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CNN: For most people, the coronavirus pandemic has meant fewer travel options. Not so for super-rich families who are increasingly using their money to cross borders that would otherwise be closed to them.
This is the elite world of investment migration, where passport applications are based not on nationality or citizenship, but on wealth and the willingness to move it around the planet.
These so-called citizen-by-investment programs, or CIPs, are currently a growth industry, as are residence-by-investment arrangements, also known as “golden visas.”
They’re a way for ultra-rich individuals to not only diversify their portfolio by moving their money into a country, but also receive the benefits of citizenship, including a new passport.
Over the past five to 10 years, the primary motivations amongst CIP participants — who tend to have a net worth of anywhere from $2 million to over $50 million — have been freedom of movement, tax benefits and lifestyle factors, such as better education or civil liberties.
But with Covid-19 dramatically transforming our 2020, some elite families are also considering healthcare, pandemic responses and potential safe havens to ensure they have a backup plan for the future.
“People really want the insurance policy of an alternative citizenship, which gives them a Plan B,” Dominic Volek, Head of Asia for global citizenship and residence advisory firm Henley & Partners, tells CNN Travel.
“They are also concerned about healthcare and pandemic preparedness because, of course, this may not be the only pandemic in our lifetime.
“Wealthy people don’t plan for five to 10 years — they plan more than 100 years in advance, in terms of wealth and well being.”
While largely anecdotal, Henley & Partners suspects that a recent uptick in interest in CIP can be linked to the coronavirus, health concerns, and general “doomsday predictions.”
The company recorded a 49% year-on-year increase in inquiries between January and June of 2020.
And the number of people who filed an application following a consultation increased by 42% when comparing the last quarter of 2019 with the first quarter of 2020.
When it comes to specific citizenship programs, Montenegro and Cyprus have been the most popular, with new applications up 142% and 75%, respectively, in the first quarter of 2020, compared with the fourth quarter of 2019. Malta meanwhile has retained significant and constant interest.
“Many people in this ultra-high net worth bracket are interested in Cyprus and Malta, because it grants the applicant and their family unlimited access and settlement freedom throughout the European Union,” says Volek.
“They not only have greater freedom of movement but also better education and healthcare (than in their home countries).”
Residency programs in Australia and New Zealand are also in high demand, but for another reason: crisis management.
“New Zealand has come out on top in terms of how it handled the pandemic, compared with some of the other usually more favored destinations like the UK or the US,” says Volek.
“So we’ve definitely seen a big increase in inquiries in the Australia and New Zealand investment visas. That’s probably also spurred by articles about these Silicon Valley guys, who had participated in various investor visas programs pre-pandemic and put doomsday plans in place.”
$6.5 million investment
Only ultra-high net worth families can participate in these residency programs: Australia’s program costs $1-3.5 million, while New Zealand will set investors back $1.9-$6.5 million.
“New Zealand’s program is pretty flexible in terms of what you invest in — as long as it’s not for your personal use,” explains Volek.
“A lot of these people have put that NZ$10 million into creating a completely self-sustainable, off-grid commercial farm. So then they’ve also got a place to go and just wait things out in times like these.”
The CIP clientele is changing too: Americans, Indians, Nigerians and Lebanese applicants have shown the biggest spikes in applications over the past nine months.
American applications, in particular, jumped 700% in the first quarter of 2020, compared with the last quarter of 2019.
These ultra-elite individuals join a steady flow of investors from China and the Middle East.