Passport To Success: Gain the ultimate global lifestyle with passports of your choice
In these uncertain times, the ability to travel freely and live and work in other jurisdictions is increasingly sought after by high-net-worth individuals (HNWI). The advantages of full access to the global economy and unfettered travel are numerous, and the queue of countries willing to allow foreign nationals to purchase residency and citizenship rights is growing – both parties have much to gain.
Just last year, for example, Namibia launched a residence by investment programme in a bid to seek foreign investment and boost economic growth. The scheme allows investors to secure residency rights in one of the most nature- and wildlife-rich countries in the world.
“Nation states are using residence and citizenship by investment programmes as an innovative financing tool,” says Christian H. Kaelin, Chairman of London-based investment migration consultancy Henley & Partners. These programmes are a means “to allocate investors’ funds to national or regional social, infrastructure and development projects that benefit their citizens and residents”.
Countries normally offer two types of schemes – one which grants residency rights, known as a ‘Golden Visa’, in return for a substantial investment, and another that accords citizenship rights (leading to a passport) following the outlay of capital, often called a ‘Golden Passport’. In most cases, the person willing to plough money into the recipient country is not obliged to live there full-time during a year. Sometimes, there is no need to stay there at all.
Call of the Caribbean
Take the Caribbean area, for instance, where five countries have a Citizenship by Investment (CBI) program: Antigua and Barbuda, St Kitts and Nevis, Dominica, Grenada and St Lucia. Only the first of these requires a minimum period of residency.
“The advantage of citizenship is that it is for life and affords you protection by the state,” says Christopher Willis, Managing Partner of investment migration expert Latitude Residency & Citizenship. “In Antigua and Barbuda, you are required to spend five full days within the first five years of becoming a citizen. Once this is completed, you do not have to spend any further time on the island. None of the other islands has a residence requirement.”
The two main investment options are to make a donation or purchase approved real estate. “In the case of St Lucia, you can also invest into a zero-interest government bond,” notes Willis.
Some of the most sought-after residence and citizenship by investment programs are in Europe. For the past eight years, Malta has headed a ranking by Henley & Partners of the best such schemes. “Malta operates a very successful CBI programme and is seen as the top standard in the industry,” says Willis. “Turkey’s programme is very popular; however it does not give you the same access to Europe as Malta.
He adds: “Portugal’s Golden Visa is a residence programme but it has significant processing delays. It is attractive as the day count requirement is low (an average of seven days per year for five years) and there is a clear path to citizenship, as long as you learn some basic Portuguese.”
Almost a dozen European Union countries have some form of residency or citizenship- by-investment scheme. In most cases, those setting their sights on a European home base or a passport will need to purchase property, public debt or investment bonds, or make a capital transfer. Certain countries like Switzerland and Austria require the investment to create jobs. Within Europe, acquiring permanent residency or citizenship in a country usually necessitates the investor living there.
Costs of residency
The amount of money needed to invest can vary, with EU Golden Visa programmes ranging from a minimum of €250,000 to €2 million depending on the type of purchase. Usually there are strict eligibility criteria for the visa or passport, including proof of ownership of investment money, the ability to sustain yourself and family members for the period you want to stay in the EU, and no criminal record.
Concerns have been mooted about these schemes. The European Commission recently voiced fears that obtaining citizenship in a European country, and by default visa-free access throughout the EU, could pose a security risk and opined that it should not be something that is brought and sold. Other bodies spotlight the danger that they could become vehicles for money laundering. The Greek Prime Minister announced that the minimum investment needed for its Golden Visa Program would increase from €250,000 to €500,000 in some parts of the country in order to “increase the affordability of real estate for Greeks”.
Nevertheless, there has been significant and ongoing growth in the demand for residence and citizenship by investment overseas over the past few years. As Dominic Volek, Group Head of Private Clients at Henley & Partners, notes, “The appeal of investment migration for affluent families is truly universal due to its many benefits, ranging from domicile diversification to global mobility enhancement, to accessing world-class education and healthcare, to having a plan B in times of turmoil.”
Ultimately, having the right combination of residency and citizenship rights will afford greater access to the global economy and boost one’s economic opportunities. Henley & Partners has a tool that analyses passports to determine what share of the world’s GDP is accessible visa-free to those that hold them. Japan tops many rankings as having the most powerful passport.
Many HNWI are attracted by the freedom inherent in possessing multiple residency and citizenship options. Willis insists: “The more options you have, the better prepared you will be. We see many applicants doing a ‘combo’ of residence and citizenship. They like the speed of getting economic citizenship in the Caribbean and also have a long-term strategy for citizenship in Europe or North America.
“If you acquire citizenship in Malta, for example, you benefit from settlement rights in all of the European Union member states. As such, you wouldn’t need to apply to another European country as you are already covered.”
He adds: “Some people choose to renounce their citizenship and need to have an alternative in place, which could be from the Caribbean or Malta.”
Despite the complexities involved in maintaining in a diversified approach, Willis is adamant this is the best policy, as long as care is taken to meet the different residency requirements of each location, especially if the intention is to graduate to citizenship. It is not necessary to obtain banks accounts in many of these jurisdictions, though “most applicants will establish some links to their new country of residence and/or citizenship”.
Daniel Altneu, Partner at global offshore legal firm Bedell Cristin, helps interested parties apply for the Cayman Islands’ permanent residency by investment programme. “[Successful applicants] only need to reside in Cayman for a minimum of one day per calendar year, so the residence requirements are extremely low,” he says.
Applicants need to invest a minimum sum of CI$2 million (US$2.44 million) in developed real estate to qualify for Certificates of Permanent Residence for themselves and any family members, and Altneu notes there is a reasonable degree of flexibility as to what property they wish to purchase. The scheme gives them and their spouse lifetime residency in Cayman and the ability to work there.
The Cayman Islands is a British Overseas Territory, and thus offers a potential route to another, much larger sought-after jurisdiction. However, as Altneu points out, “Should the holder and any family members wish to progress to Cayman Islands and British citizenship, the annual residence requirements are greater.”