While recent events have put a temporary halt on global mobility, as the pandemic dissipates it seems likely that there will be increasing interest from high-net-worth individuals and their families in having their primary or secondary residence in an offshore location. The British Overseas Territories of Bermuda and the Cayman Islands have fared very well in the current crisis, and have a great deal to offer those looking for a safe but sophisticated retreat.
Boasting an enviable lifestyle, ease of access from anywhere in the world, modern infrastructure and very well developed financial services industries, both of these jurisdictions check all the boxes for individuals seeking to relocate to a tax-neutral jurisdiction. Their governments offer various immigration options to suit the needs and objectives of prospective long-term residents. One of the routes to residency is via investment in real estate.
In the Cayman Islands, one option allows persons who invest a minimum of USD$2.4 million in developed real estate to apply for a certificate allowing the holder (and their dependants) to reside indefinitely in the Cayman Islands. Applicants must also show evidence of sufficient financial resources to maintain themselves and their dependants during their residency. Other categories of permit are also available for those wishing to make a more modest real estate investment and/or for persons who may wish to establish or relocate a business in the Cayman Islands. For example, persons can achieve residency by investing at least USD$1.2 million in an employment generating business in Cayman.
In Bermuda, whether or not a property is available for purchase by foreigners is determined by its annual rental value (ARV) ascribed by the Government valuation department. Presently, only houses with an ARV above BM$126,000 and condos with an ARV above BM$25,800 qualify. Realtors typically indicate if a property is available for purchase by foreign buyers. Non-Bermudians require a licence from the Minister responsible for Immigration before they are granted permission to buy a house or leasehold condominium.
As high-net-worth families and their advisers look beyond traditional wealth centres, it's easy to see why islands such as Bermuda and Cayman will be top contenders in attracting HNW families and their family offices, as they offer sophisticated one-stop shop wealth management services in idyllic environments.
Originally published August 2020.
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