by Jonathan Ralph, Residency & Citizenship by Investment specialist
In recent years, I’ve built a successful, award-winning wealth management practice specialising in residency and citizenship by investment opportunities. More pertinently, I’ve spent that time helping people to intelligently use their existing resources to create a better, freer and more international life. I’ve advised more than 200 families, investing more than €50m of their capital and helping them build meaningful lives across Europe and beyond. This experience, alongside my own history of living and working in multiple countries, helps me understand what it takes to create an international life and navigate the opportunities, bureaucracy, uncertainty and sense of possibility of a future in more than one country.
I’ve noticed a growing trend where business founders are actively seeking second citizenships or residency as a ‘plan B’ strategy. But in my experience, many of them make strategic mistakes in search of a quick fix. Many fail to recognise that global mobility is about much more than relocation – it needs to be viewed as a long-term strategy encompassing tax, investment, lifestyle and security. In this article I’ll explore the five strategic mistakes many of them make and highlight how to avoid them.
Mistake 1: Treating Residency as a Transaction, Not a Strategy
Often, founders focus too much on getting hold of a visa or passport as quickly as they can. In doing so, they overlook how it will integrate with their wider goals around wealth management and their own family timeline. Strategically, they should focus on aligning residency with their own long-term objectives, ensuring that plans consider any lifestyle, business expansion and exit planning goals they have set for themselves. It’s important to remember that mobility decisions certainly aren’t one-off events, and they need to build a holistic, multi-year plan that will evolve over time to meet emerging challenges.
Mistake 2: Ignoring Investment Quality in Golden Visa Routes
Founders often treat the qualifying investments associated with Golden Visa routes as a box-ticking exercise, forming the opinion that it’s a price worth paying for what they want. In doing so, they fail to appreciate the potential risk, how it may impact liquidity and the implications for any proposed exit strategy they have in mind.
Founders need to ensure that the investment they’re being asked to make stands on its own merit – aside from its capacity to enable them to qualify for residency. Every investment needs to be closely examined in relation to capital preservation, opportunities for diversification and in relation to the returns they expect on their investment like any other financial decision.
Mistake 3: Failing to understand the implications of cross-border moves
It’s critical to understand how cross-border moves impact tax obligations, estate planning and business structures. Too often, founders rely on incomplete or fragmented advice or fail to effectively coordinate planning across jurisdictions. Founders need to recognise that effective global mobility requires a clear understanding of how the move will impact legal planning and enlisting the help of an expert early in the process can ameliorate potential problems they may face in the future.
Mistake 4: Having Unrealistic Expectations on Timelines and Outcomes
Many assume that a fast-track to citizenship will deliver immediate benefits. The reality is very different, however. They need to be patient. Processes and timelines vary significantly, and the long-term benefits of each step need to be at the forefront of their decisions – not how quickly they can get the task done. Founders need to discuss trade-offs for each decision, residency versus citizenship, flexibility versus speed, with their advisors to ensure that their ambitions and expectations align with the reality of the process.
Mistake 5: Failing to Build a Flexible “Plan B”
For many, their core motivation revolves around security, optionality and freedom. Founders need to avoid making the mistake of creating a rigid plan that’s unable to adapt to political, financial or personal circumstances. For a truly effective ‘plan B’ founders need to understand the importance of optionality in relation to relocation options, freedom to travel and tax planning. They need to plan for uncertainty, understand that circumstance may change and ensure their ‘plan B’ has the flexibility to adapt to evolving geopolitical events to reap the benefits of international mobility.
In closing, it’s worth reiterating that global mobility isn’t about shortcuts or easy fixes, it’s about strategy. Founders that have successfully relocated have done so by taking a long-term, integrated approach that considers the security benefits alongside the opportunities to be gained. Effective planning, underpinned by expert advice, gives them the agency to take control of their future and benefit from not just a backup plan, but a distinct competitive advantage.
