How Citizenship/Residency-By Investment Programmes Evolved - And What's Next

Tom Burroughes Group Editor 17 April 2024

How Citizenship/Residency-By Investment Programmes Evolved - And What's Next

A marker for globalisation and the degree of unfettered movement that people enjoy, the market for so-called "golden visas" - has developed rapidly since early days when dominated by a handful of jurisdictions. Despite controversies and closures, it remains vibrant. We talk to a large law firm about the sector.

The global market for  citizenship/residency-by-investment - sometimes dubbed “golden visas” - has come a long way since the sector was initially only dominated by five English-speaking countries: the US, UK, Canada, Australia, and New Zealand. Countries ranging from Portugal to the UAE and Singapore now operate these programmes.

One sub-theme in all this is how US citizens have been looking for overseas options, concerned about domestic politics and social conditions, Jean-François Harvey, founder and managing partner of Harvey Law Group, which says it is the largest international law firm specialising in investment immigration, told this news service. 

Harvey has been an immigration lawyer for 32 years. He’s based in Hong Kong, where he has lived for the past 20 years. “Most of our American clients are worried about the country and its social integrity. As for Canadians, they want better weather and lower taxes,” Harvey said. 

One odd-seeming feature is that Americans who lean right in their political views – typically Republican voters – seem keener on leaving America, as opposed to centre-left voters on the coast. Harvey said this phenomenon is not easy to explain, reflecting on the upcoming US Presidential election.

But on the flipside, the pull of the “American Dream” - a land of opportunity - remains powerful. “There are plenty of non-Americans who want to be in the US,” Harvey said. 

Doors open and others are closed
The market is in constant flux. While countries can sometimes cut or suspend visa schemes - as with Spain a few days ago, and the UK with its Tier 1 Visa in 2022 - competition for capital inflow and entrepreneurial knowhow will keep the market busy, predicts Harvey. 

Europe, with countries such as Italy, Greece, Ireland, Malta and Portugal, has been a busy area.

“We have had so many [visa] programmes open up. There are so many options now and everyone can find what they need. There’s lots of competition between countries to attract people,” Harvey said.

Politicians have attacked golden visas, such as those in the European Union. In one example, members of the European Parliament have berated Malta, an EU member state since 2004 and a former British possession, for its citizenship programme, saying it facilitated money laundering into the bloc. (Malta has capped and changed its programmes.) 

Organisations such as Transparency International, which focus on fighting bribery and corruption, have been critical. A 2021 report by the London School of Economics said the programmes attract around €3 billion ($3.19 billion) in investment to the EU annually.

New schemes keep opening and developing. Hungary, for example, recently announced a new 10-year residence permit, obtainable for €250,000. 

Not all programmes are aimed at high net worth individuals. Some, such as the UK’s Innovator Founder Visa, are pitched at builders of business start-ups. There are also “digital nomad” visas that are part of the remote-working trend enabled by the internet and (relatively) cheap travel. 

Taxes, weather and red tape
It is not all a matter of tax and housing costs. Italy, for example, will be attractive to people for many reasons (wonderful scenery, culture, food, sports, etc.), but there are downsides (slow Italian bureaucracy) to consider. There are issues around building a network of friends and the ease, or not, of integrating into a new society, Harvey continued.

Generalising about these schemes is well-nigh impossible, but a few themes emerge. One trend, Harvey said, is families’ desire to live in countries offering high-class education for their children. Because some nations – such as Canada - have caps on how many foreign-born children can attend certain schools, the golden visa route is a way to handle that. This is a particularly important point for Asian families.

The business of advising on these progammes is a money spinner. A cluster of specialist consultancies operate as demand grows. Examples include Bartra Wealth Advisors, Henley & Partners and Apex Capital Partners, for example. An umbrella group – the Investment Migration Council – now operates to spread best practice ideas, lobby around schemes, and interact with policymakers. Golden visas constitute a big business. 

Just because a programme eventually gets shut, or suspended, doesn’t necessarily mean this is a setback, industry figures argue. As explained in this interview, programmes can be suspended or axed not because of external or internal political pressure, but because, so the industry, a scheme has achieved its purpose of attracting a certain amount of capital.

Language and culture
Harvey said there can be language-group themes, such as how people from the “Francophone” world linked to France by history and culture, can seek citizenship. In the more “Anglosphere” side (not a term that is universally approved of), there are two-way flows between the UK and Commonwealth member states. South Africa, while not without domestic challenges, is a focus of enquiries from some in the UK, Harvey said. His firm has an office in Johannesburg: “We are busy.”

For a man with more than three decades’ experience in this market, Harvey seems upbeat about further prospects in a market that, in many ways, is a temperature check on what is called globalisation. 

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