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The Man Who Grew Sark’s Population 20% by Wooing Digital Business-Owners With Political Freedom

German financial advisor and fund manager Swen Lorenz – the man behind Sark Society, a private initiative aiming to double Sark’s population – calls the island a “secret European micro-state”.

Since last year, Mr. Lorenz has helped more than a hundred individuals, many of them location-independent entrepreneurs from his native Germany, relocate to the island. At last count, in 2015, the island – which is part of the Bailiwick of Guernsey but also autonomous in terms of fiscal policy – had a population of 492, implying that Lorenz has single-handedly expanded the island’s population by more than one-fifth in the span of little more than a year.

Interview with Swen Lorenz of the Charles Darwin Foundation
Swen Lorenz, founder of Sark Society

Based in Sark since 2004, Lorenz last year told journalists he launched his initiative because he was “greatly concerned” about the jurisdiction’s falling population, which he worried would make life there “simply not viable.” To reverse the depopulation trend, Lorenz wrote a book titled How (and Why) to Move to Sark?

“I am just a resident of Sark who had the know-how and the network to start a one-off campaign to bring fresh blood to the island,” Lorenz tells IMI in an email. “Over 20% of Sark’s real estate stood empty and the island was on the brink of economic collapse. So I took matters into my hands and did something about it, by starting my campaign and making available a 300+ page handbook about moving to Sark, which I initially sold for $1,500.”

An interview with the BBC last August catapulted interest in Lorenz’s relocation service. “It took over my life for a few months and it has reinvigorated Sark,” Lorenz told the Guernsey Press last month.

Lorenz points out to IMI that he is not usually an immigration advisor and that none of his clients had made use of Guernsey’s investor immigration route.

“The entire 2020 cohort of immigrants came here on the back of the EU Pre-Settled Scheme that was valid for the UK’s Common Travel Area (incl. Channel Islands) until 31/12/2020,” he writes. “They simply all had EU passports and just registered before year-end which gives them the five-year temporary residence permit, which they can subsequently convert to permanent residency.”

Holidays in Sark | Isle of Sark | Visit Guernsey
The main (and only) road between Great Sark and Little Sark
A night-watchman state in the English channel

A generally laissez-faire jurisdiction, Sark is fiscally independent of the Bailiwick of Guernsey (which, in turn, is fiscally independent of the United Kingdom). And whereas Guernsey imposes personal income tax rates of up to 20%, Sark levies no taxes on personal income, capital gains, or inheritances.

The only notable taxes residents need to contend with are the Personal Capital Tax (PCT) and the Property Tax, but even these amount to negligible absolute sums. The PCT ranges from GBP 450 to GBP 9,000 per year, or 0.39% of the subject’s capital base, whichever is the lower. In 2014, for example, the highest total tax payment recorded was GBP 6,400.

There are regulatory benefits as well, Lorenz tells IMI. “In Guernsey, you need to keep accounts for yourself, whereas in Sark you don’t. Tax is based primarily on the size of your property and there is no need to report on income or assets,” he says, adding that the island offers a “slower pace of life,” and that it has no cars or paved roads.

Though the island has no cars, alternate modes of transport are available
Plenty of room left

Questioned as to how the tiny community was able to absorb such a sharp rise in population in a short period, Lorenz attributes the feat to an abundance of unoccupied real estate.

“We have gone from lots of property being empty to now basically 100% occupancy.”

But there is plenty more room for growth, he maintains.

“If all the derelict properties were done up and some large properties put to better use, we could easily get another 100-200 people in here. And then more could be built, despite Sark’s strict planning laws.”

Lorenz has the support of the island’s Seigneur, Christopher Beaumont, who last year told the BBC he had been in discussions with Mr. Lorenz about the plan “for a long time.”

Lorenz says the Seigneur thinks 800-1,000 inhabitants would be the optimum. Mr. Lorenz himself says he doubts the current number is more than 600, but also points out that, because of Sark’s minimal government, population statistics are not generally gathered.

