How to get a top class passport after only two years of residency

Transcription

1 How to get a top class passport after only two years of residency Just like tango, the country s famous music and dance, Argentina has a certain sorrow feeling to it. You can t help but think what could have been.. In 1914 Argentina was the world s shining star. In the 43 years leading up to the First World War its economy had grown at an annual rate of 6%. This was the fastest rate in the world at the time faster than even the US, which was experiencing its own rapid expansion, known as the Gilded Age.

2 At the outbreak of WWI Argentina was among the richest countries in the world, its income per person higher than in Germany, France, or Italy. It was the world s true land of opportunity. For an aspiring economic migrant at the beginning of the 20 th century the choice between New York or Buenos Aires was a hard one. Indeed, in 1914 half of the population of Buenos Aires was foreign born, made up of mostly Europeans. Argentina s economic might was matched by its cultural sophistication in those days the world s greatest performers made a mandatory stop at Teatro Colón in Buenos Aires, which is still considered one of the best concert venues in the world today. One hundred years ago Argentina was the future. Today, it s more known as a basket case. Especially since the times of Juan Perón after WWII, Argentina has been stumbling from crisis to crisis. It s been burning through currencies as they disintegrated in hyperinflations, enduring military dictatorship that murdered and tortured its own people, collapsing under the weight of its debt, suffering from shortages of basic necessities, and generally making life for its people a constant ordeal. It s really a sad state of affairs. 2

3 The Argentines are incredibly industrious, creative, worldly, intelligent, and fun-loving people and shrewd when it comes to business. Buenos Aires is a truly grand city, with magnificent architecture and culture. Yet signs of stress and decay are visible everywhere today. Poverty is creeping back after a few good years fuelled by the commodity boom, thanks to the government s policies of delusional autarky and populism. The country of course famously imploded in 2001 when a currency crisis and debt default caused people to resort to barter, with large markets of physical goods that were trading hands set up all over Buenos Aires. To this day Argentina s economy remains highly dysfunctional. The government has been cooking the books to mask real inflation caused by money printing. It instituted capital controls to try to prevent money fleeing the country. This caused the emergence of an unofficial black market rate for hard currency, which is widely used. It s really hard to see how Argentina could get any worse economically and politically. And it just might be that the tides will begin to turn after presidential elections in a few months, with the incumbent Cristina Fernández de Kirchner leaving office for good. 3

4 So, Argentina could prove a true contrarian, crisis-investing play right now for the right type of buccaneer. But that s not what I want to talk to you about today. Qualify for a second passport after two years of residency in Argentina Another reason why Argentina is attractive is because of its very low barrier to citizenship. Argentina s nationality law has been unchanged since 1869 and says that one can qualify to become an Argentine citizen after only two years of residing in the country. First off, an Argentine passport is an excellent travel document, ranked 17 th in the world, with visafree or visa on arrival access to 150 countries. This covers all of Europe, including Russia, Turkey etc. Argentine passport holders do need a visa to the USA, Canada, and Australia, however. Because the Nationality Act is almost 150 years old Argentina relies heavily on case law when it comes to immigration, even though it s a civil law country. This means that naturalization cases are treated differently from one Federal Court to the other. In the city of Buenos Aires alone there are 11 Civil and Commercial Federal Courts that have 4

5 jurisdiction over citizenship cases, with different criteria when it comes to naturalization qualifications and requirements. But let s take it one step at a time. If you re interested in pursuing Argentine citizenship, you need to first establish residency in the country. Step 1: Establish residency in Argentina What visa type you get is not relevant when it comes to naturalization, with all visas eligible (even student visas) after two years of residency (less if you are married to an Argentine citizen or have Argentine children). However, the easiest options to establish residency in Argentina are either the so-called rentista visa or the retiree visa. Recommended: Rentista Visa Rentista visas are common throughout Latin America, and we covered them in Chile and Colombia, among others. In essence they are for rentiers people with independent income from property, investments and such. In Argentina, in order to qualify for the rentista visa you need to demonstrate a minimum of $1,000 per month in passive income, which needs to be transferred to an Argentine bank account in your name. The following type of income is suitable for the rentista visa: Income derived from financial investments: dividends, annuity, receipts from a trust, interest payments from certificates of deposit etc. Regular distributions from a business you own outside of Argentina Rental income from outside of Argentina Just like in Chile, the rentista visa is a temporary one-year visa. It can be extended in one-year increments. You can, and in fact should, initiate the residency process while in Argentina, not at a consulate abroad, which will only complicate matters unnecessarily. The documents required to apply for the rentista visa are: Passport and photocopies of all of its pages Two passport-sized photos Criminal records from countries where you have lived during the last three years Argentine criminal records* Proof of income documents based on the criteria above 5

