Elijah is a share-holder of an international Israeli company that produces and sells skin care cosmetics. The dividends from the company are the investor's primary source of income, 25% of which goes to taxes.
Elijah is tired of giving a quarter of his income to the government. He decided to become a taxpayer in a country with a favourable tax regime.
The investor has found out that residents of some Caribbean countries do not pay taxes on dividends, royalties and interest. There are also no capital gains or inheritance taxes in the Caribbean.
The investor began wondering how to change his tax residency and become a taxpayer in one of the Caribbean countries.
On 9 June 2021, on his friends' recommendations, Elijah turned to Immigrant Invest.
First step: contacting a licensed agent
Before signing a contract with the investor, Immigrant Invest lawyers performed a detailed check on the investor, called preliminary Due Diligence. The lawyers did that to reduce the risk of refusal to participate in a citizenship and residence permit investment program for Elijah.
Our internal compliance department conducts a comprehensive preliminary Due Diligence on the investor. The check helps eliminate the risk of failure. Suppose we find points in the investor’s background that could result in their application rejection. In that case, we offer a suitable alternative solution or decline to proceed with the application after explaining the situation to the client concerned.
Head of the Legal Department, lawyer, Candidate of Juridical Sciences
Preliminary Due Diligence showed that Elijah has no issues preventing him from participating in a program: no criminal record or visa denials, he gets legal income from his company's dividends and has no tax debts.
The Immigrant Invest team was 99% confident that any citizenship program would approve Elijah’s application. However, there is always a minimal risk of rejection, as the final decision remains with the citizenship program department.
Second step: choosing a Caribbean country for tax residency
Immigrant Invest lawyers informed Elijah that to become a taxpayer in a Caribbean country, he needs to live in a state for at least 183 days a year. It is possible with a country's passport or a residence permit card.
Five Caribbean countries allow investors to obtain their passports through the Citizenship by Investment Programs: Antigua and Barbuda, St. Kitts and Nevis, Dominica, Saint Lucia and Grenada.
To get a Caribbean passport under a citizenship program, an investor passes Due Diligence and fulfils investment conditions.
Each program has at least two investment options. An investor can choose to make a non-refundable contribution to a government fund of $100,000 or buy real estate in the country worth $200,000 or more. An investor gets a Caribbean passport in 2—6 months.
Caribbean citizenship allows visa-free entry to more than 140 countries, including the Schengen Area, the UK, Hong Kong and Singapore.
Passports of Grenada and Dominica enable investors to travel to China without a visa. Investors can get a 10-year tourist visa to the US with a Caribbean passport.
In addition, all five countries are members of CARICOM. For the investor, it means that with one CARICOM passport, he can live in another CARICOM country with no limitations and restrictions and become its taxpayer.
Elijah liked that he could become a taxpayer in another Caribbean country with one Caribbean passport if he wanted.
I only needed to switch to a more favourable tax climate. But with a Caribbean passport, I get more than that.
I had no idea I could become a Caribbean country citizen in a couple of months! And I’m surprised that a Caribbean passport is strong: visa-free China, Schengen, Britain, and visa to the States under simplified procedure. And the fact that I can change my tax residency to another CARICOM country makes me feel freer.
An investor from Israel
Elijah chose Dominica Citizenship by Investment program as the less expensive program among the fastest. Moreover, the investor liked that a Dominica passport allows him to travel visa-free to China, which an Israeli passport cannot.
The Dominica citizenship program terms
The investor passes a Due Diligence check and fulfils the investment conditions to get a Dominica passport. Also, an investor pays the Due Diligence check, the application, and notarial and bank fees.
An investor has two investment options: a non-refundable contribution to a government fund of $100,000 or the purchase of real estate in the country worth $200,000. Under the real estate purchase option, investors can sell the property after an average of 5 years and return the money.
Elijah chose a non-refundable contribution to a government fund. He did not want to buy real estate in Dominica. Elijah wanted to live in other CARICOM countries to decide where he could become a taxpayer. So, purchasing real estate in Dominica would only burden him.
