speech “Alternative tax residency in the era of automatic exchange of information”. Among other things, Mr. Ionov talked about the category of special residents (Russian citizens living outside Russia for more than 183 days) and the special currency regulation regime that applies to them, as well as about how much the tax world has changed due to a striving for greater transparency. “Regulators demand global tax transparency in order to fight tax evasion. Tax transparency is now a strategy and important issue for business,” Mr. Ionov noted. He especially focused in his talk on the Common Reporting Standard: who developed this mechanism and why, how many countries have accepted such tax obligations, what information financial institutions will ask for CRS purposes, and what is important to keep in mind during immigration planning, so that one does not become resident in a country with an regime that is not ideal. The talk by Elena Marinicheva (5 Stars Estate) on “Investment in foreign real estate as a basis for immigration” was dedicated to smart investments and how to choose an investment path with an eye to the time it will take. She identified five basic principles of a “smart investment”: income as a final (and not an initial) goal, ROI, the choice of a location for the rental market, real estate management as a passive income tool and an obligatory pessimistic outlook. Why it is smart to investment in real estate today, how to optimize and maximize one’s income, and what complex solutions might there be – these were just some of the smart-investment questions that guests received answers to. Also discussed was why investors can ensure the security of themselves and their families by giving up investment in castles, villas, and penthouses for investments in resort and social real estate and development projects. Is it worth investing money in real estate? The speakers at the seminar “Alternative citizenship and tax residency in the era of automatic exchange of information” felt certain that the answer to this is obvious: of course! Yet in order to make a smart investment and boost your potential profit, it is important to take the economical and financial background into account, and to choose a country with an optimal tax climate and the possibility to develop your business. To provide for everything and reduce risks to a minimum, professionals with many years of experience in this field – the experts at Discus Holdings and 5 Stars Estate – can help.

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