Global Openness, Undivided Loyalty
When, in June 2018, Israeli-Russian billionaire and Chelsea football club owner, Roman Abramovich, suffered some discomfort following delays in renewing his UK visa, Israel was on hand to resolve the problem. By offering him citizenship – free nationality is available to any person of Jewish roots – Abramovich’s new Israeli passport would give him visa-free access to 105 countries (including the UK). And even though he may only be able to “come as a visitor for six months but will need a visa to live, work or study in the UK”, Mr. Abramovich’s recent experience underscores the utility of owning multiple passports.
As the world becomes increasingly globalised and volatile, thousands of well-heeled individuals and families rely on residence and citizenship planning, seeking to transcend constraints imposed on them by their country of origin or residence, in order to access business, education, career, and lifestyle opportunities on an international scale.
The world’s wealthiest people are exceptionally mobile – with a second, or even third passport turning out to be the must-have fixture for every discerning person of means of the 21st-century.
On the following pages, we share details of programmes in the residence and citizenship categories, which afford affluent families with all the internal rights enjoyed by residents, as well as the broader right of travel, trade, and settlement abroad. High-income individuals who aim to explore means of expanding their travelling freedom, and better tax optimisation opportunities – but still have not settled for a specific second-passport country – will especially find the reading informative.
Mechanisms Of Migration: Citizenship By Investment
Ozolua Amachree is a Nigerian entrepreneur, and founder of Agro Allied Fresh Foods. He has three passports and is working on a fourth. Multiple citizenships provide him with a multitude of entrepreneurial options, he says, explaining that investing in programmes in the African archipelago of Comoros and the Caribbean Island of St. Lucia gives him legitimate access to lower taxes and visa-free travel across innumerable countries. Ozolua is also quick to share that citizenship in multiple jurisdictions can offer access to world-class health care; and open up education choices (access to the best schools in the world for his children by qualifying them for domestic rather than international tuition fees).
Investing in Citizenship by Investment Programs (CIPs) offered by foreign countries represents the most direct routes to global mobility and overall stability. The program specifics – and costs, ranging from as little as $100,000 (£74,900) to as much as €2.5m (£2.19m) – may vary, but the principle remains the same: In essence, prosperous people invest in property, businesses, government securities or a Fund in a passport-issuing state, in exchange for citizenship. A few countries do not offer outright citizenship, but run programs usually known as “golden visas” that reward investors with residence permits that can eventually lead – typically after a period of five years – to citizenship.
Landing statistics: Countries with the largest inflows of HNWIs in 2017
Global wealth migration is accelerating. Approximately 95,000 High net worth individuals (HNWIs) migrated to other countries in 2017, compared to 82,000 in 2016, and 64,000 in 2015. The following countries experienced the biggest wealth inflows in 2017:
Country | Net Inflow of HNWIs in 2017 | COUNTRY INVESTMENT SCHEME: Minimum Capital Requirements for Migrants | Processing Time
| Permanent Residency (PR) | Time Frame to Citizenship | |
Australia | 10,000 | 162 | Investor Stream: A$1.5m | 4 months | After 4 years | PR + 4 years |
United States | 9,000 | 165 | EB-5 Investor Visa: US$ 500,000 | 10 months | Immediate | 5 years |
Canada (Quebec) | 5,000 | 164 | Quebec Immigrant Investor Program: CAD 800,000 | 8-10 months | 3 years | 5 years in total |
United Arab Emirates | 5,000 | 156 | Investor/ Specialist Visa: New [Announced June 2018] Cost TBA for investors. No investment for specialists |
To be determined (for a 10-year permit) |
To be determined |
30 years of permanent residency |
Caribbean* | 3,000 | 132 – 140 | Citizenship by Investment: From US $100,000 | 2-5 months | Mostly immediate | Mostly immediate |
Switzerland | 2,000 | 176 | Swiss Lump Sum Taxation: CHF 1,000,000 | 3 months | 10 years | 12 years |
New Zealand | 1,000 | 162 | Business Investor Visa: NZ$ 1,500,000 | 3-4 months | 2 years | 5 years |
Singapore | 1,000 | 166 | Global Investor Program (GIP): SG$2,500,000 |
6 months |
Immediate | 2-6 years with Permanent Residency |
Notes: Figures rounded to nearest 1000. | *Caribbean includes Bermuda, Cayman Islands, Virgin Islands, St Barts, Antigua, St Kitts & Nevis etc.
