IMC Defends Sovereign and Societal Value Creation of Investment Migration Programs [citizenship-by-investment]

Of note. The international lobby group for citizenship-by-investment programs argues (unconvincingly) its case. No Canadian firms that I recognized:

The two-month deadline set by the European Commission for the governments of Cyprus and Malta to reply to the letters of formal notice regarding their citizenship-by-investment pathways is approaching. In advance of this date, the Investment Migration Council (IMC) wishes to engage with all relevant stakeholders and remind them of a number of salient points.

The legal case

The right to assign citizenship is very clearly the sole competence of a sovereign state. This analysis of the European Commission’s legal case has nothing to do with whether one agrees with the concept of citizenship by investment. The vast majority of EU legal experts argue that the Commission has no legal right to become involved in how sovereign states define citizenship law.

The IMC has sought the opinions of several legal scholars, including Professor Dr Daniel Sarmiento, a leading specialist in EU competence law, and Professor Dr Carl Baudenbacher, the former president of the EFTA court. The conclusion is clear: The EU has no competence in the area of citizenship. Moreover, the concept of ‘genuine link’ that was invoked by the EU is both vague and arbitrary. The European Court of Justice already found in earlier decisions that it is not relevant.

It is therefore unlikely that the European Court of Justice would rule in favour in the matter at hand, as this could have very serious secondary consequences, and could open the way for the EU to encroach on the power of granting nationality, which is reserved, in EU Law, for Member States.

As rightly noted by the European Parliament, “Nationality is defined according to the national laws of that State.”

Strong governance and due diligence

The IMC however understands and shares the concerns of both the EU and wider stakeholders around the question of proper due diligence on applicants to such programs. This is why it has developed, in cooperation with international anti financial crime firms BDO, Exiger and Refinitiv, a common best practice framework and developed a blueprint for good governance through due diligence standards to uphold the highest levels of integrity and transparency. [Download the ‘Due Diligence in Investment Migration: Best Approach and Minimum Standard Recommendations’ Report]

Nevertheless, the IMC suggests that there has been a significant exaggeration of the risks. Working in partnership with Oxford Analytica, the leading geopolitical risk analysis and advisory firm, it has identified that for all the publicly voiced concerns, the due diligence and governance in place already acts as a powerful deterrent. [Download the ‘Due Diligence in Investment Migration: Current Applications and Trends’ Report and the ‘Citizenship by Investment Programmes: An EU Risk Assessment’ Report]

Oxford Analytica found that the operational reality is that investment migration risks are primarily theoretical in nature. This assessment is broadly shared with the intelligence, security, and law enforcement professionals involved in managing investment migration. Potentially nefarious activity is a negligible percentage and compares very favourably to other legal migration pathways.

There are, of course, enhancements that should be made at corporate, sovereign state, and intragovernmental information sharing levels. The IMC and its membership community are committed to the highest of standards. We want to work in partnership with the relevant stakeholders to devise a formal regulatory system that mirrors those of financial and professional services providers and that will ensure the necessary protection. That system should be based on an objective and knowledgeable analysis of the reality of investment migration, not one that is based on scare stories and rumour.

A creator of societal and sovereign value

Investment migration is a vital lever for sovereign nations to raise debt-free capital, attract talented individuals, and deliver benefits to society as a whole. In Malta, to mention but one example, the Individual Investor Programme attracted EUR 1.4 billion directly into the island nation’s economy following the damaging Euro crisis. This liquidity has had profoundly positive consequences. There has been significant employment creation across all levels of society, and the Maltese government has greater autonomy to invest in vital infrastructure projects, some of which involve critical care for cancer patients.

Bruno L’Ecuyer, CEO of the IMC commented: “Investment migration pathways are now a well-established, normalised wealth management advisory practice. As is the case with other established financial and professional services practitioners, we want to work in partnership with all relevant stakeholders to ensure that sovereign and societal value can be maximised through prudent, responsible, and objective regulation.”

For this to happen, all investment migration advisors must run operations to the highest possible standards and be prepared to face the consequences if they are found wanting. Equally, stakeholders must understand that the privilege of granting citizenship and residence rights is solely the domain of a sovereign state, and that significant sovereign and societal value can be created through investment migration, particularly in the Covid era, which moreover in many instances is aligned with the UNs Sustainable Development Goals.

ENDS.

About the Investment Migration Council

The Investment Migration Council (IMC) is the worldwide association for Investment Migration, bringing together the leading stakeholders in the field and giving the industry a voice.

The IMC sets the standards on a global level and interacts with other professional associations, governments, and international organisations in relation to investment migration.

The IMC helps to improve public understanding of the issues faced by clients and governments in this area and promotes education and high professional standards among its members.

