As an established global expert in the field of residency and citizenship by investment, I've observed countless initiatives aimed at attracting high-net-worth individuals (HNWIs). Recently, President Trump announced a new "Gold Card" program, offering permanent U.S. residency for a hefty price tag of $5 million. This proposal, in my view, is considerably out of touch with the market dynamics of investor immigration.
Firstly, the notion that HNWIs would line up to pay a staggering $5 million for the privilege of paying U.S. taxes underlines a fundamental misunderstanding of what motivates investors. Unlike citizenship by investment programs, which offer significant tax advantages and global mobility, a residency program that mandates living in the U.S. adds a substantial fiscal burden, due to the U.S.'s global taxation on residents.
Since 2014, I have spoken at numerous international forums and have seen the transformative impact of well-structured programs. For instance, the popularity of the Cyprus Citizenship by Investment program soared not just because it offered citizenship, but crucially when paired with the Cyprus non-domicile program, introduced around 2015, which offered highly favorable tax conditions (now considered the world's most attractive personal income tax regime).
For his residency initiative to be competitive, Trump should consider integrating elements from non-domicile programs similar to those previously available in the UK and Portugal, and those currently available in Cyprus. These programs have proven successful because they cater to the specific financial preferences of wealthy investors: lower taxes, privacy, and security. HNWIs are not merely shopping for a change of scenery but for jurisdictions that enhance their wealth preservation and growth opportunities.
Additionally, offering big tax incentives to wealthy investors who opt for residency could lead to substantial economic benefits for the U.S. These individuals often invest heavily in real estate, luxury goods, and other markets, driving demand and creating jobs. Moreover, the influx of these funds could support local economies, enhance property values, and contribute to broader economic growth. The presence of these affluent residents can stimulate sectors from construction to retail, making it a win-win scenario for both the investors and the U.S. economy.
In conclusion, if the U.S. wants to attract global capital through residency programs, it should not merely sell residency at a premium but offer tangible financial benefits that are aligned with the needs of international investors. The current "Gold Card" approach, with its focus on high entry costs without tax incentives, is unlikely to appeal to the discerning investor.
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