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December 6, 2020

From closed borders and travel restrictions to lockdowns and quarantines, the effects of the pandemic throughout 2020 has led to a surge in enquiries for second passports and residency by investment proving that what once was a luxury for HNWIs has now become a necessity.

Independent financial advisory firm, deVere Group, which boasts more than 100,000 clients globally, reports that demand for its service for residency and citizenship has skyrocketed this year, with a 50% yoy increase, while citizenship advisory firm Henley & Partners has seen similar demand throughout 2020, reporting a 25% increase in enquiries about its citizenship by investment programmes up until mid-November.

While deVere reports enquiries coming mainly from HNWIs from the US, India, South Africa, Russia, the Middle East and East Asia who are searching for residential or citizenship in options in Europe and the Commonwealth, including the Caribbean islands, Henley & Partners has seen a surge in enquiries from the usual emerging markets such as Pakistan, Nigeria and South Africa, as well as from unexpected countries such as the United States (235%), Canada (74%) and the United Kingdom (38%).

Once a luxury, now a must-have

Once considered a luxury, second citizenship or residency has become a necessity in light of the pandemic, especially for those with restrictive nationalities who live in unstable or unpredictable countries, with Covid having “brought into sharp focus what really matters to people – family, freedom and security”, states founder of deVere Group Nigel Green.

“Previously, a second passport, citizenship or residency were regarded by many as the ultimate luxury item; a status symbol like yachts, supercars and original artwork,” he states. And while this does remain the case for some, Nigel says there has also been a “shift due to the pandemic” with second citizenship or overseas residency now “increasingly becoming not just a ‘nice to have accessory’ but a ‘must have’.”

Juerg Steffen, CEO at Henley & Partners, concurs, stating that the volume of people looking for alternative citizenship/residency 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”.

For those who can afford it, looking for residency or citizenship options gives them an alternative route to safety and security amidst such global uncertainly, as well as increased global mobility at a time when travel is so restricted. Securing a second passport, or what has become known as the pandemic passport, gives HNWIs and their families the ability to continue to enjoy global mobility and a way of escaping the current border shutdowns, whether for business or pleasure at a time when global mobility is difficult to many.

But as Juerg states, rather than simply being about ease of travel or acquiring a holiday home as has perhaps been so in the past, alternative residence and citizenship now encompasses “portfolio diversification, global investment and operations, with the creation of a new inheritance and identity for the family”.

deVere Group’s Nigel Green adds: “Increasingly, people prefer the concept of being a global citizen, rather than being solely tied to the country of their birth. They to value the many associated benefits including visa-free travel, world-class education, optimal healthcare, political and economic stability, reduced tax liabilities and wider business and career opportunities”.

Caribbean CBI Programmes most popular

And it is the Caribbean citizenship by investment programmes that have garnered the most enquiries in 2020, according to Henley & Partners, especially from American, Canadian and UK citizens, with Saint Lucia the top choice for UK citizens.

This is hardly surprising considering that the Caribbean offers affordable, fast and secure routes to second passport ownership. That’s not all though. They also offer an excellent quality of life and mainly Covid-free environments.

All five of the Caribbean islands offering CBI Programmes – Saint Kitts & Nevis, Dominica, Saint Lucia, Antigua & Barbuda and Grenada – have managed to maintain incredibly low case and death rates throughout the pandemic, with three out of five having reported no Covid-related deaths to date, and Antigua reporting four deaths and Saint Lucia, just two. And they have all now re-opened for tourism, with efficient and safety-first measures in place.

In addition, they have all responded to the pandemic with Covid-related promotions or solutions with regards their CBI programmes, several of them dropping the entry level price for their CIP. Saint Kitts dropped its price by 23% to US$150,000 for a family of four, while Saint Lucia introduced a limited time offer for the purchase of Covid-19 Relief Bonds, giving a family of five the chance to purchase bonds worth US$200,000 in exchange for citizenship.

Furthermore, all five countries have adapted the rules of eligibility around dependents in 2020 in order to embrace a more family-inclusive focus, with all now allowing siblings to be included in applications.

Portugal’s residency programme popular

In terms of residency by investment programmes, it is Portugal that continues to be the top choice for Americans, Canadians and Brits, state Henley & Partners. This is backed up by residency and citizenship advisory firm, Global Citizen Solutions, which has seen a surge in foreigners applying for Portugal’s renowned RBI programme since the onset of the pandemic. In fact, the country’s RBI programme reached record numbers in May 2020 with 270 applicants spending €146.2 million on securing a Portuguese passport.

No surprises either, considering that it is widely considered to be one of the easiest, fastest and cheapest ways of obtaining European residency, as well as securing EU citizenship following five years of residency (with only five weeks of physical residency required). A more recent surge during 2020 has come following the news that from 2021, applicants to the programme will no longer be able to invest in property in Lisbon, Porto or the Algarve via the programme’s real estate investment route, though will still be able to invest in property outside of these areas.