Started as a niche segment, the investment migration market was estimated at $21.4 billion (Dh78.59 billion) in 2018, with projections suggesting it will reach $100 billion in revenue by 2025 if the 23 per cent CAGR trend persists, according to Investment Migration Insider, a knowledge platform for the sector.
“One of the key drivers of demand is securing easier and faster travel, for UAE residents needing to travel regularly for business. Citizenship by Investment (CBI) provides an opportunity for visa-free access to a much wider range of countries,” says Liam Bailey, global head of research at Knight Frank.
Sohail Saleem, Immigration Expert and Group General Manager at AAA Associates Immigration Services, agrees that attaining global mobility is the prime reason why many UAE residents are going for CBI schemes.
Key drivers of growth
Given that many UAE residents hail from countries that are witnessing increasing economic and political instability, Zaid Aldayriyeh, Managing Director at Citizenship Bay, says they seek out second citizenships and passports through investment to ensure family security and increased mobility.
UAE residents with ‘weak’ passports that have limited visa-free travel capabilities are also driving this demand for CBI programmes.
“Also, a second citizenship allows many parents to have the option of sending their children to study at respected high schools and universities in Europe and North America and this gives them the peace of mind that they can visit them at any time,” says David Regueiro, Chief Operating Officer, RIF Trust.
The rise in the number of high net worth individuals (HNWIs) and ultra-high net worth individuals (UHNWIs) is another key factor driving demand for CRBI programmes.
A second citizenship allows many parents to have the option of sending their children to study at respected high schools and universities in Europe and North America and this gives them the peace of mind that they can visit them at any time.
According to the 2019 Knight Frank Wealth Report, 36 per cent of UHNWIs already hold a second passport, up from 34 per cent in 2018, with 26 per cent planning to emigrate permanently, up from 21 per cent.
Bailey says CBI schemes have been growing in popularity globally — Chinese demand has been the clear driver for most — but demand from the Middle East is growing steadily.
The UAE welcomed over a thousand individuals into the millionaire club in 2018, taking their population to 53,798, whereas the population of UHNWIs also increased to a total of 693.
As most UAE HNWIs are businesspeople, Regueiro says a second citizenship allows them to fly out of the UAE without having to worry about obtaining a visa or lengthy border interviews.
The real standout markets in 2019 were Malta, Portugal and the US, according to Knight Frank’s Bailey.
Traditionally Portugal had not been on the radar for UAE buyers, however, with the introduction of the Golden Visa programme, the country has seen a significant increase in enquiries.
“In the UAE, nationals from Lebanon, Pakistan, India, Syria, Saudi Arabia and others are looking for a Portuguese passport,” says Carla Gomes, Managing Partner at Gate to Portugal Investments. “Other countries investing in the Portuguese Golden Visa are mainly China, Brazil, Turkey, South Africa and Russia.”
Other major countries that are seeing increasing demand for second citizenship are the Commonwealth of Dominica, St. Kitts & Nevis, Antigua and Barbuda, Turkey, and Vanuatu.
The main reason that countries such as the Commonwealth of Dominica, St. Kitts & Nevis, Antigua and Barbuda, Turkey, and Vanuatu, are top choices for investors is the low investment requirement, fast processing time and a high visa-free score of passports.
“The main reason that these countries are top choices for investors is the low investment requirement, fast processing time and a high visa-free score of passports,” says Saleem of AAA Associates.
For residency by investment, he adds the top choices are Portugal, Canada, Spain and Greece. “Investors choose these countries for residence because of great business opportunities, better lifestyle and good return on investment.”
Aldayriyeh of Citizenship Bay points out that the Caribbean countries are popular for their affordability factor, whereas Cyprus is a sought-after destination among UHNWIs as it’s the only European citizenship that can be obtained in six months, without residency requirements.
Another rising star in 2019, he adds, was Turkey’s CIP due to the country’s popularity among people in the Middle East, its geographical proximity to the Gulf region, and the programme’s competitive investment requirements.
In 2020, industry players expect Caribbean programmes to continue to lead the way. “However, another programme to look out for this year is Vanuatu’s CIB programme, which has gained some traction in recent months,” says Aldayriyeh.
Another programme to look out for this year is Vanuatu’s CIB programme, which has gained some traction in recent months.
While immigration is a very personal process with every individual having different requirements, Vrinda Gupta, Managing Partner at Vazir Group, says a hotlist for 2020 would be Canada’s Entrepreneur Permanent Residency Programme; the Cyprus Citizenship by Investment Programme; and the Greece Golden Visa.
Regueiro highlights the Grenada CBI programme that comes with two options — an investment of $220,000 into prime real estate or a government donation of $150,000 with applicants receiving their citizenship in as little as three months, giving them visa-free access to 142 countries, including China.
Focus on due diligence
Looking into 2020, Knight Frank’s Bailey says the biggest trend to watch for won’t be the expansion of new locations offering citizenship-by-investment — which will happen – rather it will be a big and sustained push towards increased due diligence.
Due Diligence will be happening at the point of initial application, with a sharper focus on the reputation of the applicant, and the source of their wealth. There will also be increasing focus on the social impact of investment through these schemes.
“This will be happening at the point of initial application, with a sharper focus on the reputation of the applicant, and the source of their wealth. There will also be increasing focus on the social impact of investment through these schemes,” he says.
Not just property investment, industry experts say people have the options to acquire citizenship or residency by various other means including a donation to a designated government fund, making fixed bank deposits, purchasing government bonds, and making a fixed capital investment in an approved business.
For instance, the Caribbean Islands and Malta offer a choice between the real estate or investing in government bonds.
“However, the most sought after non-real estate programme in our experience is the Canadian Entrepreneur Permanent Residency Programme, for start-ups,” says Gupta.
While donating to a government was originally the most popular option for obtaining a second citizenship, particularly in the Caribbean, due to its lower price point, Regueiro says nowadays investors are instead choosing to invest in real estate as they can often receive a positive ROI and in the process also receive a second citizenship.
The UAE, with its 8.58 million international migrants, who account for upto 88 per cent of the total population of the country, according to United Nations, Department of Economic and Social Affairs, continues to see an increasing number of residents immigrating to other countries.
“There is a growing demand for immigration in the UAE and most of it is due to increased awareness and of course availability of more options across the globe,” says Vrinda Gupta, Managing Partner at Vazir Group (pictured).
There is a growing demand for immigration in the UAE and most of it is due to increased awareness and of course availability of more options across the globe.
She says the most cited factors influencing an individual’s decisions are stability, children’s education, social benefits, free healthcare, better tax policies, business opportunities and visa-free travel.
In terms of preferred countries, Gupta says Canada remains one of the top destinations for immigration for UAE residents as it has multiple immigration programmes, options and criteria to match most individual circumstances.
While Canada and traditional markets such as the US and the UK continue to attract UAE residents, other popular options for skilled immigration such as Australia, New Zealand, Germany and France are seeing increasing demand as well.