The Chief Pleas, who form the island’s parliament, meet in this unassuming house.

Now that the EU Pre-Settled Scheme has lapsed, prospective Sark residents will have to avail themselves of conventional channels of immigration. Guernsey has both an Entrepreneur and an Investor visa program, the latter of which has a minimum investment requirement of GBP 750,000.

“Sark’s authorities had assumed neither [the entrepreneur nor investor visa] applied to Sark. I informed them that the entrepreneur visa does apply to Sark – even though no one has ever applied.”

It is likely, he says, that Guernsey will extend also the investor visa to Sark later this year, as part of a harmonization of immigration rules between the Channel Islands Bailiwicks and the rest of the UK. At that point, he notes, Guernsey is also likely to harmonize the investment requirement with that of the UK’s Tier 1 investor visa, which is to say it would raise it from GBP 750,000 to GBP 2 million.

More From Europe

Lorenz – the man behind Sark Society – calls the island, which has no cars, no paved roads, and practically no taxes, a “secret European micro-state”.

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The post The Man Who Grew Sark’s Population 20% by Wooing Digital Business-Owners With Political Freedom appeared first on Investment Migration Insider.

Neither Holiday Nor Investment: The Rise of Digital Nomad Visas Part 2


Due Process
With Michael Krakat

Legal Scholar Michael B. Krakat observes investment migration through the lens of international, constitutional, and administrative law.


This article is a sequel to December’s “Holiday by Investment” and The Rise of Digital Nomad Visas, where the focus was on holidays rather than work. In this follow-up article, the opposite will apply, focusing on the working side of things, now as it seems commonly referred to as teleworking visa or Digital Nomad Visa (DNV). 

What is one’s exact work/life balance and working status is no longer clear: Being home, or being stranded/marooned, or being on holiday while working, is more than ever becoming a question of perspective and degree. Working from locations more exotic than home (other than having your home in exotic locations) makes sense, especially in times of global turmoil.

During the coronavirus pandemic, working from home arrangements are slowly becoming the new normal, a change in modus operandi likely to persist well after the pandemic has been vanquished. Especially those countries that have been relying on tourists may profit from revenue created by way of digital nomad workers. Several states, including some small island states, have proposed their own versions of the DNV, allowing foreign nationals to stay for longer periods while working their jobs or projects remotely. 

21 points prospective DNV participants must contemplate
Recurring requirements and important points to keep in mind for those considering a DNV include: 

  • Application costs (normally marginal when compared to CBI);
  • Evidence of (self-)funding/financial sustainability, at the very least, for the time of visit/temporary residence;
  • Health insurance (global) should include a med-evac fly-out option pending the country’s health infrastructure and availability; 
  • Registration for superannuation or other social security agreements;
  • Taxation planning (in which jurisdictions is the work performed?); Dual taxation agreements (avoidance of dual taxation);
  • Nature of work/legality (self-employement or employment), full- or part-time work; work pending on both jurisdiction for which work is performed, as well as jurisdiction in which the (online) work is performed; 
  • Any (ie. political) impact of the work so performed on the place of actual abode (ie. blogging);
  • Cost analysis, real living costs;
  • Requirements for partners and/or dependent children;
  • Requirement or incentives to employ locals;
  • Political stability and overall safety; 
  • Networking, professional support;
  • Restrictions on nationalities able to visit and take out the DNV;
  • The exact validity period of the visa;
  • The exact nature of the DNV, which may include or exclude any of the points mentioned;
  • Possibility to change visa status and the consequences thereof;
  • Are there options to renew, to extend, as well as to transition into other visas? Eventually, are there pathways to permanent residence (PR)? Will the period of DNV count toward PR?; 
  • General COVID-related health requirements on exit (see ie. IATA), travel bans & exemption applications ie. Australia, vaccine requirements, etc. In addition, what are the arrival country’s quarantine requirements and health coverage?
  • Potential long term sustainability in case of COVID lockdowns;
  • Weather, long term personal sustainability;
  • Last, but not least, overall connectivity/internet quality.

