Passport to Success: The Growth in Investment Migration
November 4, 2016 | BY George Hopkin
For some wealthy investors, one nation is simply not enough. We look at the growth in investment migration
Though you’d never guess they share much ground, media mogul Rupert Murdoch does have something in common with film director Terry Gilliam. Both men have changed their citizenship to take advantage of the resulting business benefits.
Gilliam—famously known as the only non-British member of comedy troupe Monty Python—renounced his US citizenship to become a true Brit in every legal sense in 2006. “I thought I’d just simplify my life,” the writer-director told The Onion’s film industry website AV Club later that year. “I’m getting old. I’m gonna die. I’m not at all happy with what America has been in the last 10 years. The reality is, when I kick the bucket, American tax authorities assess everything I own in the world—everything I own is outside of America—and then tax me on it. And that would mean my wife would probably have to sell our house to pay the taxes. I didn’t think that was fair on my wife and children.”
Murdoch became a naturalised US citizen—and as a result forfeited his Australian citizenship—in 1985 in order to expand his American empire; legislation meant it was impossible for a non-US citizen to own a US television station. He was much less forthcoming than Gilliam about the decision. When asked at the time why he had traded citizenship, he answered simply: “Because I wanted to.”
Murdoch and Gilliam are far from alone; there is a growing number of wealthy businessmen who want to become global citizens of multiple nations. Make no mistake: This is not the hot-topic immigration that’s making headlines across a Europe suffering from migrant-crisis fatigue or a US dumbfounded by strident Donald Trump rhetoric. This is the world of migrant investors, where those with the right level of income and the appropriate legal advice can effectively buy themselves and their families the very best opportunities the planet has to offer.
“Investment migration has never been so popular,” says François Mandeville, the founder and managing partner of Hong Kong-based Mandeville & Associates, a consultancy specialising in business immigration that has helped 10,000 families resettle in North America since 1995. “High-net-worth individuals—particularly from China, but also from the Middle East and Russia—more than ever before are looking for mobility in this increasingly globalised world,” says Mandeville. “Investment immigration is seen as an efficient way to provide globalised education for their children, to improve their quality of life and, in a certain way, to internationalise the activities of their companies.”
It’s not just private-sector companies working with wealthy clients who have seen this increase in the number of people buying second passports; international research institutes have also spotted the trend. “Many more people seek an additional citizenship—in most instances, they don’t have to give up their current citizenship—every year,” says Demetrios Papademetriou, founder of the Migration Policy Institute, a US think tank. “This is a function of two trends. First, the ranks of very wealthy families have been growing at very rapid rates and this will continue for the foreseeable future,” says Papademetriou. “And as people become wealthier, their need for purchasing an ‘insurance’ policy (this is an important way of thinking about investor visas) against changing circumstances at home—especially political upheaval, etcetera—rises accordingly.”
Mainland China has emerged as a major growth market for outgoing investor migration thanks to the country’s economic boom, which has minted countless millionaires with a taste for the international life. “Recent surveys indicate that nearly 47 per cent of wealthy Chinese are planning to migrate to another country in the near future,” says Mandeville. “We believe that this industry will keep on growing during the next 10 years.”
For now, the most popular destinations for investment migration remain the same as they have for a long time: the US, Canada, the UK and Australia. But the industry is seeing changes as these established front runners are forced to come to terms with the increase in demand and as new destinations bring their own competing offerings to the market.
Canada—for many years high on wish lists thanks to its Immigrant Investor Programme—effectively closed the door in 2014 when it cancelled the backlog and introduced far more strict requirements for future applicants. “But Canada as a destination for immigrant investors has not dropped in popularity, since the province of Quebec is running its own programme, which has proven to attract thousands of applicants,” explains Mandeville.
The wealthy still send their children to countries they believe offer the best education, says Mandeville, but the options for which countries the parents call home are now more diverse. “Five years ago, immigrant investors’ main motivations were education of their children and quality-of-life improvement. The US, Canada, Australia and the UK were the best options to reach those goals. In recent years, however, delays and increased selection requirements made other countries with quicker processing and simpler conditions more attractive for immigrant investors.”
Investors can make things happen quickly—£10 million buys entry to the UK fast-track scheme; A$15 million is the price for Australia’s premium investor programme; and Malta’s Individual Investor Programme is available for a donation of €650,000.
At the other end of the budget spectrum, citizenship can be bought for a US$100,000 donation or US$200,000 real estate purchase on the Caribbean island of Dominica; an investment as low as US$94,000 in Latvia; and a US$45,000 investment in the Comoros. Among other popular destinations are St Kitts and Nevis in the Caribbean, Cyprus and Portugal, whose Golden Residence Permit Programme is no doubt popular with jetsetters, as it only requires investors to stay in Portugal for a minimum period of seven days in the first year and 14 days in subsequent years.
Experts predict a decade-long surge in people joining the executive chairman of News Corp and the man who played Cardinal Fang in the Spanish Inquisition sketch. Certainly, it’s a trend worth watching.
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