Global Residence and Citizenship Handbook. Christian H. Kälin

there a robust protection for copyrights and patents?Company governanceIs it easy to incorporate and operate a company? Are corporate laws, regulations, taxes etc. mature and efficient? Are minority shareholders’ rights protected?Public and private corruptionIs there any public or private corruption? Is it difficult to do business legally without having to bribe or use other illegal means?

People, Culture and Lifestyle
Language	What is the local language? Do people speak English, or which other languages?
People	Are you moving to an open and liberal society? Are the people friendly and welcoming, non-discriminatory? Are there social tensions or harmony between different ethnic or other groups in the society?
Culture and religion	Is there uniformity or diversity in the community with regard to religion, ethnicity? Are there places of worship particular to your religion in the country? Is there discrimination against your own culture/religion?
Gender and minority issues	What is the status of women in society? Are there restrictions in public life for women or for people of certain ethnicity, religion, sexual orientation, etc?
Civil rights and freedoms	Is there freedom of speech, religion, language, press, political expression, information etc.?
Quality of living	What is the overall quality of living in the main cities and the countryside? How do the main cities and the country compare globally in terms of quality of living?

Residence Permits
Application procedure	What are the minimum time and requirements to apply for a residence permit?
Ease	Is it easy to become a legal resident? Are there many steps required, interviews, visits to the country?
Physical presence	Are there any minimal physical presence requirements to maintain legal residence status?
Time to Permanent Residence status	What are the conditions and the minimum time required to obtain Permanent Resident status?
Cost	What is the cost to obtain and maintain the residence permit (including tax considerations)?
Visa-free travel	As a resident, are there any visa-free travel benefits irrespective of citizenship?
Status	Does residence in the country provide international social status benefits?
Revocation	Under what circumstances can residence permits be revoked/not renewed?

Citizenship
Time	What is the minimum time of residence required to apply for citizenship?
Ease	Is it easy to become a citizen or restrictive? Does the country traditionally welcome new citizens (e.g. Canada) or is it restrictive (e.g. UAE)?
Language	Are there strict language requirements?
Other restrictions	Are there other restrictions on becoming a citizen (e.g. sub-national restrictions, cultural, ethnic, etc.)?
Visa-free travel	Do citizens enjoy good visa-free travel?
Cost	What is the cost to obtain and maintain citizenship?
Obligations	Does citizenship come with burdensome obligations (e.g. military service, taxation)?
Status	Does citizenship provide national or international social status benefits?
Revocation	Under what circumstances can citizenship be revoked?

Legal and Tax
Taxation	What is the taxable base and rate of taxation of the following?– Income and capital gains taxes– Net wealth and property taxes– Inheritance and gift taxes Are there good tax planning options?
Matrimonial and divorce law	Will pre-nuptial agreements be recognized in this country? What impact does residence in the country have on a possible divorce filing?
Real estate market	What is the state of the real estate markets (residential, commercial)? What is the availability of residential real estate for rent and purchase?
Real estate acquisition	Is it easy to acquire property? What are the transfer duties payable? Are there any restrictions on buying or selling?
Estate planning	Are there forced heirship rules? Can you use trusts or foundations? Do you need to adjust your will and other instruments of succession planning?
Licensing, business permits	How easy is it to set up a business? Are there license and permit rules that one must abide by, i.e. license for carrying out a profession, driver’s license, boat license etc?
Law enforcement and courts	How effective is the local law enforcement?Is there a reliable legal system?Can claims be effectively pursued in court?

1.5 Tax residence: considerations and implications

      To determine if a person should be subject to taxation, countries generally use the following criteria:

      • Residence: a country may tax the income of anyone who lives there, regardless of citizenship or whether the income was earned in that country or abroad

      • Source: a country may tax any income generated there, regardless of whether the earner is a citizen, resident, or non-resident

      • Citizenship: a country may tax the worldwide income of their citizens, regardless of whether they reside in that country or not

      For the internationally mobile, the tax position across different countries will be an important concern. But the amount of tax they pay is also of interest to the relevant tax authorities. The simple rule is, the more you pay, the more interesting it becomes – for both sides.

      Most countries use residence and/or source when determining if a person should be subject to taxation. The US, and to a lesser extent some other countries,⁸ are notable exceptions.

      The place of residence for tax purposes or tax residence is therefore important in determining how you are taxed. If you have connections with, and spend long periods in, more than one country, there may be uncertainty about whether such connection or time spent in different jurisdictions does not make you tax resident in more than one place. The question of tax residence is very important for internationally active people, because getting it wrong can be expensive and time-consuming to resolve.

      Other than the number of days spent in a country – which is perhaps the most important factor – a wide range of personal, business, property, economic and social connections must also be considered to determine ‘tax residence’.

      In many countries, the laws and regulations are ambiguous, except for minimum thresholds (i.e. below a certain number of days of presence in the country – with anywhere between 10 and 90 days a year, you are generally safe and would normally not be deemed resident for tax purposes, depending on the country), and there is generally no clear guidance on the relevant weight of each factor.

      Factors that can play a role include:

      • Where your spouse lives (if you are married)

      • Where your children live (if you have children)

      • Where you have accommodation available for your use (i.e. where you own or rent homes)

      • Whether or not you were tax resident in previous years

      • Whether or not you carry out full-time work somewhere outside the country (i.e. you have a full-time job and workplace outside the country)

      • Whether you are doing any work in the country (even if just a few days per year)

      • Whether you spend more days in the country in any tax year than in any other single country

      • What social ties you have in the country, memberships in clubs and societies etc

      By choosing a country with a mild tax climate for a main residence, a taxpayer can considerably reduce his burden legally and effectively without the need for complex tax planning. Belgium, Croatia, Hong Kong, Malta, Monaco, Singapore, St. Kitts and Nevis, Switzerland, and the UK, to name a few, are attractive destinations in this respect. So a change of residence may well be worthwhile not only as a lifestyle choice but also from the standpoint of taxation.

      A move will either have tax advantages and tax savings or it can create a greater tax burden, depending on the jurisdiction. It is therefore imperative to establish the tax implications prior to changing residence. Interesting scenarios could arise that one would not ordinarily be aware of. Most sensibly, one should consult