Digital nomad visas don’t fit neatly into conventional visa categories
What is the legal nature of DNVs? This depends on the actual circumstances. For DNVs, there really isn’t any ‘investment’ as such. Unlike holiday by investment visas, the stay is long term and the basic structure is not that of a visitor visa with merely the elements that focus on tourists extended for people working remotely. 

These are, hence, no mere visitor visas with any working-restriction waived. As it seems, the closest visa category may be the actual work visa. This is because the visa conferral depends on evidence of work undertaken in reference to another jurisdiction. However, this could be an issue as the work is performed for another jurisdiction, because one is not locally employed, and because the fruits of one’s labor are not or not usually or necessarily so enjoyed in the place of actual abode. 

Corporate permission should be obtained to extend the working from home arrangement and to transplant it into another jurisdiction. 

One may be employed or self-employed/freelancing. Tax advice should be taken out before embarking on a DNV, especially for countries that do not address dual taxation by way of agreement.  

When compared to residence- and/or citizenship by investment RCBI options, digital nomad visas appear as being exceptionally affordable:  Examples include Bermuda, where visitors can apply for a 12-month ‘residential certificate’ for US$263. This is contingent on some of the abovementioned requirements, including financial sustainability for the time of residence, to avoid the necessity to find local employment. 

Barbados also allows for a 12-month DNV. The remote work visa is open to individuals and families throughout the world, beginning with a fee of US$2,000 per person/US$3,000 per family unit and the proving of at least US$50,000 earnings per year.

Similar arrangements exist for Estonia with proof of at least US$4,180 of monthly income in the last six months, a 14-day isolation period to help the country maintain its low COVID-19 infection rate, and a EUR 100 application fee. The program is to be capped at 2,000 applicants per year. 

Georgia is another country for this type of visa, as is Germany (Freelance visa for up to three years), the Czech Republic’s Long Term Business Visa (one year), Spain’s self-employment work visa (one year), or Mexico’s Temporary Resident Visa (up to four years). 

Pacific island states such as Vanuatu, holding the status of ‘COVID-free’, may widely profit from such a program. All DNV countries profit from regional workers. In Vanuatu’s case, this would be Australians and New Zealanders, despite the quarantine requirements still in place. In the case of Bermuda, Americans, and so forth.

DNVs are politically more palatable
In any case, the DNV holders would likely have a positive impact on local economies, generating more revenue than regular tourists, as their period of stay is far longer. Education and training programs, as well as conferences, and even start-ups could follow suit, bringing back local and global economies.

Acceptance by the local citizenry may be substantial in that local jobs may be created in the wake of DNVs, whereas no local jobs or job prospects are under threat by what amounts to highly educated and trained DNV experts in fields including IT. DNV may then be renewable – if need be, indefinitely so – creating a win-win economic environment. 

In conclusion, the vocational output may increase depending on one’s preference of abode. There is no more need to stay in dull weather or being bound to a specific office location. For many, laptop work is made possible anywhere with a stable internet connection. The list of countries offering DNVs as a COVID recovery plan is likely to grow quickly, and further options will likely arise. 

More from Due Process

The list of countries offering digital nomad visas as part of COVID-recovery plans is growing quickly, writes Michael B. Krakat.

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Long-term but temporary stay visas for people who can work from anywhere are in vogue. Michael Krakat evaluates their merits.

 

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The post Neither Holiday Nor Investment: The Rise of Digital Nomad Visas Part 2 appeared first on Investment Migration Insider.

“Holiday by Investment” and The Rise of Digital Nomad Visas


Due Process
With Michael Krakat

Legal Scholar Michael B. Krakat observes investment migration through the lens of international, constitutional, and administrative law.


