Investment citizenship programs are not new. They’ve been around for decades, primarily as a way for countries to boost their incomes. Canada and the Caribbean island of St Kitts and Nevis started theirs in the 1980s and the US and UK began similar ones in the 1990s.
At last count, 23 countries from Cyprus to Singapore offered some kind of investment residency or citizenship scheme and more are being created with similar programmes proliferating across Europe. Almost half of all EU member states now offer some form of investment residency or citizenship programmes.
The industry has seen huge growth in recent years. 2014 marked the first year that the US ran out of immigrant-investor visas before the end of the fiscal year. Events including the decision by Britain to leave the European Union and the 2016 US Presidential election are driving new interest.
In China, which produces more then two thirds of all investor immigrants globally according to a recent study by Investment Migration Insider, instabilities such as lack of civil liberties and freedom of the press, environmental pollution (air and water), capital control measures, high levels of state control and restrictions in FDI (foreign direct investment) lead many Chinese UHNWIs to look at ways to better secure their future through immigration options.
The IMF says Citizenship by investment programmes amounted to 14% of St Kitt’s GDP in 2014, and other estimates say the programme may have accounted for as much as 30% of the government’s revenue in 2015.
But increasingly, richer countries are offering ‘citizenship for a price’. Comparable programmes in New Zealand cost NZ$1.5m ($1.06m) – a popular move among Silicon Valley’s tech elite recently – or £2m ($2.58m) for the UK and $500,000 for the US.
Andrew Henderson, an American entrepreneur and founder of the Nomad Capitalist, a blog, podcast and consulting company, has four passports and is working on his fifth. Multiple citizenships provide him with a multitude of entrepreneurial options, he says.
“For me it’s about how I could have better options, better tax treatment, better treatment as a person and get the same visa free travel.” he says, adding that he expects investment citizenship to rise.
“I think the world is going more nomadic. People don’t want to be in once place. They want to have one or two or three bases for lifestyle reasons and pay reasonable taxes, and that’s what becoming more accessible.
While not everyone with multiple citizenships will reside in multiple nations, it has been said the industry can be viewed as a barometer of turmoil in the world with many investors seeing these programmes as a safety net.
The Caribbean has long been the dream vacation destination for westerners, and while the US, Canada and the UK have dominated the flow of investor immigrants since these programs were first introduced over 30 years ago, the Caribbean programs are unique in the world.
When considering the many faces the future can hold, the region holds significant advantages as a second home destination and sanctuary. The Caribbean citizenship by investment programs are particularly well suited to those not seeking an immediate move of their family, and can be an essential component in an international wealth preservation strategy.