Golden visas and residence permits: how can I move to the EU?
Whether you are dreaming of winters in Cote d’Azur or planning your retirement in the rivieras of Italy or France, Golden Visas are one of the many options available to you since Brexit.
Joanne Leach, our Senior Client Director in France, tells us more about the options available, and the financial planning that should be considered before you move to the EU and Monaco.
What is a “golden visa”?
A number of countries in Europe offer so called “golden investor visas” that result in residency and potential citizenship, when investing a defined sum as payment towards your application of residency.
Why are individuals and families choosing a long-term visa over a temporary one?
If you are a British passport holder or a citizen of a country on the Schengen visa waiver list, you can enter the Schengen area visa-free for a period of up to 90 days in any 180-day period (as per the 90/180-day rule). If your country is not on the exemption list, you must apply for a Schengen visa (or other approved visa) before you travel.
While the 90/180-day rule might sound ideal on paper, Joanne reveals that many individuals and families struggle with it: “90 days every six months isn’t enough time for everyone; it is particularly difficult for those with properties or extended family in the EU.” She notes that the transition from freedom of movement to the 90/180-day rule has been challenging for many Brits and is often a key driver in decisions to make a more permanent move.
In situations where you have used all your permitted days under the 90/180-day rule, but you need to travel again urgently – for example, a loved one living in the EU has passed away – you will need to apply for a VLS-TS, long-stay visa to legally re-enter. In such cases, applying and having a visa granted might not happen as quickly as you would like or need.
“Whenever you want to stay in the EU for longer than 90 days, you must look at country-specific visas,” Joanne continues. “If you are coming to France, you can travel on a long-stay visa, but you must apply for this before you travel.”
France’s long-stay visa typically grants you up to a year in the country. However, when it is no longer valid and you want to return for more than 90 days, you must reapply from your home country.
Altogether, such bureaucracy and inflexibilities are encouraging individuals and families to choose EU residency over temporary visas.
Regardless of whether you are relying on temporary visas or applying for residency, Joanne reminds us that visas should not be your only concern when staying in the EU for extended periods of time. You can – without warning – become resident for tax purposes and this can have a dramatic impact on your wealth.
“If you spend more than 6 months, or more time in that country than any other , you may become tax resident unintentionally in another country and, in the worst case scenario, find you are liable to tax in two countries.”
How to secure EU residency
Golden Visas and various residence permits can help you – and your family – secure EU residency. While each country’s Golden Visas and permits differ in terms of eligibility requirements, all of them have one thing in common: you must invest in, and contribute to, the country and its economy.
EU residency via Golden Visa schemes
Spain, Portugal, Greece, Italy, Malta, Switzerland, Austria, and Belgium all offer Golden Visa programmes for non-EU nationals.
Joanne reveals that a large proportion of her contacts and clients are interested in securing Golden Visas for Spain and Portugal. Both countries make the process relatively easy and cost-effective and spouses and dependent children can be added to applications.
It is worth noting that, to renew your Golden Visa, there is no minimum stay requirement in Spain and only 7 days a year in Portugal. Also, if you hold a Portuguese Golden Visa, you may be able to secure citizenship and an EU passport in as little as 5 years after your initial visa is granted.
Qualifying for a Spanish or Portuguese Golden Visa
As a guide, one of the following investments will help you qualify for a Spanish Golden Visa:
- Purchasing real estate (minimum total value of €500,000).
- Investing in Spanish public debt (minimum €2,000,000).
- Purchasing shares in a company or making a deposit in a Spanish bank (minimum €1,000,000)
- Investing in a new, qualifying business.
There are a number of different investment options that you can choose from to qualify for a Portuguese Golden Visa. Some of them include:
- Purchasing real-estate with a minimum value of €500,000 (note: area restrictions apply).
- Investing in a qualifying Investment Fund (minimum €350,000).
- Purchasing company shares (minimum €1,000,000)
- Creating a minimum of 10 jobs for locals.
Note: Additional criteria must also be satisfied to secure a Spanish or Portuguese Golden Visa.
Applying for a Golden Visa in France, Italy, Switzerland, Austria, and Belgium
When applying for a Golden Visa in countries such as France Italy, Switzerland, Austria, and Belgium, you will find that investing in real-estate is not an option. Instead, qualifying criteria – while still varied – ranges from philanthropic donations (Italy) to the creation of a company and payment of local taxes (Switzerland).
Beyond Golden Visas: French or Monegasque residency
How can I get French residency?
If France is your desired destination there are a number of different visas you can apply for Joanne suggests the most straight forward is the Long Term VLS-TS Visiteur Visa and Carte de Séjour Visiteur Residency Permit.
However, if you wish to run a business or work in France the ‘Talent Passport’ for investors, entrepreneurs, and international talent, enables you – and your family – to reside and work / start a business in the country and lasts for 4 years on a renewable basis, compared to the 1 year renewable basis of the Long Term VLS-TS Visiteur visa.
Joanne states. “You have to apply for both of these visas from your home country, and you should allow at least 3 months before your move.”
