How to Reduce Your Tax Liability with RCBI

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RIF Trust on the Taxation Benefits of RCBI

RIF Trust CEO Mimoun Assraoui  is aware of the many benefits of securing a new residency or second citizenship, including the advantage of being able to cut your tax liability: “Look, I don’t pretend to be a tax expert but I am a Residency and Citizenship by Investment specialist.”

“Everybody at RIF Trust knows the programs inside out, so we’re appreciative of their tax-based obligations,” he explains.

Our CEO sums up: “This article will highlight the most tax-friendly Residency by Investment and Citizenship by Investment programs available to HNWIs. Reducing your tax liability is a relative concept but for the purposes of this piece, we will focus on the countries offering next-to-nothing personal income tax rates or other tax perks to tax residents.”

Reducing Your Tax Liability with Residency by Investment

The Malta Permanent Residence Programme (MPRP) appeals because it allows you to travel freely through the 29 countries making up the EU Schengen Area. Yet its become popular with older investors due to its lack of an inheritance tax. This has seen it find favor amongst British HNWIs looking to retire to the island group.

Base yourself in the Canary Islands with a Spanish Golden Visa and your corporate tax bill will drop thanks to the archipelago’s 4% rate. It’s 25% on the mainland. However, in Malta and Spain, you will be paying over 15% on your income tax.

There’s 0% individual income tax to pay as a UAE Golden Visa holder. There’s also a zero commitment for companies operating out of one of the United Arab Emirates’ free zones. Businesses with annual profits of less than $100,000 similarly pay 0% in corporate tax.

As a HNWI, the 10% federal tax rate on personal income rising from 0 to $11,000 per year is unlikely to appeal. As is the 12% rate for incomes up to $44,725 per annum. You can cut your tax liability with a US EB-5 Visa, however, if you reside in Alaska. Florida, Nevada, South Dakota, Tennessee
Texas, Washington, or Wyoming as none of these 8 states administer a state tax.

Ensuring Less Taxable Income Through Citizenship by Investment

Antigua and Barbuda Citizenship by Investment will lower your tax liability. There’s no personal income tax to pay. Neither, are you taxed on your capital gains, inheritance, or wealth.

The same is true with Dominica Citizenship by Investment. Whichever Eastern Caribbean program you choose, you receive similar tax benefits. Dominica doesn’t tax corporate profits, estates, foreign income, gifts, inheritance, or personal income.

Grenada Citizenship by Investment, likewise, is a portal to a tax-friendly jurisdiction. Again, you’re not liable for individual income tax. If you realize any capital gains on foreign income, there’s no tax to pay either.

We’ve already told you about Malta not applying inheritance tax. This is the same for citizens as well as residents. That makes Maltese Exceptional Investor Naturalization (MEIN) an attractive Citizenship by Investment.

St Kitts and Nevis Citizenship by Investment is another tax-kinder program. St Kitts and Nevis tax residents pay 0% on dividends, interests, and royalties. There’s a mere 4% unincorporated business tax rate.

The last low-tax Caribbean Citizenship by Investment program is St Lucia Citizenship by Investment. Here, you can reduce your corporate and personal income tax liability to 0% on overseas income. If you establish a company on the island, you won’t have to pay tax on capital gains, dividends, or salaries.

Finally, another island paradise in Oceania is also a tax utopia. Vanuatu Citizenship by Investment is a gateway to little or no direct taxation. This makes it a dream destination if you’re concerned with international tax planning.

Selecting the Best RCBI Program For You

Reducing your tax liability is possible with any of these programs. So, how do you distinguish between them? One way of doing so it to consult our Passport Index.

Generally, the European and North American passports offer more visa-free entry than travel documents from other continents. The exception is the UAE passport which you will not be able to secure as there is no naturalization route from residency to citizenship in the United Arab Emirates. Joint top with the UAE travel document, however, is the Spanish passport with visa-free travel to 183 destinations.

You can naturalize as a Spanish national with 10 years of residency. This is reduced to 2 if you come from Latin America or the Philippines. Another strong travel document is the US passport, available after 5 years of naturalization.

The Maltese passport is similarly a top 10 travel document. However, just as in the UAE, you cannot naturalize from residency. So, you will have to pay the higher MEIN premium rather than rely on the MPRP.

What you should do before deciding is talk through your options. This is where an appointment with a Residency and Citizenship by Investment authority such as RIF Trust will help. So, contact us now, and we’ll show you how to begin your tax liability lowering strategy today without delay.