Raise More Money: The Secret Foreign Direct Investment Strategy

Hey, welcome to another episode of Making Billions. I'm your host, Ryan Miller. And today I have my dear friend, Jon Green.

Jon is the managing partner at latitude USA. It's a firm that specializes in the investment immigration space, particularly in the foreign direct investment sector. He's worked with firms such as Goldman Sachs, HSBC, and why UBS and more.

So what this means is that Jon understands foreign direct investment and is about to teach you how to leverage it as a strategy to raise money overseas for your fund, or for your startup.

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[THE GUEST]:  Jon is the managing partner at latitude USA. It's a firm that specializes in the investment immigration space, particularly in the foreign direct investment sector. He's worked with firms such as Goldman Sachs, HSBC, and why UBS and more.

[THE HOST]: Ryan is a Venture Capital & Angel investor in technology and energy. He achieved market-beating placement growth in his first 5 years in the industry.

Transcript

Ryan Miller 0:00 
Hi, my name is Ryan Miller and for the past 15 years have helped hundreds of people to raise millions of dollars for their funds, and for their startups. If you're serious about raising money, launching your business or taking your life to the next level, this show will give you the answers, so that you too can enjoy your pursuit of Making Billions. Let's get into it.

Ryan Miller  0:22 
What's the one thing every fund manager, entrepreneur and business executive have in common? The answer, raising capital. My next guest has a capital raising strategy that I have never heard of. And he's about to hit you right between the eyes on a simple strategy on how to attract foreign direct investment. All this and more coming right now. Let's get into it.

Ryan Miller  0:42 
Hey, welcome to another episode of Making Billions. I'm your host, Ryan Miller. And today I have my dear friend, Jon Green. Jon is the managing partner at latitude USA. It's a firm that specializes in the investment immigration space, particularly in the foreign direct investment sector. He's worked with firms such as Goldman Sachs, HSBC, and why UBS and more. So what this means is that Jon understands foreign direct investment and is about to teach you how to leverage it as a strategy to raise money overseas for your fund, or for your startup. So Jon, welcome to the show, man.

Jon Green  1:11 
Thank you, Ryan, really happy to be here and big fan of the show and the community. So it's a it's a real honor to be here. Thank you.

Ryan Miller  1:17 
Yeah, man, it's good to have you. We've been very fortunate. We're in the top 2% in the world, and all because of awesome guests, just like you. So we're gonna talk about billionaire cheat codes. We're talking about many different things, but investing around the world investment, immigration, so maybe in like 30 seconds or so just bring me up to speed a little bit on what exactly is investment, immigration.

Jon Green  1:35 
Certainly. So there's two main types of programs we offer what we call citizenship by investment, and residence by investment. So citizenship by investment, you're either investing into a country or contributing and then subject to due diligence checks are granted citizenship. So this is fairly quick, anywhere from 6 to 18 months, you can get citizenship. The other type of program a little bit more common residence by investment, also known as a golden visas in Europe, where you're investing in the country in return for a residence permit.

Ryan Miller  2:03 
Brilliant. I love that. And so using these things, investment and residency, it's one way that capital moves around the world, sometimes we just summarize it in a big term called foreign direct investment, or FDI. So we're going to jump into exactly how that works and really work through a lot of your knowledge in this area. So before we get into the all the complex, sexy stuff that we're going to talk about, before we go really crazy, let's talk to the beginners, right? You were a beginner, I was a beginner at some phase, let's hit him right between the eyes. So in the early days, when you're looking at foreign direct investment, and you're really trying to flush things out and understand this, well, how do people in this industry? How do they win? And how do they not lose?

Jon Green  2:41 
Certainly, it's a great question, a good starting point. So really, we want to find out from a client, what their objectives are for the program or for what they're trying to accomplish. Some are doing this for diversification of their portfolio. Others are succession planning, retirement planning, diversification of citizenship or residency. So we really sit down with a client and review in detail with them what their plans are, and that can help steer them into a specific country and program.

Ryan Miller  3:10 
Awesome. When you look at not losing. What would you advise someone to say, look, so early days, right? Plan out your goals? Do whatever it is understand what you're up to? What are your investment objectives, but then not losing meaning don't do stupid stuff, what are some of those things that you've seen that people who are just starting this process, kind of get some knocked off the board?

Jon Green  3:28 
Well, one, I recommend always hiring a professional company to assist you from A to Z with the program. So unfortunately, there's people who've tried to do these programs themselves in a foreign country, they don't quite understand the rules and the laws, it's a foreign language, and they don't structure it properly, and it ends up costing them a lot more money in the end, because they were trying to save a little bit up front on the professional fees. So always choose a firm that is able to assist you have one that is reputable, right, so they have a long track record of successfully helping clients with these type of citizenship or residence by investment programs, and that you can look at their background and ensure they are you know, they say who they are, and that you can trust them. And you know, don't do it yourself because that that has a lot of pitfalls, unfortunately.

