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

Exclusive: Cyprus sold passports to criminals and fugitives

Not surprising given earlier stories and the kinds of people these programs can attract:

Convicted fraudsters, money launderers and political figures accused of corruption are among dozens of people from more than 70 countries who have bought so-called “golden passports” from Cyprus, according to a large cache of official documents obtained by Al Jazeera’s Investigative Unit.

The Cyprus Papers is a leak of more than 1,400 passport applications approved by the government of the island nation between 2017 and 2019, and it raises serious questions about the Cyprus Investment Programme.

Passports from the Republic of Cyprus can be important for individuals from countries that have restricted access to Europe, as Cyprus is a member of the European Union (EU) and a passport offers its holder access to free travel, work and banking in all 27 member states.

In the coming days, Al Jazeera will reveal the identities of dozens of people who acquired Cypriot citizenship who, according to the country’s own rules, in many cases should not have received a passport.

Security risk

To apply for a Cypriot passport, applicants must invest at least 2.15m euros ($2.5m) in the Cypriot economy, usually by buying real estate, and have a clean criminal record.

However, applicants provide their own proof of eligibility, and although Cyprus claimed to check applicants’ backgrounds, the documents obtained by Al Jazeera prove that this did not always happen.

Since its inception in 2013, the programme has received repeated criticism from the EU, which has called for it to be closed down.

“It’s high value for everyone who comes from a country where there’s a lot of dirty money involved”, German MEP Sven Giegold, a strong critic of the programme, told Al Jazeera.

“You open a bank account, a business relationship and less questions asked, no visa requirements, easier to get access to get everywhere to travel than if you are from Russia, China or even more doubtful countries.”

Since 2013, when the passport programme started, the country has made more than 7 billion euros ($8bn), used to keep afloat the nation’s failing economy.

Burisma and Gazprom officials

Between 2017 and 2019, the countries with the highest number of people applying were Russia, China and Ukraine.

Among the approved applications seen by Al Jazeera was Ukrainian tycoon Mykola Zlochevsky, owner of the giant Burisma energy company.

When Zlochevsky bought his Cypriot passport in 2017, he was already under investigation for corruption in his home country.

In June 2020 Ukrainian prosecutors said they were offered $6m in cash to drop the investigation.

Zlochevsky and Burisma deny any knowledge of the bribe.

Like many on wanted lists in their home country, Zlochevsky’s Cypriot passport allows him to live beyond the reach of Ukrainian law enforcement.

A similar application came from Russian national Nikolay Gornovskiy, former boss of the state-owned energy giant Gazprom.

Gornovskiy was already on Russia’s wanted list for abuse of power when Cyprus approved his passport in 2019 and has so far thwarted all attempts to extradite him.

Other applications were approved even after the applicant had been arrested and sometimes even served their time in prison.

Ali Beglov, a Russian national, bought his passport despite serving a prison sentence for extortion, which should not have been possible according to Cyprus’s rules.

Chinese businessman Zhang Keqiang also received a Cypriot passport, despite having spent time in prison for a fraudulent share deal.

Vietnamese businessman Pham Nhat Vu’s passport was approved a month after he was charged with giving millions of dollars in bribes in a telecoms deal.

He is now serving three years in jail.

According to Laure Brillaud, Senior Policy Officer with Transparency International, an NGO focused on combatting international corruption, these results are worrying but not surprising.

“These programmes bear inherent risks of money laundering, corruption and tax evasion. They were designed to attract people just looking for a fast track to the EU,” she told Al Jazeera.

Stricter rules

In May 2019, Cyprus introduced tougher rules on who was eligible for citizenship, which banned anyone under investigation, wanted, convicted or under international sanctions from buying a passport.

Cypriot parliamentarians in July finally passed a law that gave the country the power to remove citizenship after several scandals involving notorious golden passport investors, but politicians voted against any move to publish the names of those who buy Cypriot citizenship.

