Citizenship-by-Investment: Henley Global Citizens Report 2022 Q2 Press Release

2022/07/19 Leave a comment

Always interesting to see where the money is going. Canada is on the list for the start-up visa program, which is distinct from most of the other programs listed in terms of being based more on actual investment than just residence (but look forward to an eventual IRCC evaluation to see how effective it is):

“A tsunami of private capital has left Russia and Ukraine, the UK has lost its wealth hub crown, and the US is fading fast as a magnet for the world’s wealthy, with the UAE expected to overtake it by attracting the largest net inflows of millionaires globally in 2022, according to the latest Henley Global Citizens Report, which tracks private wealth and investment migration trends worldwide.

The Q2 report released today by international residence and citizenship by investment advisory firm Henley & Partners exclusively features the latest projected 2022 net inflows and outflows of US dollar millionaires (namely, the difference between the number of HNWIs who relocate to and the number who emigrate from a country) forecast by New World Wealth. The firm is the only known independent wealth research company systematically tracking international private wealth migration trends over the past decade. The HNWI migration figures focus only on people with wealth of USD 1 million or more and who have truly moved — namely, those who stay in their new country more than half of the year.

As expected, Russia has suffered the biggest emigration of millionaires over the past six months, with forecast net outflows of 15,000 by the end of 2022 — a massive 15% of its HNWI population and 9,500 more than in 2019, pre-pandemic. Russia’s invasion is in turn driving a steep spike in outgoing HNWIs from Ukraine, which is predicted to suffer its highest net loss in the country’s history — 2,800 millionaires (42% of its HNWI population) and a net loss of 2,400 more than 2019. No country-specific figures are available for 2020 and 2021 owing to Covid-related lockdowns and travel restrictions.

Top 10 countries gaining and losing millionaires in 2022

Forecast figures in the Henley Global Citizens Report show the top 10 countries in terms of net inflows of HNWIs in 2022 will be the UAE, Australia, Singapore, Israel, Switzerland, the US, Portugal, Greece, Canada, and New Zealand. Large numbers of millionaires are also expected to move to ‘the three Ms’: Malta, Mauritius, and Monaco. On the flip side, the 10 countries where the highest net outflows of HNWIs are predicted are Russia, China, India, Hong Kong, Ukraine, Brazil, the UK, Mexico, Saudi Arabia, and Indonesia.

Dr. Juerg Steffen, CEO of Henley & Partners, says HNWI migration was a rising trend over the past decade until, understandably, it dipped in 2020 and 2021 due to the Covid-19 pandemic. ‘The 2022 forecast reflects an extremely volatile environment worldwide. By the end of the year, 88,000 millionaires are expected to have relocated to new countries, 22,000 fewer than in 2019 when 110,000 moved. Next year, the largest millionaire migration flows on record are predicted — 125,000 — as affluent investors and their families earnestly prepare for the new post-Covid world, with an as yet-to-be revealed rearrangement of the global order, and the ever-present threat of climate change as a constant backdrop.’

Andrew Amoils, Head of Research at New World Wealth says HNWI migration figures are an excellent barometer for the health of an economy. ‘Affluent individuals are extremely mobile, and their movements can provide an early warning signal into future country trends. Countries that draw wealthy individuals and families to migrate to their shores tend to be robust, with low crime rates, competitive tax rates, and attractive business opportunities.’

UK and USA – the mighty are falling

According to the latest data, destinations that traditionally attracted wealthy investors are losing their luster. The UK, once touted as the world’s financial center, continues to see a steady loss of millionaires, with net outflows of 1,500 predicted for 2022. This trend began five years ago when the Brexit vote and rising taxes saw more HNWIs leaving the country than entering for the first time. The UK has suffered a total net loss of approximately 12,000 millionaires since 2017.

The appeal of another financial giant, the US, is also dwindling fast. America is notably less popular among migrating millionaires today than pre-Covid, perhaps owing in part to the threat of higher taxes. The country still attracts more HNWIs than it loses to emigration, with a net inflow of 1,500 projected for 2022, although this is a staggering 86% drop from 2019 levels, which saw a net inflow of 10,800 millionaires.

