Expo 2020 Dubai.
The world’s wealthy are calling the UAE their homes, but there are ways others can do so too. Image Credit: Expo 2020 Dubai.

The global Citizenship-by-Investment (CBI) industry was recently valued at $21.4 billion. International interest in applying for a second citizenship has risen alongside pandemic recovery and the global market is expected to reach $100 billion by 2025. If these projections are realized, recipients of CBI (currently 5,000 people annually) will inevitably climb even higher.

Not only did COVID-19 disrupt economies, it was a catalyst behind the global GDP falling 6.9 per cent at the tail-end of 2020. Several factors such as inflation, rising fuel prices, and political uncertainty have since encouraged investors and citizens to actively seek out greater stability - something which investment migration has become known for providing over the past 30 plus years.

In the UAE, Residency by Investment (RBI) was rolled out in 2019 in the form of the UAE Golden Visa. It was initially announced that 6,500 investors would be granted RBI to boost the country’s talent pool and overall economy. Today, 65,000 individuals have secured benefits of the highly sought after 10-year residency permit, and the UAE’s initiative has largely contributed to sustaining the country’s economy, especially throughout COVID-19.

Amidst pandemic recovery, the UAE’s GDP grew 3.8 per cent in 2021 and anticipated to reach 5.4 per cent this year. This upward trajectory has resulted in the country expanding eligibility for its Golden Visa across multiple sectors, most recently with announcements stating that developers and frontline health workers (specifically nurses) are now among those qualified to avail the RBI incentive.

How can CBI keep your pockets fuller?

Depending on the country and type of program, the application process varies while the minimum investment required to secure CBI ranges from $100,000 to $2.4 million. At first glance, these numbers may seem steep but the long-term benefits have been proven to outweigh the initial cost.

Though the UAE is an income tax-free country, on a global scale, it is more of an exception. For instance, even US citizens living abroad are still obligated to pay taxes on their income - regardless of which country they reside and work in. If you’re in a similar position where your country of residence deploys high tax rates, obtaining a second citizenship, via CBI, has the potential to pay for itself in tax savings alone.

For example, citizens of St. Kitts who acquire a second Caribbean citizenship are exempt from personal income tax, inheritance tax, wealth tax, and capital gains - as long as they don’t sell their assets within a year of purchasing them. With the required initial investment for such Caribbean second citizenship programs starting at the lowest end of the spectrum, this makes it among the most affordable CBI initiatives in the world while widening your potential for RoI.

The UAE’s Golden Visa RBI program, also provides lucrative travel benefits, one of which is a 6-month long entry visa validity with multiple entries to proceed with residence issuing.

What stability does CBI provide?

While a major factor behind the growing interest in CBI programmes can be tied to an increase in private wealth and emerging market economies, it could be argued that the ability such initiatives provide in escaping political and economic instability are making an equal, if not greater, impact.

Globally, crude oil prices have skyrocketed 350 per cent from April 2020 to April 2022 - the highest increase in any equivalent two-year period since the 1970s. This paired with supply chain issues, added volatility, and rising food and commodity prices also play a part in accelerating global inflation which is forecasted up to 5 per cent in 2023, and therefore further emphasizing the importance of wealth protection, especially in such turbulent times.

According to recent data, the UAE leads all countries when it comes to projected net inflows and outflows of high networth individuals (HNWIs) for 2022 with 4,000 people. In layman’s terms, there are a significant number of millionaires who have realized the benefits of the UAE’s Golden Visa and are looking to leverage the country’s program to support economic growth. But CBI isn’t only for the world’s ultra-wealthy…