The new stricter law applies to anyone who commits a serious crime, is wanted by Interpol or subject to sanctions in the 10 years after they bought their passport.

Cyprus is reviewing all past applications and announced about 30 unnamed people face losing citizenship, but The Cyprus Papers reveal many more may fall foul of the new law.

They include people such as Venezuelan Leonardo Gonzalez Dellan, an ex-banker, who was sanctioned by the United States for laundering millions in illegal currency deals for the Venezuelan government.

Another person who could lose his passport is Oleg Bakhmatiuk, under investigation in Ukraine for embezzlement and money laundering relating to his giant agricultural firm.

He called the charges “a complete fabrication and politically motivated”.

Although Bakhmatiuk told Al Jazeera the proceedings against him had ended with the charges dropped, the country’s official prosecutor confirmed he is still on Ukraine’s wanted list.

Embezzlement and money laundering

Some other examples of passport holders facing serious charges are Russian brothers Alexei and Dmitry Ananiev, who bought citizenship in 2017.

They are accused in Russia of embezzling from the bank they once owned.

Another person who received Cypriot citizenship is Chinese national Li Jiadong, who was sanctioned by the US for laundering $100m in cryptocurrency related to North Korean hackers.

Lastly, there are Maleksabet Ebrahimi and his son Mehdi, who are both on Interpol’s most-wanted list for money laundering and fraud in Iran and facing similar charges in Canada.

Maleksabet Ebrahimi denies the charges against him and says he complied at all times with Iranian and Cypriot laws.

‘Cyprus should be ashamed’

In response to questions from Al Jazeera, Cypriot Member of Parliament Eleni Mavrou said: “The way the programme was implemented the last few years was obviously a procedure that allowed cases for which the Republic of Cyprus should be ashamed.”

“I believe that the new regulations will not leave room for foul play or for stepping over the boundaries that a state should respect,” she added.

The Minister of the Interior, Nicos Nouris told Al Jazeera: “No citizenship was granted in violation of the regulations in force at the given time.”

Source: Exclusive: Cyprus sold passports to criminals and fugitives

Wealthy Americans invest in foreign passports, US visa loses lustre

Decline in value of US citizenship and its passport, according to the citizenship-by-investment industry:

There is a must-have travel accessory that wealthy Americans are buying this year: foreign citizenship.

A financial advisory firm specialising in “global citizenship” has been inundated by requests from US clients looking to “invest” in a foreign passport, reported The Washington Post.

The Toronto-based firm Arton Capital says that there has been a 30-40 per cent increase on last year in clients looking to obtain “a second citizenship and passport by investing in the economy of the host country.”

With severe outbreaks of coronavirus closing international borders to travellers from the US, it would appear a second passport has become the final refuge of wealthy Americans.

“This limitation of mobility has made more people aware of … the benefits of having more than one passport,” Armand Arton, president of Arton Capital told The Washington Post.

In response to the high community transmission rates, many destinations are refusing inbound travel from the US for all reasons but repatriation.

These travel restrictions have been put in place for public health reasons. However, for those with enough personal wealth, it might still be possible to buy their way out.

Some governments including Portugal, the United Kingdom and the Dominican Republic offer investment-based citizenship as through “job creation and capital investment by foreign investors”. Established to attract investment into local economies, these schemes are essentially passports for sale.

The cost of these “golden visas” ranges from around $100,000 for some Caribbean nations to over $3 million for passports within the EU.

“We’ve had Americans contacting us and saying, ‘Listen, I cannot believe that my American super passport cannot get me into as many countries as it used to before. What can I do?’ “Arton says. “That was never the case for us before.”

New Zealand also offers pathways to citizenship for investors, although notably there are requirements on the amount of time a candidate has spent in the country to qualify for an “Investor” class visa.

An applicant for a class 1 Investor visa must spend an average of 30 days in New Zealand a year over a three-year period, on top of a $2.5 million investment. Due to the closure of New Zealand borders since March to all but New Zealand residents, the process has become far more difficult.