Commenting on the geopolitics of millionaire migration in the Henley Global Citizens Report, award-winning journalist Misha Glenny says private wealth growth is bound to remain anemic in the US this year as political unpredictability looms. ‘In November, the mid-term elections are likely to return a Republican House and possibly the Senate, too. With culture wars between Democrats and Republicans mounting once more with the leaked decision of the Supreme Court to overturn the Roe vs. Wade ruling on abortions, some fear we are entering another period of dramatic instability such as that which characterized the Trump years. As a consequence, some high-net-worth investors will doubtless think twice before committing their wealth to the Americas.’

The UAE’s stellar ascent as a wealth hub

By contrast, the UAE has become the focus of intense interest among affluent investors and is expected to see the highest net influx of HNWIs globally in 2022, with 4,000 forecast — a dramatic increase of 208% versus 2019’s net inflow of 1,300 and one of its largest on record. This mirrors the country’s remarkable rise in the Henley Passport Index rankings over the past decade as it focused on attracting tourism and trade by implementing a succession of mutually reciprocated visa waivers. The UAE is now doing the same with its competitive, agile approach to adapting immigration regulations to attract private wealth, capital, and talent.

Glenny says affluent Russians seeking to escape the impact of the devastating Western sanctions on their country have started to move to the UAE and Israel in large numbers. ‘An underlying pattern was already detectable in advance of the invasion of Ukraine. Well before the imposition of sanctions on the Russian banking system, there was a tsunami of capital leaving the country, largely prompted by the increasingly capricious governing style of President Vladimir Putin and his demands of loyalty made on middle-class and wealthy Russians. They have now come under further pressure from many Western countries, such as Britain, where they had previously made their homes.’

Israel, Australia, New Zealand, Singapore among the big winners 

As Glenny points out, net HNWI inflows are on the rise in Israel, with a figure of 2,500 forecast for 2022 — a significant increase of 79% since 2019.

Long-term high performer Australia consistently attracts large numbers of HNWIs. New World Wealth estimates that over 80,000 US dollar millionaires have moved to the country over the past 20 years. In 2022, the net inflow is expected to be 3,500 — the second-highest globally. Neighboring New Zealand is expected to receive a net inflow of 800 HNWIs in 2022, and Asia’s prime hub of affluence, Singapore, continues to attract millionaires, with net inflows of 2,800 expected — a prolific 87% increase compared to 2019’s figure of 1,500.

Commenting in the Henley Global Citizens Report, FutureMap founder and international bestselling author Dr. Parag Khanna says, ‘Globalization is not dead — and certainly not from the perspective of Asia, where inward capital flows are rising on the back of a post-Covid reopening and genuine investments across the region in productive capacity. With multiple factory floors, multi-trillion-dollar economies, rapid urbanization, a rising middle class, and surging technological penetration, Asia’s continued ascent remains the major economic story of our age.’

China, Hong Kong (SAR China), India, Brazil among the biggest losers 

Wealth emigration is beginning to hurt in China, with net outflows of 10,000 HNWIs expected in 2022. Amoils says, ‘General wealth growth in the country has been slowing over the past few years. As such, recent outflows of HNWIs may be more damaging than in the past. China’s deteriorating relationships with Australia and the US are also a major long-term concern.’

In Hong Kong (SAR China) HNWI departures continue albeit at a slower pace, with projected net millionaire outflows of 3,000 in 2022 (a 29% drop compared to 2019). Brazil’s millionaire exodus is intensifying with net outflows of 2,500 HNWIs predicted — up 79% compared to 2019. India is expected to suffer a net loss of approximately 8,000 HNWIs in 2022, up 14% since 2019 when the net loss was 7,000. However, India produces far more new millionaires than it loses to migration each year.

Commenting on wealth growth projections in the Henley Global Citizens Report, Prof. Trevor Williams, former Chief Economist at Lloyds Bank Commercial, says emerging economies are forecast to boom in the next decade. ‘As the world economy grows, economies in Africa, Latin America, and elsewhere in the Global South are catching up with high-income economies. And as this report shows, they will see a more significant number of millionaires and billionaires in the next decade. For example, the number of HNWIs in Sri Lanka is forecast to increase by 90% by 2031, while India and Mauritius’s millionaire growth is forecast at 80%, and China’s at 50%, compared to 20% in the USA and 10% in France, Germany, Italy, and the UK.’

