Applications for investment migration and second passports have gained traction in the wake of the pandemic. The unprecedented trend of Covid-19 lockdowns and related travel restrictions and the suspension of temporary visas by several countries during the pandemic have forced many high-net-worth-individuals (HNWI) to explore options for second citizenship to ensure security and global mobility for them as well as their families.
“The pandemic has meant that even more wealthy people have felt hemmed in by borders and are likely to hedge the risk in the future by ensuring they can move smoothly across them and spend time in desirable locales,” says professor Kristin Surak from the London School of Economics in her recent research on the uptake of residence by investment programmes in the European Union.
Over the past decade, we have learned that you can never be too prudent to forecast the future. Investment migration is a constantly evolving industry.
Maryam Djafarpour, International Business Development Manager, Savory and Partners, echoes the same, as she says, “Over the past decade, we have learned that you can never be too prudent to forecast the future. Investment migration is a constantly evolving industry. However, the lockdowns and grounding of flights have made everyone yearn for mobility. This emphasises how we take mobility and freedom for granted. Such disruptions of a global magnitude have created instability within regions leading to an increased demand in the sector.”
A recent study published by residence and citizenship advisory firm Henley & Partners also points to an accelerated growth of investment migration amid Covid-19, which has now become a standard consideration for international HNWIs who are looking to hedge volatility, create short-term value as well as long-term yield through enhanced global mobility.
The firm has recorded a 25 per cent increase in the number of HNWIs enquiring about citizenship by investment (CBI) as opposed to residence by investment (RBI) programmes since the outbreak of the virus, indicating that wealthy international investors are considering a more permanent change. “Investment migration has matured from being a luxury lifestyle product to become a sophisticated investment choice, and the Covid-19 fallout has put a spotlight on the many benefits of strategic residence and citizenship planning,” says Dr Juerg Steffen, CEO, Henley & Partners, in a press statement.
Besides offering the freedom of movement and visa-free access to a comprehensive list of countries, a second passport also grants an investor access to favourable tax regimes as well as global banking opportunities.
“Many investors have realised that diversification is as relevant to lifestyle planning as it is to wealth management,” adds Dr Steffen.
While Covid-19 has accelerated growth in the investment migration sector, demand for CBI/RBI schemes has remained upbeat in the past decade. Saint Kitts and Nevis was the first nation in the Caribbean to offer citizenship in exchange for investment in 1984. Many countries, including in Europe, introduced residency programme to attract foreign investments and consolidate their economies after the financial downturn in 2007-2008.
The investment migration market was estimated at $21.4 billion (Dh78.59 billion) in 2019, with projections suggesting it will reach $100 billion in revenue by 2025, if the 23 per cent growth rate persists, according to Investment Migration Insider, a knowledge platform for the sector.
Despite many common incentives, CBI/RBI programmes vary significantly in terms of investment options, benefits to successful applicants and their approved family members, and residence and immigration requirement during the processing period.
Drivers of growth
“The sector is currently benefiting from all the instability we are living worldwide at the moment — pandemic, conflicts and wars, travel bans, unemployment and bankruptcy, among others,” says Tiago Camara, Partner, PTGoldenVisa, which specialises in investment migration in Portugal.
The Portuguese residency programme is a scheme that grants investors and direct family members access to residency and citizenship, without relocation, and with a minimum investment starting at just €280,000.
“The Covid-19 pandemic has, above all, brought instability and uncertainty to both the economy and our social lives. More than ever, people are reconsidering the future, and looking at Golden Visas as a road to safety and security.”
Portugal offers one of the most competitive investment migration programmes in the European Union and its RBI schemes have been growing in popularity globally amid the pandemic.
“These days an investment that guarantees a safe backup plan to investors and family members, is no more an option, but a must-have for their future. The Portuguese residency programme is a scheme that grants investors and direct family members access to residency and citizenship, without relocation, and with a minimum investment starting at just €280,000,” adds Camara.
