“Citizenship-Based Tax is Coming to Big Economies” – 10 on the Weekend: Andrés Gutierrez

Ten On The Weekend is a semi-weekly feature in IMI, the concept of which is simple: Each time, we ask the same ten questions of a different industry figure, letting readers get to know the interviewee on a more personal and informal level than they might in an ordinary business setting.

Our guest this weekend is Andrés Gutierrez of CSB Group.

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How do you spend the weekends?
Amongst my family in the fresh air, shooting arrows or hiking!

Originally from Argentina, weekends mean spending time with my family whilst cooking or making an Argentinean Asado, or the closest that we can get to it in Europe. Having different nationalities under the same roof and having lived in a few places also mean more culinary influences – Argentinean, Italian, Spanish, and English traditions come together in the same house. Not so much of a mix up though!

2020 was a year that hit my father’s health, so I have spent a fair amount of time with him and my mother. However, some weekends I catch up with work if needed, and also with industry news.  

Also, we practice the sport of archery, and we go on family hikes. Archery has become a big part of my life, and my wife and 2-year-old daughter are keen enthusiasts also. I would say that, before COVID19, hiking was the family activity as we were training to do the Three Peaks of Yorkshire. This is a hike of 25 miles over three peaks, each nearly 700 meters high, typically performed in 10-12 hrs. I was carrying my two-year-old daughter on my back the whole day and we were training hard for it. But it has been canceled for obvious reasons. 

Like many colleagues during the pre-COVID era, I typically would spend many weekends travelling – Asia, Africa, Europe or wherever it may have been. Now, 2020 had a lack of travel. Let’s see what waits in 2021. 

What are your top three business goals this year?
Before we get into that, let’s consider what we faced in 2020: Many changes in the investment migration panorama, influenced by COVID19 like any other industry. We have seen limited time offers get extended, changes to qualifying dependant rules, new residence-to-citizenship regulations in Malta, and Cyprus still out of the picture. 

What lies ahead? 

Supposedly, all will go according to plan in 2021. We may see another significant shift in the market as vaccines prove their worth and travel starts to return. This, combined with a digital working style, will change (again) the life and working patterns we created in 2020. 

From an industry perspective, I firmly believe that compliance will be an even more critical industry focus (are we going to see investment migration as a regulated activity for AML purposes in 2022?). From a client perspective, the economic effects of COVID-19 on government budgets are still to be seen.

We are seeing wealth taxes popping up in certain jurisdictions – Argentina and Bolivia implemented them, Spain has raised it together with the income tax for high earners, and citizenship-based taxation will come up in big economies sooner or later. An effective migration plan with a stronger focus on international tax planning as a key triggering factor is already a trend that will keep growing. 

These two factors combined – compliance and tax planning – will mean higher case complexity and, therefore, specific knowledge of the investment migration market and international tax for HNWI. This will translate into a higher professionalization of the firms and individuals advising on investment migration. 

This will also end up with a stronger case for private equity investments leading to residency rights. Fund investments can be complicated products and require expert advice as well as significant regulatory compliance oversight to protect investors. With a robust framework, they represent an excellent option to align the interests of governments, investors, and fund managers as they can implement proper investment diversification strategies. 

The Portuguese fund investment option is a clear example of this, as discussed many times with Steven Pepa, from Saratoga Capital. His view and input on the market is crucial and will make a shift. Whilst some people call him crazy, I think that being crazy is “doing the same thing and expecting different results” as the saying goes. 

Also, belonging to and being certified by a body like the Investment Migration Council will be crucial. Hats off and thanks to Bruno L’Ecuyer, Dennis Kravchenko, and all the IMC team for all the efforts to represent the investment migration market and practitioners. 

With all that in mind, the first business goal is to keep on adapting to the current circumstances, which may seem somehow ethereal but also essential in a COVID-19 impasse like this. If there is something that I am proud of, it’s how CSB Group adapted to the 2020 circumstances. We plan to keep going and improving on our approach. This turns out to be quite natural – CSB Group has over 30 years of experience within regulated industries and taxation in Malta. Hence, the ability to adapt to the market (compliance) and client demand (taxation and structuring needs) is feasible.

The beauty of a diversified group like CSB is having different units that cover different private client needs. Aside from investment migration, we have a powerful taxation team, and we specialize in luxury real estate through Malta Sotheby’s International Realty as the real estate arm of the group, providing holistic advice to private clients with a one-stop-shop concept in mind since inception. 

Therefore, growing the CSB Group and Malta Sotheby’s International Realty brands in the investment migration market to better serve our international clientele for their estate planning, international taxation, and investment migration needs are the second part of our business goals in 2021. 

Finally, we cannot wait to resume traveling and meet our clients and partners on the ground, and keep building our intermediary and referral relationships.

