Although some governments have suspended or closed so-called "golden visas," there remains plenty of vigour in the market for such programmes and for the option of seeking residency abroad. Americans, for example, have been among those taking up the option.

Portugal’s recent move to scrap a tax break for high net worth foreigners, as well as reforming its “golden visa” programme, are examples of how countries that have sought to tempt overseas investors can sometimes shut the gate. But it is too early to claim that these schemes are fading, figures in the sector say.

Ireland and the UK have mothballed these citizenship/residence-by-investor programmes for the wealthy (although other avenues, for entrepreneurs and those in particular occupations, remain.) And, at a time when there’s much talk of how “globalisation” is in reverse, it is tempting to think that the squeeze on visas and tax breaks are prime examples.

But on the flipside, jurisdictions such as Dubai have been rolling out the red carpet for wealthy expats; Italy has its own version of the UK’s much-criticised (not necessarily fairly) non-domiciled regime, Spain retains its “golden visa” – for the moment – and the US has its E-2 visa for wealthy foreign investors. Malta, a European Union member state, has such a visa, although it has had to shut the doors to Russians after Putin’s invasion of Ukraine in February last year. (Malta has faced repeated calls in the EU to axe its programme.) Back in Portugal, it attracted a mass of US expats during the pandemic, although afterwards the country’s government, worried about soaring real estate prices and the effect on locals, restructured the initiative.

This is big business. Globally, according to a 2022 paper from the London School of Economics, more than 60 countries operate golden passport or visa programmes, which see hundreds of thousands of people using their purchasing power to gain a grade of membership in a polity each year. In the European Union alone, more than 130,000 people have gained citizenship or residence in this way. In total, they attracted more than €21.4 billion ($22.7 billion) to the bloc. (The global total is likely to be significantly higher, when locations in the Caribbean, for example, are added to the mix.)

With all the changes under way, should observers conclude that these HNW visas aren’t as “golden” as they used to be?

“I wouldn't say the amount of golden visa programmes is shrinking. While the closure of several highly publicised European programmes has made the news, other countries around the world are looking for ways to create new visa systems and investment mechanisms,” Alex Ingrim, a financial advisor with Chase Buchanan, a financial services firm that advises internationally mobile clients, told this publication. 

“I think it's important to highlight that regardless of the whether golden visa programmes are opening or closing, the amount of visa options in general only seems to be increasing. `Digital Nomad’ visas with paths to long-term residency are opening around the world, while different retirement visa programmes are available in many countries. The golden visas grab the headlines, but I think the real substance of most immigration regimes lies in allowing large volumes of people to work and retire in any country,” Ingrim said. (A “digital nomad” is a person who earns a living working online in various locations of their choosing, rather than a fixed business location).

“Greece and Italy have very attractive retirement regimes. Greece has a foreign pensioners regime which is available to individuals who have not been tax resident in Greece for five out of the last six years. The individual can then take advantage of a 7 per cent flat tax on all foreign source income. This regime lasts for 15 years in total. Italy has a very similar regime, where individuals need to relocate to a southern Italian town of less than 20,000 inhabitants, and they can take advantage of a 7 per cent flat tax on foreign source income. The Italian regime lasts for only 10 years,” he continued.

“Both Italy and Greece also have very attractive regimes for UHNW residents (€100,000 flat tax regimes), and have very attractive tax regimes for working people. The availability of several different regimes in both countries makes them very attractive – there's a special tax regime for most situations,” he added.

That programmes can be suspended – sometimes in reaction to political disquiet – isn’t necessarily a problem, as Bruno L’ ecuyer, chief executive of the Investment Migration Council, an organization representing advisors in this space, has told this news service. Sometimes a country will run a scheme for a few years with the specific goal of closing it after a set period, he said. 

There’s little doubt that the industry of advising HNW individuals on cross-border solutions, citizenship, residency, and added passports, has thrived. One of the largest advisor firms in the space is Henley & Partners. It issues regular measures on the potency of a passport, for example, as calculated by how many holders gain visa-free entry into a particular nation. In July, the firm said Singapore had displaced Japan for having the most effective passports when judged by this metric. Such rankings cast light on the kind of jurisdictions that are attractive for lacking onerous entry requirements – which can feed into whether such places encourage banks and others to set up booking centres, offices, and build business. In a sense, they can be benchmarks for how globalised the world economy is.

