COVID-19 has been a real global shock, on every conceivable level. Economic growth and income have been significantly reduced, there have been interruptions and restrictions on global mobility, and even blockages in transnational trade. And what can we say about migration, whose staunchest enemies have seen in the coronavirus an invaluable ally in trying to curb it.
However, one of the legacies that this pandemic will leave behind seems to go in the opposite direction. There is a certain type of migratory movement in which COVID-19 may mark a before and after, the point at which it definitively triggered. Because, instead of slowing down, the supply and demand for investment migration programs, also known as Golden Visa, has only increased.
Fall and recovery
In recent years we had already witnessed a notable increase in interest in acquiring a residence or alternative citizenship through investment. The security, opportunity and diversification that these programs offer to HNWI (high net worth individuals) became a very attractive asset for them.
It just so happened that COVID-19 cut off that mobility dynamic and disrupted several facets of our lives. And, as with any type of migration, the boom in these golden visa programs was stopped in its tracks. Rich or poor, people who wanted to cross the borders of their country of residence during the spring of 2020 had a very difficult time. Global travel and migration were hampered by quarantine and sanitary controls.
However, now that the pandemic restrictions have been relaxed, we have seen a tremendous revival in the movement of wealthy people. Mostly, they are HNWI with citizenship or residence in countries that they feel have managed the current crisis ineffectively. And so, as a way to diversify, move away from risk, or seek a competent healthcare system, they have sought passports from countries that can offer them such options.
The example of Eric Schmidt
A paradigm of this situation is that of U.S. travelers who have faced or are facing unprecedented travel restrictions in Europe. Because of this and the dismal way in which the US has dealt with COVID-19, interest in migration-by-investment programs —which give access to alternative options— among Americans skyrocketed in 2020. The biggest representative of this dynamic has been Eric Schmidt, former CEO of Google, who obtained Cypriot citizenship for himself and his family. The security and healthcare systems that the EU offers have driven this dynamic, in which Schmidt is just one of the most prominent examples.
Growth opportunity for countries
In the same vein, the havoc the pandemic has wreaked on tourism-dependent economies has led several Caribbean island nations to introduce new investment options, or to lower the requirements on existing options. HNWIs seeking safe harbors, to which their families can retreat in case of need, have shown great interest in the Caribbean region, as small island nations have handled the pandemic extremely well.
Without going any further, St. Lucia has launched the region's first electronic payment and processing platform, meaning that applications can be made entirely online. In the not too distant future, it is expected that migrant investors will have even more options and that countries will introduce new residency and citizenship by investment programs; as well as other options, such as solutions to alleviate financial hardship caused by the pandemic. These golden visa programs have a proven ability to generate substantial revenues in the countries that issue them, and have the capacity to generate a highly positive economic impact.
It is still too early to know how the pandemic will alter the list of nations emitting the largest HNWI flows. In 2020, this group of countries consisted of China, France, India, Russia, Turkey and Hong Kong.
In terms of inbound destinations, Australia, Switzerland and the US —although the US is also likely to start issuing a large number of outflows— are expected to remain the preferred destinations for migrant investors over the next decade. Cyprus, Greece, Italy, Spain and New Zealand are the main candidates to join this list of sought-after relocation options.
Prior to the COVID-19 crisis, personal security and diversification were considered the main drivers of demand for alternative residency and citizenship, but the pandemic has introduced new motives for acquiring these assets. As the world's wealthy emerge from the current crisis more aware of their vulnerability to unforeseen events, they are likely to seek greater assurances that seamless travel and relocation, as well as rapid access to good healthcare, will be available to their families in the future.
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