Relentless uncertainty fuels demand for investment migration 

Henley & Partners received the highest number of investment migration program enquiries on record in the first quarter of 2022 — an increase of 55% compared to the previous quarter, which was itself record-breaking. The top four nationalities currently driving demand are Russians, Indians, Americans, and Brits, and for the first time ever, Ukrainians are in the top 10 globally.

The Portugal Golden Residence Permit Program remains the most popular program in 2022, followed by the St. Kitts and Nevis Citizenship by Investment Program. Next is Canada, with the Canada Start-Up Visa Program the fastest way for entrepreneurs and wealthy individuals to access Canadian residence and the North American market. Rising in popularity this year is the Greece Golden Visa Program, and last in the top five is the Antigua and Barbuda Citizenship by Investment Program.

Dominic Volek, Group Head of Private Clients at Henley & Partners, says historically, many wealthy individuals acquired residence rights or citizenship without moving to those countries. ‘Recent turmoil is causing this to shift — more investors are considering relocating their families to other countries for a range of reasons, from safety and security, to education and healthcare, to climate resilience and even crypto-friendliness. It is important to note that nine of the top ten countries for forecast net HNWI inflows in 2022 host formal investment migration programs, which encourage foreign direct investment in return for the right to reside or citizenship. Investors can now see the value of diversifying their domicile portfolios as the ultimate hedge against both regional and global volatility.’

The Henley Global Citizens Report also features regional insights by investment migration industry leaders representing seven key markets: the Americas, Europe and the UK, Africa, the Middle East, South Asia, East Asia, and Southeast Asia and Oceania alongside expert commentaries by notable private wealth industry leaders such as Albert S. Yeo, President of BDO Private Bank Inc. (Philippines), Bijal Ajinkya, Partner in the Direct Tax, Private Client and Investment Funds Practices of Khaitan & Co (India), Yannick Archambault, Partner and National Leader of the KPMG Family Office in Canada, Matthias Ribback, who manages multi-asset portfolios for US clients of Vontobel Swiss Wealth Advisors AG, Murray Sarelius and Michelle Zhou from KPMG China, Ladi Runsewe, Founder and Chief Executive Officer of UR Family Office (UFO) in Nigeria, Ayuli Jemide, founder of DETAIL Commercial Solicitors (Nigeria), Tim Searle, Chairman of Globaleye (Dubai), and Giles Maynard, Senior Financial Advisor and Regional Manager at Carrick Wealth in South Africa.”

Source: Henley Global Citizens Report 2022 Q2

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How you can buy a British passport—the dangerous commodification of citizenship

2022/01/07 2 Comments

Of note:

Last week, the UK Nationality and Borders Bill passed in the Commons. The Bill gave the home secretary Priti Patel the power to strip British people with dual nationality or born abroad of their citizenship without needing to warn them first. Three thousand miles away, in a conference centre in Dubai, a collection of lawyers, wealth managers, immigration experts and High Net Worth Individuals (HNWIs) were selling and shopping for visas and passports. The event hosted “the right advisers and government contacts” to help applicants “get ahead in life in countries such as Canada, USA, UK, Spain, Greece, Germany, Bulgaria,” including promising to hand-hold applicants through the UK’s investor visa process, where a £2m investment can be exchanged for long-term residency. Both events are representative of shifting currents in global citizenship. But who gets citizenship—and why? Who gets to keep it—and who doesn’t?

The commodification of citizenship began in the 1980s. When the Caribbean islands of St Kitts & Nevis attained independence from Britain, the economy was hindered by a colonial-era reliance on sugar exports. Selling citizenship represented a perfect economic opportunity. An existing resource with apparently unlimited supply, low overheads and limited human capital requirements, selling passports could deliver a direct injection of cash for the government. At $150,000 for a family of four, with no obligation to live or even visit the islands, the passports include access to tax-free income and visa-free travel to over 130 countries. For St Kitts and its customers alike—a diverse group of wealthy investors largely from developing countries from which travel is restricted—there seemed to be few downsides, besides potential displeasure from other countries.