Exodus: Countries with the largest outflows of HNWIs in 2017
Wealth migration figures are an important gauge of the health of an economy. The following countries experienced the biggest wealth outflows in 2017:
Country | Net Outflow of HNWIs in 2017 | Outflow | Inflow | Countries Migrating to |
China | 10,000 | 10,000 | – | USA, Canada and Australia |
India | 7,000 | 7,000 | – | USA, Canada and Australia |
Turkey | 6,000 | 6,000 | – | Europe and the UAE |
United Kingdom | 4,000 | 5,000 | 1,000 | Australia and USA |
France | 4,000 | 5,000 | 1,000 | Canada, Switzerland and USA |
Russia | 3,000 | 3,000 | – | USA, Cyprus, UK, Portugal and the Caribbean |
Brazil | 2,000 | 2,000 | – | Portugal, US and Spain |
Indonesia | 2,000 | 2,000 | – | Singapore |
Saudi Arabia | 1,000 | 1,000 | – | UK and the UAE |
Nigeria | 1,000 | 1,000 | – | UK, France, Switzerland, South Africa and the UAE |
Venezuela | 1,000 | 1,000 | – | USA |
Notes: Figures rounded to nearest 1000. | Source: New World
It is important to remember that not all countries allow their citizens to hold dual citizenship.
Weighing Value: Rating Citizenship Options
There is an informal rating system for the most sought-after passports. Some industry experts determine the value of passports by the number of visa-free countries a person can travel to (hence Singapore topping the list, with visa-free access to 166 countries – see full list Global Passport Power Rank 2018).
On the other hand, the Nomad Passport Index ranks the value of citizenship by weighing the passport of 199 countries and territories in the world, based on five factors:
- Visa-free travel (50% of ranking),
- Taxation (30% of ranking),
- Perception (10% of ranking),
- The ability to hold dual citizenship (10% of ranking) and
- Overall freedom (10% of ranking).
This index is designed to show the true value of citizenship in each country from the perspective of a high-achieving citizen who wants the freedom to minimise tax obligations, diversify wealth, and travel freely without judgment, the report says.
Country & Ranking | Passports: Visa-Free Destinations | COUNTRY INVESTMENT TYPE: Minimum Capital Requirements for Migrants | Time Frame to Residency | Time Frame to Citizenship |
1- Sweden | 165 | No program exists | 5 years | 5 years |
2- Belgium | 163 | Belgium Business Residence Program (BBRB): 200,000 Euros | 5 years | 5 years |
3- Italy | 164 | Golden Visa: 1,000,000 Euros | 5 years | 10 years |
3- Spain | 164 | Spanish Golden Visa: 500,000 Euros | After 5 years | 10 years |
5- Ireland | 164 | Irish Immigrant Investor Program: 500,000 Euros | 5 years | 5 years |
6- Finland | 165 | No program exists | 4 years | 5 years |
6- Germany | 165 | Business Investment: 250,000 Euros | 5 years | 8 years |
8- Denmark | 165 | No program exists | 6 years | 9 years |
8- Switzerland | 163 | Swiss Lump Sum Taxation CHF 1,000,000 | 10 years | 12 years |
8- Luxembourg | 165 | No program exists | 5 years | 7 years |
11- France | 164 | French Investor Program :10,000,000 Euros | 5 years | 10 years |
11- New Zealand | 162 | Business Investor: NZ$1,500,000 | 2 years | 5 years |
Conclusion
It’s a win-win situation. For states that offer citizen by investment programmes (CIPs), the primary benefit is significant financial investment in their domestic economies. As the number of successful applicants increases each year, host countries often also gain international prominence on account of their increased competitiveness.
For applicant-investors, a second or third passport does not just mean increased travel freedom. Having an alternative passport also grants its holder the right to do business and settle in (or navigate) an expanded set of countries and regions, as well as allowing access to all the benefits enjoyed by other citizens. Clearly, while not everyone with multiple citizenships will reside in multiple nations, many of the investors see these programmes as a safety net or insurance policy for themselves and their families.
The global citizenship-by-investment industry does matter and, by all accounts, it is here to stay
*Disclosures: This material does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. ARM Investments (ARMI) advises investors to independently evaluate particular investments and strategies, and seek the advice of a financial advisor or wealth manager. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.