The Complete Guide to Tax Residency

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Where do Multi-Nationals call home? Anywhere they want to.

Tax residency is becoming an increasingly popular topic among wealthy “Multi-Nationals”. This is a term coined to describe people who truly live an international lifestyle. They have family, friends, businesses, properties, and wealth peppered throughout the world.

As these Multi-Nationals begin to age and consider the significant wealth they have amassed over a lifetime, inheritance and estate planning become important issues for them and their family. This leads many to consider where best to make themselves tax resident for that concluding chapter in their rewarding life.

As many Europeans already know, nationality and tax residency are separate matters. You could, for example, be a German national but be tax resident in the Cayman Islands or Anguilla.

Indeed, this is an appealing concept for a growing number of wealthy Europeans who like to spend their summer months in the Mediterranean, yet flock to the Caribbean for the remainder of the year. And if it comes with significant tax advantages, then why not? 

Tax Residency

The definition of tax residency is quite broad. Some countries outlined it in their tax code. Other jurisdictions have their tax authorities use a variety of criteria for handling the question on a case-by-case basis. Some places might not even define it at all, such as states that do not raise personal income tax, such as Qatar or the UAE. Others, like Hong Kong and Singapore, routinely tax certain local-source incomes but ignore everything else, e.g. what you earn from investments abroad.

And yes, it is possible to be a tax resident in more than one country, but thankfully many governments have entered together into a DTA (Double Taxation Avoidance agreement) to ensure such residents are not be taxed on the same income twice.

Where a person ultimately is a tax resident is often decided by factors such as the place of your permanent home(s), where the centre of your vital interests ultimately lies, the place of your “habitual abode”, how many days you physically spend in a country, etc.

In today’s inter-connected world, with its growing number of Multi-Nationals with footings all around the globe, it is becoming more and more difficult for nations to determine where one’s vital interest ultimately lies. So this has led to countries sharing details under a new regime called Common Reporting Standards (CRS).

In an effort to combat tax evasion and protect the integrity of the international tax regime, governments around the world have introduced CRS, an information-gathering and reporting requirements for financial institutions. CRS is prompting an automatic exchange of data regarding bank accounts on a global scale. As such, this is further prompting anyone with multiple properties and assets in different countries to nominate a specific country as their primary tax residency.

Fortunately, it’s not too challenging for some Multi-Nationals to shift their “centre of vital interests” away from their home country and bring it to a more “tax-friendly” jurisdiction such as Anguilla, Jersey, Guernsey, or Singapore.

Indeed, if you typically do not spend more than ninety (90) days per year in any one country, you can structure your lives around establishing a tax efficient residency base. As there is a need to self-certify under the CRS regime, a tax residence programme allows you to properly establish a tax residence and ensure you are compliant with CRS requirements.

New Tax Residency Opportunity

Latitude, one half of Latitude Group with RIF Trust, is headquartered in Jersey. This is an island with a strong track record of attracting HNWIs to their shores. However, Jersey isn’t alone in the tax residency space. Guernsey, Jersey’s sister island, offers a similar tax regime, with no capital gains tax or inheritance tax. Even Italy, in late 2017, created new provisions designed to attract foreign nationals. You can become a tax resident in Italy, for an all-in annual tax collection of only €100,000 per year.

Anguilla – Reclusively Exclusive

In October 2018, Latitude won a 10-year Public Service Concession with the British Overseas Territory of Anguilla to promote inward investment to the island and attract an international network of Multi-Nationals to their shores.

Anguilla now offers you the opportunity to transition to a low-tax jurisdiction. The island boasts slower paced living and a clean and safe environment. It has a reclusively exclusive setting amidst a tropical climate, excellent food, friendly locals, and beaches.

Its new residence provisions will appeal if you have busy lifestyles and spend less than 90 days in any other country. If you desire an alternate country of residence for you and your family members for tax-planning purposes, Anguilla ticks all the boxes.

The location of Anguilla in the Caribbean is an attractive solution for applicants from Latin America, Canada, and Western Europe. It is quite common for these wealthy nomads to spend significant time in the Caribbean during the winter months. As such, the opportunity to make Anguilla their tax residence would fit into their lifestyle, especially as they will be required to spend a certain amount of days each year.

About Latitude

A new generation of wealthy elite have ambitions that reach far beyond the limitations of national borders. They live in a connected world, with a global outlook. Latitude’s team of specialists offer leading insight and expertise to investors who are prepared to make an important economic contribution to gain residency or citizenship privileges in a selected country.

Latitude also provides government advisory services by helping nations create residency- and citizenship-by-investment programmes that attract this privileged segment of the world population to their shores.

Our internationally-recognized team have over 75 years of combined experienced in the investment migration industry. An unrivalled international network of clients and institutional relationships, combined with complementary ancillary services from our global financial services partner, provides a uniquely compelling proposition for our clients.

But what makes us really stand out from the crowd is our approach: genuinely innovative products, competitively priced services and customer-driven, hands-on delivery. Our clients expect the world – we deliver it.

This article was first published in European Business Magazine.