The pandemic has become a real shock wave for every sector of society. Security and reliability are now more important than ever. And, of course, the business world has not been oblivious to this trend.
Because, as demonstrated in recent months, the effects of COVID-19 have led to a huge spike in the number of entrepreneurs who have decided to diversify their investments in a new way: through residency and citizenship-by-investment programs. For more information, visit the official website of the Spanish Ministry of Foreign Affairs.
First of all, let's answer a couple of questions:
- What is a residency or citizenship by investment program? It is a procedure that allows a citizen of a country to obtain a residence permit and/or citizenship if he/she meets certain labor, financial, or asset purchase requirements.
- Why have they become so fashionable after the emergence of COVID-19? Basically, because they are a way to overcome the limitations and associated risks of being restricted to a single jurisdiction. A way to diversify investments.
Let us now get to know them a little more in depth.
Growth, origin and profile
According to Henley & Partners, an agency that advises on citizenship and residency by investment, the increase in interest in this type of process is remarkable: the average number of daily consultations so far in 2021 has been 32% higher than in the first six months of 2020.
In this regard, it is interesting to note how COVID-19 has brought about changes in the predominant nationalities of entrepreneurs interested in investment migration. Without going any further, the most significant change has occurred in the number of inquiries from U.S. citizens, with an increase of 192% over the previous year. Not so surprising, perhaps, considering the unusual problems US citizens have faced in moving around the world during this pandemic.
There were also notable increases among citizens of other countries. There have been increases of 30% among Canadian and Australian nationals, as well as increases of 29% and 26% in the interest shown by nationals of the United Kingdom and France, respectively.
These data would serve to outline a concrete profile: that the boom in applications is coming from the most developed countries in the world, although the majority are from outside the EU. Of course, it should be added that the applicants are people with a very high net worth. But there is more: the majority, when it comes to entering this type of program, have the same type of priorities.
Almost everything in the priorities of applicants for citizenship and/or residency-by-investment programs comes back to the same thing: COVID-19. Because, predictably, the preferences are repeated in most cases: health security, infrastructure reliability and risk management. This is shown in the Global Mobility Report for the first quarter of 2021 by the Migration Policy Institute and International Organization for Migration.
Then, of course, there is also the purely economic issue. More and more investors are realizing that investing in a pool of domiciles around the world will provide them with an enhanced combination of short-term value and long-term performance, which is the incentive to enter into such programs.
And finally, as important, if not more important, as any of the above reasons, is family. An aspect that most investment migration programs include and which is becoming increasingly crucial.
Many of these programs extend their coverage to parents, siblings and even grandparents. Thus, in an increasingly unpredictable world, geographically diversifying not only financial investments, but also housing options has become very attractive. This helps to ensure access to top-quality education and healthcare, as mentioned above. But it also reduces exposure to risks such as crime, political instability, bad governance and unexpected political changes.
That no place is infallible is something we have learned, the hard way, over this past year and a half. Even the world's superpowers falter, even the most powerful country can fail its citizens.
Hence, today, some investors decide to apply for a citizenship and/or residency program for themselves and their families. Another way to sustain for decades the educational, health, employment, financial and life security of several generations.
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