However, this hasn’t stopped wishful thinking. In June the Herald revealed that 112,800 Americans visited the Immigration New Zealand Site, a spike of 160 per cent on last year.

Unlike other pathway’s to residency, many schemes do not require claim by heritage or even having to have ever stepped foot in the country, which makes them extremely appealing as an investment.

Residency via investment it is not a quick process. For most countries it can take months even years to have residency granted. Applicants and the source of their investments are subject to scrutiny.

“The one thing that we do have to explain to clients is this will take longer than you think”, says Paddy Blewer, PR director for Henley & Partners. Applicants are up to “hardcore investigation” not only by the country granting prospective citizenship, but also the agencies themselves.

Henley & Partners which helps clients with citizenship-via-investment programmes and also keeps track of the Henley & Partners passport rankings says they are very discerning with the clients they take on.

“We do that because we care about our reputation. We do that because we want to be around for the next 20 years.”

The US also offers a pathway to citizenship though investment via the EB5 visa.

The scheme which was established in 1990 was opened up to international investors willing to put between $1.3 and $2.7million into qualifying schemes in the States.

The USCIS has granted almost 80,000 paid-for visas via the programme, though demand for US citizenship via investment tailed off dramatically since 2016. The appeal of American citizenship began to lose its lustre, even before the coronaviurs pandemic.

Last month reports by the Passport Index and Henley and Partners Passport Rankings found a dramatic reordering in the value of international travel documents. Comparing passports by the number of countries offering visa-free to holders, the US passport in particular had suffered since the outbreak the Covid 19 crisis.

The Passport Index recently recorded a 20-place fall for the US passport, with 86 countries having put a coronavirus related ban on travellers from the US.

Source: Wealthy Americans invest in foreign passports, US visa loses lustre

Caribbean countries selling discount citizenship due to COVID hit

Of note. The citizenship variant of Gresham’s law in action:

Citizenship by Investment (CBI) Programs are not new to the Caribbean. Many countries in the region have been offering passports to wealthy foreigners in exchange for monetary investment for years, but with staggering post-COVID tourism losses, many passports have gone on sale. Among the countries to recently slash prices or make their CBI programmes more compelling are St. Kitts and Nevis, St. Lucia, Antigua and Barbuda, and Dominica.

St. Kitts and Nevis, which earns around 35 per cent of government revenue from its CBI programme, was one of the first Caribbean countries to begin slashing prices.

“In these days of Covid, when tourism is not happening, we have to find ways to create revenue to sustain our economy,” said Les Khan, CEO of St. Kitts and Nevis Citizenship Investment Unit, in a phone interview with Bloomberg.

St. Kitts and Nevis is currently offering a special deal through to the end of 2020. It entails paying a contribution of $150,000 to the country’s “Sustainable Growth Fund”, which will secure, for those who can afford it, passports for a family of up to four– a 23 per cent discount off of the usual cost of $195,000.

This is a great deal when considering the fact that St. Kitts and Nevis currently has the 26th most desirable passport in the world, out of 169 countries, according to the 2020 Henley Passport Index.

In May, St. Lucia cut the required CBI investment in five-year, non-interest bearing bonds in half, to $250,000 for an individual or $300,000 for a family of four. The “special offer” on these “Covid-19 Relief” bonds expires at the end of 2020. St. Lucia’s passport ranks at number 33 on the 2020 Henley Passport Index.

In Antigua and Barbuda, a family of four can become citizens at the bargain price of a $100,000 donation to its development fund. The government recently cut the price for adding additional children. Antigua and Barbuda’s passport ranks number 29 on the 2020 Henley Passport Index.

