A Guide to Investment Migration for Governments and Global Citizens
National and international political shifts, volatile economies and markets, and rapid technological and ecological changes combine in complex ways every day to transform pacific environments into chaotic ones, economic assets into liabilities, safety into insecurity. At the same time, risks can become opportunities overnight, particularly for those who are able to act swiftly, unburdened by bureaucracy and the frictions of global travel. More than half a century of rapid globalization has linked nations, economies, and markets in new configurations. Yet, while global connectivity continues apace, static notions of nationality remain, and citizenship — the accident of birth that determines where individuals can travel and reside, and which markets and networks they can access — continues to define and constrain people.
Wealth — what one has accumulated, but also the sum of one’s knowledge, talent and connections — has traditionally been a buffer against chaos as well as a path to further success. Yet even wealthy individuals and families, if they are not globally connected, will remain limited by the particular context, policies, and resources of their birth citizenship. These can hinder their ability to respond to new threats or opportunities, or to access the global travel, culture, and residence options that appeal to them.
Individuals interested in insuring against political and economic uncertainty, as well as those determined to capitalize on the rapidly changing mix of markets, business ventures, and culture on offer around the globe, cannot afford to ignore the value of expanding their residence and citizenship options. That is, they need to consider holding second or multiple passports, or alternative residences, if they are to claim the power and flexibility of true global citizenship.
Individuals interested in insuring against political and economic uncertainty cannot afford to ignore the value of expanding their residence and citizenship options
Alternative citizenship holds particular appeal for international investors and globetrotters. Jim Rogers, Co-founder of the legendary Quantum Fund with George Soros, is among them. Rogers says his many journeys convinced him of the necessity of a second passport. “If you’ve seen the world, you know the world is always changing, and whatever you think today is not going to be true in 15 years,” says Rogers. “So you had better have a plan in case you’re in the wrong place at the wrong time.” He adds: “Many countries and people throughout history have learned that things change, and often for the negative, so everyone should have a ‘plan B’ that includes having some of your assets in other countries and a way to live in another country if you need to. Everybody in my family has more than one passport. In my view, it’s a wise insurance policy and a wise investment.”
Investment Migration Boom
Investment migration programs enable nations to grant residence or citizenship rights to individuals in exchange for a substantial investment. These are rapidly growing phenomena, particularly in the last decade, with demand for alternative residence and citizenship rights now driving thousands of individuals to these programs each year. Supply has increased, too, with a host of new investment migration programs emerging around the globe. As of 2016, there were 60 different programs in 57 countries, half of them set up since 2000.1
While the citizenship programs of small island nations often dominate the narrative and the news, it is large economies that actually account for the bulk of investment migration activity, with major global players such as the US, the UK, and the EU participating in the industry since its inception. In fact, the US’s EB-5
Immigrant Investor Program, established in 1990, is the world’s largest investment migration program. It offers permanent residence in exchange for an investment of USD 500,000 to USD 1 million in a new commercial enterprise that boosts job creation.2 Between 2012 and 2013, more than 11,000 successful applicants provided a combined USD 5.8 billion in capital through the EB-5 program and supported 562 projects, which generated some 174,000 jobs, according to the US Commerce Department.3 Despite significant pushback from anti-immigration forces within the Trump administration, in March, the US Congress voted to extend the programme.4 Advocates for the program argue that it is consistent with the nation’s founding idea of attracting talented individuals from around the world.
While the citizenship programs of small island nations often dominate the narrative and the news, it is large economies that actually account for the bulk of investment migration activity
The US is not alone among high-income nations with such programs. More than 36,000 investor visas were issued globally in 2014, and a small group of high-income nations — the US, Canada, the UK, Hong Kong, and Australia — accounted for more than 80% of them. Most Western nations operate some type of investment migration program.5 Canada established its Federal Immigrant Investor Program in the 1980s, followed by the US and the UK in the next decade. New Zealand, Australia, and Singapore followed suit.6
Some nations are beginning to move from residence-by- investment, as is the case with the US program, to citizenship- by-investment. Austria, for example, now grants citizenship in exchange for substantial financial contributions.7
Investment migration is by no means a new phenomenon, however. The idea of exchanging investment in a country for citizenship dates back to Roman times, when citizenship was granted to neighboring and conquered peoples, often in exchange for money, to ‘Romanize’ them and strengthen the empire. Today, citizenship-by-investment has grown into a roughly USD 3 billion industry, while residence-by-investment — which is slightly more difficult to approximate — most likely exceeds tens of billions of dollars each year.
But if investment migration is a legitimate, established phenomenon — and also a rapidly growing one — the reasons for this transcend financial and security concerns.
1A Gamlen, C Kutarna, and A Monk ‘Re-thinking Immigration Investment Funds’, Working Paper No. 128 University of Oxford, 2016
3 Q Chen ‘The “Golden Visa” Program into the US Is Set To Expire, and That’s Worrying Many in China’ CNBC, April 2017 4 EB Solomont ‘EB-5 Gets Yet Another Six-month Extension’ The Real Deal, March 2018
5 Gamlen et al. op. cit.
6 K Surak ‘Global Citizenship 2.0: The Growth of Citizenship by Investment Programs’, Investment Migration Working Paper 2016/3