Europe’s Competitive Investment Migration Programs – Attractive Options for Wealthy Retirees

Deciding when and where to retire is one of life’s biggest decisions. As we age, being close to friends and family, and having access to good healthcare and security, become central considerations. For high-net-worth individuals, lifestyle priorities are increasingly driving retirement decisions and in turn, interest in investment migration programs.

As mentioned in the Henley & Partners’ Global Mobility Report 2021 Q3 edition, a recent survey of wealthy investors revealed that more than half of affluent investors expect to live to 100 years or more. The UBS Investor Watch Report noted that the expectation of longevity is prompting investors to act differently, adjusting their financial plans and spending habits and allocating wealth to long-term investments. Of the investors surveyed, 90% acknowledged that they believe their wealth enables them to live a healthier life yet admitted to feeling anxious about the financial implications of old age.

The expectation of a long life emphasises the importance of careful retirement planning, not just financially, but also in terms of where to reside. Wealthy individuals nearing retirement age are increasingly looking to investment migration programs — comprising residence by investment and citizenship by investment — to acquire alternative residence or citizenship in exchange for a significant economic contribution, often in the form of real estate investment.

European golden visas highly desirable to the silver economy

Europe’s sunnier, culture-rich coastal enclaves, with attractive investment migration programs to match their natural beauty, are emerging as the retirement destinations of choice for wealthy investors. Eight of the top ten ranking countries in Henley & Partners’ Global Residence Program Index published in Investment Migration Programs 2021 are European, with Portugal and Austria sharing top spot out of 24 countries.

The advantage of European investment migration programs is that they are well established and efficient, facilitating access to high standards of living and healthcare as well as visa-free access to the 26 states in Europe’s Schengen Area.

Europe’s liberal democratic institutions and economic influence have always made it a destination of choice for the world’s wealthy. Europe has also consistently retained its position as the most peaceful region in the world according to the Institute for Economics and Peace’s Global Peace Index, the world’s leading measure of global peacefulness. From an investment point of view, the current record-low interest rates further enhance the appeal of real estate markets in highly sought after investment migration countries such as Cyprus, Greece, Malta, and Portugal.

Real estate-linked investment migration for retirement

Real estate continues to be an investment with staying power, providing decades-long returns.

“Europe’s most popular investment migration programs include the option to purchase real estate, and in exchange investors are granted permanent residence or citizenship. European real estate-linked investment migration programs are a reliable backstop for turbulent times, providing unrivaled safety, security, and stability, as well as obvious lifestyle perks. Over the lifetime of the investment, the investment migration-linked real estate offers three potential gains: the core value of the asset, rental yields should you opt not to live in the property, and the security of global access to hedge against market and political volatility.”

Securing access to world-class healthcare

Aside from the health benefits of the temperate Mediterranean climate and diet, the European countries that host investment migration programs also offer access to high-quality healthcare. Although excellent free public healthcare is available to residents in many European countries, it is often advisable or a requirement for investors to take out private health insurance. This could ensure access to top doctors and healthcare providers, enable more flexible visiting hours, and particularly ensure a reduction in waiting times, often a key consideration for senior citizens.

Those currently looking to secure alternative residence in Europe as a retirement option have a wide range of programs to explore. The attractive real estate investment options of Portugal, Italy, Greece, Malta, and Spain make them abiding favourites.

Portugal – Secure and welcoming, with tax benefits for retirees

As the oldest nation-state in Europe, Portugal boasts a rich history and vibrant culture, with its mild climate, pretty countryside and sunny beaches adding to the appeal for those looking for a complete retirement package. It has a relatively small population of slightly over 10 million and all the benefits of EU membership including visa-free access to all Schengen states.

Retirement in Portugal requires a residence permit, which non-EU citizens can acquire via the Portugal Golden Residence Permit Program, requiring a minimum contribution of EUR 250,000. After five years of residency, you are eligible to apply for Portuguese citizenship.

Importantly for expatriate retirees, healthcare in Portugal is excellent, both public and private. Almost 9% of GDP is spent on healthcare, and all Portuguese citizens and permanent residents can access quality national healthcare for free, although private healthcare reduces waiting times for treatment. There are also tax incentives designed to attract foreigners to Portugal. Those qualifying for non-habitual residence status are exempt from Portuguese income tax for 10 years, and retirees are exempt from paying taxes on pensions that do not originate from Portugal.

