Real Estate Investor Magazine South Africa Real Estate Investor Magazine - June 2017 | Page 52

RESIDENCY BY INVESTMENT
The World is Your
Portfolio
Exploring Offshore Investment
and Residency Opportunities
BY NICOLE DOUGLAS
S
outh African HNW investors have a
longstanding affair with offshore investments,
choosing to hold a proportion of wealth
outside of their home country to take advantage
of opportunities in foreign markets. GlobalData’s
2016 Global Wealth Managers Survey found that
the typical South African HNW investor offshores
32.2% of their total wealth. When compared to the
global average of 18.7%, it is clear that investors in
South Africa display a strong propensity for seeking
opportunities abroad.
When it comes to investing offshore, HNW
investors are motivated by an array of factors. In the
case of South Africa, the strongest driver is geographic
diversification. This can help reduce a portfolio’s
exposure to risk and open the door to investment
opportunities that would otherwise be inaccessible.
Investing in foreign markets may also provide
investors with the opportunity to obtain residency.
Many countries around the world offer residency-
by-investment programs, enabling HNW investors
to make the most of foreign financial opportunities
along with greater education and lifestyle possibilities.
EU countries are of particular interest to South
African investors. GlobalData research shows that
half of South African HNW offshore wealth is held
in this region, namely in the UK. Not only is this
market a major safe haven but it holds historic ties
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with South Africa. However, with the UK losing
some of its charm in light of leaving the EU, investors
will do well to consider other EU countries in which
to obtain residency.
For example, the property-specific program offered
by Spain grants residency to individuals who invest
€500,000 in Spanish real estate or a business and make
at least one visit to Spain during their residency. And
in Ireland, foreign investors can invest €2m in REITs
listed on the Irish Stock Exchange or by investing
at least €450,000 in residential property along with
€500,000 in bonds. In short, these investment
options require a lower minimum threshold compared
to the UK and grant access to opportunities across the
trading bloc that may otherwise be unattainable.
For South African HNW investors looking to
diversify their portfolios and residences, they will do
well to explore offshore opportunities and residency-
by-investment programs. Working with a wealth
manager that specializes in offshore holdings can
provide the expertise and access to products that are
needed for global diversification. Professionals who
offer guidance in residing in specific markets can
assist with local insight and the steps required for a
successful application.
RESOURCES
GlobalData
www.reimag.co.za