Read our digest to learn the latest developments in respect of migration programs and more. This week’s topics include: newborn children of residents will be eligible for a Portuguese passport after they reside in the country for one year; the government of Russia intends to denounce the double taxation treaty with Cyprus; and Swiss cantons entice businesses with corporate tax cuts…
- 1 Ministry of Finance of the Russian Federation denounces the double taxation treaty with Cyprus
- 2 Children of residents will be eligible for a Portuguese passport after they reside in the country for one year only
- 3 Swiss cantons entice businesses with corporate tax cuts
- 4 Bermuda trust firewall provisions have been confirmed
- 5 Montenegro reopens its borders to Russians
- 6 Millionaires are in the market for real estate to take advantage of the slide in prices
Ministry of Finance of the Russian Federation denounces the double taxation treaty with Cyprus
Moscow has confidently lobbied for the taxation policy tightening in respect of Russian companies operating in Cyprus. As it was reported by the Vestnik Kipra, from January 2021, they will have to pay an additional 15% tax on dividend payments transferred to accounts abroad.
The Russia Government has already initiated withdrawal from the treaty with Cyprus. According to comments by the Ministry of Finances, Moscow was unable to effect the compromise with negotiators from Nicosia and ease the requirements due to the fear of “tax-free withdrawals of considerable financial resources”.
After three rounds of negotiations, the agreements between the countries will be amended. The Russian side claims that it was done to improve financial and economic indicators of their jurisdiction. Withholding tax on dividend and interest payments will be charged at the rate of 15%.
The professional service industry will be affected the most.
According to the Cyprus Mail, Nicosia representatives still hope that the terms and conditions will be eased following the results of bilateral meetings on August 10-11.
Earlier, the Cyprus side proposed to make several exceptions in the new agreement and exempt the following categories of persons from higher taxes:
- state-owned enterprises;
- companies that are issuers of listed securities;
- legal entities, if their activities are monitored by investment groups.
Moscow is betting that legal entities will choose other EU countries or return to their homeland. For the first time, revision of tax treaties with other jurisdictions was announced by the President of Russia in his televised address to the population on March 25, 2020. He explained it by the need to support the national economy in the face of the coronavirus pandemic.
This is not the first Moscow’s attack on private business – there was a deposit clipping in 2013 and the corporate tax increased to 12.5%.
Aiming to return taxpayers, Moscow intends to cancel similar tax treaties with Malta and Luxembourg.
Russian businessmen still have such options as Switzerland and the Netherlands.
The Migronis’ experts in international tax law will assist you in choosing a low-tax jurisdiction for business, while taking into account all the latest developments in national laws and international treaties. You can contact them and select options for reducing personal tax costs through investment immigration via the chat.
Children of residents will be eligible for a Portuguese passport after they reside in the country for one year only
The authorities of the republic have changed a number of rules for holders of a residence permit, in particular, related to renewal of the status and terms of obtaining citizenship for their children.
Now all investors who applied for golden visas after April 1, 2020 will have to renew their residence permit for the first time after 2 years, and not after 1 year as it was before. According to the website of the Foreigners and Border Service (SEF) of the Ministry of Internal Affairs of Portugal, corresponding amendments were introduced to the law on the state budget and the law governing the stay of foreign nationals in the country.
Furthermore, the Parliament significantly amended the 1981 Citizenship Act. According to sicnoticias.pt, the approved amendments stipulate that children of foreign nationals born in Portugal are eligible for citizenship after a year of residence in the country.
A child will receive a Portuguese passport if at least one of his/her parents has a residence permit of the country valid for a year and if the couple wants to apply for this minor’s citizenship.
In the future, grandchildren of residents will also be able to obtain a Portuguese passport if two requirements are met:
- their parents acquired citizenship by birth (one year after being born in Portugal);
- residents’ grandchildren must speak Portuguese.
If a foreign child is naturalized, future generations will not have such a right.
Acquisition of citizenship has been also simplified for foreign spouses of Portuguese citizens if their joint children have Portuguese passports.
You can step up the process of getting a residence permit in Portugal for yourself and for your family by being issued a golden visa for investment. Please contact the Migronis’ consultants for more information on the passport by investment program and pre-immigration tax planning.
Swiss cantons entice businesses with corporate tax cuts
As it was reported by the Local, the government of the Swiss canton of Nidwalden has prepared tax reforms, which include reduction of the corporate tax down to 9.8% by 2025.
Nidwalden is located in the center of the country and has a population of just over 43,000 people. It intends to deprive Hong Kong of the title of tax paradise, at least when it comes to businesses (so far their rate is the lowest in the world – 8.25%). The decision to cut the rate has also been driven by the global crisis caused by the coronavirus.
Other Swiss cantons, such as Uri and Schaffhausen, have also cut their tax rates. Bern now has one of the highest rates in Switzerland – 17.2%.
Bermuda trust firewall provisions have been confirmed
According to the Step, a specialized portal, the Trusts (Special Provisions) Amendment Act 2020 has added a new section to the 1989 Act to protect Bermuda trust assets from application of foreign orders, which is done to maintain competitive advantage of such forms of management.
The new provisions strengthen security of the jurisdiction by limiting application of foreign laws and orders to management. For example, a foreign law shall not determine or dispute the structure of the trust, its validity, or rules for its administration.
The final judgment on all matters related to local trusts shall be passed by the Bermuda Supreme Court only.
Exceptions to the above stated are the matters where foreign land is concerned or if foreign law has been chosen to apply to any severable aspect of a Bermuda trust.
Montenegro reopens its borders to Russians
This Balkan State has updated the list of countries, nationals of which can visit the Republic. The respective information was published by the Press Office of the Government of Montenegro at their official web-page.
The National Infectious Diseases Advisory Committee (NCT) passed the resolution that residents of Russia and Azerbaijan can now visit the country without any additional conditions. For example, they do not need to present a medical certificate confirming a negative COVID-19 test or observe a two-week quarantine upon arrival, as it was applicable before. The resolution was facilitated by reduction of the epidemiological risk for the country and considerations regarding the needs of the state economy.
Now participants of the citizenship by investment program can personally visit their investment targets.
You can obtain Montenegro citizenship in about six months by investing a total of € 350,000 in a governmental fund and real estate in the north of the country. The Migronis’ experts are ready to tell you about it in detail via the dedicated chat window.
Millionaires are in the market for real estate to take advantage of the slide in prices
The UK, Spain and France are among top choices of the wealthy.
According to the Global Buyer Survey 2020, a report by Knight Frank that looks at the global market of luxury property, more than 700 clients of this estate agency have changed their investment attitudes.
In the midst of the pandemic, residential real estate has become the top priority for these buyers; a quarter of them expressed desire to buy a secondary residence. Moreover, because of the lockdown, many buyers redefined factors that influence their understanding of what the dream house should actually be like. Availability of a high-quality medical infrastructure is the prerequisite for choosing the country of residence. A lot of people saw the level of healthcare in their homeland and drew out the relevant lesson, so 9% of the respondents intend to change their country of residence due to the above mentioned condition.
Another factor is that a detached house should be a spacious one, sufficient for the entire family, with a private office, a gym and, if possible, a pool and a garden. Furthermore, they ask about high-speed Internet and availability of natural parks and waters within a walking distance.
As to selecting a new country of residence, approximately 70% of respondents indicated that actions of the authorities during the pandemic were an important factor for them.
How to choose the most suitable country for immigration, what factors are to be taken into account, even if they seem to be the low-key ones – the Migronis’ experts will advise you on these and other relevant matters via a chat.