Ryan Miller  4:13 
Okay, so let's let's talk about you mentioned citizenship by investment and residency by investment. Maybe we can unpack that a little bit and walk us through some of the things that you're seeing out there in your market that can help a lot of investors this really understand how does this immigration and this FDI in this whole thing work for investors, billionaires who are just looking for multiple passports and then also fund managers, you can walk us through the residency and citizenship by investment?

Jon Green  4:38 
Sure. Let's start with citizenship by investment. So this is not as many countries around the world offer this. So it's about a 10 countries. The most common or most popular, I would say is in the Caribbean. So there's five Caribbean countries, Antigua and Barbuda, Dominica, Grenada, St. Lucia and St. Kitts and Nevis. So they all have laws enacted which allow you to contribute or invest in real estate and qualify for citizenship. So these are the lower cost programs, they take about 6 to 12 months from start until finish. And you can include multiple family members like a spouse, children, even adult children, if they're enrolled in school, you can include dependent parents and grandparents in some programs, even your siblings. And so these are the quickest way to get a second citizenship. It's almost like a Plan B, or a life insurance policy in your back pocket. Should you hope you never have to use it. But should the time come you certainly glad you had the foresight to get a second citizenship ahead of time. So there's a five Caribbean programs. And you also have what I would call the ultimate solution in Malta, which is an EU country. And so they're Europe's only citizenship by investment program, which takes approximately 18 months, so a little bit longer of a process. But you end up with a Maltese passport. And once you have that you can live and work anywhere in Europe. And so it's about it's substantially more expensive. It starts at about 950,000 euros compared to the Caribbean, which starts at just over 100,000 US.

Ryan Miller  5:58 
Wow. So citizenship by investment. So folks from one standpoint that we're talking about is saying, if you're an ultra high net worth or individual, you have these options, right? So you can move around the world if you need to, or even if you want to, right, but and we'll get into this later, I just want to prime you guys that maybe in some of these countries, you're also able to open up your own fund or a feeder fund. If you're domiciled in the US, yes, talk to you Americans, I know you most of you listen to this show. But anyone around the world can hopefully deploy this strategy. So what if you open foreign funds for your domiciled fund or domicile in another country? This is an also another mechanism that potentially you can utilize working with, say, your company or someone else, Jon, you can leverage those as a fundraising strategy, would you? Would you say? That's fair?

Jon Green  6:42 
Exactly. This is where the residence by investment programs come into play, also known as the Golden visas in Europe. And so the main programs are offered by Portugal, Spain, in Greece, Malta also has a permanent residence program. But the three other countries, Spain, Greece and Portugal that I mentioned, they obviously in the 2008, 2009 debt crisis, they were in trouble. And they needed a way to stimulate their economy. And so they created these golden visas where typically you invest in real estate in return for the residence permit, which gives you the right to live and in the case of Spain, and Portugal and Malta work full time in the country, if you wish. And so this was a way to help them out of that debt crisis. And it's really had a positive effect is it's attracted billions in foreign direct investment into these countries. And, and you're seeing this positive effect where you see a dilapidated block, you know, in Lisbon, and that developer comes in and rebuild a third of it, then another developer comes in and rebuilds the other two thirds, and they're using immigrant investor money to pay for the construction, the financing. So it's had a very positive effect on these countries.

Jon Green  7:46 
And what's interesting is Portugal has a fund option. It's called the venture capital fund, where if you're interested, you can invest 500,000 into a venture capital fund, which in turn, of course, is investing in Portugal, 60% of the capital must be deployed in Portugal, but 40% can be outside, and then you get a residence permit. So you have a lot of funds being created in Portugal, venture capital funds, specifically looking to raise capital from foreign direct investors. And so it's had a just a tremendous effect on on the economy there and in Portugal, and Greece and Spain, etc. And we're seeing that real positive effects.

Ryan Miller  8:21 
Man that's brilliant. So the venture fund that's goes right into what we're talking about is what if you open a venture fund in Portugal and use that visa program, work with a company like yours, and use that visa program, that would be a pretty cool area to explore when you're raising capital for a fund. If you're ready to go international and have these international feeder funds, immigration might be an avenue that a lot of fund managers or even founders, they're not considering. And so that is a whole pool of capital folks that you can really look into exploring to help you build and raise so and then you know, Dubai, Dubai is a really big sexy thing that we hear a lot about. A lot of people are very interested in Dubai Do they have any programs that you know of?

Jon Green  8:59 
They do. They have a golden visa, which is a 2 million Dirham investment in real estate, which is approximately 550,000. US so you purchase real estate and you get a residence permit which allows you to live there in say Dubai in the United Arab Emirates if you want. And that country has gone through phenomenal change over the last 20 years. I've been going there for about 12 years now. And it does not look the same every year return it's there's new buildings more development. It as you say it's a sexy country that's gone through a lot of a lot of changes. And it attracts a lot of foreign direct investment as well to their shores. And so it's it's it's been a benefit of the the golden visa programs as well.

