- The Nomad Beach Index ranks the best destinations for high-net-worth investors seeking a little more sun and a lot less in taxes.
- Nearby Caribbean islands place high in the top 10 but U.S. citizens looking to move to zero income-tax climes often have to renounce their American citizenship to fully benefit.
- Puerto Rico, however, came in at No. 10 — making for a happy medium.
Cancun and Daytona may draw spring breakers and Waikiki, honeymooners, but which beaches worldwide are millionaire magnets?
Hong Kong-based consulting firm Nomad Capitalist released its latest annual index of the top sandy spots that appeal to high-net-worth investors looking to not necessarily vacation but actually put down roots — and some cash — in the world's sunniest climes: the Nomad Beach Index for 2021.
The firm's first such effort in two years — it took a Covid-related hiatus in 2020 — the index for this year features a top 10 ranking that includes 24 beach destinations around the globe.
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The firm graded beach destinations best suited for entrepreneurs, investors, stockbrokers and other high-net-worth individuals looking to invest, relocate and/or gain residency or citizenship. It aggregated data from more than 30 sources, ranking each on a scale from 1 to 50 to for beauty (30% of index ranking); services, taxes and immigration (20% each); and safety (10%). Thirty-six beaches were ranked in total.
The Cayman Islands tops this year's list, thank to its status as a Caribbean tax haven for investors who do not wish to deal with the complicated tax laws of other countries, according to Nomad Capitalist.
The company helps "seven- and eight-figure entrepreneurs [and] investors who want to have a second home [or] have a Plan B citizenship or residence, or all the above, [or] reduce taxes in some cases, although there's less of that this year," said founder Andrew Henderson. "With the pandemic, people are eager just to have a second place where they can go."
Other Caribbean nations such as Antigua and Barbuda, St. Kitts and Nevis, Dominica and St. Lucia — along with the neighboring Bahamas —also made the top 10. Proximity to the U.S. and a highly developed infrastructure and services sector factored in their rankings, according to Henderson.
"It's also immigration [policy]; how easily can you get there?" he added. "You can go to Antigua [or] St. Kitts and obtain citizenship by investment in six or seven months." (Actual timeframes vary by nation. St. Kitts and Nevis, for example, has a reported average processing time of three months and as little as 45 days, according to the 2021 CBI Index.)
"Now you're a citizen and you can live there as long as you want and enjoy the zero-tax policies," Henderson. "I thought someone should take that into account along with which beach was the nicest."
Investors residing abroad but retaining American citizenship, however, are still subject to U.S. taxes, so some — like Henderson — have turned in their blue passports to fully enjoy foreign tax regimes. But those who don't wish to take that route can head for Puerto Rico, which came in at No. 10 along with spots in Croatia, the Philippines, Nicaragua and Spain.
"If you're German or British, you can just leave the system, keep your passport and head down there," he said. "For Americans, you're looking at Puerto Rico to keep your passport and still have great tax benefits."
Indeed, Puerto Rico is a convenient tax haven for U.S. citizens. Qualifying residents of the island are exempt, for example, from capital gains taxes.
Clarification: This article has been updated to clarify that the processing time for citizenship by investment in St. Kitts and Nevis reportedly averages three months and can be as little as 45 days.