How having second citizenship can increase business mobility
If the pandemic has taught us anything, it’s that having a Plan B is no longer a luxury, but a lifeline. And for those who can afford it, investing in second citizenship is the ultimate Plan B – an escape route for when life goes pear-shaped.
A form of economic migration, citizenship by investment (CBI) has been around for nearly four decades, and today is offered by a number of countries via CBI Programs.
Once considered a luxury, like having a yacht, supercar or original piece of artwork, second citizenship has shifted in light of the three Cs – Covid, Climate Change and the Conflict in Europe – and is increasingly seen as “not just a ‘nice to have accessory’ but a ‘must-have’,” declares Nigel Green, founder of independent financial advisory firm deVere Group.
According to Green, applicants value the many benefits of a second passport, including “visa-free travel, world-class education, optimal healthcare, political and economic stability, reduced tax liabilities, portfolio diversification, and wider business and career opportunities”.
Not to mention, a new inheritance and identity for families with the ability to pass citizenship down for generations to come.
Surge in demand for citizenship amid uncertainty
This is especially true for those with restrictive nationalities or who live in unstable or unpredictable countries. Lebanese, Syrian, Nigerian, Pakistani and Bangladeshi nationals are among the top five nationalities investing in second citizenship, as they look to increase global mobility and opportunities. Nigerians, whose passport has seen the worst decline in its power of any other passport over the past decade, have access to just 45 countries – compared to some CBI programs which offer visa-free access to more than 160 countries.
In light of recent events, the pandemic and invasion of Ukraine among them, it is increasingly the case that citizens of first-world countries are also looking to second citizenship as a Plan B, with Covid bringing “into sharp focus what really matters to people – family, freedom and security”, says Green.
deVere Group saw demand for its citizenship service rocket in 2020, with a 50% YoY increase, and London-based advisory firm Henley & Partners reported a record number of enquiries during 2020 and 2021, with an average increase of 46% in enquiries each month since the outbreak of the pandemic.
Swiss boutique advisory Passport Legacy has noticed an uptick in demand for dual citizenship, namely from citizens of first-world countries concerned about their safety since the Russian invasion of Ukraine. And Turkey’s CBI program has seen significant growth in the last few years and a sudden surge of demand recently from both Russian and Ukrainian applicants looking to escape the conflict.
Juerg Steffen, CEO of Henley, says that the volume of people looking for alternative citizenship routes has now reached a critical mass “where it is reasonable to suggest the investment migration is now a standard consideration for international HNWIs who are looking to hedge volatility, create short-term value, as well as long-term yield through enhanced global mobility”.
While Henley has seen a surge in enquiries from the usual emerging markets like Pakistan, India, Nigeria and South Africa, more surprising has been the surge from countries like the US and the UK with an increase in 2021 of 208% and 110%, respectively.
CBI programs are worldwide, but Caribbean islands reign supreme
While the CBI programs on offer today, 14 and counting, span the world – from Montenegro, Malta and Turkey in Europe, to Vanuatu in the Pacific, Cambodia in Asia, and Jordan and Egypt in the Middle East – the most popular come courtesy of five nations in the Caribbean.
Not only is the Caribbean the birthplace of the CBI industry, with St Kitts & Nevis pioneering the program back in 1984, it’s home to the world’s five most competitive and consistent programs, according to FT’s annual CBI Index.
The CBI programs of St Kitts & Nevis, Dominica, Antigua & Barbuda, Saint Lucia and Grenada consistently bag the best scores for affordability, efficiency, transparency, reliability, global mobility and family-friendliness, not to mention offering attractive ROI on real estate given their tourism credentials. They are popular with all nationalities, but especially with African and Middle Eastern HNWIs thanks to the family-inclusiveness of the programs; and also with Americans, as the currencies are pegged to the US dollar, offering economic stability to business-minded individuals.
While many programs deliver similar options, processes, and costs, there are clear differences, giving each a unique selling point that appeals to differing demands.
If cost is the deciding factor, Dominica, Antigua and St Lucia offer the cheapest routes for single applicants, at just US$100,000; but if speed matters most, St Kitts offers the world’s fastest route with a 60-day Accelerated Application Process.
St Kitts is also the best of the Caribbean islands for global mobility thanks to a passport that is the world’s 25th strongest, with access to 156 countries. For the ultimate in global mobility, look no further than EU member state Malta, which gives access to 185 countries, though it will cost you – a 13-month wait and cost of US$1.47 million. Meanwhile, Turkey, Grenada, Egypt and Montenegro all offer the chance to work, study and live in the US under the E-2 Investor Visa Treaty.
