Global demand for a second residency and citizenship-by-investment (CBI) has risen by 23 per cent year on year, according to the Rif Trust, an investment migration consultancy.
Why is the industry experiencing such growth?
The advancement of technology has created a more connected world than ever before, but it has not provided a solution for people who still struggle to travel freely between borders.
Second passports are being increasingly sought out to combat this restriction of mobility.
Similar to high-end cars with steep price tags, second passports were once perceived to be a luxury item that only wealthy individuals could afford.
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Watch: who is eligible for a UAE Golden Visa under new rules?
This is no longer the case, as second passports have grown in popularity among the world’s middle class.
CBI programmes in locations such as St Lucia, Dominica, and Antigua and Barbuda have helped to drive this shift in mindset, with minimum investments starting at $100,000.
Affordable health care and access to educational opportunities are among some of the several benefits that second passports offer.
However, with inflation rates rising and a global recession looming, many people have viewed the prospect of securing a safer financial future as a primary factor in their pursuit of a second passport.
Financial protection
Second passports facilitate the ability to open international bank accounts. This allows you to store your money in a potentially more favourable location that may have more incentives than your home country — in other words, it is a great way to protect your money.
Take Cyprus, for instance. In 2013, expatriates were suddenly blocked from taking any money out of their accounts and out of the country.
A similar situation is occurring in Lebanon. The country’s banking system has had limited withdrawals of dollars since 2019, and it has been announced that their banks will remain closed indefinitely.
This means individuals with money tied up in Lebanon’s banking system are unable to access it as the severe economic crisis in the country continues.
By securing a second passport and being able to bank overseas, the threat of your wealth being restricted is mitigated.
Furthermore, many countries, such as Singapore and Switzerland, also offer banking confidentiality to maintain investors’ privacy.
Investment opportunities
A second passport provides more investment options as it grants access to a wider pool of financial assets to invest in. It allows you to diversify your assets in ways that may not have been possible with your original passport.
Holders of a second passport are not required to live in the second country year-round, and investing in property as an asset can yield an ongoing return in the form of rental income.
For example, Greece’s residency-by-investment programme (RBI) must be renewed every five years, but has no stay requirements.
Therefore, if a Golden Visa applicant avails of permanent residency in Greece through the acquisition of real estate, they can rent out their property and use this passive income to invest in additional assets if they choose to.
Tax incentives
Since its inception three years ago, the UAE’s RBI programme has surged in popularity. It was recently announced that more than 100,000 people have received the country’s Golden Visa, which offers various advantages including tax incentives.
Similarly, second passports for Caribbean Commonwealth countries such as St Kitts and Nevis are highly appealing as their government does not impose a tax on offshore income; this benefit applies to both personal and professional income.
Business growth
For business-oriented individuals, a second passport can be leveraged to strengthen corporate relationships.
Being able to travel freely to an expanded list of countries enables additional face-to-face interactions with potential prospects and existing clients, resulting in extra networking opportunities and more fruitful co-operation.
There are fewer political and logistical restrictions and investors can capitalise on the tax benefits mentioned above that most governments offer alongside second passport programmes.
What the future holds for the investment migration industry
The global CBI sector is currently valued at approximately $30 billion; it is projected to hit the $100 billion mark by 2025.
Considering these expectations, investors are likely to continue seeking opportunities to acquire second passports for the betterment of their future and that of their families.
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World's most powerful passports — in pictures
From increased freedom of movement to family safety and lifetime security, financial benefits are just one aspect of the many advantages that second passports bring to the table.
This is becoming increasingly known worldwide and as this knowledge becomes more accessible to all, the demand for second passports will continue to rise.
What are the cons of investing in a second passport?
While getting a second passport has many benefits for business-oriented individuals, families and educational opportunities, long wait times are often associated with the physical obtainment of the passport.
The process takes as long as four months and, in many cases, even longer, with 90 per cent of the time being spent on background verification.
This is why submitting all documents in a timely fashion is essential to ensure there are no further delays with the processing time. Missing documents may even lead to rejected applications.
Some countries restrict citizens from holding a second passport and in this case, those who wish to apply for a second passport need to renounce their current citizenship.
Interested parties should do their due diligence to understand whether a second passport is a viable option for them.
Jeffrey Henseler is the founder of Passport Legacy and managing partner of Passport Legacy, UAE HQ.
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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What is Folia?
Prince Khaled bin Alwaleed bin Talal's new plant-based menu will launch at Four Seasons hotels in Dubai this November. A desire to cater to people looking for clean, healthy meals beyond green salad is what inspired Prince Khaled and American celebrity chef Matthew Kenney to create Folia. The word means "from the leaves" in Latin, and the exclusive menu offers fine plant-based cuisine across Four Seasons properties in Los Angeles, Bahrain and, soon, Dubai.