Pre-COVID-19, Dominica offered the cheapest citizenship by investment program in the world with the cost of second passports starting at only $100,000, but the price was scheduled to increase by 75 per cent, to $175,000. According to Dominica’s CBI website, “This major cost increase has now been put on hold indefinitely, although prices could increase once the COVID-19 pandemic is over so we encourage you to act fast.” Dominica has the 38th most desirable passport in the world, according to the Henley Passport Index.

The incentives seem to be working. According to Henley & Partners, a London-based passport broker, there has been a 42 per cent increase in citizenship applications.

“‘Investment migration’ has shifted from being about living the life you want in terms of holidays and business travel to a more holistic vision that includes healthcare and safety,” said Dr Christian Kalin of Henley & Partners.

Source: Caribbean countries selling discount citizenship due to COVID hit

Revive Canada’s immigrant investor program, IIAC says

Favourite line: “a formal immigrant investor program, building on the strengths of the previous federal program.”

Reality: the evaluation that showed minimal to no benefits (Evaluation of the Federal Business Immigration Programwww.canada.ca › english › pdf › pub › e2-2013_fbip – the backlog was not the issue) and census data showing lower incomes than refugees.

The Harper government correctly ended the program.

IIAC’s citing the Quebec program as a model is risable as most end up elsewhere in Canada with the same minimal impact or contribution to the economy (Douglas Todd: Time to end ‘honour system’ in Quebec’s immigrant-investor scheme).

Government should not go there as main benefits accrue to the consultants that push for such programs:

The Investment Industry Association of Canada (IIAC) has suggested that increasing foreign direct investment (FDI) in Canada could help rebuild the economy in the wake of Covid-19.

In a May 5 letter to federal Finance Minister Bill Morneau, IIAC president and CEO Ian Russell wrote that there are “tens of thousands” of foreign investors looking for permanent residence in Canada, and other countries will benefit from their wealth if Canada doesn’t.

Russell suggested the federal government could increase FDI by re-introducing “a formal immigrant investor program, building on the strengths of the previous federal program.”

The previous program, the Federal Immigrant Investor Program (FIIP), was closed in 2014 as a result of the Economic Action Plan 2014 Act, which found that large backlogs of applications tied to economic immigration programs were a major hurdle for the immigration system.

IIAC conceded that the FIIP had issues, but suggested a new program could be temporary and tied to the economic recovery from Covid-19.

“To speed up [the program’s] implementation, its structure could be similar to what exists in Quebec but with the addition of a non-refundable contribution to boost its impact,” Russell wrote. “Unlike regular investors or entrepreneurs, immigrant investors are more interested in obtaining permanent residence for themselves and their families, and having the return of their portion of capital guaranteed after a reasonable time period (5-7 years).”

The implementation of such a program would require collaboration between multiple ministries, and “the government could decide where the FDI would be best invested as per its needs for post-Covid-19 recovery,” Russell said.

Dealer firms regulated by the Investment Industry Regulatory Organization of Canada (IIROC) could “help design, promote and support this new [FIIP] program,” Russell suggested, adding that many IIROC members were “involved in the FIIP process” and some have acted as consultants to other countries.

In data released in late February, Statistics Canada said foreign direct investment in Canada was positive in Q4 2019, but lower than what was recorded a year earlier.

Read the full IIAC letter.

Source: Revive Canada’s immigrant investor program, IIAC says

The Ultra-Rich Are Now Buying ‘Pandemic Passports’ So They Can Move to Safer Countries

More citizenship-by-investment demand (so much for all being in this together and that pandemics don’t discriminate):

Wealthy travelers have been playing a game of “beat the ban” as countries have closed their borders to try to fight the Covid-19 pandemic. Getting it wrong can be very expensive, as one British couple recently learned. The pair bought two £10,000 ($12,000) first-class tickets to escape from London to Barbados, but they were so worried that British Airways would axe its service that they paid £100,00 ($125,000) to charter a private jet instead. (BA carried on flying.)

Now the super-rich are buying the ultimate insurance policy to make sure they will be able to travel to whatever virus-free, sunny bolt-hole they choose, if a second spike in Covid-19 infections triggers another global lockdown. The world’s wealthiest are snapping up multiple citizenships in countries around the world.

