CITIZENSHIP: Malaysia, South Korea make gains as global rich take second passports

Capgemini’s ‘World Wealth Report’ reveals the global HNWI population dropped by 3.3 per cent to 21.7 million in 2022, while its wealth decreased by 3.6 per cent to $83 trillion. This marks the steepest drop in 10 years.

North America registered the steepest wealth decline (by 7.4 per cent), followed by Europe (3.2 per cent) and Asia-Pacific (2.7 per cent). In contrast, Africa, Latin America, and the Middle East showed resilience by registering financial growth in 2022 due to solid performances in the oil and gas sectors.

Despite these turbulent times, investors refuse to lose faith. In fact, an astonishing 70 per cent of ultra-HNWIs, as revealed in ‘The Wealth Report’, expressed their unwavering belief in growing their portfolios and the value of their assets throughout 2023.

Race to secure global mobility

The pandemic has served as a harrowing wake-up call for many wealthy individuals, revealing the vulnerability of their global mobility in the face of unforeseen events. Even those with established passports were more aware of the risks.

This realisation ignited a frenzy among investors to secure second, and sometimes, even third passports and residencies. It’s a race to safeguard their access to global markets in any situation, triggering an explosive boom in residency and citizenship by investment.

‘The Wealth Report’ findings reveal that 13 per cent of ultra-HNWIs are planning to apply for a second passport or new citizenship. And it’s not just about the allure of Europe. Surprisingly, the highest demand is in Asia, with 16 per cent considering additional passports.

The Americas come in second with 15 per cent, while Europe and Africa follow at 11 per cent.

Golden Visa programs

Data suggests that Europe is no longer the sole attraction for these elite investors. The report uncovers hidden gems, like Malaysia’s investor visa, which surpassed all European schemes combined in 2019. South Korea and Panama are also gaining immense popularity, approving more applications than Greece and Portugal, the latter of which recently confirmed the modification of its Golden Visa without allowing real estate. It was the most popular route to obtain the Portuguese Golden Visa.

Governments are shifting their focus from investor-led schemes to more entrepreneurial opportunities. These innovative programs may not be the top choice for investors seeking visas, but they are gaining momentum as the primary offering. Governments strive to create themes that attract long-term investments in local businesses, nurturing sustainable economic growth.

‘The Wealth Report’ predicts that global demand for properties valued between 3 million euros and 7 million euros will remain robust, especially among buyers from slower economies. This voracious appetite for prime real estate and golden visa incentives continues to drive up prices in sought-after markets. The tightening restrictions and introduction of new taxes reflect the delicate balance between local affordability and the influx of global wealth.

Several opportunities remain for HNWIs seeking second citizenship, particularly in the Caribbean. It is critical to act and invest to secure an application under still very attractive conditions.