Kenney specialises in vegan cuisine and is the founder of Plant Food Wine and 20 other restaurants worldwide. "I’ve always appreciated Matthew’s work," says the Saudi royal. "He has a singular culinary talent and his approach to plant-based dining is prescient and unrivalled. I was a fan of his long before we established our professional relationship."
Folia first launched at The Four Seasons Hotel Los Angeles at Beverly Hills in July 2018. It is available at the poolside Cabana Restaurant and for in-room dining across the property, as well as in its private event space. The food is vibrant and colourful, full of fresh dishes such as the hearts of palm ceviche with California fruit, vegetables and edible flowers; green hearb tacos filled with roasted squash and king oyster barbacoa; and a savoury coconut cream pie with macadamia crust.
In March 2019, the Folia menu reached Gulf shores, as it was introduced at the Four Seasons Hotel Bahrain Bay, where it is served at the Bay View Lounge. Next, on Tuesday, November 1 – also known as World Vegan Day – it will come to the UAE, to the Four Seasons Resort Dubai at Jumeirah Beach and the Four Seasons DIFC, both properties Prince Khaled has spent "considerable time at and love".
There are also plans to take Folia to several more locations throughout the Middle East and Europe.
While health-conscious diners will be attracted to the concept, Prince Khaled is careful to stress Folia is "not meant for a specific subset of customers. It is meant for everyone who wants a culinary experience without the negative impact that eating out so often comes with."
Emergency phone numbers in the UAE
Estijaba – 8001717 – number to call to request coronavirus testing
Ministry of Health and Prevention – 80011111
Dubai Health Authority – 800342 – The number to book a free video or voice consultation with a doctor or connect to a local health centre
Emirates airline – 600555555
Etihad Airways – 600555666
Ambulance – 998
Knowledge and Human Development Authority – 8005432 ext. 4 for Covid-19 queries
World Cup final
Who: France v Croatia
When: Sunday, July 15, 7pm (UAE)
TV: Game will be shown live on BeIN Sports for viewers in the Mena region
Various Artists
Habibi Funk: An Eclectic Selection Of Music From The Arab World (Habibi Funk)
Desert Warrior
Starring: Anthony Mackie, Aiysha Hart, Ben Kingsley
Director: Rupert Wyatt
Rating: 3/5
About Krews
Founder: Ahmed Al Qubaisi
Based: Abu Dhabi
Founded: January 2019
Number of employees: 10
Sector: Technology/Social media
Funding to date: Estimated $300,000 from Hub71 in-kind support
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Document everything immediately; including dates, times, locations and witnesses
Seek professional advice from a legal expert
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In criminal cases, you can contact the police for additional support
McLaren GT specs
Engine: 4-litre twin-turbo V8
Transmission: seven-speed
Power: 620bhp
Torque: 630Nm
Price: Dh875,000
On sale: now
Schedule for Asia Cup
Sept 15: Bangladesh v Sri Lanka (Dubai)
Sept 16: Pakistan v Qualifier (Dubai)
Sept 17: Sri Lanka v Afghanistan (Abu Dhabi)
Sept 18: India v Qualifier (Dubai)
Sept 19: India v Pakistan (Dubai)
Sept 20: Bangladesh v Afghanistan (Abu Dhabi) Super Four
Sept 21: Group A Winner v Group B Runner-up (Dubai)
Sept 21: Group B Winner v Group A Runner-up (Abu Dhabi)
Sept 23: Group A Winner v Group A Runner-up (Dubai)
Sept 23: Group B Winner v Group B Runner-up (Abu Dhabi)
Sept 25: Group A Winner v Group B Winner (Dubai)
Sept 26: Group A Runner-up v Group B Runner-up (Abu Dhabi)
Sept 28: Final (Dubai)
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Emergency
Director: Kangana Ranaut
Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry
Rating: 2/5
THE BIO
Favourite place to go to in the UAE: The desert sand dunes, just after some rain
Who inspires you: Anybody with new and smart ideas, challenging questions, an open mind and a positive attitude
Where would you like to retire: Most probably in my home country, Hungary, but with frequent returns to the UAE
Favorite book: A book by Transilvanian author, Albert Wass, entitled ‘Sword and Reap’ (Kard es Kasza) - not really known internationally
Favourite subjects in school: Mathematics and science
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Singham Again
Director: Rohit Shetty
Stars: Ajay Devgn, Kareena Kapoor Khan, Ranveer Singh, Akshay Kumar, Tiger Shroff, Deepika Padukone
Rating: 3/5
THE SPECS
Engine: Four-cylinder 2.5-litre
Transmission: Seven-speed auto
Power: 165hp
Torque: 241Nm
Price: Dh99,900 to Dh134,000
On sale: now