Alternative options
While countries might restructure these visas so that, for example, a person cannot get one by buying real estate, other options will arise because governments are in a war to attract talent and capital, Nuri Katz, founder of Apex Capital Partners, told this news service.

Katz was asked if he saw new forms of golden visa structure (more focus on startups, new businesses, specific sectors (STEM, land) to make them more politically palatable.

“Yes, I think that investments will need to go into functioning companies that will create real employment opportunities for people in the countries accepting investments,” he said.

“I believe that greater restrictions are going to be put on the whole notion of golden visas. I think that real estate will not be an option for much longer but rather more sophisticated investments such as venture capital funds or simply government donations will be the options. I believe also agents and promoters will need to become much more regulated in the way they work and the industry thus will become way more regulated,” Katz continued. 

With the grim events in Ukraine and Israel in front of mind, and geopolitics continuing to put personal safety into the limelight, will this feed demand for those able to afford these programmes?

“I think the continuation of these programmes is not dependent on the demand, as the demand has and will always be there. It will depend on the government's tolerance of risk for such investors and their acceptance of the value of such investment vs the risk of the political fallout stemming from accepting these investors,” Katz replied.

Americans seeking options
In the past, the idea that many HNW US citizens would want to spend more, or all the rest of the lives outside the US might have raised eyebrows, and with the Internal Revenue Service exerting a worldwide tax grip, this has proven to be a reason why it has not been a major trend in the past. 

With weakness to some currencies against the dollar, and concerns among some Americans about political polarisation, crime and problems at home, the allure of “abroad” has been noticeable. (Your correspondent has noted on an anecdotal front that a lot of Americans have been buying properties in places such as London and parts of continental Europe. This is a trend that goes back a century, when rich Americans would delight in spending summers in the South of France.)

Chase Buchanan’s Ingrim argues that there are several forces encouraging US citizens to think about foreign options, and there is also the working-from-home phenomenon that was turbocharged by the pandemic. 

Ingrim is bullish on France.

“We recommend France to retiring Americans due to the double taxation agreement in place between France and the US. It's very advantageous for US source retirement income, capital gains tax on US domiciled portfolios, and Roth IRAs maintain their tax-free status. As the benefits are enshrined in the Agreement, there's no time limit, and it’s a more stable tax jurisdiction for our American clients, as a result. Cyprus and Malta are also very solid jurisdictions based on their favourable double taxation agreements and non-domicile regimes,” Ingrim said.

“Within the tax optimisation discussion, we stress that we want our clients to end up in a jurisdiction where they enjoy living. There's no sense in moving to a jurisdiction solely for tax purposes only to find out that you hate living there or do not want to be associated with the jurisdiction. It's as much a lifestyle discussion as a tax optimisation discussion – people don't traditionally move to Europe for tax optimisation, there are many other jurisdictions where you can find no or low taxes for these purposes,” he continued. 

“Many of our American clients begin the conversation extremely open-minded without a fixed idea of where they necessarily want to end up in Europe. As a result, we look at their overall asset base and highlight some of the pros and cons of certain jurisdictions and let them know if there may be a better alternative,” Ingrim said.

“The 'hidden costs' aren't always directly financial – they may like the tax regime in Malta but may not like 'island living.' The Italian 7 per cent regime is very attractive, but living in a small southern Italian town isn't ideal for everyone,” he said.

“Americans are primarily looking for a better quality of life and new experiences. While there are tremendous career opportunities in the US, the pace of life can burn people out very quickly. As a result, we see a lot of clients that would like to retire early and slow down. Europe offers a slower pace of life and an increased focus on food, family, and culture. This is very appealing coming from a society that emphasises career success ad nauseum. Many Americans are also tired of the violence and animosity they see in everyday life in the US. Europe is certainly safer and the general dialogue and discourse between neighbours is far easier and more harmonious,” he added.