The IMC is constituted as a not-for-profit association under Swiss law. Based in Geneva, it has representative offices in New York, London and the Cayman Islands. Managed by a Secretariat under the direction of a Governing Board, the IMC also has a non-executive Advisory Committee, in which the most important industry stakeholders are represented. The IMC is funded by membership fees, donors and income from activities such as events, education, training, and publications.

(Membership list can be found here: https://investmentmigration.org/members-directory/ )

Source: IMC Defends Sovereign and Societal Value Creation of Investment Migration Programs

Green: Canada should revive the investor immigrant program and fix its past failures

Not aware of any studies that show meaningful benefits from investor immigration programs in OECD countries. Green is notably vague with respect to how he proposes to “fix its past failures” beyond increasing the investment threshold. The IRCC evaluation was devastating (https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwjN2Z6D2qDtAhX8GFkFHWXyCD4QFjAAegQIAxAC&url=https%3A%2F%2Fwww.canada.ca%2Fcontent%2Fdam%2Fircc%2Fmigration%2Fircc%2Fenglish%2Fpdf%2Fpub%2Fe2-2013_fbip.pdf&usg=AOvVaw2KiDUWqxbDR2xBXtujZnYm) and census data indicates the median incomes based on tax data to be minimal and lower than refugees. Quebec’s comparable program largely serves as a backdoor entry to other parts of the country:

From the earliest days of Confederation, immigration has been essential to Canada’s evolution and identity as a country. The labour – and tax dollars – of successive waves of people from around the world have supported universal health care, pension plans, education, national infrastructure, and the creation of small businesses and employment.

The economic stress caused by a global pandemic, on top of the dual realities of an aging population and a slow-growing population, make immigration more important than ever. It is also an opportune time for Canada to revive the investor immigrant program that was terminated in 2014, with a view to integrating it into our long-term economic strategy.

The federal government has clearly flagged that expediting immigration to Canada is a priority over the next several years.

In addition to setting a target to welcome 401,000 permanent residents in 2021, Ottawa recently made it easier for Hong Kong students and youth to quickly come to Canada on work and study permits, as well as offering new ways to stay permanently. The new permanent residence rules will also benefit people from Hong Kong already in Canada under existing work and study permits.

Then there’s the 300,000 Canadian citizens living in Hong Kong, many of whom, in light of recent political developments there, may be contemplating a return.

Also consider that although many applications were delayed by COVID-19, most are already well down the approval pipe and will proceed quickly once embassies and visa agencies fully reopen. Ottawa has already flagged that it will work to fast-track increased admission to Canada in 2021.

For all of that, there is much more that can be done for both prospective immigrants and Canada. At the top of that list is a practical reassessment of the investor immigrant class.

In 2020, the practical benefits of reviving the program far outweigh any misplaced concern about those “buying” Canadian citizenship.

Let’s not be hypocritical: Those of us already fortunate enough to live here stand to benefit as much as anyone who is new to the country.

The key to making it work this time around is to be clear-eyed about past failures, to refine the tax structure and better manage the five-year deposits required by these immigrant investors. It does not seem excessive to increase the $800,000 fee that was required before the Harper government cancelled the program. But in the past, those deposits were directed to provinces to foster the growth of small and medium-sized enterprises – a well-intentioned initiative that never took shape.

By learning from that disappointing experience, Canada can win on several counts.

It can seize opportunity to create a COVID-19 fund to help offset the economic cost of the coronavirus and attract immigrants who have the means to make a big difference in short order.

It can also attract a group of educated and financially secure immigrants who, along with their families, will make a lasting contribution to our economy. It is also an opportunity to bring regional and local governments into the process to ensure the funds are put to the best use.

Nowhere would that difference be felt more immediately than in the stabilization of the domestic residential real estate market, small business and employment, something of great importance to all Canadians and their families.

For some time now, there have been claims that housing markets, especially condominiums in urban centres, are threatened by an imbalance of supply and demand.

That’s a tough prospect for municipalities and provinces that have already been economically ravaged by the effect of the coronavirus.

Higher immigration levels – especially in the economic class – address this on a number of levels.

Furthermore, while much has been made of the pandemic-driven urban exodus, new Canadians tend to gravitate to and revitalize our cities.

Immigration is an important way for Canada to build long-term economic, social and cultural bridges around the world. Does anyone think it will be anything but beneficial to our relations with Washington that vice-president-elect Kamala Harris had such a positive experience as a student in Montreal?

We have always been justifiably proud of being a country of immigrants. Clearing the 2020 backlog, expediting new permanent residency applications and reinstating the investor immigrant class is both timely and strategic at a time when we need to reinforce our country as seldom before, and to ensure the long-term prosperity of all Canadians.

