Citizenship by investment, or what has been termed ‘passport shopping’ is one of the latest trends to have fallen into favour with wealthy property investors. Prestige takes a look at what’s involved when it comes to diversifying your passport portfolio.
For many years property developers, very often in partnership with their host countries, have sought to further incentivise their investors by bundling a number of value-adds into the deal. Typical promotions range from special mortgage rates, zero percent down payments to prizes such as cars, planes, residencies and now even offers of citizenship. When it comes to such schemes, it pays to tread cautiously and to remember that all promotions carry with them a cost. Whether this be the price of purchasing a car for every applicant or the exorbitant fees for a celebrity endorsement, developers will have factored this into the equation. A canny investor therefore should probably look first and foremost at what they are buying their property for. This is where residence and citizenship-type promotions definitely come into their own. After all if ‘your home is your castle’ then your focus is ultimately about providing a safe haven for your family and there’s certainly an increasing number of ultra high net worth individuals who will invest in a house not only because they wish to live in beautiful surroundings, but also because of the safety and support that a country can provide them and their family.
Prudence is advised when it comes to citizenship-linked property, in particular checking that the deal offered by the developer has the full legal backing of the country behind it. After all, no matter how big a property developer may be, residences and citizenships can ultimately only be offered by host countries. Janice Williamson, General Manager of Next Generation Equity, a leading player in the burgeoning citizenship-by-investment sector in the UAE, gave us some sage advice. “Before parting with your hard-earned savings, if you are considering any residence or citizenship programme check two things. Firstly, why do you want it (normal reasons being for global visa-free travel, tax efficiency and a safe haven)? And secondly, is it 100% endorsed by the country it is being offered in? A number of my customers have come to me several years after thinking they had secured a passport or permanent residence only to find the goal posts had been shifted.
There are some absolutely excellent programmes out there but only select one that is confirmed in writing as being official by the embassy or consulate in question (if it is a foreign programme) or by the Ministry of Immigration (if it is a UAE offering). Remember, if something sounds too good to be true; that’s probably because it is!” That said, securing your family’s safety and long term financial security cannot be over-emphasised and some sound planning now could save you a fortune in the long-run.
The trend towards dual citizenship-byinvestment has been growing in recent years as more people become aware of the benefits, and the process involved. Some nationalities face limitations when travelling, coupled with financial and social instability, and alternative citizenship can open up a number of possibilities by allowing them to obtain a new passport. Emirati citizens,for example, can travel visa-free to approximately 80 countries, whereas anyone holding a Caribbean passport is afforded visa-free travel to over 120 global countries. Investment can be made through several channels, one of which is real estate, and for global investors looking for greater personal and economic freedom, it may just be a good option.
Q&A
Janice Williamson talked further to Prestige about some of the most common questions related to citizenship-by-investment.
1. Who can benefit from second citizenship?
For people who face visa restrictions it can be really challenging if they need to travel regularly for business or if they want to visit family overseas. Securing a new citizenship can alleviate that burden. There are also other benefits such as greater financial freedom in terms of investment, banking and taxation, as well as lifestyle reasons where people may simply want to locate to different country.
2. What programme options are available and which one should I choose?
There are a lot of different programmes and it is important to clarify the difference between citizenship and residency. Citizenship programmes guarantee full lifetime citizenship in the country of choice and the second passport is granted immediately following a successful application. Residency programmes offer immediate residency following a successful application and full citizenship can usually be applied for after a period of time. A second passport will only be given following the citizenship approval. Everyone has their own reasons for exploring the idea and the choice should be based on each individual’s unique situation. Next Generation Equity currently offers eight citizenship and residency programmes across the Caribbean, Dominica, Grenada and several European countries.
3. How much does it cost?
Costs vary widely but basic investment is between $100,000 and $500,000. The different investment channels include real estate purchase, government bonds, cash deposit to a government development fund or investment in one of the country’s main industries. A guaranteed return on investment is available with some real estate options. There are also other costs to consider such as property purchase costs, government fees, application/processing fees and due diligence fees.
4. Is dual citizenship completely legal?
Yes, all programmes are governed by respective laws with the objective of encouraging foreign investment into the country for its development. So not only are the right programmes legal but, by adopting them, you can provide strategic investment into the country you choose to reside in.
5. How long does it take?
Approximately two to six months for citizenship and a minimum of one month for some residency programmes after submitting the application.
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