A growing number of high-net-worth individuals are seeking a second passport or a permanent residency overseas.
Now widely perceived as the ultimate luxury item by HNW individuals, perhaps more so than luxury cars, boats or designer jewellery, there are many far-reaching benefits to possessing a second passport or residency in another country, way beyond being a status symbol.
The majority of HNW individuals and their families considering dual citizenship or residency are, characteristically, from India, China, South Africa, the Middle East and Russia, and are typically seeking opportunities in Europe or the Caribbean.
Some of the key advantages to a second passport or overseas residency include greater opportunities for visa-free travel, political stability, tax efficiency, first-rate education and healthcare possibilities as well as more extensive business growth prospects.
Of course, there is a sharp distinction between citizenship and residency, however both options offer varying advantages to the holder. The principal difference is citizenship, which provides a passport, cannot be rescinded, except if it was ceded fraudulently.
In regard to residency, so-called ‘golden visa’ programmes offer residency in return for investment, mainly real estate. Such investments begin at approximately 250,000 euros in Greece; 300,000 euros in Cyprus; and approximately 500,000 euros in Portugal.
Every host country will have a set of obligations within the investment scheme, including the number of days that must be spent in the host country. There are also requirements that feature in all programmes, such as the ability to verify the legal origin of funds, and the holder not being in possession of a criminal record.
In the main, the majority of high-net-worth individuals will initially opt for residency as it tends to be less expensive and more straightforward to complete. Plus, it is a well-recognised way to achieve full citizenship in the long-term.
Despite the fact these ‘golden visa’ schemes are not without their critics, it is widely recognised that they are positive for their domestic economies.
Looking to Cyprus as an example, Finance Minister Harris Georgiades said his country’s programme has added 1.2 per cent to economic growth over the past three years, stating the recovery of the construction and real estate sector is due to the residency for investment programme.
In addition, Eurico Brilhante Dias, secretary of state for internationalisation in Portugal, said his country’s scheme was attracting considerable interest to Portugal.
Indeed, in Portugal’s case, this is proving to be the optimum option for many HNW individuals. Residency requirements are only two weeks per year, full residency advantages are granted, allowing the holder to live, work, study and open a business, with access across Europe’s Schengen area. Moreover, after six years there is the option of obtaining full citizenship.
These high-net-worth individuals define themselves as global citizens seeking further opportunities for themselves and their families in a host country, which is a trend that can be expected to grow substantially in the coming years as the world becomes increasingly globalised.
By Nigel Green, founder and CEO of deVere Group