At first, uptake was slow. But after a dramatic slashing of the EU import price for sugar in 2006, the Kittitian government enlisted the help of Henley & Partners, a London law firm, to give the programme a boost. Their influence was profound. In the following eight years, the percentage of St Kitts GDP derived from the citizenship-by-investment (or “CBI”) programme jumped from 1 to 25 per cent. Today, CBI is a booming international industry worth an estimated $3bn.

In short, St Kitts commodified citizenship, and Henley commercialised it. Now operated by around 100 countries around the world, CBI programmes offer a passport or residency permit in exchange for a one-time payment or a hefty real estate investment. Prices range from $130,000 for a single applicant (Vanuatu) to several millions (the UK) to schemes about which little public information is available (Switzerland, Austria). The innovation of CBI is in bypassing the linguistic, cultural or employment-related migration requirements usually tightly enforced by governments when the person involved isn’t incredibly rich. It has also spawned an entire industry. Search “citizenship by investment” on Google and a slew of adverts for agents, lawyers, due diligence firms and advisers appear, all hungry for their share of the application fee. There are even CBI influencers: Nomad Capitalist, a YouTube channel, garners millions of views each year for videos with titles like “12 Second Residence Permits with a Simple Bank Deposit.”

Source: How you can buy a British passport—the dangerous commodification of citizenship

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Methodology for Investment Migration Programs 2021 (Henley & Partners)

2021/03/31 Leave a comment

For those of you interested in indexes and citizenship and how the private companies make their assessment:

In constructing the Global Residence Program Index (GRPI) and Global Citizenship Program Index (GCPI) we have referred to multiple sources and experts to obtain and interpret the primarily qualitative data used. We have relied principally on the expertise of residence and citizenship analysts and the experience of investors and government officials. As a result, the explanatory power that supports the scores in the different categories is based on surveys, interviews with respondents, and opinions solicited from selected experts. Where possible, the subjectivity of the various factors has been assessed against publicly available data and widely accepted composite indicators.

The data for surveys and interviews has been consistently collected from a representative sample that includes respondents, experts on citizenship, and practitioners who have been involved in the design of qualitative research in global mobility and related spaces. The sample frame for respondents consists of existing and potential investors, their advisors, and government officials in countries that either already have, or are in the process of establishing, investment migration programs. Relying on potential clients means that the responses of those who decided against proceeding with any program are also included. It may also be noted that among our respondent and expert base are government officials and consultants engaged in investment migration programs that have been discontinued as well as those that are in the process of being established or reformed.

The factors that are analyzed in each of the indexes are as follows:

Global Residence Program Index

  • Reputation
  • Quality of Life
  • Visa-free or Visa-on-arrival Access
  • Processing Time and Quality of Processing
  • Compliance
  • Investment Requirements
  • Tax
  • Total Costs
  • Time to Citizenship
  • Citizenship Requirements

Global Citizenship Program Index

  • Reputation
  • Quality of Life
  • Visa-free or Visa-on-arrival Access
  • Processing Time and Quality of Processing
  • Compliance
  • Investment Requirements
  • Residence Requirements
  • Relocation Flexibility
  • Physical Visit Requirements
  • Transparency

Reputation 

Reputation relies on the perceptions of investors and advisors regarding the image of the countries in which they invest. This indicator is subjective by nature, but much like the Attractiveness Indicators employed by the IMD in its Executive Opinion Surveys, our intention was to allow our respondents and informants the space to consider intangible and unanticipated factors while assessing the reputation of destination countries.

Endeavoring to assess reputation is not new, and the relationship between reputation and outcome is a popular mechanism for assessing the competitiveness of organizations, cities, and even regions. Furthermore, the reputation of a country, much like the reputation of a corporate, is a historical indicator that allows its previous efforts to meet investor expectations to be assessed.

Quality of Life 

The assessment of Quality of Life (QoL) uses a wide range of methods to evaluate subjective perceptions of various sample groups in different contexts, as well as developing factors that are independent of subjective perceptions. Like Reputation, QoL could well benefit from considering investors’ experiences and what is particularly relevant to individuals who are interested in investment migration.