Green is a Managing Partner at Green and Spiegel and past chair of the Canadian Bar Association, National Section, Citizenship and Immigration

Source: https://www.theglobeandmail.com/business/commentary/article-canada-should-revive-the-investor-immigrant-program-and-fix-its-past/

Apex Capital Partners Launches Discounted Citizenship by Investment Program for Concerned Citizens Following Flood of Inquiries from Conservative Americans Looking to Relocate Abroad After Biden’s Presidential Victory

Almost funny but reflects a certain mindset (don’t recall any similar pitches from citizenship-by-investment firms targeted at Democrats following Trump’s election (the Cape Breton site encouraging Americans was more a welcome site):

 Apex Capital Partners, a boutique financial advisory firm specializing in advising international individuals and governments on Citizenship by Investment Programs (CIPs), today announced the availability of its “American Second Passport Program,” a new option intended for US citizens who are concerned with the country’s direction under President-Elect Joe Biden, and are now serious about moving abroad. Ultimately, CIPs provide individuals and their families with the legal means for acquiring second citizenships, passports and permanent residency in other countries, often in the Caribbean or Europe.

Apex Capital Partners typically receives approximately five inquiries from American citizens per year but is now hearing from numerous concerned citizens on a daily basis, experiencing a 650% increase in interest since the November 3rd election alone, when compared to 2019. This comes as no surprise, as leading up to the election the team has been inundated with requests from high net worth individuals, particularly conservatives, seeking to relocate abroad should now President-Elect Biden emerge victorious. Now, the Company is offering 35% off its American Second Passport Program until January 20, 2020 – Inauguration Day.

Many Americans are now very concerned about proposed significant increases to their income tax payments, as well as continued social unrest. Further, this year’s “American nightmare” fueled by COVID-19 has resulted in very restricted travel for Americans, limiting recreational or business trips for anyone possessing just a US passport. For these reasons, citizenship by investment in other parts of the world is widely considered a safe, financially secure passport diversification option.

Americans concerned by a Biden administration are turning to Apex Capital Partners, a leading, internationally recognized Company that works directly with both international governments and those pursuing citizenship abroad to implement strategies needed to acquire foreign citizenships. These alternative citizenship opportunities are made possible through CIPs, a legal transaction in the form of a real estate or infrastructure investment in exchange for citizenship, in countries such as the Caribbean and Europe – with popular examples such as St. Kitts and Nevis, Saint Lucia, Dominica, Grenada and Montenegro.

“CIPs are especially valuable now for three key reasons. One, with an alternative to a US passport, travelers and business executives can bypass the current travel COVID 19 restrictions in place. Two, people can reside in a safe, unthreatened place amid shaky US social and political conditions that they perceive are dangerous. Lastly and right now the most popular reason, is that citizenship abroad enables for more financial security and often reduced taxes – a concern felt by many conservatives and HNWI,” said Nuri Katz, Founder of Apex Capital Partners.

Interest to leave the country after Biden’s victory has also been expressed publicly to the nation by none other than President Trump himself, who recently suggested “maybe I’ll have to leave the country.” Prior to the outcome of the 2016 Election, many liberal individuals and families across the country threatened to leave if Trump was elected. Some people left, while many more turned to social media to state their displeasure with Trump’s administration. Four years later, the same trend came during the first 2020 presidential debate, when Google searches for “move to Canada” greatly spiked.

“Talk about leaving the country after an election outcome is certainly not new, but we’re now seeing it become a reality after such a difficult year. In 2017, around 5,000 people internationally obtained CIPs, but this year I estimate it to be 25,000,” said Katz. “Despite all the potential and personal reasons for wanting to leave the United States, it is still a very difficult decision and should be conducted with an experienced team of migration advisors as well as tax and legal professionals. Using a network of legal advisors, our team informs investors on viable options to seek citizenship and evaluate all financial consequences. Throughout this process, we’re here to help answer any and all questions.”

About Apex Capital Partners

Apex Capital Partners is a full-service advisory firm specializing in investment consulting and wealth management for a multinational, high-net-worth clientele. APEX provides services with end-to-end execution in areas such as second citizenship and immigration, wealth and asset management, financial services, and international real estate sale and development.

For more than two decades, APEX consultants have guided affluent individuals and their families through the complexities of foreign investing, and of obtaining second citizenship and residency. The APEX team also advises governments in establishing Citizenship by Investment programs, and provides support services to financial institutions, law firms, and family offices representing the interests of high-net-worth investors. For those interested in pursuing a citizenship by investment opportunity, please contact Apex Capital Partners by visiting http://apexcapital.partners/

Source: Apex Capital Partners Launches Discounted Citizenship by Investment Program for Concerned Citizens Following Flood of Inquiries from Conservative Americans Looking to Relocate Abroad After Biden’s Presidential Victory

The scandal-hit market for passports and long-term visas is booming

From the Economist:

FOR THE industry’s critics, it is a scandal that exposes exactly what they have been warning about. Many people have an almost instinctive distaste for the business in selling long-term-residence rights in a country or even citizenship there for cash, usually in the form of an authorised investment. So a documentary this month on Al Jazeera, a Qatar-based television channel, seeming to uncover corruption in an “investment migration” scheme offered by Cyprus, did not not seem especially shocking. It showed Cypriot politicians filmed in a sting operation, apparently willing to sell their country’s passport to a (fictitious) Chinese businessman who, in the cover story, had been convicted to seven years in jail for money-laundering, and so should have been ineligible.