Third step: obtaining a Dominica passport
1. Document collection. Immigrant Invest lawyers filled out an application form for Elijah and prepared a package of the investor’s documents:
- police clearance certificates;
- constituent documents of Elijah’s business — to confirm the legality of income and money for investment;
- a letter of recommendation from the bank;
- Elijah’s bank statement for the last two years;
- medical insurance.
It took two weeks to prepare the documents.
When the lawyers collected the documents, Elijah paid the Due Diligence fee — $7,500. Then, immigrant Invest lawyers submitted Elijah’s documents to the Dominica Citizenship by Investment Unit (the CBI).
2. Due Diligence in the CBI unit of Dominica typically takes two to six months. Elijah received the approval three months after applying.
There were no additional requests from the CBI because Immigrant Invest lawyers prepared a comprehensive package of documents and did everything aligned with the program's requirements.
3. Fulfilment of the investment condition. Along with the approval, the Dominica CBI unit sent details to contribute to the country's Economic Diversification Fund. For Elijah, the fee was $100,000.
$109 815 — Elijah’s payments under the Dominica citizenship program
4. Obtaining a passport. The program unit confirmed that the payments were credited and began to produce a naturalisation certificate and a second passport for Elijah.
Four weeks later, the investor received his passport by mail to his designated address.
4 months to obtain a Dominica passport
Last step: obtaining tax residency in Dominica
Tax residency in Dominica is a three-step process:
- Registration in Dominica.
- Registration of Tax ID.
- Obtaining a Tax Code.
Living in Dominica for more than 183 days per year is not required at the registration stage.
1. Registration in Dominica. The tax documents indicate the address of permanent residence in Dominica. It is enough to rent a house for an extended period, e.g. a year.
Immigrant Invest real estate specialists had selected several properties for Elijah. Elijah then flew to the country on a Dominica passport to see the apartments and open a bank account in Dominica.
Elijah chose the apartment near the sea with one bedroom. Immigrant Invest lawyers contacted the landlord in Dominica to check the legal transparency of the contract and the property. Elijah signed a lease for a year for $14,000 and transferred money to the apartment owner from his account in Dominica.
2. Tax ID is an individual taxpayer number that a person enters into the electronic database of Dominica taxpayers. But Tax ID does not give the right to pay taxes to the budget of Dominica.
Immigrant Invest lawyers started preparing a Tax ID application for Elijah as soon as they received a copy of the rental agreement. They collected the following documents:
- an application form, which indicates the investor’s mailing address in Dominica;
- copy of the lease agreement;
- Elijah’s Caribbean passport.
The investor or his representative submits documents to the tax office In Dominica. Immigrant Invest lawyers transferred Elijah's documents to a local agent in Dominica who continued to act on behalf of the investor by a power of attorney.
The Dominica IRS approved Elijah's application in four days and issued a confirmation certificate with a unique number. The investor entered a personal account on the website of the Dominica tax service.
3. Tax Code a resident receives to start paying taxes in Dominica. After receiving the Tax Code, the tax resident can submit a return to the tax office on the island.
The Tax Code is issued upon request to the Dominica Tax Office. Elijah sent the request through his account on the tax service website.
Immigrant Invest lawyers helped Elijah fill out an application for assignment of the Tax Code. Two days later, the investor received a notification that he was successfully assigned a taxpayer ID for filing returns and paying Dominica’s taxes.
Elijah became a tax resident of Dominica on 22 October 2021 — the whole process took two weeks.
Investor’s future with Dominica citizenship and tax residency
Elijah is ready to move to Dominica. The first time he is going to live in the apartment he has rented to register a tax number. If he doesn't like it here, he will rent accommodation in another area of Dominica.
To maintain tax residency in Dominica, Elijah will live in the country for 183 days a year. During the other half of the year, the investor is going to travel. The Schengen Area, the UK, China, Singapore, Hong Kong — 144 countries are open to the investor visa-free with a Dominica passport.
With Dominica's tax residency, the investor does not need to pay taxes on dividends. For comparison, in the country of his first citizenship, Israel, the dividend tax rate is 25%. So, having tax residency in Dominica, Elijah retains all his income. And with Israel's tax residency, he loses a quarter of his income.