CITIZENSHIP AND RESIDENCY: Number of HNWs seeking second passport ‘skyrockets’.

As published on international-adviser.com, Tuesday 1 December, 2020.

The impact of national lockdowns and travel restrictions has pushed high net worth individuals (HNWIs) to seek additional passports as well as overseas residencies.

According to financial advisory firm DeVere, demand for its residency and citizen service “skyrocketed”, with an increase of 50% year-on-year, while citizenship advisory company Henley & Partners reported a similar trend with a 25% increase in enquiries about citizenship-by-investment schemes by mid-November 2020.

Henley & Partners said that, while the top five counties in terms of enquiries in 2019 were all emerging markets – namely India, South Africa, Bangladesh, Pakistan and Nigeria – this is not the case for 2020.

India retained the top spot, but the US shot up to second place from sixth. The UK placed sixth, one up from 2019, and Canada came in eighth from the previous 16th place.

This mirrors the increase in demand received by citizens of such countries, as Henley & Partners reported that by mid-November 2020 enquiries from US nationals surged by 235%, followed by Canadians (74%) and Brits (38%).

“The volume has also now reached a critical mass where it is reasonable to suggest that 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,” said Juerg Steffen, chief executive at Henley & Partners.

“More than simply being about ease of travel or acquiring a vacation home, alternative residence and citizenship encompass portfolio diversification, global investment and operations, and the creation of a new inheritance and identity for the family.

“Savvy investors have realised that diversification is as relevant to lifestyle planning as it is to wealth management. By spreading their assets across a range of markets and jurisdictions, over time they are more likely to harvest returns than if they hedge their bets on one country alone — even if that is a world-leading nation.”

But according to Nigel Green, founder and chief executive of DeVere Group, the rise in demands goes beyond the covid-19 crisis.

“Increasingly, people prefer the concept of being a global citizen, rather than being solely tied to the country of their birth,” he said. “They too 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.

“The pandemic has brought into sharp focus what really matters to people: family, freedom and security.”