Henley’s Partners lavish annual Forum provides wealthy investors and high-net worth individuals with the latest information on the next frontier of wealth management: the acquisition of a second passport also called citizenship by investment.
On the first week of May 2015, 200 people composed of global leaders like the Prime Minister of Malta and the UNHCR representative for Refugees converged on the Dolder Hotel in Zurich to discuss the relatively new and growing market for citizenship by investment schemes that offer high-net-worth individuals more security over their wealth. Migreat was there. Here are four main take-aways on the current status of citizenship by investment schemes.
1. A growing number of citizenship and/or residence by investment schemes are available
Islands of the Caribbean and of the Mediterranean are not the only ones offering the possibility for rich investors to become the holder of two passports. The conference introduced Portugal, the UK, Spain and Canada as countries that have introduced or have current processes for investors to acquire residency and citizenship. Here is a quick look at four investor programs that provide access to 172 countries in the world without the need for a visa to enter.
Portugal offers a Golden Residence Permit Program to individuals investing in Portugal either by
- transferring capital of a minimum value of €1,000,000
- acquiring real estate of a minimum value of €500,000
- creating ten new jobs
And you only need to spend seven days per year in Portugal, after which you can become eligible for citizenship after six years.
Similarly, Spain offers three options to investors (capital transfer in a company or Spanish debt, investment in real estate of €500,000 or creation of a business) with less strict requirements for entrepreneurial investors starting a business (the business only needs to be recognised as “innovative, creating employment and of general interest to Spain”). The program is generous in the sense that it provides residency to wealthy investors and their families straightaway without the need to stay a minimum of days in Spain, provides access to the Schengen area and ease the possibility to apply for citizenship five years later.
The United Kingdom continues welcoming wealthy investors after having raised the minimum threshold for its investor immigration program to £2,000,000 (GBP). However, residency is a must with a maximum of 180 days spent outside the UK per year allowed – but the route to settlement can be sped up if more capital is invested: £5,000,000 or £10,000,000 invested will allow investors and their family to apply for permanent settlement after either three or two years.
Canada just ended its previous immigrant investor programme and has launched a new one this year that will grant 50 investors with over a million Canadian dollars in liquid capital permanent residency. However the application period for this year is now over.
2. With so many citizenship by investment options, there is increased competition…
Figuring out which is scheme is best for you is the new question. At the conference, experts confirmed that the UK and Switzerland are still the preferred options for high net worth individuals due to their long tradition of welcoming foreign investment and the secrecy with which they are allowed to operate. Malta is an up and comer and is becoming an attractive destination since its program has received the approval of the EU.
3. … and comes regulations
Many speakers at the conference discussed the hidden side of citizenship by investment schemes: the compliance process & personal checks that each application undergoes. Interventions from Michael Harris, an expert in due diligence at Thomson Reuters and the announcement of the recent launch of an association of professionals dealing with Investor Immigration and Citizenship-by-Investment, reaffirmed the development of expertise and high ethical standards within the industry.
4. … all of this for the greater good
The industry often has a bad reputation for issuing passport to wealthy individuals who are trying to avoid taxes or legal issues (and even terrorists). However, more importantly it raises a sensitive moral question: can citizenship be bought and sold like a commodity? Herein lies the irony if one considers that one of the foundations of a modern state is that citizenship is a contract-based right – so can’t it be a financial contract too?
Nevertheless, these schemes have positive direct impact that cannot be ignored. St. Kitts was able to emerge from the global financial crisis far ahead of its neighbors in the Caribbean thanks to its Citizenship-by-Investment program. The UNCHR was granted 1 million Euros by Henley’s & Partners to support registration UNHCR’s Global refugee registration activities.
Citizenship-by-Investment programs are shining a light on the passport market that has been pushed forward by the growing number of millionaires coming from developing countries that are looking to benefit from the same standards around wealth management that the developed world enjoys. Not to mention the freedom to travel the world without visa hassles.
Migreat will continue report on visa programs and visa opportunities. For questions related to visa and immigration to Europe, please visit Migreat.com