For the industry’s practitioners—the consultants, accountants, bankers, wealth managers, lawyers and government departments selling their country’s charms—this is a blow. Although the politicians involved have protested their innocence, Cyprus has suspended its “golden passport” scheme from November 1st. European Union officials in Brussels and members of the European Parliament were already hostile to such schemes. And in response to the latest scandal, the European Commission has begun legal action (“infringement procedures”) to investigate both Cyprus’s scheme and one offered by Malta. It is an extremely sensitive issue for the EU. On the one hand, no issue is more jealousy guarded as a “national” competence than whom a country allows to be a citizen. On the other hand, a passport from an EU member confers the right to live and work anywhere in the EU; and a “Schengen” visa allows free travel to 22 EU members and four other countries.

Source: The scandal-hit market for passports and long-term visas is booming

After outcry, Cyprus suspends its citizenship for cash programme

Good riddance:

Cyprus said it was suspending a controversial citizenship for investment programme on Tuesday following reports of abuses of a system that gives the rich a passport and visa-free travel throughout the EU.

Criticism of the programme reached a head after the Al Jazeera network secretly filmed a state official, a lawmaker and a lawyer apparently attempting to help an imaginary Chinese investor – with a criminal record – get a passport.

A criminal record should disqualify a candidate.

Several news outlets, including Reuters, have carried reports in the past two years on a scheme where thousands of foreign investors with deep pockets have leapfrogged over normally arduous citizenship processes, including for persons born on the island.

Parliamentary speaker Demetris Syllouris, seen in the video apparently offering to use his influence in getting the investor a passport – and suggesting alternatives if that failed – said he would be standing down from his duties from Oct. 19.

Syllouris, 67, is the second highest-ranking state official in Cyprus after President Nicos Anastasiades. He said he would withdraw until an investigation was complete.

“I would like to publicly apologise for this unpleasant image conveyed to the Cypriot public… And any upset it may have caused,” he said in a statement.

Syllouris has previously said he suspected something was amiss with the imaginary investor but was fishing for information. He said the reports were “staged” and out of context.

The suspension of the programme, in its current form, would take effect from Nov. 1, government spokesman Kyriakos Koushos told journalists after an emergency session of the island’s cabinet.

For a minimum investment of 2 million euros, the scheme would guarantee visa-free travel in the European Union, which Cyprus joined in 2004.

Criticised as opaque and fraught with the risk of money-laundering, the scheme is popular with Russians, Ukrainians and, more recently, Chinese and Cambodians.

The persons filmed in the documentary claimed entrapment and said they had reported the matter to authorities months ago.

Reuters reported in October 2019 that Cambodians close to long-time leader Hun Sen, plus family members, had acquired passports, leading authorities to review the programme.

Another report by Al Jazeera in August this year said at least 60 individuals who acquired citizenship between 2017 and 2019 were high risk, and would probably not have qualified with new tighter rules since introduced.

At the time, authorities dismissed that report as “propaganda”, focussing instead on trying to find the whistleblower.

Rich families buy second citizenship in post-Ritz Saudi Arabia

Of interest:

“I have clients who escaped the Ritz-Carlton event because they were prudent enough to secure second citizenship beforehand. … The moment you hire me you are admitting to yourself that there is a danger,” David Lesperance, a Canadian lawyer who has advised dozens of affluent Gulf families since the early 1990s, told Al-Monitor.

In November 2017, 381 prominent Saudi businessmen, royals and officials were caught up in the “anti-corruption” crackdown led by Crown Prince Mohammad bin Salman.

Saudi authorities reportedly pressured a quarter of Ritz-Carlton detainees, including through physical abuse, to hand over to the state assets worth a total of over $106 billion.

Ryan Bohl is a Middle East analyst at the US-based geopolitical-­risk firm Stratfor. He told Al-Monitor anti-corruption campaigns led by Gulf Cooperation Council (GCC) countries are now “used to seize assets of those the state sees as disloyal.”

In this context, the global trade of second citizenship — often associated with tax evasion, money laundering and corruption — is viewed by some Gulf nationals who are exposed to risks related to political oppression and regime change as a strategic way out.

Cyprus and the bin Laden family

Preferred destinations are publicly known — Cyprus, Ireland, Turkey, the United Kingdom, the United States, Canada and the Caribbean islands, among others — but firms operating in this secretive industry do not disclose how many Gulf nationals bought second citizenship.