Henley & Partners, a London-based citizenship broker, is one of the biggest players in the nearly $4 billion-a-year “identity management” business (a.k.a. “passports for sale”). The firm’s latest figures show a 42 percent year-over-year increase in the number of people filing a formal application for a new nationality during the first three months of 2020. The number of inquiries is up by 25 percent.

“’Investment migration’ has shifted from being about living the life you want in terms of holidays and business travel to a more holistic vision that includes healthcare and safety,” Dr. Christian Kalin, the firm’s chairman, told Robb Report.

So, what exactly is convincing high net worth individuals that they need an escape plan? According to one Italian multi-millionaire who is critical of his government’s handling of the pandemic, the decision came down to two factors: the varying performance of national healthcare services and the closure of national borders, which has split up families. “We want to know there is a safe place, with good medical services, that the whole family can go to at short notice if we need to,” the millionaire told Robb Report. “Only citizenship can guarantee that.” Countries that have closed borders have continued to admit nationals returning home. Most national airlines have maintained some flights to major capitals.

The most popular “pandemic passports” or permanent residency programs are those of Australia, Antigua, St Kitts and Nevis, Tuvalu, Vanuatu, Austria, Switzerland, Portugal, Cyprus, Malta and Montenegro. All offer nationality or permanent residency in return for a direct donation to the national treasury or investments in local property or businesses. It can cost as little as $100,000 per family member in the Caribbean, rising through €1 million to €2 million ($1.1 million to $2.2 million) in Malta and Cyprus, to €7 million ($7.6 million) in Austria.

Australia and Austria are particularly attractive because they not only have high-quality national health services but the government of each country acted quickly to limit the spread of the virus. The United Kingdom, which has been a magnet for the super-rich in recent years and offers residency—but not a passport—in return for multi-million-pound investments, is not considered a safe haven because critics say the government botched its handling of the pandemic by reacting too slowly to the threat and failing to ensure the National Health Service was properly prepared.

Although having funds to buy multiple citizenships gives the rich an advantage in protecting their health and lifestyle, Kalin points out that the fees and taxes they pay are a source of much-needed capital for hard-pressed governments that now have to raise funds to pay for Covid-19 emergency economic bail-out programs. “Take Antigua,” he says. “It depends on tourism and now there is none and there won’t be for some time. It needs fresh sources of funds. Citizenship by investment is one.”

Source: The Ultra-Rich Are Now Buying ‘Pandemic Passports’ So They Can Move to Safer Countries

Wealthy Move Their Money To Tax Havens

As always…:

Lockdown might impact peoples’ ability to move across borders, but it doesn’t stop money flowing into tax havens around the world.

The economic shocks of coronavirus have meant that offshore financial centres such as Switzerland are back to their old tricks: Banking peoples’ money away from their more risky homelands.

UBS, a Swiss bank and the world’s largest wealth manager, announced its profits were up by 40%. In the first three months of 2020, it saw $12 billion in net new money, nearly treble the amount banked in the previous quarter.

“We successfully managed March’s high volumes and activity across our trading and client platforms, including peaks of three times the normal levels,” Sergio Ermotti, the bank’s CEO, told investors on Tuesday (April 28).

This enabled the bank to gain a higher share of wallet from its clients, Ermotti added.

Pre-coronavirus, Switzerland’s popularity for offshore banking was fading as its banking sector could no longer guarantee client secrecy. However, the country’s notorious stability combined with low COVID-19 infection rates have renewed its appeal among the international wealthy who use its private banking services.

“There are some countries where the risk of your money and your wealth being more at risk than others does potentially also lead to inflows into safe and secure places like Switzerland,” says Anna Zakrzewski, who leads Boston Consulting Group’s Global Wealth Management division.

Source: Wealthy Move Their Money To Tax Havens