We investigate opportunities for South Africans wanting to relocate to greener pastures – close to home and further afield
WORDS: DEBBIE HATHWAY – PHOTOS: SUPPLIED
Consistent with the global trend towards pursuing a quality lifestyle in a more harmonious environment, the Covid-19 pandemic has accelerated growth in the investment migration industry. “In the past, alternative residence or citizenship may have been seen as ‘nice-to-have’ assets of convenience that enhanced travel freedom and provided vacation homes, but the coronavirus has prompted a further shift,” says Dominic Volek, group head: private clients, Henley & Partners, the leading international residence and citizenship advisory firm. “Now they are ‘must-have’ essential assets because of the undeniable advantages they provide, including giving families alternative relocation options in a time of crisis.”
The company’s sixth annual Investment Migration Programs 2021 report highlights the world’s most notable residence and citizenship programmes. Malta’s Granting of Citizenship for Exceptional Services by Direct Investment scored highest on the Global Citizenship Programs Index. Also in the top 12 are Austria, Montenegro, St. Lucia, Antigua and Barbuda, Grenada and St. Kitts and Nevis (in joint sixth place), Dominica, Turkey, Vanuatu, Jordan, and Cambodia, in that order.
Meanwhile, the Austria Private Residence Program and the Portugal Golden Residence Permit Program are joint leaders on the Global Residence Programs Index. Following them are programmes offered by Italy, Switzerland, Greece, Jersey, the UK, Australia, Malta, Spain, the US, New Zealand, Hong Kong, Dubai (UAE), Monaco and Thailand.
“Before Covid-19, affluent investors chose where to reside based on somewhat predictable factors such as quality of life, access to education, and travel freedom. Now the big draw-cards include safety and security, access to first-class healthcare with strong capacity, reliable infrastructure, pandemic preparedness and management, good air links, and, most importantly, better prospects for their children and grandchildren, and a safe and comfortable retirement for their parents and grandparents,” says Henley & Partners CEO Juerg Steffen.
Where to for South Africans?
Andrew Rissik, MD, Sable Investment Migration, says 2021 is proving to be an interesting year. “Covid-19 and the consequent global reaction is still very much part of our lives. Despite all the logistical difficulties of international travel, we’re seeing more affluent contributors to South Africa’s economy using the time in crisis to either secure a Plan B for themselves and their families or, more worryingly, decide to leave South Africa entirely,” he says. “We’re seeing clients investing in places such as Portugal, Ireland, Montenegro and Grenada, all solutions with no requirement to relocate or leave South Africa.”
A great Plan B, then. Most qualifying investments are real estate based and some are private equity funds. For people looking to leave, the firm favourites are the UK, Australia, the US and Portugal. Rissik says, “The UK and Australia are popular for obvious reasons, and they’re actively looking for skilled or wealthy entrepreneurial South Africans. The US residency is via an investment that makes it a less popular route for individuals who have not amassed wealth. Portugal is the most compelling option for relocation for retirees and mobile entrepreneurs as the tax regime is attractive and the lifestyle similar to what we’re used to in SA.”
Chris Immelman, who heads up Pam Golding International, rates Portugal the best option for South Africans looking at an alternative domicile for pure investment, EU residency or retirement. Changes to the Portugal Golden Visa Programme have been clarified and are effective from 1 January 2022. Salient points are that residential properties in the metropolitan areas of Lisbon and Porto will in future be excluded from the Golden Visa programme. In addition, the required investment in Golden Visa qualifying funds will be increased from €350,000 (±R6,2m) to €500,000 (±R8,9m).
“This means that all Golden Visa applications will need to be submitted well before the end of this year to still qualify under the existing regulations. Naturally, these changes will not affect those who are already part of the programme,” says Immelman. “While the changes will only be implemented from year end, we urge those still interested in the programme to submit their application as soon as possible.” Given the difficulty of travelling internationally during the Covid-19 restrictions, he suggests consideration of one of the €350,000 developments that provide fixed rental income and a full return of funds at the end of the programme. “Something like the new LAPA Hotel Development, which will be operated by Renaissance by Marriott,” he adds.
Follow the sun
Mauritius is still a popular emigration destination for South Africans with a slew of advantages for those who want to be there for business or leisure. It’s a tax-efficient destination, with income tax capped at 15% and land transfer tax at 5%. Zero inheritance or capital gains tax only adds to the appeal for those considering property investment – something the new Rawson Properties Mauritius franchise can facilitate for investors both on- and offshore.
Rawson franchisee Isabelle Hardy says most South Africans tend to invest around the MUR8,5m mark (R3,2m). The average four bedroom villa on an erf of 1,000m2 will cost upwards of MUR37,867m (R14,288m), but more compact properties are available for far less. Some of the more popular developments open to foreign nationals include Mont Choisy Golf and Beach Estate, Rockview, Ki Resort and Nautilya in the north, Pointe d’Esny Le Village on the southeast coast, and Akasha Villas and Asmara Beachfront Residences on the west coast. Timo Geldenhuys, a partner at Mauritius Sotheby’s International Realty, says the west coast of Mauritius and more specifically the Tamarin/Black River area has become the destination of choice for many investors and professionals choosing to make Mauritius their home.
“This part of the island has seen significant growth over the last five years from a property development perspective as well as in the increase of amenities offered. New international schools, restaurants, shopping malls, office parks and medical facilities, among others, have been established to meet the growing demand driven by the residential developments in the area,” he says. This beautiful area sits at the entrance to the Black River Gorge and is close to the beaches of Tamarin, La Preneuse and Le Morne. Mauritius Sotheby’s International Realty is currently marketing Eco Lodges in Domaine de Palmyre, the most protected area of the west coast, with construction starting on six villas in July next year. Eco Lodges is right on trend in terms of desirability for luxury residential property that meets the need for living close to nature, with nearby mountains and coastline some of the best Mauritius has to offer.