Internal documents leaked to the Qatari broadcaster Al Jazeera earlier this year revealed, however, the extent of Cyprus’ citizenship by investment program: about 2,500 individuals from 74 countries bought a Cypriot passport between 2017 and 2019.

Although Russian, Chinese and Ukrainian citizens account for the vast majority of names listed in the Cyprus Papers, applications from Saudi Arabia have “increased since the rise of Crown Prince Mohammad bin Salman,” Al Jazeera’s investigation reads.

In 2019, Cyprus granted citizenship to the relative of a Saudi national detained at the Ritz-Carlton and to a member of the bin Laden family — once one of the most influential in the kingdom. During the crackdown, three bin Laden brothers were detained and the family’s conglomerate effectively taken over by the state.

According to The Independent, some wealthy Saudis moved assets “out of the region” in the days following the Ritz-Carlton arrests, and Capital Economics’ senior emerging markets economist Jason Tuvey noted “a jump in Saudi residents placing banking deposits abroad.”

GCC states either prohibit dual citizenship or condition it on government approval but are not actively cracking down on second citizenships, Bohl believes. “They are, however, trying to find ways to ensure that such secondary passports do not become shields by which dissidents can attack their policies with impunity,” the analyst said.

Saudi operatives abducted three princes living in Europe between 2015 and 2017 and a year later a hit squad killed and dismembered Saudi journalist and Washington Post contributor Jamal Khashoggi, who was a US resident with three children who are US citizens.

“It is beyond having a second nationality,” said Ziad Karkaji, managing partner of a Beirut-based firm specialized in residency and citizenship programs. Speaking about Al-Waleed bin Talal, a high-profile Saudi investor who holds a Lebanese passport, Karkaji told Al-Monitor, “With all his power and connections, he still stayed in the Ritz-Carlton.”

In September 2020, a group of Saudi dissidents, most of them in exile, crossed a red line by announcing the formation of a pro-democracy political party to call for peaceful change and combat what they referred to as state “violence and repression.”

“Every society is three meals away from chaos”

Beyond political considerations, getting second citizenship is “a long-standing practice” for Gulf businessmen and investors who travel frequently and want to avoid visa processing time, Bohl recalled. According to The Henley Passport Index, a power ranking of passports, the Cypriot travel document is twice as powerful as the Saudi.

Given the complexity of navigating national and international legislation, high-end intermediaries such as private bankers and family offices often recommend wealthy individuals seeking second citizenship to hire an expert. Some jurisdictions, like Malta, publish the names of foreigners who have acquired citizenship in the island state.

Applications for second passports from GCC nationals also soared about a decade ago during the Arab Spring. Some senior officials and members of royal families fear social discontent could lead to shifts in power and their assets being frozen.

As the global economy is expected to gradually shift away from carbon-intensive energies, the ruling families in the Arab Gulf states face unprecedented economic and sociopolitical challenges to reinvent their oil-dependent model of governance. Experts warn the change could cause political instability and eventually increase demand for second citizenship.

“Well, as Lenin said, ‘Every society is three meals away from chaos.’” Things happened, you know; in Tunisia it started with a fruit seller,” Lesperance commented.

Source: Rich families buy second citizenship in post-Ritz Saudi Arabia

Wealthy Britons step up citizenship shopping to thwart Brexit

Not surprising:

The number of British entrepreneurs looking to “buy” citizenship from countries offering visa-free access to the European Union has risen sharply, investment migration firms say, as prospects of a post-Brexit trade deal between Britain and the bloc darken.

Investment immigration firm Astons said it had seen a 50% and 30% year-on-year increase in interest from clients seeking Cypriot or Greek citizenship respectively this quarter, less than four months before UK passport-holders are likely to lose their rights to freedom of movement across the EU.

Henley & Partners also reported a rise in requests for advice on investment migration applications to Malta, Portugal, Austria and several Caribbean islands, which offer a range of residency rights, visa-free travel to the EU and citizenship to investors in local business or property.

Citizens of certain Caribbean sovereign states including St. Lucia and St Kitts & Nevis also enjoy preferred access to the EU, thanks to close ties with EU members as a result of historic, diplomatic and modern trade agreements.

“This isn’t about tourists. This is the UK high net worth community that have a constant need to travel to and spend significant time in the EU,” said Henley & Partners director Paddy Blewer.

“This is investment migration as a volatility hedge and a component in a high net worth portfolio value defence strategy,” he said, adding that volumes of client engagement were higher now than immediately after the 2016 Brexit vote.

Interest in additional citizenships is rising even as the European Commission examines possible steps to curb EU states selling passports and visas to wealthy foreigners, due to concerns it can help organised crime groups.

Cypriot residency can be secured in two months with a 300,000 euro ($351,870) property purchase. Securing citizenship takes six months and requires a minimum property investment of 2 million euros.