We are aware, moreover, that there are substantial institutional efforts in developing composite indicators for QoL — the United Nations Human Development Index is one of the most comprehensive (relying on life expectancy at birth, schooling, literacy rates, and gross national income per capita). These factors do not cover all civil and political liberties though; for assessing democratic values, Freedom House’s Freedom in the World report is a preferable indicator.

As our focus is also on investment, the World Bank’s Doing Business reports are pertinent, since investors may have to negotiate the regulatory environment of destination countries for a variety of economic activities. We have sought to anchor the framing of our questions in established indicators but recognize that such indicators do not always correspond to what is being assessed in the GRPI and GCPI.

Visa-free or Visa-on-arrival Access

The methodology for this factor is relatively straightforward. It aims to measure an improvement in the mobility of an investor, or their ability to enter additional countries visa-free or with visa-on-arrival access as a result of being a citizen of, or resident in, a particular jurisdiction.

For the GCPI this factor relies on the 2021 Henley Passport Index, which curates data from 227 different travel destinations (including countries, territories, and micro-states), collated by the International Air Transport Association, to arrive at the ranking. The Henley Passport Index compares data on the number of destinations that a citizen of a given country can visit without requiring a prior visa. A relaxed travel policy is worthwhile in itself, but it also characterizes a country’s political regime and the extent of its civil liberties.

While acquiring alternative citizenship is more directly linked to ease of travel, an alternative residence can also enhance the mobility of individuals. It thus also features as a factor that motivates residence investments and is included in the GRPI.

Processing Time and Quality of Processing

Processing time for applications and their quality of processing are two distinct aspects that are assessed differently. Some countries may offer a short processing time between lodging an application and issuing a visa or permit, but there may be uncertainties in administrative processes. In this regard, input from respondents has proved valuable: the responses and analysis thereof have verified the official or declared processing time and complemented the ‘hard’ data on actual processing time taken (namely, the number of days), including obstructions faced.

Compliance

Countries have different procedures and varying due diligence requirements for profiling applicants (including criminal records and financial statements), sources of funds, the manner of fund transfers, and the vulnerability to abuse of the funds invested. The standard measures adopted are best practices developed by international associations and professional agencies for anti-money laundering, counter-terrorist financing, and anti-bribery and corruption. The EU, unlike the USA, does not have a joint or federal procedure for conducting due diligence, so EU countries differ widely in terms of their national rules. Clear information and frameworks regarding due diligence facilitate better risk assessments for potential investors. A more intensive due diligence requirement may be an advantage as this translates into less uncertainty in private investments. Since financial institutions usually engage in Know Your Customer audits regardless of the regulations of investment migration programs, they are less vulnerable than private investments. Vulnerability to money laundering in different sectors could, furthermore, be avoided in the presence of clear regulations.

Investment Requirements

The upfront investment amounts for residence differ in terms of amount required, nature of investment, and additional costs. For this indicator, we consider the required investment amounts. The range in the stated amounts is broad and the nature of the investment is not always left to the discretion of the investor. Options for different forms of investment are specified by the destination governments, largely depending on policy considerations and benefits to the respective countries. Generally, a country offering more choice in how to invest and requiring lower investment amounts (including additional costs) scores higher.

Because of the unique nature of citizenship-by-investment (CBI) programs, investment amounts are substantial, and the accompanying conditions do not allow much choice in the nature of the investment. There is a noticeable pattern to the investments required for CBI programs: the investment amounts are generally greater than those required by residence-by-investment (RBI) programs, there is usually a requirement or at least an option to purchase real estate, and there is usually a requirement or an option to make a non-refundable contribution.

Tax

This factor raises the question of the extent of the tax burden that a resident is required to bear for both corporate and personal economic activities. It is rare for a country not to impose any taxes on its residents. The only two countries in our indexes that have that distinction are Monaco and the UAE, since they do not impose personal income tax, property tax, capital gains tax, or net worth taxes. For all other countries, preferential tax schemes and tax waivers, and incentives for applicants with significant investments heavily influence the score arrived at for this factor.

