Just three years ago, the sudden restrictions on free movement as a result of Covid-19 prompted wealthy individuals, even those in the West, to come up with a Plan B.
Many of them were looking for the best possible legal options that would guarantee them both mobility while also offering their families access to first-class educational institutes around the world. On top of that, those in the market for a backup plan wanted to make it easier to diversify their wealth while facilitating a wide range of business activities.
Needless to say, certain countries are more attractive than others when it comes to actually living there and in relation to crime, or individual personal security, with the latter becoming something increasingly important for the well-heeled, even in Western Europe.
Voting by Foot
The Ukraine War is just the most recent example of the large geopolitical changes seen in the past few years and it is prompting any number of individuals to reconsider their lives and look at the new options that are out there. «This is even more the case the more educated they are», explains Daniel Duric, Managing Director at Passport Legacy, a Dubai-based consultancy for residency permits and citizenships in a conversation with finews.asia.
That is something the newest «Henley Private Wealth Migration Report 2023» confirms. Brexit and Russia’s invasion of Ukraine have led thousands of millionaires to vote with their feet in both the UK and Russia in recent years. Many of them have sought out new countries to live in – or some have applied for additional citizenship.
Frequent Flyer Passports
There has also been a change in paradigms in that there is significantly more information out there related to government residency/investment programs and citizenship requirements. In other words, a business that previously mostly operated in a grey zone has become more transparent than ever. Much of that has been accelerated by the fact that a great deal of information, data is directly available online, which makes comparisons much easier to make.
That is a radical change in thinking and one that the Indian-American political scientist and publicist Parag Khanna puts best when he succinctly says that passports are becoming increasingly similar to frequent flyer programs. But it goes beyond that. The increased tolerance for double or multiple citizenships gives many people the opportunity to find a new and better place in the prevailing international hierarchy.
Less Inequality
«One thing that our clients have in common is that they possess citizenships that aren’t particularly helpful when traveling. They are people that involuntarily live in countries with weak legal systems, autocratic governments and, often, ethnic tensions», sums up Philippe May, Managing Director of the EC Holdings consultancy. «Under those premises, every additional or alternative citizenship limits global inequality, at least to a certain measure.»
But keeping to those kinds of high standards means the companies involved have to acknowledge international standards that make sure that clients are suitably advised when it comes to applying for another passport or residency.
Source of Revenue
The leading companies in the sector are organized under the purview of the Investment Migration Council (IMC) in Geneva. The body sets standards and has issued a set of ethical and professional guidelines that members have to meet in a way that ensures the necessary quality and control.
finews.asia closely reviewed the requirements and processes involved in a citizenship application earlier this year, going through the process step by step. In that connection, it is worth mentioning that it is not just about the consultancies that issue the passports or the residency permits, but that it is the governments of the countries themselves who have come to see this as a substantial proportion of their budgetary revenue.
New EU Citizenships
This also has to be discussed against the background of regular announcements by individual countries that they are ending certain programs. Such pronouncements often have a half-life that is as long as the next government. Such dead-end programs are more often than not successively replaced by new, similar schemes that have little more than slight modifications. Generally, the overall number and range of programs worldwide are increasing in number.
One thing that is often forgotten is the fact that the number of citizenship-by-investment programs and residency permits is a fraction when compared with the more than 700,000 new EU citizenships conferred annually. Many of the latter also do not undergo the same stringent due diligence procedures that applications for individual government investment programs have to undergo.
Undocumented Immigrants
That makes the situation a great deal more relative, particularly surrounding the issues that have cropped up in recent years about those very same programs about political or economic questions. The real problems are not caused by the relatively small number of closely reviewed successful applications in investment programs, as there are a far higher number of undocumented immigrants – and the hundreds of thousands of citizenships – granted with little scrutiny in Europe.
Claude Baumann is the founder and CEO of finews.ch, finews.asia, which is based in Singapore, and finewsticino.ch for the Italian-speaking region of Switzerland. He has written extensively for the «Weltwoche» and «Finanz und Wirtschaft» publications and is one of the co-founders of publisher Nagel & Kimche. He also launched the business travel magazine «Arrivals» and is the author of several books on the banking industry.