Reuters reported in December how some donors to Britain’s ruling Conservative Party had sought Cypriot citizenship including hedge fund manager Alan Howard.

“Both Cypriot and Caribbean investments are proving very popular … primarily driven by high-net-worth individuals (HNWIs) from the UK who have an eye on the future and life after Brexit,” said Astons spokesman Konstantin Kaminskiy.

CARIBBEAN DREAM

Henley & Partners said its volume of engagement with clients seeking alternative citizenship or residence by investment climbed 40% in the first quarter of 2020 versus Q1 2019, before flattening during the COVID-19 lockdown in Q2.

But interest has rallied since July 1, with a 15% year-on-year increase in engagement to Sept. 10, as the end of the Brexit transition phase nears.

Henley & Partners’ Blewer said clients were increasingly drawn to Caribbean citizenship applications – which is likely to give them better travel access to the EU than Britain – but which have a lower minimum investment and a quicker approval process.

Saint Lucia citizenship, offering visa-free travel to 146 countries, can be obtained in around four months for a minimum investment of 76,152 pounds, data supplied by Astons showed.

For less than 40,000 pounds more, investors can obtain citizenship of St. Kitts & Nevis – and visa-free travel to 156 countries – in around 60 days.

In contrast, Malta offers citizenship in exchange for around 1 million pounds of investment, but the process takes up to 14 months.

Portugal, meanwhile, typically processes investment migration applications in three months but only grants EU residency to investors and visa-fee travel to just 26 countries.

“With HNWIs, time is often more important than what is essentially a small fluctuation in cost and many are looking to secure additional citizenship as fast as possible in the pandemic landscape,” Arthur Sarkisian, managing director of Astons, said.

EU authorities are under pressure to clamp down on investment migration programmes by member states.

Sven Giegold, a member of the European Parliament from Germany’s Green party, said these kind of citizenship sales “posed a serious threat to EU security and the fight against corruption” in the bloc.

“EU passports and visas are not a commodity. Money must not be the criterion for citizenship and residence rights in the EU,” he said.

Source: Wealthy Britons step up citizenship shopping to thwart Brexit

How Covid-19 is changing citizenship by investment

More in depth than previous post:

Before Covid-19 connections and money could buy almost anyone the right to live pretty much anywhere they wanted.

The industry known today as CRBI—citizenship and residence by investment—began in 1984 in the Caribbean island of St. Kitts and Nevis, which offered a passport to foreigners who “invested substantially” in their economy. Today, more than half of the world’s 193 countries will trade citizenship or residency for cash. The industry is worth up to $25 billion a year and has spawned a new class of self-styled global citizens. But it’s also attracted criticism from those who say passports-for-purchase turn democracies into havens for criminals and facilitate money laundering and tax evasion.

The pandemic has led to unprecedented border closures and travel restrictions. Experts say that’s helped the CRBI industry grow but it’s also shaking it up, as high net worth individuals turn away from traditionally prized passports like the US and towards countries with high-quality healthcare systems.

London-based CRBI advisory firm Henley & Partners saw a 49% increase in enquiries in the first two quarters of 2020 compared to the same period last year. A competing advisory firm, Arton Capital, saw a dip in interest in the first quarter of the year as the pandemic spread in Asia. But enquiries rebounded and have increased 25% since April according to founder Armand Arton.

The CRBI industry was growing before the pandemic, thanks to demand from wealthy individuals in developing countries like India or Nigeria, whose economic growth has outpaced their diplomatic clout, “which is what bestows visa-free travel on citizens,” explains Paddy Blewer, public relations director for Henley & Partners.

A millionaire from oil-rich Gabon, for example, needs to apply for a visa to enter Europe’s Schengen zone. But that process can take up to 60 days and evidence suggests that Schengen visa applications from Africa are more likely to get rejected. Instead, a second citizenship from a Caribbean nation would guarantee them visa-free access to Europe for $150,000. That’s merely a “rounding error” for Blewer’s clients, who typically have about $6 million of assets under management.

Because of Covid-19, Blewer and Arton say investors are looking for countries who are perceived to have dealt with the pandemic better than others. That applies to Germany, Portugal, Australia, and New Zealand. Essentially, if people can work remotely from anywhere in the world, says Blewer, they are asking themselves one question: If another pandemic comes around, “where would they prefer to be?”

Finally, more Brits, Canadians, and Americans, whose passports are among the most valuable in the world, are becoming CRBI applicants. Henley & Partners reports “a dramatic 100% increase in enquiries from US citizens in the first six months of 2020,” which Blewer attributes to economic instability and a poor handling of the coronavirus. US citizens aren’t getting ready to leave en masse, he says, but they’re looking to hedge their bets. In September, a US passport holder could only travel visa-free to 86 countries, down from 171 last year.

