Tuesday, 5 December 2017

EU crackdown on tax havens

The EU has placed 17 countries and territories on a tax haven blacklist and put a further 47 on notice. This follows the revelations contained in the Panama and the Paradise Papers, and estimates that about $673 billion is lost to governments each year due to aggressive tax avoidance.

The EU blacklist and will be linked to European legislation to ensure these jurisdictions will not be eligible for funds from the EU (except for development aid), but apart from that, no real sanctions were put in place.

The blacklist includes South Korea, Mongolia, Namibia, Panama, Trinidad & Tobago, Bahrain and the United Arab Emirates, Guam, American Samoa, Barbados, Grenada, Macau, the Marshall Islands, Palau, St Lucia, Samoa and Tunisia. Interestingly, only three countries on this list - St Lucia, Grenada and Panama - are also actively engaged in residency- and citizenship by investment programmes.

Hopefully this will further counter the misperception that countries ‘selling’ 2nd passports are necessarily synonymous with blacklisted tax havens or involved in dubious tax practices.

Friday, 1 December 2017

Electric cars cheaper than gas

Electric cars are already cheaper to own and run than petrol or diesel cars in the UK, US (Texas and California) and Japan, taking into account subsidies, purchase price, depreciation, fuel, insurance, taxation and maintenance.

According to an article in the Guardian, if this trend continues, electric cars are expected to become the cheapest option even without subsidies in a few years. Read the whole article below: https://www.theguardian.com/environment/2017/dec/01/electric-cars-already-cheaper-to-own-and-run-than-petrol-or-diesel-study

Sunday, 19 November 2017

Great residency options for HNWIs


Tuesday, 22 August 2017


I will be speaking at this event on 29th September in London. VIP passes with free attendance are available, should anybody be in the neighbourhood at the time: VIP Code FKW53524SPK.


Monday, 1 May 2017

The end of Jacob Zuma?

Could the broad anti-Zuma protests which are now reaching a crescendo across South Africa, finally be bringing the President close to his CeauČ™escu moment?  

The humiliating and crushing treatment dished out to Zuma at the main Workers’ Day rally in Bloemfontein on the 1st of May where he was prevented from speaking by trade unions members, could finally spell the end of his presidency. This is in addition to several months of calls for his to resignation from leaders across the spectrum, including opposition parties, members of the tripartite alliance – Cosatu and the SACP, ANC veterans, three former South African Presidents and Archbishop Desmond Tutu, and even members of his own cabinet.

The significance of Zuma booed and heckled will have emboldened the anti-Zuma elements both within the ANC alliance and in the opposition, especially supporters of the EFF, a party which is frequently thrown out of Parliament when disrupting Zuma's speaches. His rapidly diminishing support-base is now limited to group of financial beneficiaries, assorted sycophants and the Gupta family. The rousing applause that Vice-President Cyril Ramaphosa received at a similar venue and his open criticism of Zuma, make it unlikely for the two men to ever appear together at a public venue again. 

When Nicolae CeauČ™escu of Romania, Erich Honecker of East Germany were confronted by hostile and resentful crowds and were seen as powerless to do anything about it, the floodgates finally opened and soon led to their downfall. Zuma should keep these examples in mind in case he is considering an authoritarian response to growing opposition to his Presidency, as Matthews Posa warned he might doing.

In either case, South Africa has moved past the point of no-return, where either the masses in the streets will soon bring down Zuma, or his own Party will do so as an act of self-preservation.  

© Johann van Rooyen, 1 May 2017

Also see the author's other blog at  Residency and Citizenship for Investors

Thursday, 20 April 2017

Why oil is doomed

According to Dieter Helm, an Oxford University economics professor with a track-record of correctly predicting oil prices, the oil market downturn has got a long way to run (cited by Jillian Ambrose in the Telegraph 17 April 2017). 

The main reason, he argues, is concern over climate change and the renewable energy revolution, in particular, electric cars. He says that the burgeoning market for electric vehicles is underestimated and 'could radically change' the outlook for oil demand. 

Even BP admits that electric car use could halve the demand of drivers for oil and that the number of electric vehicles could double from previous estimates of 57 million to 100 million in 2035. Even this is probably a vast under-estimation, considering the rate at which car companies are turning out new electric vehicles, Tesla being just one. BMW is planning to bring out several EV models and Chevy's Bolt offers a cheaper alternative with range of 400km on a single charge, comparable with Tesla and gas-powered engines. 

Helm argues that industry shifts to a low carbon future means prices may continue to fall ‘forever’ and so far only BP and Royal Dutch Shell are adjusting, albeit very slowly, away from oil to gas and towards low-carbon energy. He advises oil companies, with total assets of $1 trillion and $300 billion in gas assets to follow a 'ruthless harvest-and-exit strategy', slashing capital expenditure, pumping remaining reserves, cutting cost and paying out very high dividends.

(c) Johann van Rooyen, 20 April 2017

Monday, 12 December 2016

The Chinese Dragon - riskier than you think?

China is in the process of aggressively and rapidly expanding its hegemony around the world and it is building up its military might. However, the biggest risk posed by this superpower lies in the financial sphere and it is resulting in people and capital leaving the country at unprecedented levels. 

China is embroiled in dangerous geopolitical adventures in the South China Sea, making grandiose territorial claims and building artificial islands. It reaches into other countries to silence critics, is becoming more repressive and remains an authoritarian one-party state. It suffers from high levels of pollution and corruption. These tendencies are making many wealthy Chinese anxious and looking for a way out.

China is already the largest source of regular emigrants in the world, with more than half-a-million Chinese immigrants settling in the OECD bloc in 2013 and millions more are waiting their turn.    China is also the largest source of investor-class emigrants and as pointed out previously, in many host countries Chinese make up close to 80% CBI applicants. Chinese buyers now the largest source of foreign investment in the U.S., Canadian and Australian residential property markets, driving prices sky-high. 

10% of China’s billionaires have already emigrated and more than half of its 1.3 million millionaires plan to leave of the country in the next five years - that is about 650,000 or about 130,000 per year until 2020. Whether they will succeed is anybody’s guess, since only 9,000 managed to leave last year.

China is experiencing large capital and migrant outflows - between US$450 billion and US$1.2 trillion of capital left China last year, often in the suitcases the millions of Chinese emigrants and tourists. Chinese emigrants are allowed $50,000 per year, but this is not well-enforced and desperate Chinese emigrants simply smuggle their cash across borders. For example, border guards at the Vancouver airport seized $13-million in hidden currency over the past two years, that is in addition to the $323-million of declared currency (over $10,000) by Chinese tourists.
Apart from capital outflows, China has $28 trillion in outstanding loans. Its credit-to-GDP gap is now three times over the danger threshold and much higher than the US subprime bubble. Its total credit of 255% of GDP poses a risk of a full-blown banking and systemic financial crisis, with obvious consequences for  migration flows: The hypothesis is this: the greater the economic risk, the faster Chinese money and emigrants move offshore. The faster they move offshore, the greater the fear that stricter capital controls will be implemented - Which in turn could speed up the exodus in a pre-emptive effort to avoid the clampdown – once the clampdown occurs, there will be a dramatic slowdown of both people and capital.