Passports — more golden than ever

Passports — more golden than ever

2021/03/14 6:56am



Strangely, as Covid-19 has choked world travel, the market for second, or even multiple, passports and residence visas appears to have grown even more rapidly than before the pandemic. The trade in what is called citizenship by investment (CBI), or residence permits obtained through golden visas, is notoriously hard to quantify, and abounds in euphemisms and evasions.

Having said that, one of the better-known advisers in the field, UK-based Henley & Partners, said this week it had “seen a 32 per cent increase in the daily average number of enquiries (about CBI) compared to the first six months of 2020 . . . the most astonishing being a 192 per cent leap in enquiries from US citizens in 2020. Enquiries from Canadians are up 34 per cent and there have been 29 per cent and 26 per cent more enquiries from UK and French nationals, respectively. After a flat 2019 for our contracted revenues, we had 25 per cent growth in 2020 and 40 per cent growth rate so far in 2021.”

Henley will not give out the underlying data, but the trend is confirmed by others in this odd world. In recent years the big volume has been coming from moneyed Chinese, expats living in Gulf countries, the post-Soviet rich, and some Nigerians and South Africans.

The increase in CBIs and golden visas shows us that globalism never really happened. And national identity is just another asset. The demand is up, because even under Covid restrictions, nationals and legal residents were always welcome home.

Emirati-based expats have been among the most desperate passport bidders. Within a day, they can go from an upper-middle class life to joblessness and expulsion, depending on an employer’s whim or a weaker oil market. If that happens, they and their family can travel to more places with passports from Commonwealth issuers such as St Lucia or Antigua.

The new Caribbean citizens should understand that all the details of their applications and bank arrangements will be available for electronic perusal by the Anglo-American agencies.

At the most shadowy end of CBI, an overly-transactional Chinese bureaucrat can go online through a VPN and pay $130,000 to Vanuatu, along with $5,000 to an intermediary, and get a passport in 30 days. Anguilla also has a reputation for lax due diligence. Border agencies react accordingly.

Then there is the middle class of multiple nationality holders. For example, Turkey is using its own CBI programme as a tool of ‘soft power’ in its region and in the broader Islamic world.

Having put up a $500,000 deposit in a Turkish bank, or bought $250,000 in Turkish property, applicants such as Syrian or Pakistani traders can obtain a Turkish passport and travel visa-free throughout the post-Soviet republics and Central Asia. They have the use of a relatively sophisticated commercial banking system, and put their children through a variety of Islamic schools. They can also apply for an “E-2” visa to travel on business to the US.

There was a time when a middle class or skilled working class migrant could readily get Canadian “landed immigrant” status, which, with five years of actual residency, could turn into citizenship There is still a “Quebec Immigrant Investor Program”, suspended last March, which resumes at the beginning of April.

This requires a “legally acquired” net worth of C$2m, a five-year passive investment with a non-refundable down payment of C$1.2m, professional skills, and an intention of settling in Quebec, which means you at least try to speak French. In other words, Canada is not reaching hard for immigrants any more.

The EU is even more full up. Cyprus ended its CBI programme last year after some embarrassing revelations about its skimpy due diligence. Malta still does CBI, but it has been pressed by its fellow EU members to be far more restrictive. Austria is now the discreet billionaire’s second passport of choice within Europe.

The US is actually still the leading CBI country through its “EB-5” visa. For investing as little as $900,000 for job creation in a distressed part of the US, EB-5 offers a path to permanent residency and citizenship.*

“We estimate the total global market is between $25bn and $30bn. Of that, $20bn goes to the US through EB-5,” says Henley’s Paddy Blewer.

The only country that does not seem to have any would-be multiple nationality seekers? New Zealand. According to the CBI brokers, Kiwis are happy with one passport.

*The minimum investment for the EB-5 visa is now $900,000. An earlier version of this column said it was $500,000.