“What we have seen with the pandemic is a complete change in the power of a passport,” Arton says.

Source: How Covid-19 is changing citizenship by investment

Surge of Covid-Related Interest in Investment Migration from Citizens of Developed Nations

The citizenship-by-investment industry broadens its marketing to include those from developed countries:

The massive volatility driven by Covid-19 has pushed the steady growth in investment migration into overdrive, with a nearly 50% increase in enquiries overall as the pandemic coursed around the globe in the six months to June 2020 compared to the same period last year. While the surge in interest shown by citizens of emerging economies such as India and Nigeria is somewhat predictable, a fascinating turn of events is the growing attention from nationals of leading developed nations. Most notable is America, with a dramatic 100% increase in enquiries from US citizens in the first six months of 2020 compared to the same period in 2019, along with significantly greater interest shown by Canadians and UK citizens.

“The tumultuous events of 2020, including the unplanned pause during the Great Lockdown, have resulted in people reconsidering how they wish to conduct their lives and — for those fortunate enough — choosing where they want to live by opting for investment migration,” says Henley & Partners CEO Dr. Juerg Steffen. “The relentless volatility in terms of both wealth and lifestyle has resulted in a significant shift in how alternative residence and citizenship are perceived by high-net-worth investors around the world.”

In terms of the total number of enquiries made in the first six months of 2020, Indian nationals outstripped all other nationalities by a long stretch. Henley & Partners received 96.5% more enquiries from Indian nationals than Nigerian nationals, who were placed second, followed by Pakistan and, startlingly, the US.

Several countries that host investment migration programs rank high on prominent indexes such as the 2020 Global Peace Index (GPI), the World Bank’s 2020 Ease of Doing Business ranking, and Deep Knowledge Analytics’ Covid-19 Regional Safety Assessment ranking. For those seeking the comfort of an alternative residence option in times of crisis, New Zealand comes out on top, impressively ranking 1st in both the GPI and Ease of Doing Business index and 2nd in the Covid-19 Regional Safety Assessment ranking. Other secure alternatives for high-net-worth families are Singapore, which ranks 7th in the GPI, 2nd in the Ease of Doing Business index, and 10th in the Covid-19 Regional Safety Assessment ranking, and Australia, which ranks 13th, 14th, and 6th in the three indexes, respectively.

In terms of alternative citizenship options in Europe, Austria is the top option, ranking 4th in the GPI, 27th in the Ease of Doing Business index, and 8th in the Covid-19 Regional Safety Assessment index, while Montenegro ranks 69th, 50th, and 83rd in the three indexes, respectively. The GPI omits the Caribbean small-island nations, but St. Lucia ranks 93rd in the Ease of Doing Business index and 127th in the Covid-19 Regional Safety Assessment ranking, making it the Caribbean investment migration program of choice for high-net-worth individuals.

“Once ‘nice-to-have’ assets of convenience and privilege that enhanced travel freedom and provided vacation or second homes, alternative residence and citizenship have rapidly become ‘must-have’ essential assets, not just to survive, but to thrive in the 21st century,” says Henley & Partners Group Head of Sales Dominic Volek, who points out that 19 of the G20 nations offer some form of mechanism to encourage inward investment in exchange for residence rights. The 20thmember is the EU, and 60% of EU member states offer investment migration options.

Source: Surge of Covid-Related Interest in Investment Migration from Citizens of Developed Nations

Nigeria’s wealthy use Henley in Caribbean passports for cash plan

More on the citizenship-by-investment industry:

A year ago, the office of Citizenship by Investment Program (CIP) in the small Caribbean island nation  of St. Lucia had received no applications from any Africans in its nearly five years of operations.

But in the past few months, it has issued up to 60 passports to Nigerians and is reporting steady increases in applications from the country—still its sole African market.

That sharp rise reflects spiking demand among Nigeria’s wealthy private citizens who are increasingly tapping into “investment migration” programs offered by foreign countries. The programs allow foreign nationals to obtain fast-tracked citizenship and passports or permanent residency permits in exchange for specified amounts of cash investments. The payment for the passports can come in form of direct “contributions” to the development funds set up by the national governments or through investment in real estate projects which offer the promise of not just passports but also possible profits.

With around 40,000 passports believed to have been issued through investment migration programs globally, citizenship by investment is now estimated to be a $3 billion industry. It is often favored by high-net worth individuals from countries with “weak” passports often from countries in sub-Saharan Africa and some Middle Eastern countries.

“What you have is a community of wealthy individuals who cannot travel without visas.”

Henley & Partners, the world’s largest investment migration consultancy, has also set up shop in Africa’s largest economy after seeing a sharp rise in demand from the country over the past three years. The office in Lagos is only Henley & Partners’ third in Africa, in addition to offices in Cape Town and Johannesburg opened six years ago.

