US citizens have always looked at Europe with fascination and a hint of romanticism, so that many have made and will continue to make a case to go travel across the continent in whatever way, shape or form possible.
A similar trend has been true for US nationals looking to move away from the United States, many of whom want to relocate to Europe, and more specifically Portugal. But US expats were never the biggest group of expats to settle down in the country, as usually their UK and Chinese counterparts would take the top spots for number of Portuguese golden visa applications.
But international advice firm Blacktower Financial Management told International Adviser this has started to charge in the last 12 months.
“The increase in the number of US nationals looking to move to Portugal in recent years has been impossible to ignore,” Gavin Pluck, group managing director, and John Westwood, group chairman, told IA. “In previous years, Americans have tended to rank as the fourth, fifth or even sixth nationality in terms of expats submitting enquiries about the [Portuguese] golden visa.”
In 2021 there was a shift, with the US ranking second with more than 100 golden visas issued to American citizens, only to be outnumbered by the volume of applications by Chinese nationals. In the first half of 2022, applications from US expats grew even further and they are now on track to overtake Chinese nationals and reach the top spot, the Blacktower duo said.
As a result, Blacktower tapped into this opportunity by creating its American desk in September 2022, a service tailored for US nationals looking to relocate to Portugal.
“We are not only receiving more enquiries regarding the golden visa, but also regarding other types of visas,” they added. “This increased demand across all expat services led to the implementation of the American desk.”
Pluck and Westwood added that Blacktower does not process visa applications itself, but it can advise clients on whether that may be a viable route and put them in contact with third parties that will be able to assist with the process if they wish to obtain one.
Fatca
When dealing with US expats, there is one issue that every adviser and wealth manager has to deal with: abiding by the Foreign Account Tax Compliance Act (Fatca).
So, how does Blacktower comply with the extraterritorial legislation?
“Since Blacktower does not hold assets and only advises on assets, the reporting falls to the custodian and, of course, always the taxpayer,” they said.
“It is always the taxpayer who has the ultimate responsibility even if the bank or other financial institutions do not report accurately. However, any investment products utilised by Blacktower for our US citizen clients will always need to be Fatca compliant.”
Expansion?
When launching the American Desk, Blacktower hinted at a possible expansion of the service, but is this actually on the cards?
Pluck and Westwood told IA they will respond to rises in customer needs in whatever country they see an opportunity.
“The American desk was implemented as a response to an increased demand for expat services in Portugal where there was a lack of effectively-regulated firms to fulfil these services. As an international firm, we are well placed to respond to opportunities such as this and are constantly monitoring patterns and trends to see where potential client bases could benefit from our assistance and services.
“If an opportunity similar to this one arises in Europe or beyond, we plan to respond with a similar initiative, be it assisting US expats or otherwise.”
Middle East and Canada
When Pluck took over as group managing director in June 2021, he told IA his plans were to expand Blacktower into Switzerland, Australia, the Middle East and Canada.
Since then, the firm received Swiss and Australian licences in October 2021, so what of the other two jurisdictions?
Pluck and Westwood said: “The application for a licence within the DIFC is a lengthy process and has taken longer than originally anticipated. We understand that this has largely been due to the high number of applications received by the DIFC in 2021. However, Blacktower are now at the final stages in this process and are anticipating a positive outcome.”
In 2019, Blacktower acquired Dubai-based advice firm called Prestige Wealth Solutions, which Pluck and Westwood confirmed was completed three years ago.
But most of Prestige’s business was focused on Europe and the US, so they said there is no connection between the M&A deal and Blacktower’s expansion plans in the Middle East.
“The group has also obtained permissions via our Cyprus Securities and Exchange Commission (CySec) licence to conduct business in Canada and will be reviewing the business case for a direct licence in due course,” they added.
Under CySec rules, a Cyprus financial institution is allowed to conduct business in several other countries outside the EU “provided that they comply with the regulatory regime of the third country”.