Italy – Culture, art, and a favourable tax regime for pensioners

Strategically located in the heart of the Mediterranean and home to some of the world’s greatest art treasures, Italy is another excellent option for high-quality retirement living. Italy ranks joint-2nd on the Global Residence Program Index and offers two investment options to qualify for Italian residence status, with a minimum investment ranging from EUR 250,000 to EUR 2 million securing residence with no permanent stay required.

A recently introduced pensioner tax law has further increased Italy’s appeal for retirees. The new tax regime grants significant benefits to new tax residents who receive foreign income, with a 7% flat tax aimed at encouraging retirees from abroad to transfer their tax residency to South Italy. Furthermore, foreign financial investments and real estate abroad are exempt from wealth taxes. The option can be adopted from the year you become tax resident of Italy and is valid for the nine consecutive years that follow, namely, a total of ten years.

Greece – Pick an island for retirement bliss, with an attractive tax program for foreign pensioners

Greece is regarded as the cradle of democracy and the birthplace of western civilization, and renowned for its hospitality and appealing lifestyle, with hundreds of inhabitable islands scattered across the Aegean and Ionian Seas. The Greece Golden Visa Program is one of the most affordable residence by investment options in Europe — in one to two months, in return for a real estate investment of EUR 250,000 you could receive a residence permit and enjoy the benefits of visa-free access to Europe’s Schengen Area.

In an effort to expand the country’s tax base, Greece recently introduced legislation offering a flat income rate of 7% for foreign retirees who transfer their tax residence to Greece — an incentive applicable for 10 years that applies to all foreign income. Residence applies for multiple generations, with citizenship an option after seven years of residence.

Malta – A leading investment destination

The picturesque island nation of Malta has been called the Mediterranean’s best-kept secret, though it has steadily built a reputation for charm and stability and become one of Europe’s leading investment destinations. It is also known for its friendly people and superb quality of life, making it a good choice for retirees, and its excellent airlinks enhance its appeal.

The Malta Permanent Residence Program requires mixed capital requirements of minimum EUR 175,000. The application processing time is between four to six months from submission to approval, and investment is required in the first five years only. For retirees looking for alternative citizenship, Malta’s Granting of Citizenship for Exceptional Services by Direct Investment Regulations (S.L. 188.05), under the Maltese Citizenship Act Cap. 188, LN437 of 2020, allow for the granting of citizenship by a certificate of naturalisation to foreign individuals and their families who contribute to the country’s economic development. Applications undergo a thorough four-tier due diligence process, and applicants and all adult dependents must hold Maltese residence status for a minimum of 36 months (or 12 months by exception) before they may apply for citizenship. The investment requirement is EUR 738,000 for a minimum residence period of 36 months or EUR 888,000 for a minimum of 12 months (including property lease).

Spain – Invest in real estate and live the good life

Spain is yet another highly sought-after location for investors who are planning for retirement. The Spain Residence by Investment Program is ranked 5th in the Global Residence Program Index and is an efficient route to realising retirement in this vibrant country, with a number of investment options, including real estate. With a minimum investment of EUR 500,000, residence permits are issued after a 20-day consultation period and apply to the main investor, spouse, and all economically dependent descendants.

Seniors are spoilt for choice – Seek expert advice

Europe’s key investment migration destinations have actively been working to attract wealthy retirees to their shores, recognising that this cohort, along with senior professionals aged 45 to 64 years, constitutes the wealthiest age bracket. What is more, according to the Brookings Institute’s Future Development blog, the number of senior citizens is growing by 3.2% every year, with analysts noting that their spending power is also rising — the growth of the ‘silver economy’. By 2030, many of the world’s seniors will be in Asia, and seniors and senior professionals will remain the wealthiest age group.

The big question remains: Where is the best place to invest? With so many options to choose from, it is highly advisable for those interested in exploring what alternative residence or citizenship have to offer as part of their retirement planning to select a reputable and experienced investment migration advisory firm with a strong global presence.