“The reason we opened in Nigeria is because we saw significant potential in the market with growth in private wealth without global mobility for high net worth individuals,” says Paddy Blewer, public relations director at Henley & Partners. “What you have is a community of wealthy individuals who cannot travel without visas.”

That reality is best captured by the weakness of Nigeria’s international passport. In fact, Nigerian passport holders can visit two fewer countries now than they could in 2010 without first obtaining a visa. The country also suffered the worst decline in passport power over the past decade, according to rankings on the annual Henley Passport Index.

But even paperwork-intensive visa application processes have also gotten more complicated for Nigerians. Under the Trump administration, for example, US visa application fees for Nigerian applicants have been increased, an interview waiver process  for visa renewals for frequent travelers has been indefinitely suspended while a ban has also been placed on issuing immigrant visas to Nigerians. The net effect of these restrictions resulted in Nigeria recording the largest global drop-off in visitors to the US last year.

In search of improved international mobility, investment migration programs by Caribbean nations offer wealthy Nigerians and other citizens a legal and established workaround that ticks two crucial boxes: price point and access.

For instance, St. Lucia’s lowest-priced program, a “contribution to the national economic fund,” costs $100,000 for individuals and $140,000 for a family of four, as well as $15,000 for each additional family member. “That pricing model has really resonated well with the Nigerian community,” says Nestor Alfred, chief executive of St. Lucia’s CIP office. “A lot of our Nigerian applications consist of families.”

Other Caribbean islands including Dominica as well as St. Kitts and Nevis also offer investment migration programs with minimum costs of $100,000 and $150,000 respectively, a lot less than similar European programs typically cost. The US program issues permanent residence permits in exchange for investment ranging from $500,000 to $1 million.

But in addition to relative affordability, passports of Caribbean island nations also rank much higher than Nigeria’s on a global scale. For instance, St. Lucia passport holders have visa-free and visa-on-arrival access to 145 countries—more than triple Nigeria’s figure. And for extra context, St. Lucia passport holders’ visa free access allows them into the entire European 26-country “Schengen” area, the UK, and Switzerland.

Taking it up

With Nigeria’s oil-dependent economy battered by the pandemic and set for its worst recession in three decades, there are few indications interest in investment migration from Nigeria will slow down.

Nigeria and South Africa dominate demand from Africa and currently account for 85% of Henley & Partners’ business on the continent, with Nigeria growing rapidly with an interest in Caribbean-based citizenship programs.

That momentum will likely remain fueled by Nigeria’s super-wealthy with the country’s population of people with a net worth of more than $30 million—currently at 724 people—forecast to grow by 13%in the next five years.

But as it turns out, interest in emigration is not restricted to Nigeria’s super-wealthy alone. Over the past three years, middle-class Nigerians have also increasingly emigrated through skill-based programs offering legal pathways to residency and citizenship in Canada and Australia. In the last five years alone, the number of Nigerian immigrants issued permanent resident permits in Canada has tripled.

One distinction however is that high net-worth individuals who have earned most of their wealth locally are typically simply looking to boost their mobility options rather than permanently relocate. “What we’re dealing with people whose businesses and largely their wealth is derived from Nigerian investment—they’re not going to leave permanently,” says Blewer. “This is about being able to go where they want at the drop of a hat. It’s not about leaving Lagos.”

Double-checking

For tourism-based economies in the Caribbeans, investment migration programs offer a significant alternative to receiving foreign direct investment. And as recent history shows, with the Covid-19 pandemic paralyzing global travel and tourism, the revenue diversification opportunities these programs offer can prove vital. Indeed, after Hurricane Maria devastated Dominica in 2017, the government sought to shore up tourism deficits by reducing some of its processing fees to make its investment migration programs more attractive and in turn, provide much-needed funds to rebuild and boost the local economy.

But Dominica has also been caught in the crosshairs of a corruption scandal involving its passports program. Last year, an Al Jazeera investigation showed high-powered officials involved in brokering transactions to sell diplomatic passports to foreign business people suspected of corrupt dealings. Diezani Alison-Madueke, Nigeria’s embattled former minister of petroleum who is wanted for alleged corrupt dealings while in office, was identified in the investigation as one of the recipients of a diplomatic passport under questionable circumstances.

The scrutiny from such scandals amplify why investment migration programs claim to place a premium on due diligence. Even though it’s not legally required to, Henley & Partners says it carries out client verification processes, covering sources of wealth, and criminal history.

“We’re not interested in persons involved in military, government officials, or politically exposed persons. Our interest is more in executives and young professionals,” Alfred tells Quartz Africa. As such, the increased applications from Nigeria being primarily from private business executives across sectors, including banking, is ideal for St. Lucia because “it’s easier for us to determine the source of funds,” Alfred says.

Source: Nigeria’s wealthy use Henley in Caribbean passports for cash plan