Rising Taxation on Wealth Creation

Tax is a growing consideration for investors considering golden visas and global relocation as a means of escaping punitive tax rates. Governments are increasingly looking for taxation from High Net Worth Individuals (HNWI) including entrepreneurs, business owners and wealth creators. In many developed nations tax on income averages typically around 50% of marginal earnings at the higher rate and is driving many to seek alternative residence where their wealth is more appreciated. Those countries are where governments see the investment and job potential this wealth brings as the primary benefit rather than the cash that can be extracted through taxing it.

Wealthy individuals often pay a high proportion of tax in western economies and retaining wealth creators is essential for those economies. In the UK the top 1% of earners paid 28.5% of all Income Tax in 2023 and in the USA the top 1% of taxpayers paid 40.4% of all tax in 2022.

With rising debt levels and higher social costs in many western economies taxes have risen in order to pay for increased government spending. And with ageing populations and increasing debt interest the future does not look good for business owners, entrepreneurs and higher earners who are likely to be called upon again and again as developed economies see escalating deficits.

Progressive Taxation Hits Wealth Hard

Governments have many ways to tax and those most appropriate to high net worth individuals, business owners and wealth creators tend to fall into four main categories:

Income Tax: On employees. High earning employees see progressive taxation as their earnings increase often hitting 50% or more at the marginal rate.

Business and Dividend Tax: Many business owners pay tax twice, on their profits as corporation tax and again on their withdrawals, often in the form of dividends. Our analysis shows the combined effect of these.

Capital Gains Tax: This is levied on the growth in assets.

Inheritance Tax: This is where they come back to get you when you don’t need it anymore and let’s face it, there’s not a lot you can do about it. With inheritance tax counted you could save hard for a lifetime and with the final tax bill on your estate have given as much as 75% of your wealth to the tax man.

In addition there are other taxes such as:

Wealth Tax: Most governments shy away from this but a few have tried with limited success. Don’t be surprised to see this becoming increasingly of topic in the coming years.

Property Tax: This becomes harder to do anything about as you can’t move a property. Governments love to tax things that can’t move as there’s usually no choice or alternative for the owner.

Changing World And Increasing choice

Digital communication has drastically reduced barriers to moving internationally. Business is far more mobile than it was 10 or 20 years ago making relocation across the globe much easier. This is the case not only for businesses but for freelancers, contractors, sports and media personalities and even full time employees who in some cases “can work from anywhere”. Most governments have failed to wake up to the fact that the world has changed and they continue to raise taxation on those that contribute most to an economy, as if they don’t have a choice. Well today many people do. And with the proliferation of golden visa programs in the last 10-15 years that choice is growing.

Global Mobility as a Solution

There are today more options than ever for escaping higher taxation countries by investing wealth in another country to gain residence or citizenship through a golden visa program.

Some countries offer low or zero tax and we have listed those that offer golden visas enabling individuals to move and protect their wealth through investment into their economies. Low Tax Countries offering Golden Visas.