Globalization, including the worldwide sale of citizenship and residence, has incorporated millions of migrants into a global market for membership entitlements. Persons have today joined the movements of goods, services, and capital. The need for global mobility, in response to globalization, as well as to climate change or pandemics, has become one of the most pressing issues of this century.

Migrants of the world do not form their own country. If they did, that country would arguably be one of the largest on earth (the fifth largest, as it was once estimated). Aspects of these commoditized migrations include lifestyle migrations of cosmopolitan travelers as ‘citizens of everywhere and nowhere.’ For some, the temporary life of a more or less permanent traveler may bring the decluttering and minimization of some assets, but this does not necessarily need to be the case.

As a form of temporary residence, “lifestyle migration” has developed as a way for the affluent and privileged to stay on the move, in continuous search for temporary stays, as a way of moving on a permanent basis, with varying levels of attachment (if any) to a given place. Often, of course, there are one or more permanent home bases or safe havens to which the traveler can return. Laptop work, passive income, and early retirement are included in highly individualistic patchworks of interlocking stories and identities.

Travel on passports that allow a relatively large number of visa-free entries into destinations worldwide is of great help when attempting to pull off lifestyle migration. The same must be true for diversification of political protection by one’s actual home countries effectively acting as ‘anchors’ on global journeys. 

Gathering no moss
A sub-form of residence by investment (RBI) – sometimes expressed as the direct purchase of visas – may then be long-term holidays by investment (HBI). 

HBI, when combined with other such programs and planned to line-up over the course of several years, could lead to a prolonged (everlasting?) holiday, following the proverbial ‘endless summer’ across seasons and times zones. 

It may then well be true that temporary stays, inasmuch as they win you time, may actually act as ends, not merely means, and become the final result, beyond permanency expressed through visa or even citizenship. In other words, why not constantly be on the move, with time intervals that may be well planned? 

There is merit in the temporal, especially when various temporal programs are combined: Here, it may no longer take a cynic to suggest that one’s (grand-) parents may perhaps be better placed in various holiday locations or world-cruises – private nurse included – which could be less costly than the aged care and retirement facilities in many countries.

A residence at cruise ship The World is one alternative for perpetual travelers.

But the temporal even has merit if only as a stage on the way to naturalization: Applicants for countries’ residency may here benefit from the limbo of waiting lists and temporary visa as such, with the progress and long road to naturalization effectively becoming a temporary safe haven.

Care must be taken here in that visa applications are often based on the intentions at the time of application, and knowledge of abortion and the utilization of processes toward the permanent for temporal purposes could be viewed as vexatious applications.

At the same time, the legal minus of temporary stages or steps within applications toward permanent residence is – pending the circumstances – often factual and legitimate instruments to spend time on country. 

Likewise, temporary visitor visa or special category visa options as zero commitment and maximum outcome allow lawful presence. 

Temporary status, in other words, may often suffice for a person’s actual (temporary) needs and become a permanent state only if that is desired. Lifestyle applicants, consumers of places and experiences, may often ask themselves: After how many years – or after how many memories created – do I get tired of a place become ready to move on? 

The permanently temporary
There appears to be no problem with HBI where both the selling country and the migrant are clear on the mutual goals. The concept of HBI appears to be complex as it might include holiday only, as well as work-holiday lifestyle options, such as ‘working from home in a holiday location’ deals. HBI may then include anything between mere visitor status, as well as no work conditions on visitor visas waived (working permits for visitors granted) and other aspects of temporary residence under special category visas, pending the actual circumstances of the applicable law. 

Antigua & Barbuda offers special residence status for two years to ‘digital nomad’ laptop workers. Barbados allows ‘working from home’ on its shores for one year. Similar programs exist for Bermuda, Estonia, and Georgia, offering remote workers the chance to experience a different way of life for a specified time. 