6 *Yes, a background check from Argentina is needed as well, even if you never lived in the country. After you enter Argentina as a tourist, our recommended legal contact (see below) will take you to the relevant government office to get the necessary document (it takes 24h), after which you can apply for residency. All documents issued outside of Argentina will need to have an Apostille legalization (a higher level of notarization) affixed, or be legalized by the Argentine Consulate in the country where they were issued. Also, all documents in a language other than Spanish must be translated in Argentina by a licensed translator, having its signature certified at the Colegio de Traductores. Again, our recommended legal contact will take care of this for you. Once you have all the documents gathered and have submitted an application, the immigration agency will get back to you within 60 days. If you want your spouse and children to become residents as dependents as well, the monthly income requirement remains the same $1,000. Another option: Retiree Visa Essentially the same as the rentista visa, the retiree visa is also a good option. The regulations don t specify any minimum amount for the pension pensions as low as $500 per month were found to be approved. 6

7 The regulation also doesn t specify the required source of pension, and our legal contact has successfully obtained residency for people with private pensions as well. Official residency expenses The following expenses are associated with applying for residency in Argentina (not including legal fees): Filing fees: AR$1,200 ($133, using the official exchange rate) Argentine background check: AR$150 ($17) Translation fees: AR$300 per page ($33) Legalization fees: AR$165 per document ($18) Step 2: Live in Argentina at least partially If you want your naturalization process to go without a hitch, you should actually be spending time on the ground in Argentina for at least six months during both the first and second year. This is what s required by the immigration agency to keep your legal residency in good standing. Now, despite the dire straits its economy finds itself in, Argentina is a very nice place to spend time. Something can be found for anyone. From the bustling and cosmopolitan Buenos Aires, to the more laid back lifestyle in the provinces. If there s something Argentina doesn t lack it s space. The country is huge, and populated by only 41 million people. There are vast empty spaces, especially in Patagonia, the southern part of the country. Whether you re into deserts, Alpine landscapes and winter sports, fields, vineyards, lakes, and rivers, or cultured cities, Argentina has something for everyone. Another great thing about Argentina of course is the lifestyle. Argentines themselves are hedonists, with a high propensity to enjoy life, no matter what is being thrown against them. Having excellent wine and food helps. So after suffering for two years by drinking malbec and eating steak you can apply to become a naturalized Argentine citizen. 7

8 How to use capital controls to your advantage Every time destructive governments distort the market, opportunity arises. In the case of capital controls, despite the government s efforts to maintain an overvalued official exchange rate, the market will always come up with a true supply and demand balance. Currently, the unofficial, blue dollar rate is about 30% higher than the official one. Which means that Argentina can be really cheap if you exchange your money at the market rate. This means that you should eschew official exchange offices and ATMs. If you fly in, taxi drivers will be usually more than happy to accept your US dollars as well. The unofficial, market rate is so prevalent in Argentina that it s really not difficult to find someone willing to exchange their pesos for your dollars. To exchange money at the market rate you can simply ask in your hotel, taxi drivers, or shop assistants if you re not of course already confronted by the sight of moneychangers on the street shouting Cambio! Otherwise this doesn t really apply to Argentina, since the practice there is so ubiquitous I ve always found the best way to exchange money at the market rate in countries with capital controls is to walk into a jewelry store and ask them if they know where you can exchange money. They ll usually do it for you right there. Remember that you can bring in up to $10,000 US dollars in cash (or the equivalent in euros) into Argentina without having any problems. This is cash that you will be able to exchange at the blue dollar rate. And it s enough to live the most luxurious lifestyle for several months. A lot of locals tend to open a bank account in neighboring Uruguay at the Colonia branch of Banco de la Republica Oriental del Uruguay. They can hold and withdraw US dollars to that account, so if they need more dollars to live in Argentina, it s a short ferry ride away. Step 3: Apply for citizenship As I said before, some courts in Argentina are more efficient and friendly when it comes to approving naturalization requests. (Our legal contact will help you find the best solution.) Some courts will only check when the local ID card of the applicant was issued. If it was issued more than two years prior (which doesn t mean that the applicant has been physically present in Argentina during that time), they will move forward with the naturalization application. 8