Total Costs

The stated investment amount does not always constitute the total actual cost an investor must bear to acquire residence status. As the nature of investment differs considerably across programs, it is difficult to compare the total actual cost of investment. Programs that offer a range of investment options score higher in this sub-indicator. Some investors have, however, raised questions about the uncertainties and volatility of foreign markets and therefore the value of choosing options that appear to be safer. Generally, destination countries that reduce investors’ opportunity costs by providing a wider choice of investments or by offering incentive-based investments are considered by investors to be more attractive.

Time to Citizenship

The time it takes applicants to gain citizenship is one of the criteria for assessing a RBI program’s attractiveness.

This refers to the process of naturalizing as a citizen once already a resident, which is distinct from direct CBI. Countries that have appeal in this regard offer a relatively fast path to citizenship, mainly because the time it takes to naturalize is comparatively short. However, this factor considers both the formal time required and any physical presence requirements. Countries with prohibitive rules governing the transition to citizenship score zero.

Citizenship Requirements

This factor examines all the requirements to qualify for naturalization after the specified minimum time has been fulfilled, including physical presence requirements, additional investment requirements or other ‘commitment’ requirements, and other requirements to qualify for citizenship, such as language requirements and cultural integration tests. In some countries, the transition from permanent residence to citizenship is less demanding and there are minimal additional requirements. Other countries have stringent physical presence but few additional requirements.

Residence Requirements

None of the countries ranked in the GCPI impose demanding conditions of residence. Smaller countries keen on attracting investment use waivers or substantial reductions in residence requirements to their competitive advantage.

Relocation Flexibility

An assessment of the number of citizenship investors in the different countries reveals that a substantial percentage of them apply for the migration of family members with the intention of either settling in the destination country or keeping the option open in case they need to leave their home countries. For this factor, we evaluated first the number of investors who indicated their intention to relocate and compared it to the number of investors who have relocated, in order to gauge which countries are conducive to relocation. Subsequently, we assessed the factors facilitating relocation. In this regard, EU member states have a clear advantage because a citizen of an EU member state can consider relocating to another member state or to a choice of several additional countries that have agreements with the EU, such as Switzerland. Though such relocation is not automatic, the rules are well established, they provide clarity on how and when relocation to another EU member state is permissible, and the process entails lower information costs. Destination countries’ efforts towards enabling family unification, and the ease with which they deal with private property, reduce the uncertainties that relocation can entail. Furthermore, for citizens who can support themselves financially, EU law imposes very few restrictions on their freedom to relocate.

The rule of law plays an important part in informing investors’ choices in relocation: their confidence in an existent fair process for securing personal freedom, settling investment disputes, and the legal wherewithal to negotiate with government authorities, all point towards a higher score.

Physical Visit Requirements

This indicator assesses whether physical visits are required as part of the application process, usually for interviews, oath-taking ceremonies, and passport renewals, by evaluating the number of visits required and the bureaucracy of the processes that precede them.

Transparency

The World Economic Forum’s transparency indicators for CBI programs are: public support, evaluation studies, availability of public data, and due diligence criteria. No GCPI countries publish evaluations of CBI inflows, but the other criteria inform the structure and content of the surveys, which inquired about access to clear information on application processes, including due diligence, and how funds are used. Although many investors wish to understand, and preferably choose, where their investments are used, investments are often deployed in predetermined ways, making it difficult to influence their use. The visibility of such contributions in domestic projects and the earmarking of funds influence investors’ decisions and perceptions of program transparency.

Circulating such information is advantageous as it enables investors to conduct meaningful risk assessments. Furthermore, the impact of investments on potential and existing businesses could influence business decisions. The pivotal aspects for transparency are program rules and regulations, and processes and their implementation in program administration.

Source: https://www.henleyglobal.com/publications/investment-migration-programs-2021/methodology

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Wealthy Britons step up citizenship shopping to thwart Brexit

2020/09/26 Leave a comment

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

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How Covid-19 is changing citizenship by investment

2020/09/17 Leave a comment

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

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

2020/09/16 Leave a comment

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

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

2020/08/28 Leave a comment

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

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Wealthy Americans invest in foreign passports, US visa loses lustre

2020/08/05 Leave a comment

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

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Caribbean countries selling discount citizenship due to COVID hit

2020/07/28 Leave a comment

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

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

2020/05/06 Leave a comment

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

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