An interesting option is what appears to be tourist visa residence by payment ‘loyalty options’, perhaps more close to the heart of holidays, absent the work component. The Maldives here offer a $30K ‘all you can stay’ holiday package at the Anantara Veli Resort in the South Male Atoll. It apparently includes the use of a two-person overwater bungalow at the private-island property for unlimited use over 2021, including breakfast and airport transfers. This then seems to tie into the countrywide loyalty program, a three-tier-tourist program called ‘Maldives Border Miles’ to debut next year, including Gold, Silver and Bronze levels that correspond with the money spent in the country, pegged to reward for frequent visitors. 

An overwater bungalow at the Anantara Veli Resort in the Maldives.

Section 9 of the Maldives Immigration Act outlines that permits to remain in the Maldives include Tourist Visa (as well as Diplomatic-, Student-, Business-, Dependant-, Work-, Resident- and Special Visa). It then appears that, under s10 of that Act, Tourist visa usually go for up to 30 days, but can be extended to 90 days. However, another way to extend the stay appears to exist under s18, whereby a foreign national who has a permit to stay in the  Maldives and would like to remain for a longer period than allowed in the permit may apply for an extension. Upon receipt of such an application, pursuant to Regulations, made under the Act, there is government discretion to extend it.

Presumably, examples such as these may fall under the tourist visa category. However, these prolonged stays may likewise run under the special visa without actual time limitations.

It appears that, on the example of the Maldives, HBI acts as a ‘minus’ not only to citizenship by investment (CBI) passport purchases, but also to (temporary) residence by investment (RBI). Breakfast is included, and the stay is limited to certain premises, which makes HBI something ‘less’ than RBI, a vacation by investment through the lens of certain premises offering the deal.

The potential inherent indeterminacy is here of interest, as it seems up to the visitor how long the stay should be getting extended, subject to certain caps (such as an annual cap). It may then perhaps even be open, whether the ultimate cap of a yearly stay in the hotel could itself become negotiable. 

Offers such as these are potentially extendable: One could think beyond the adding of lunch, dinner, or the use of sporting and leisure equipment. Options could include travel between hotels or other places. In the logic of mercantilism, will we perhaps become able to swap between similar packages, places, and deals? An important (serious) upgrade would be some form of health-care throughout the time of stay and other options that could be added to the package, such as other insurance (including cancellation) or the later addition of family members or friends into the deal. 

Healthcare itself then is perhaps one of the most pressing issues in both RBI and HBI, and it may be a good idea for those offering lifestyle migration to add such options. Health is especially an issue if one looks at the older expat generations in many of the holiday locations, some perhaps able to utilize (costly) global healthcare insurance packages (including the emergency evacuations), and others relying on locally available healthcare. Pre-Corona, when frequent flyer points somewhat demarked a way of life for many, it was often possible to change from one temporary travel-healthcare option to another as the overall travel continued. 

For lifestyle migrants, travel itself and temporary residency in multiple places, even on rotation throughout the year, may even create a somewhat permanent state of affairs beyond attachments to any single place. This then could become a way of life also from the point of choosing- or leaving – one’s (previous) tax domicile.

This may in certain instances be problematic for American and Eritrean citizens, who are taxed globally based on their citizenship. Permanent traveling then appears to be an art-form, perhaps getting harder to implement, and may certainly lead to unforeseen consequences if not well planned. Global, permanent travel appears as such as mostly a legal venture in itself. Yet, the laws of each country will need to be understood and followed, including any limitations and conditions imposed on working whilst on a tourist visa, as well as in regards to taxation based requirements. 

With HBI, flexibility appears to be the key, as the borders between RBI and lifestyle migration appear fluent. Some years of travel and escapism may be combined with years of more permanent residence, including the return to the urban matrix and a more settled presence in the pursuit of overall happiness. 

More from Due Process

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Michael Krakat: The Greeks and Romans had competing views of citizenship: link-based and transaction-based. Little has changed in 2,000 years.

 

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