If you love to see new places and don’t have a European, UK or US passport, you probably get frustrated when traveling.
Crossing borders has always been a difficult ritual for third-country passport holders. They go through immense bureaucratic paper work and get stuck at immigration counters just to visit a foreign country.
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The good news is, if you’re a wealthy individual, you can buy your way into a second citizenship and declare yourself an Austrian, British or Belgian. What’s more, you can make money at the same time.
Forget about immigrant or 10-year multiple-entry tourist visas. Some of the world’s popular destinations, including Austria, Dominica, Saint Kitts & Nevis, UK, USA, Canada, New Zealand and Cyprus have their own investor programmes that offer high-net-worth individuals a chance to obtain a second passport in exchange of their investment.
A few of these countries grant a citizenship without requiring candidates to even set foot on the country they’re applying. Applicants are, however, required to have at their disposal between Dh275,000 and Dh18 million, to be invested either in government bonds, real estate and in other forms of business, or set aside for a charity project.
Citizenship-by-investment programmes are increasingly becoming popular among well-heeled residents in the UAE and other countries in the GCC. It makes traveling easier when a family member needs to go abroad to study or an investor wants to explore opportunities elsewhere.
“One great advantage for high-net-worth individual acquiring a second passport is getting immense travel freedom to do business and pleasure, not just for investors but also for family members who always have a second home to move during political crisis and instability, thus seeking safety and privacy,” says Balakrishnan Prabhu, CEO, founder of Best Citizenships.
“It’s a great way to skip immigration hassles and bureaucratic paper work, when crossing borders. For example, a third-country national acquiring EU citizenship opens up entire EU and over 100 countries to do business and earn money,” he adds.
Best Citizenships assists clients on areas such as residence planning, citizenship and real estate consulting. They also cater to residents from the UAE, Qatar, Bahrain, Saudi Arabia, Oman and Kuwait. “We have had clients from Kuwait, Pakistan and UAE who benefited from citizenship by investment,” says Prabhu.
Paul Hymers, financial director at Atlas Corporate Services, a global corporate and trust service provider, says one of the advantages of an alternative passport is the ability to open bank and stock brokerage accounts around the world as a citizen of the new country. Thus, investing in a second citizenship benefits not only third-country passport holders, but also expats from other countries including the US who want to minimize their tax bills.
“By definition, expats living in the UAE only are no longer resident in their home country and not subject their tax regulations on their UAE or other overseas income. So for these people, simply by living in the UAE, they have the perfect opportunity to reorganize their assets from an international tax planning perspective,” says Hymers.
The Australian government has announced only this year a new program, the Significant Investor visa, which allows wealthy investors to acquire a permanent residency down under.
The only requirement is that each foreigner should be able to invest Australian $5 million into the country. Australian Minister for Immigration and Citizenship Chris Bowen said the new visa will make it “easier for investors coming to Australia by offering some concessions on visa requirements, such as not having to meet a points test and reduced residence requirements.”
Range Developments, a Dubai-based real estate developer, recently introduced the construction of Park Hyatt resort, a multi-million project in the Caribbean that allows investors from around the world to buy shares and earn a second citizenship at the same time.
The resort will be built on the Eastern Caribbean island of St. Kitts, a member of the Commonwealth of Nations and will be financed under the St. Kitts & Nevis Citizenship by Investment Program through the sale of individual investment shares for $400,000.
A St. Kitts citizenship can be granted in 120 days, without a residence or visitation requirement, and the ability to travel to 139 countries around the world including the European Union, UK, Canada and Africa and Asia without the need for a visa, according to Mohammad Asaria, vice chairman of Range Developments.
Investors who put their money into this project can expect the annual investment yield to range between 2 per cent and 5 per cent, depending on the actual performance of the project, according to Munaf Ali, CEO of Range Developments. And with the cost for acquiring a St. Kitts citizenship rising every year, the investor also stands to make a capital gain when the investment is sold.
“Based on income and capital gain projections, the investor is expected to receive an amount equivalent to the capital invested and all fees that were paid at the outset following the expiry of a mandatory five-year holding period,” explains Ali. Since the project launch in Dubai last July and in Pakistan last month (September), there has been a consistent stream of investor interest. The launch in Pakistan alone drew more than 200 investors and dignitaries who were interested to know more about the project.
“The popularity (of citizenship-by-investment programs) has been on the rise for the past few years,” says Munaf Ali, CEO of Range Developments.
“Today’s investors are always looking out for good investment opportunities from a long-term perspective. These investors are businessmen/senior executives and are keen on expanding their business globally. However, many people face various restrictions, such as the visa restrictions and the time taken to apply for visas. A citizenship-by-investment program comes handy for these individuals and their families,” Ali points out.
Ali says that in today’s day and age, a person of talent needs borderless travel as businesses are far more international and global. “Making an active decision with regards to his citizenship gives them more personal freedom, privacy and security. In a nutshell, alternative citizenship gives people freedom to travel, to do business and security for your family and life.”
However, getting a second citizenship is not that easy. Only very few countries grant citizenships without any residency requirements like St. Kitts & Nevis and Austria.
In most cases, a candidate is required to live in the country for a certain period, usually for five to eight years, and ensure that their investment is on the right track.
For example, investors eyeing a UK passport have the option to first apply for an investor or entrepreneur visa. Both visas provide anyone the routes to have the right to apply for “Indefinite Leave to Remain” in the UK, a prerequisite to obtaining a citizenship.
To obtain the investor visa, the applicant has to invest a minimum of £1 million into UK government gilts (bonds) or share capital in active and trading UK-registered companies. The candidate should not spend more than 180 days per year outside the UK during the qualifying period. After living in the UK for five years (or less if the amount invested is £5 million or of £10 million), the investor visa holder can apply for “Indefinite Leave to Remain” (permanent residence).
For the entrepreneur visa, a minimum of £200,000 investment is required. The candidate can either set up a new business in the UK, acquire an existing business or become a director of an established business, but it must be successfully trading and have created two additional full-time positions within the company for the initial three-year residency visa to be extended for a further two years. After living in the UK for five years, the candidate can apply for “Indefinite Leave to Remain” (permanent residence).
“After fulfilling the requirements and having lived in the UK for a minimum of 185 days per year over the qualifying period, the candidate has the right to apply for ‘Indefinite Leave to Remain’ in the UK. Citizenship can be applied for on the sixth year after first acquiring the right to apply for ‘Indefinite Leave to Remain’,” explains Dominic Stoneham, director for business development at Entrepreneur Relocation UK (erUK), which assists clients seeking UK residency.