What’s your biggest business concern right now?
On a global level, economic recovery and the impact of COVID-19 in the world population. We have to see how effective the vaccines are and which measures towards traveling will be taken; we know that we will be able to get on a plane, but how? That will affect smaller economies that depend on tourism. I am not speaking only about the usual suspects like the Caribbean countries, Malta, or Cyprus, but also more significant economies like Portugal or Spain. 

Of course, we are awaiting the result of the infringement procedures and how this will affect the entire industry, not only Malta or Cyprus. Citizenship is a matter of each individual estate, and we expect a logical approach from the European Commission. However, we still have to wait for the results. 

Which book is on your nightstand right now?
I was once a very avid reader; now, not so much, I must confess. But I keep on reading nonetheless. Currently, I am reading For Whom the Bell Tolls by Ernest Hemingway. “All you have to do is write one true sentence. Write the truest sentence that you know,” is one of my favourite quotes from him. 

Also 21 Lessons for the 21st Century, from Yuval Noah Harari – I thoroughly enjoyed his Sapiens and – on another level – Homo Deus.

How and why did you first get involved in the investment migration industry?
I started as Head of Legal Processing at CS Global Partners. I then moved onto business development and advising clients came naturally due to my background. I am a dual-qualified lawyer in Argentina and Spain and relocated from Argentina to Europe many years ago, so I always understood why and how to make a country-move. 

I made many changes in my life, with my parents, alone, and with my own family. I saw my parents preparing and executing a Plan B. Then, I did it for myself, more than once; single, married, and with my family. There is no better advice than that of experience itself, and clients always appreciate that.  

My parents always said to me that “in life, you can choose everything but your parents,” something that dictates where you are born, your nationality, and capabilities. We help clients break those barriers if they have no possibilities of obtaining citizenship by ancestry like in Spain or Italy, or by birth, like in the US and – more recently – Portugal, for example. 

What was your proudest moment as a service provider?
Every time a client gets the passport and certificate of registration or residence card, it makes me proud.

Knowing that I have contributed to create and deliver a citizenship and residence planning strategy that brings peace of mind to every one of my clients makes me very proud. 

Academically, getting my Master’s degree and legal qualification in Spain, given the challenging circumstances at the time. Being qualified to practise law in two different jurisdictions has been an invaluable asset. 

Which investment migration market development has surprised you the most in the last year?
I have seen the African market’s rise for some years now, so that is not a surprise. Coming from South America, Uruguay’s rise as a destination in LatAm is not a surprise neither. Still, it looks more like a consolidation of that jurisdiction of choice. 

I would say that the US, as a source market for investment migration, came somewhat as a surprise. Of course, US nationals were keen on investment migration, but it is not the most traditional market – it is usually a receiving jurisdiction. 

It is interesting how migratory trends work; many of my LatAm friends and family are looking to relocate to the US, while Americans are looking to move out.

In terms of programmes, the Irish IIP presents a precious option. As James Hartshorn, CEO of Bartra Wealth put it in one of the webinars we delivered together: The alignment between the programme objectives, promoter, and investor is vital. That’s straightforward to say, but we have seen a lot of imbalance within some jurisdictions and with certain service providers. 

If you could go back 10 years in time, what business decision would you change?
Well, in Argentina, I started working as a law clerk in my father’s law office and moved countries several times. I have worked in the legal field in four different countries. I also have been involved in a few family business ventures – from the ground up to their closure – and saw my father retiring last year. I have done a few things and made quite an amount of decisions in a relatively short time – I haven’t reached 40 yet. 

But I wouldn’t change a thing. Absolutely nothing. 

All the steps I took, led me to where I am now, doing what I am passionate about with great colleagues and business leaders. I do not have any regrets.

I would have liked to get into this industry (much) earlier, but some things are just out of our control.

What investment migration industry personality do you most admire?
Mohammed Asaria – his vision years ago led him to become the only developer to deliver three top-notch developments in the Caribbean. His understanding of the market, knowledge, business acumen, and approach is second to none — a visionary that executes and delivers. 

Also, I cannot avoid mentioning David Lesperance. A wealth of experience, smartness and boldness all together. And let’s not forget his articles about Vanuatu CBI! 

Finally, I would like to make a special mention to one of my colleagues, Dr Franklin Cachia. Franklin is the Managing Partner of CSB Legal and our in-house tax expert. His passion, attitude, and legal acumen make him an invaluable member of the CSB team and an example to follow. 

If all goes according to plan, what will you be doing five years from now?
Five years from now, I won’t be even in my mid-40s, so I expect to keep on growing and leading a team of experts in the private client field. Investment migration is one of the verticals of a private client practice, and I will always aim to serve clients better.