Tax evasion: blacklist of 21 countries with ‘golden passport’ schemes published

by Juliette Garside
 
 
Three European countries – Malta, Monaco and Cyprus – are among those nations flagged as operating high-risk schemes that sell either residency or citizenship in a report released on Tuesday by the Organisation for Economic Cooperation and Development.The Paris-based body has raised the alarm about the fast-expanding $3bn (£2.3bn) citizenship by investment industry, which has turned nationality into a marketable commodity.In exchange for donations to a sovereign trust fund, or investments in property or government bonds, foreign nationals can become citizens of countries in which they have never lived. Other schemes, such as that operated by the UK, offer residency in exchange for sizable investments.Related: The staggering sums the super-rich pay to get a second passport. – and why(Lovemoney)

The price of the easiest way to a passport from another country: Over the past few decades, scores of countries have generated billions by offering the opportunity for people to buy a passport, something many super-rich people have been all too keen to take advantage of. We take a look at what it costs to buy residency in some of the world's richest countries and why these schemes have been controversial.

The programme operated by Malta is particularly popular because as a European member state its nationals, including those who buy citizenship, can live and work anywhere in the EU. The country has, since 2014, sold citizenship to more than 700 people, most of them from Russia, the former Soviet bloc, China and the Middle East.

But concern is growing among political leaders, law enforcement and intelligence agencies that the schemes are open to abuse by criminals and sanctions-busting business people.

Transparency International and Global Witness, in a joint report published last week, described how the EU had gained nearly 100,000 new residents and 6,000 new citizens in the past decade through poorly managed arrangements that were “shrouded in secrecy”.

 

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Also on the OECD blacklist are a handful of Caribbean nations that pioneered the modern-day methods for the marketing of citizenship. These include Antigua and Barbuda, the Bahamas, Dominica, Grenada, St Lucia, and St Kitts and Nevis, which has sold 16,000 passports since relaunching its programme in 2006.

After analysing residence and citizenship schemes operated by 100 countries, the OECD says it is naming those jurisdictions that attract investors by offering low personal tax rates on income from foreign financial assets, while also not requiring an individual to spend a significant amount of time in the country.

Related: Countries the super-rich are moving to… and leaving (Lovemoney)

Citizenship for sale: Many countries have turned against immigration in recent years, but one group of migrants appear immune to the trend. Figures suggest the super-rich are more mobile than ever before. More open economies, the ease of working digitally abroad and special citizenship or "golden visa" schemes for the wealthy helped record numbers leave their home countries last year. Here are the favored destinations of the world’s elite, and the countries that some are leaving behind.

Second passports can be misused by those wishing to “hide assets held abroad”, according to the thinktank. Its flagship initiative is a framework for countries to cooperate in the fight against tax evasion by sharing information. Known as the Common Reporting Standard, the framework allows for details of bank accounts an individual might hold abroad to be sent to their home tax office.The OECD believes the ease with which the wealthiest individuals can obtain another nationality is undermining information sharing. If a UK national declares themselves as Cypriot, for example, information about their offshore bank accounts could be shared with Cyprus instead of Britain’s HM Revenue and Customs.

“Schemes can potentially be abused to misrepresent an individual’s jurisdiction of tax residence,” the OECD warned.

The final names on the list are Bahrain, Colombia, Malaysia, Mauritius, Montserrat, Panama, Qatar, Seychelles, Turks and Caicos Islands, United Arab Emirates and Vanuatu.

Together with the results of the analysis, the OECD is also publishing practical guidance that will enable financial institutions to identify and prevent cases of avoidance through the use of such schemes, by making sure that foreign income is reported to the actual jurisdiction of residence.

NOW SEE: World’s most (and least) corrupt countries revealed – where does the UK rank?(Lovemoney)

Good country, bad country: More than two-thirds of the world's countries have a serious corruption problem. From blatant bribery and rigged elections to embezzling public funds and intimidating or even bumping off political opponents and journalists, unethical dealings run rife across the planet. Using the latest data from Transparency International’s annual Corruption Perceptions Index (CPI), we count down the world’s least and most corrupt places.