Ryan Miller 9:35 
Man, so there you go. So there's real estate, there's venture capital, all of these types of investments, if you can work with the governments in those areas, register in those areas, and then structure your offer in this way. That's a powerful way to raise capital. So working with companies like latitude USA or whoever is good at it, and maybe we'll talk a little bit more about that. But these represent potential strategies that you can use to raise capital or Around the world, I absolutely love it. So shout out to my friend George Eakins of the American Dream fund. He does an EB5 program. I know we didn't really touch on that. But that's another area through immigration investment that is used to raise capital. Now, before we move on any of that, I'm just wondering, as we round third base, who bring it home is there, I'm wondering if there's maybe one or two things that you can leave behind? For people who are looking for your advice. They really just really want to understand this, what would you tell people as far as some solid advice to give them a competitive advantage?

Jon Green  10:30 
Certainly, well, again, what we want a client to do is look for the right service provider. So one of the things that should be a member of the Investment Migration Council, which is a an organization that oversees the Ethics and Standards and of the industry. And so you want to make sure they're a member of the IMC Investment Migration Council. That's number one.

Jon Green  10:49 
Number two, you want to make sure that the company you're choosing has a proven track record. And this is their main line of business. So there's a lot of small little firms that do this as a side business, but they don't live it and breathe it day in and day out. And so they're not as knowledgeable when it comes to the programs. And you want to make sure they're licensed as well, for example, that it was licensed in the in the five Caribbean programs in Malta. So that's an added benefit. And then another option that latitude happens to provide is we're a government adviser. So we'll actually go in and help a government design this program from scratch. And so everything from enacting and passing the necessary legislation to designing the application forms and hiring the due diligence staff and designing all the processes etc. And so that gives us a really unique insight into the industry, that we have that government advisory side as well.

Jon Green  11:39 
And so those are some of the important things I would consider. And you want to make sure that of course, you're working with a legitimate firm in terms of sometimes you'll see things online, certain countries offering a citizenship by investment program, like Mexico or Romania, you know, those are complete false programs, unfortunately, they're fraudulent. And so you got to stay away from that. And if it's, if it sounds too good to be true, it probably is. And if you have any doubts, you can always call an embassy or consulate to check to see, before you put down any significant money with an unknown company online, who's created a fancy website to trick people. I think that's some of the the unfortunate things of this industry, it's investment. So it's there's a lot of money involved in the niche market, but it is a, you know, a growing and fast market. And so you got to make sure that you're picking the right player to choose. And they're going to be, you know, agnostic with what program is right for you, they're not going to steer you to a program that, you know, is best for their back pocket. It's really what's best for the end client. And that's where we again, latitude is able to come in and assists clients and really listen to what their goals are, and then we steer them to the right program. Because there are a lot of misconceptions in the marketplace.

Jon Green  12:51 
But I will say what's interesting is with the US market, I've been doing this for 15 years now and I've seen it really grow 15 years ago, I'd I'd ask are, you know I go around in the conference circuit and talk to bankers, Wealth Advisors, real estate agents, lawyers, and they give us a blank stare when we say what we did citizenship and residence by investment. Well, why would an American never need a second passport? Is that even legal? And of course it is your you know, Americans, Canadians, we can hold multiple citizenships and passports, but it's becoming much more of something that's more commonplace now than for example, we talked about Portugal earlier, the US is the number one source market for that program. And so a lot of people, like I'll give the example during COVID. Unfortunately, Americans were banned from a lot of countries, their passport wasn't allowed in just because of how bad things were going with the outbreaks. But those with a second citizenship didn't face that restriction whatsoever. Even if they were flying from the United States, they could still freely fly on their second citizenship. And so that's really where these these types of programs are starting to grow more and more in popularity with our North American clients.

Ryan Miller  13:51 
Man, have you ever had a story? So you're talking about so number one best piece of advice for saying is work with a professional firm? You ever had a zoo doing this while never had someone who did not work with a professional firm and ended up regretting it? And I'm just curious if you can share anything like that?

Jon Green  14:06 
I got two quick examples for you. And so, one, I had a client call us up and say he got rejected for the Spain golden visa. And I'd never heard of somebody rejected if they had a clean criminal record. And I asked why. And he said he didn't structure the deal, right? I said, well, who did you choose to use as your provider, and unfortunately, he chose to do it himself. And so the way they structured him and his wife each put in 250,000, but the main African has to put in 500,000. So to the Spanish authorities, it looked like they were half of what they needed to be because they were two separate people putting in the money. So one had to sell to the other there's transfer tax, it was about a $60,000 mistake, because he tried to save a few 1,000 up front. So that's an example with Spain.

