Canadian Citizenship: The Wealthy Global Family's Safe and Tax-Efficient Alternative
Wealthy global families are becoming increasingly aware of their need for a well thought-out citizenship and residency strategy to protect their wealth and to safeguard their freedom of movement.
In the uncertain world facing us today, prudent families understand the importance of keeping their options open and having multiple passport choices. If your family has a net worth of $50 million or more, you may already have started to investigate which combination of passports and residency is best adapted to your situation.
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Canadian Citizenship: The Wealthy Global Family's Safe and Tax-Efficient Alternative
Date: NOVEMBER 2009
http://www.northwoodfamilyoffice.com/re_whitepapers.asp
Canadian Citizenship: The Wealthy Global Family's Safe and Tax-Efficient Alternative
Introduction
Wealthy global families are becoming increasingly aware of their need for a well thought-out citizenship and residency strategy to protect their wealth and to safeguard their freedom of movement.
In the uncertain world facing us today, prudent families understand the importance of keeping their options open and having multiple passport choices. If your family has a net worth of $50 million or more, you may already have started to investigate which combination of passports and residency is best adapted to your situation.
Those who have begun to examine this complex subject will have found that the problem is not the lack of options. Rather, it is identifying the right ones, and probably more importantly, avoiding the wrong ones. For instance, how do you find a place that is safe, stable and free? That is livable, accessible and cosmopolitan? That offers 'first-world' health care, education, culture and services? That is business-friendly, family-friendly and privacy-friendly? That offers tax advantages and the opportunity to preserve family wealth? And, just as important, is likely to retain all these features in the future - both in the near-term and over the many ensuing generations?
For the first time in many years, a confluence of factors is causing many wealthy families to add Canada to the list of countries they are evaluating as part of their citizenship and residency strategy. This paper will review some of the pros and cons of Canada as a destination, but suffice it to say there are three main reasons for giving it serious consideration:
- An appealing destination and passport. Canada has many of the most positive features of a developed country, with few of the most troublesome drawbacks. It is actively looking to increase the number of immigrants, particularly those who are educated and have high net worth. It takes only three years of residency to earn the right to apply for Canadian citizenship.
- A surprisingly-attractive tax regime for high net worth immigrants. While historically viewed as a high-tax jurisdiction, Canada actually has a wide range of basic tax rates, no estate or gift taxes and no 'global tax leash' (i.e. permanent taxation based on citizenship). And although not well known, there are tax-reduction structures specifically designed for wealthy families immigrating to Canada that can allow for minimal taxation for the first five years of residency. As well, there are many attractive planning opportunities that can allow them to obtain a valuable passport with minimal tax consequences.
- World-class professional services and an ideal home for the family office. Canada has a world-class professional services and financial infrastructure, making it an ideal location for the family office, particularly in the new 'post-bank secrecy' world.