For those looking to include their families, Dominica, Grenada and Antigua offer both best value, and widest inclusion of family members. For US$150,000, Antigua gives second citizenship to a family of six members and also throws in a university place for one family member, thanks to its unique University UWI option. And while all Caribbean countries allow inclusion of spouses, blood children and siblings (under 18) of the applicant, Grenada and Dominica have extended citizenship to siblings of the spouse, siblings over 18, parents and grandparents, and in Dominica’s case, adopted siblings.
Route to citizenship – donation or real estate investment
So, how does the process work? Unlike some CBI Programs, which only have one route to citizenship, the Caribbean islands, along with Jordan, Egypt and Montenegro, offer two or more routes – a one-off payment to the country, or investment in real estate.
There are advantages to both routes. Donation offers applicants not just the cheapest route (from as little as US$100,000), but the most philanthropic, with donations supporting the socio-economic development of the country. Using funds from its CBI program, Dominica has built primary schools and health centres and is constructing an international airport. Antigua & Barbuda has utilised funds from its program to help reconstruct Barbuda following devastation in 2007 from a hurricane, as well as launch many of the island’s sustainable initiatives.
The second route, via investment in real estate, is more expensive (from US$200,000), but one with obvious added value, giving applicants a source of income or a second home should they wish to relocate.
Investment is allowed only in government-approved real estate, from resorts to hotel rooms, serviced apartments to offices, with specialist companies on hand to manage them and most offering attractive ROI.
Take Antigua & Barbuda, where property on the island is growing in value by 1.5% to 3% per year due to the islands’ tourism growth with more than 300,000 tourists visiting annually. St Kitts also enjoys a thriving tourism sector with a busy cruise season, and is a popular off-the-grid destination for American holidaymakers.
The ROI potential is even more of a pull when you consider that many of these Caribbean nations put sustainability and preservation of nature top of their agenda.
While Dominica, aka the ‘Nature Isle’, and home to the world’s second longest-running CBI program, has plans to become the world’s first climate-resilient nation, Antigua was named 2021’s Emerging Sustainable Destination of the Year by Lonely Planet for its pioneering initiatives to ensure the island’s beauty is preserved. The twin island nation has established the Green Corridor, a collection of eco-friendly hotels, resorts and businesses on its southwest coast.
This focus on sustainability is making these islands increasingly attractive for travellers as green travel becomes the prevalent choice, in turn making investment in real estate in such countries also attractive.
And most Caribbean CBI programs only allow investment in sustainable resorts or projects. In Antigua, there’s the five-star Callaloo Cay Resort, located in the Green Corridor, which features a 5-acre national park and allows building heights no higher than a palm tree. While Sugar Ridge Resort features rooms that wrap around an exotic tropical hillside, and are built to fit within the 43 acres of lush indigenous flora and fauna without disturbing it.
Then there’s Dominica’s only six-star, all-villa resort, The Residences at Secret Bay, which offers buy-in of a ready villa with award-winning eco credentials. Named Number One Resort in the Caribbean and Number Six Resort in the world by Travel + Leisure’s 2020 World Best Awards, Secret Bay is crafted of standalone luxury villas enveloped in a rainforest-rich embrace, and has a track record of more than eight years of good rental demand returns.
According to Gregor Nassief, Secret Bay proprietor and CEO of GEMS Holdings Limited, investors get “completed villas, proven financial performance and a competitive exit strategy with a robust market for resale” giving them confidence in their investment.
“We’re seeing strong demand from the Middle East, Africa and Asia, and receiving increasing interest from the US market seeking a Plan B,” he adds.
Second life – from educational opportunities to a laidback lifestyle
And if life does get unpredictable in your part of the world, you can simply upsticks and relocate. After all, who wouldn’t want to live in one of these locations? The Caribbean islands are safe, offer a good standard of living, developed business infrastructure, great educational and medical facilities, international airports (bar Dominica) and they all handled the recent pandemic effectively, resulting in few fatalities.
Saint Lucia lays claim to the best economy in the Caribbean, while Antigua has the most technologically advanced hospital in the region, and Grenada – which has an extremely high literacy rate (98.6%) – is home to the best US offshore university, the internationally accredited St George’s University, deemed one of the finest medical, veterinary and arts/sciences schools in the world.
They also offer idyllic destinations year-round with endless sunshine, laid-back lifestyles and lots to do – good news whether you are renting or living there.
Antigua is home to 365 beaches, one for each day of the year, offers hiking and ziplines through its rainforest and hosts one of the world’s top regattas. Grenada lays claim to one of the world’s top 10 beaches, Grande Anse, according to Conde Nast Traveller, a dozen or so waterfalls, numerous spice plantations and is widely known as having a community that is culturally vibrant and very friendly. Dominica, with its UNESCO rainforest, 26 golf courses and the world’s second-largest hot lake is the ultimate destination for a laid-back, healthy and sustainable life.