Jon Green  14:48 
We had another example, in St. Kitts and Nevis client was rejected because the company he had worked for was gotten into some some tax trouble giving poor tax advice was sued by clients. He had a title of Director of Marketing. At the time, St. Kitts thought that that meant he was on the board of directors. And unfortunately, his local service provider who only did this as a side business, not as a main line of business, didn't know how to properly articulate and appeal the decision by the government. So he was ultimately lost his appeal as well. And that, you know, probably cost him another 30-40,000 US for him. And we were able to successfully assist them with antiga citizenship, and show the government demonstrate to them that the reason for his rejection was frivolous in St. Kitts, and we subsequently got him citizenship in Antigua. And the case now, though, I'll mention in the Caribbean is, if you get rejected by one country in the Caribbean, you can't apply for another. So this is a fairly new law or standard that's come in. So you got to make sure if you're picking a program, you're picking the right service rider, because it's kind of a one shot now in the Caribbean with that second citizenship programs.

Ryan Miller  15:50 
Man. Okay, so right, they're working with it, it's, I've heard it said before, by a former mentor of mine, when I was younger, he said it's expensive being cheap. So that just reminds me of your story, there is like a try to save a little bit of money be cheap, it actually ends up being quite, quite expensive. So working with a professional firm, that even though it might cost you a little bit, it actually in the long run saves you so it's a better to work with the firm and just get it done right, and then move on. So again, wonderful strategy, understanding those rules and structuring your offer. Or if that's you, personally, you could do that too. But either way, structuring it properly does matter a lot.

Ryan Miller  16:26 
All right, so that's number one, what about the last one? Number two, what would you say would be a second piece of advice you can give to people who are looking to really invest in other countries gain passwords, build funds, whatever it is.

Jon Green  16:37 
Certainly I would start sooner than later, the marketplace is changing rapidly. So we see programs come and go recently, the UK shut down their immigrant investor program, Ireland shut down theirs. The Cyprus Citizenship Program closed a few years ago as well. And the EU doesn't always look favorably upon, you know, immigrant investor programs. And so they put pressure on their on the countries like Spain, Portugal, Greece and Malta, to close their programs or raise the minimum costs. And so these programs are not going to last forever. So for a lot of people who have been thinking about it, now's the time to act. And other times, you know, the programs tweak. So Portugal used to have real estate and bank deposit as qualifying options, that's no longer available as of March, or sorry, November of last year, they changed it. So now it's the venture capital fund that we talked about earlier, that will be popular, but a lot of people were sad that they missed out on that real estate opportunity to qualify because they were on the fence and took too long to make a decision. So definitely act sooner. I'd say the same with the Caribbean, we're hearing rumors that due to pressure from the EU, they may double their price of their programs. And so when that happens is anyone's guess. But hopefully we'll have a couple of months under the current pricing before the government, the government's done their act. So again, my advice is to start the process sooner than later to ensure that the program still exists. And it's at a reasonable price.

Ryan Miller  17:56 
Yeah, I love it. So before we wrap things up, is there anything else you'd like our fans around the world to know, ways to contact you anything at all?

Jon Green  18:03 
Yeah, certainly, our websites, the best way, latitudeworld.com, you can reach us anytime. And you know, again, we're happy to meet with with clients, or what we call introducers, advisors and sit with their clients and just advise what the programs are. Because a lot of differences between the two, you know, timing for application processing can be quite long in Portugal compared to Spain. And sometimes people are looking for a flexible path to citizenship. So that's not Greece that's better in Portugal, etc. So we really are able to sit down with the clients and review that with them. And we don't charge for that it's a complimentary service. We only onboard once we onboard a client, if passed our internal due diligence, would we then ask for the retainer. So it's all complimentary ahead of time. So I do encourage people who have been thinking about these programs to reach out to us at latitudeworld.com.

Ryan Miller  18:51 
Awesome. Well, thank you for that. So just to recap everything that Jon and I talked about, you know, work for a professional firm, make sure you don't make that mistake, where you're trying to be cheap, and it actually is expensive. And the second thing, start now, if you're thinking about building a fund or internationally or having remote offices, or whatever it is you want to participate in these programs, work with companies like Latitude, you do these things, and YouTube will be well on your way in your pursuit of Making Billions.

Ryan Miller  19:24 
Wow, what a show. I hope you enjoyed this episode as much as I did. Now, if you haven't done so already, be sure to leave a comment and review on new ideas and guests you want me to bring on for future episodes. Plus, once you head over to YouTube and see extra takes while you get to know our guests even better. And make sure to come back for our next episode where we dive even deeper into the people, the process and the perspectives of both investors and founders. Until then, my friends, stay hungry. Focus on your goals and keep grinding towards your dream of Making Billions.