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by Juliette Garside
 
 
Three European countries – Malta, Monaco and Cyprus – are among those nations flagged as operating high-risk schemes that sell either residency or citizenship in a report released on Tuesday by the Organisation for Economic Cooperation and Development.The Paris-based body has raised the alarm about the fast-expanding $3bn (£2.3bn) citizenship by investment industry, which has turned nationality into a marketable commodity.In exchange for donations to a sovereign trust fund, or investments in property or government bonds, foreign nationals can become citizens of countries in which they have never lived. Other schemes, such as that operated by the UK, offer residency in exchange for sizable investments.Related: The staggering sums the super-rich pay to get a second passport. – and why(Lovemoney)

The price of the easiest way to a passport from another country: Over the past few decades, scores of countries have generated billions by offering the opportunity for people to buy a passport, something many super-rich people have been all too keen to take advantage of. We take a look at what it costs to buy residency in some of the world's richest countries and why these schemes have been controversial.

The programme operated by Malta is particularly popular because as a European member state its nationals, including those who buy citizenship, can live and work anywhere in the EU. The country has, since 2014, sold citizenship to more than 700 people, most of them from Russia, the former Soviet bloc, China and the Middle East.

But concern is growing among political leaders, law enforcement and intelligence agencies that the schemes are open to abuse by criminals and sanctions-busting business people.

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Transparency International and Global Witness, in a joint report published last week, described how the EU had gained nearly 100,000 new residents and 6,000 new citizens in the past decade through poorly managed arrangements that were “shrouded in secrecy”.

 

Download the Microsoft News app for your Android or iPhone device and get news & live updates on the go.

Also on the OECD blacklist are a handful of Caribbean nations that pioneered the modern-day methods for the marketing of citizenship. These include Antigua and Barbuda, the Bahamas, Dominica, Grenada, St Lucia, and St Kitts and Nevis, which has sold 16,000 passports since relaunching its programme in 2006.

After analysing residence and citizenship schemes operated by 100 countries, the OECD says it is naming those jurisdictions that attract investors by offering low personal tax rates on income from foreign financial assets, while also not requiring an individual to spend a significant amount of time in the country.

Related: Countries the super-rich are moving to… and leaving (Lovemoney)

Citizenship for sale: Many countries have turned against immigration in recent years, but one group of migrants appear immune to the trend. Figures suggest the super-rich are more mobile than ever before. More open economies, the ease of working digitally abroad and special citizenship or "golden visa" schemes for the wealthy helped record numbers leave their home countries last year. Here are the favored destinations of the world’s elite, and the countries that some are leaving behind.

Second passports can be misused by those wishing to “hide assets held abroad”, according to the thinktank. Its flagship initiative is a framework for countries to cooperate in the fight against tax evasion by sharing information. Known as the Common Reporting Standard, the framework allows for details of bank accounts an individual might hold abroad to be sent to their home tax office.The OECD believes the ease with which the wealthiest individuals can obtain another nationality is undermining information sharing. If a UK national declares themselves as Cypriot, for example, information about their offshore bank accounts could be shared with Cyprus instead of Britain’s HM Revenue and Customs.

“Schemes can potentially be abused to misrepresent an individual’s jurisdiction of tax residence,” the OECD warned.

The final names on the list are Bahrain, Colombia, Malaysia, Mauritius, Montserrat, Panama, Qatar, Seychelles, Turks and Caicos Islands, United Arab Emirates and Vanuatu.

Together with the results of the analysis, the OECD is also publishing practical guidance that will enable financial institutions to identify and prevent cases of avoidance through the use of such schemes, by making sure that foreign income is reported to the actual jurisdiction of residence.

NOW SEE: World’s most (and least) corrupt countries revealed – where does the UK rank?(Lovemoney)

Good country, bad country: More than two-thirds of the world's countries have a serious corruption problem. From blatant bribery and rigged elections to embezzling public funds and intimidating or even bumping off political opponents and journalists, unethical dealings run rife across the planet. Using the latest data from Transparency International’s annual Corruption Perceptions Index (CPI), we count down the world’s least and most corrupt places.