Application criteria for the Talent Passport varies by situation, with categories including ‘qualified or highly qualified paid employee’, ‘self-employed or engaged in a liberal profession’, ‘able to prove your national or international reputation’, and ‘performance or creator of literary or artistic work’.
For investors, the ‘self-employed or engaged in a liberal profession’ situation includes a ‘Business Investor’ option. As a general guide, you can potentially qualify for this if you:
Make a direct investment. This may include share capital investments, reinvested earnings or ‘loans between affiliated companies’ and it can be done:
- Via a company that you control.
- Via a company that you have a minimum 30% shareholding in.
You will also need to (as per the eligibility guidelines) be: “creating or protecting, or committing to create or protect, jobs within the four years of the investment” and be “investing, or committing to invest, at least €300,000 in fixed tangible or intangible assets.”
What do I need to do to apply for residency in Monaco?
As Joanne previously told us in her Moving to Monaco guide, securing a residence permit in Monaco is relatively simple. However, she forewarns: “Since Brexit, if you wish to move to Monaco you now need to apply for a French VLS-TS visa before applying for Monaco residence in the country in which you are resident. This can add some three to four months to the application process.
Should you already be in Monaco and caught in the middle of Brexit or Covid 19, there is a possibility that your visa application could be started at the French Embassy in Monaco but the Monaco government must first approve the request.”
While eligibility criteria for Monegasque residency permits can vary by nationality, the main conditions include:
- That you have adequate accommodation in Monaco (with a minimum commitment of 1 year).
- That you have sufficient financial resources.
- That you are of good character.
How will moving to the EU impact your wealth?
Joanne is often asked by her clients:, “which EU country is the most tax efficient to move to?”. She tells us: “the answer to that is dependent on so many things” and suggests that the best way to protect your wealth is to seek professional advice and tidy up your financial affairs before you move.
Joanne adds: “Careful planning before you arrive in France, for example, can result in it being more tax efficient than the UK.”
To begin preparing for your move, she shares these tips:
4 tips to consider before moving to France
1. Plan only for the country that you are securing residency in
A Golden Visa or a residence permit allows you to legally reside in a specific country. This means that you cannot secure a residence permit in France and then decide to relocate to Spain.
“If you are thinking of moving to Spain, ensure that you have taken steps to preserve your wealth for that country – before you move,” Joanne cautions, “whilst the EU makes it easy to move between countries in the Schengen area, each country has different laws and taxes and can require a new visa. As with any big decision it’s important to carefully plan particularly in terms of your wealth.”
2. Review your tax planning strategy
“EU member countries have different tax regimes,” Joanne states. “even within countries, Spain for example, there can be different rates of income tax, wealth tax, inheritance tax, property taxes, gas taxes.”
Tax planning advice helps you ensure that everything from your investments to your inheritance tax (IHT) planning activities are suitable for your new home and as tax efficient as possible. Joanne highlights a few of the many tax-related implications of moving to the EU, showcasing how and why careful analysis and planning is crucial.
“When you are preparing to move abroad, it’s always a good idea to review your investments before you leave the UK,” Joanne points out. She shares an example: for British nationals, ISAs lose their tax efficiency once you become French tax resident and unit trusts can become less tax efficient.
She also advises that, ‘regardless of your age, you should consider estate planning and how you wish to leave your legacy. Estate duties are thought of as a voluntary tax, living in France and other countries in Europe is no different. You need to talk about IHT planning as soon as possible because the laws on death are very different in EU member states. Some have no IHT, others may charge as much as 60%.”
Joanne continues: “many people coming to France – or to another EU member state – often want to maintain ties to their home country. For some, this may mean not selling their there UK residence.” She explains, in such a situation, there may be financial consequences: “Not only does this potentially affect your domicile and potential inheritance tax planning, but there’s other taxes too. In the first five years of moving to somewhere like France you have a wealth tax holiday on foreign property, such as your home in the UK. However, after 5 years, the value of properties outside of France become assessable for tax in France. This can be onerous and in some cases people decide to sell their UK home or downsize at which point the main residence has become your second home and is assessable for Capital Gains Tax (CGT).”
3. Review your pension planning strategy (especially if you are retiring in the EU)
If you are retiring abroad, you will need to consider how best to draw down your pension, as fluctuating exchange rates can prove costly. It is also worth noting that, if you are moving to the EU from the UK, your state pension will no longer increase due to the triple lock on pensions.
4. Find out if there are any financial incentives available to you in your new country of residence
Seeking professional advice can also help you benefit from any financial incentives that may be available to you, especially if you are a highly skilled worker.
In France, for example, the Special Expatriate Tax Regime is offered to individuals who: 1.) are recruited by a company and, 2.) have not been classified as French tax resident for the preceding 5 calendar years. If you satisfy eligibility criteria for the expatriate regime, you will be entitled to a number of income tax exemptions and property wealth tax benefits.
Ready to move to the EU?
Whether you are preparing to move, or you have already relocated, our experienced team are here to help, with financial planning and wealth management advice that is tailored to you and your unique situation.
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