Demand for Caribbean citizenship has been incredibly high as the pandemic has shown us yet another reason why it is so important to diversify one’s citizenship and not be reliant on a single country.
The global health crisis has also generated intense interest in CBI and RBI programmes in the Caribbean nations, which greatly expand travel opportunities for investors.
“Demand for Caribbean citizenship has been incredibly high as the pandemic has shown us yet another reason why it is so important to diversify one’s citizenship and not be reliant on a single country,” says David Regueiro, COO, RIF Trust.
Investing in a popular and high-end property is the right strategy for obtaining the second citizenship and passport. It has double benefits; first you get the opportunity to own a property in a foreign land and secondly, you can obtain second citizenship with a strong return on your investment.
“More UAE and GCC residents are applying to increase their freedom to travel visa-free and secure access to an alternative country with stronger healthcare systems outside their home country.”
The application process for the Caribbean nations is straightforward and the entire process of citizenship can be completed in just a few months.
The current investment amount for the EB-5 programme is $500,000.
“Caribbean programmes have made it simple to apply remotely, maintained their normal processing times and have recently made updates to make them more attractive and affordable for families,” says Regueiro.
How to invest
There are several ways to secure a second passport in the EU and Caribbean nations. An applicant needs to park a specified investment amount in a particular area — usually real estate, bank deposits, or government bonds. For many people, investing in property is, however, the best route.
“The current investment amount for the EB-5 programme is $500,000 within certain geographical areas in the US,” says Preeya Malik, Managing Director, Step Global.
“With a green card, families may live anywhere in the US, start a business, obtain employment, and gain all the other rights and benefits of permanent residents. As most UAE residents have already migrated from other countries, migration to further West remains popular. Many investors choose the EB-5 programme as a future route for sending their children to top schools and universities in the US. The regional centre programme has expired but applicants can still apply under the permanent direct EB-5 programme investing $500,000 for a limited time.”
“Choosing the real estate option presents a positive return on investment for investors. Unlike the non-refundable donation option, real estate provides rental income to help offset some of the initial costs and allows investors the opportunity to recover their investment after the required hold period. Secret Bay in Dominica, Six Senses in Grenada, and Moon Gate in Antigua are some of the best options available at the moment,” says Regueiro.
Check if it’s approved by the government. Also find out if the project will qualify you to obtain second citizenship and whether you can sell it after the required holding years.
In real estate investments, more than 75 per cent of the total cost of the programme are invested in one of the approved projects in the country and the initially invested amount must be maintained for a minimum period, usually for five years before the investor can sell it, explains Tony Ebraheem, Founder and Lawyer, 111 Immigration. “Obtaining second citizenship through investments in real estate in Turkey is one of the most popular options. Demand for real estate investments for a passport is strong in Portugal, Grenada, and Dominica as well,” he adds.
It is necessary for the immigrant businessman to carry out —through qualified legal advisors — a prior legal due diligence process
Before investing in a property for second citizenship, it is critical to do your due diligence and check the real value of the project, suggests Ebraheem. “Check if it’s approved by the government. Also find out if the project will qualify you to obtain second citizenship and whether you can sell it after the required holding years.”
“The pandemic has taught us many lessons. One of them is the importance of having an alternative citizenship or a strong second passport, preferably of a country, which allows worldwide freedom of travel in times when circumstances are not in one’s favour, such as Covid-19-related travel restrictions imposed by some countries,” says Imran Farooq, CEO, AAA Associate Immigration Services.
“Start the process with an established and experienced business immigration and citizenship by investment consultancy firm, which has a long track record of handling cases with successful outcomes.
“Investing in a popular and high-end property is the right strategy for obtaining the second citizenship and passport. It has double benefits; first you get the opportunity to own a property in a foreign land and secondly, you can obtain second citizenship with a strong return on your investment.”
“It is necessary for the immigrant businessman to carry out —through qualified legal advisors — a prior legal due diligence process on all the above-mentioned legal matters, along with other issues as well, in order to ensure that the desired goal is achieved with the least possible legal risks.”