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Family Office · Singapore Citizenship / PR Application | Global Immigration
Residency Assessment
en English
af Afrikaanssq Albanianam Amharicar Arabichy Armenianaz Azerbaijanieu Basquebe Belarusianbn Bengalibs Bosnianbg Bulgarianca Catalanceb Cebuanony Chichewazh-CN Chinese (Simplified)zh-TW Chinese (Traditional)co Corsicanhr Croatiancs Czechda Danishnl Dutchen Englisheo Esperantoet Estoniantl Filipinofi Finnishfr Frenchfy Frisiangl Galicianka Georgiande Germanel Greekgu Gujaratiht Haitian Creoleha Hausahaw Hawaiianiw Hebrewhi Hindihmn Hmonghu Hungarianis Icelandicig Igboid Indonesianga Irishit Italianja Japanesejw Javanesekn Kannadakk Kazakhkm Khmerko Koreanku Kurdish (Kurmanji)ky Kyrgyzlo Laola Latinlv Latvianlt Lithuanianlb Luxembourgishmk Macedonianmg Malagasyms Malayml Malayalammt Maltesemi Maorimr Marathimn Mongolianmy Myanmar (Burmese)ne Nepalino Norwegianps Pashtofa Persianpl Polishpt Portuguesepa Punjabiro Romanianru Russiansm Samoangd Scottish Gaelicsr Serbianst Sesothosn Shonasd Sindhisi Sinhalask Slovaksl Slovenianso Somalies Spanishsu Sudanesesw Swahilisv Swedishtg Tajikta Tamilte Teluguth Thaitr Turkishuk Ukrainianur Urduuz Uzbekvi Vietnamesecy Welshxh Xhosayi Yiddishyo Yorubazu Zulu

Six main considerations before migrating to protect your wealth

Over the years, High Net Worth Individuals (HNWI) have been worried about the passing down of their wealth to the next generation. Some possible reasons could be either the high inheritance and estate duty tax in their tax jurisdiction, or next generation was not capable of handling the wealth.

Inheritance tax is a tax imposed on the money or property that you received from somebody when they die, whereas an estate tax is a levy on the estate of a person who has died. Based on the latest information listed in the Wikipedia, Japan has the highest inheritance tax at 55%, followed by South Korea (50%), France (45%), United Kingdom and United States of America (40%). Can you imagine that your descendent had to pay tax at 55% on the money or value of the property before they can gain access to your wealth? At the point of your death, how can your descendent gain the wealth and continue your legacy?

There are four main solutions to reduce or eliminate inheritance tax. Firstly, is to change your citizenship while the second solution is to shift your assets to other tax exempted country. Thirdly, is to set up a Trust and the last solution is to buy insurance. In this article, we will be focusing on using immigration as a form of wealth protection.

An individual can change their citizenship to a country with no inheritance tax or have dual citizenship. Some of the countries that do not have inheritance tax include Hong Kong and Singapore. Based on my years of experience advising on immigration matters, individual should think carefully and consider these six main factors before applying for the citizenship. Some of the considerations are as follows:

  1. What is the tax policy of the country that the individual wants to migrate to?Some countries may have no inheritance tax but the country imposes high tax on individual’s income and capital gain. Failure to consider the tax aspects, may result in an increase in overall tax over the years.  This may not act in favour to the descendent in preserving the family wealth.
  2. Does the country have good infrastructure and medical facilities?Migrating to a country is not to reset the lifestyle and start slogging for livelihood again. It is to enjoy the life at one’s comfort. If the country has good infrastructure such as transport, this will help the individual to get to their destination more easily, accomplishing things that matters to them.The country must have adequate and state-of the art medical devices and facilities and most importantly skillful medical professional. In the event of sickness, the individual must have access to the facilities and the professional to help and use.
  3. Is the country’s political, economic and social environment acceptable by the individual?It would be unacceptable if the individual migrates into a country that have riots every day or a country whereby its citizens dislike foreigners. The individual will not feel secure in both financially and physically. Being in such country will increase the risk of getting hurt both on the individual and also on the individual’s assets.
  4. Is the individual ready to give up his or her current citizenship?Country like Singapore, does not accept dual citizenship. This means that the individual would have to give up on the current citizenship before accepting Singapore citizenship. This may pose an issue to the individual’s business or wealth in the current country, if the individual has added advantage of being a citizen in the current country. You would not want to lose the competitive advantage that you have as a citizen of the current country, that you have built up over the years by merely applying a new citizenship.
  5. Does the individual have family members to bring along with him to the new country?If the individual plans to bring the family members, there are a lot of considerations. For example, the education options and its relevant cost and time to enroll into the school, the accommodation for the family and whether if your spouse is able to find a job in the new jurisdiction. I recalled that a successful female director from Hong Kong was considering Singapore because Singapore has quite a fair amount of international school and Singapore is in the centre of Asia. The positioning of the country in the world and its infrastructure make her easy to fly to neighbouring country for business purposes. In addition, she is able to enroll her children in the International School of her desire, thereby putting her mind to rest on her children, allowing her to concentrate on work.
  6. How is the individual going to make a living or maintain his or her standard of living in the new country?If you are a high net worth individual, it is highly likely that you own a business or certain investment into properties, and other alternative investment. Will you be planning to start a new business in the new country or shift your existing business to the new country or appointing an agent to manage your wealth for you? Will there be any problems to bring the hard-earned money into the new country? These decisions are critical and may affect the livelihood and ease of cashflow in the future.

The above six factors are the commonly discussed factors, that we engage our clients and does not include all the factors that an individual should consider before migrating into a new country. Migrating is no longer a luxury option but a commonly use option to protect the wealth by individual. Understanding your concerns and exploring the various options will allow you to decide the correct country to migrate to. We will be focusing on the use of “Trust” as a tool for protecting and passing down your wealth in our next article.

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