9 Other courts are more meticulous and will request from the immigration agency to see the entry/exit records to Argentina to determine if the applicant meets the physical presence requirement within the last two years. You will also be required to demonstrate sufficient financial resources to sustain yourself in the country. There is no minimum income requirement, but you can have an application approved with an income starting at $600 per month. Upon application you ll also need to show at least lower intermediate level of Spanish language proficiency. The language test is very informal and friendly. It normally consists just of a short conversation, and perhaps reading of a few articles from the Argentine constitution. The naturalization application process normally takes at least 9 months after it was submitted to the court. Our legal contact says that the 11 courts in the city of Buenos Aires are pretty efficient, and take between 9 months to a year to finalize the process. In the provinces, he says, it s a completely different story it can take from two to five years. Initiating applications outside of Buenos Aires is therefore not recommended. Since you cannot choose your court, it s important to register your domicile within a jurisdiction of a court that s known to be more efficient. The whole process takes part in a federal court, so a judge is in charge of deciding on your case. Normally the whole file is handled by a court clerk, so you don t even get to see a judge in most cases. It s also important to note that naturalizations happen regularly in Argentina, with courts in Buenos Aires receiving dozens of applications every month. 9

10 Tax implications Like most countries, Argentina taxes its residents on their worldwide income. You become a tax resident in Argentina when you acquire official residency in the country or physically spend more than three months there in a year. Income tax rates for individual residents range from 9% to 35%. If after you become an Argentine national you decide to leave Argentina, there ll be no more tax liability to Argentina, as long as you don t spend more than 90 days cumulatively in the country within a 12-month period. Foreign individuals coming to Argentina for employment purposes for a period not extending five years are NOT considered tax residents in Argentina, and therefore only pay taxes on their Argentinesourced income. Forced heirship rules are practiced for assets located in Argentina, regardless of your nationality. So it can be an estate-planning nightmare unless you re very careful about it. On top of that there is also a wealth tax (0.5% %) on assets held in Argentina by non-residents and on assets both in Argentina and worldwide for residents of Argentina. In practice, almost nobody declares assets outside the country, but the AFIP (the local IRS) is taking some measures to find them. For example, by checking company records online for US states to see if residents own foreign companies. There is no inheritance or gift tax on the federal level, however, although the provinces of Buenos Aires and Entre Rios do levy such a tax. The bottom line, however, is Argentina is not a place to plant a financial flag. Don t hold much assets or savings in the country. If you have investment income offshore, leave it offshore apart from the amount necessary required for your residency. If you bring money into the country that s your own savings that you had already earned prior to obtaining residency, that money is not subject to tax. Who is this right for? If you want and can spend at least 6 months in Argentina for two years in a row, and can satisfy the rentista (or retiree) visa income requirement, Argentina is a cheap and very fast option to obtain an excellent second passport. All in all it will take you about three years two years of residency, plus around a year for your naturalization request to be processed. And right now, living in Argentina can be very cheap, especially if you use the market rate to exchange your hard currency. 10

11 Legal contact A word of warning do not try to navigate Argentina s bureaucracy on your own, especially if you don t speak Spanish. While establishing residency under the rentista visa can be fairly straightforward, you should definitely seek legal help before applying for naturalization to become an Argentine citizen. It will make the whole process much more smooth. Gabriel Celano is an English-speaking Argentine lawyer I met with in Buenos Aires recently. His specialty is immigration and corporate law. He has helped many people obtain residency visas and Argentine nationality through the years. He has a track record of unblemished integrity and has an extensive understanding of the Argentine immigration system and its intricacies. His firm helps clients with everything that is required; the idea being that clients do the least amount of work possible and the firm takes care of everything. He charges a flat fee of $1,500 for a standard residency process (with clean background checks and for passport holders that don t need a visa to enter Argentina). His citizenship application fee is $2,000. We have, however, negotiated an exclusive deal with Gabriel, which gives SMC members 15% off the normal price. This means that the residency process will cost you $1,275, while the citizenship process will cost you $1,700. Héctor Gabriel Celano Celano & Asociados Abogados Av. Belgrano 634, 2 B C1092AAT Ciudad Autónoma de Buenos Aires Argentina Tel Gabriel@celano.com.ar 11