At a time in which we are being subjected to unprecedented restrictions and limitations, with lives, businesses, and travel plans constantly disrupted, many wealthy individuals and entrepreneurs are beginning to recognize the significance of four key factors when planning for the future: mobility, adaptability, resilience, and stability. These are applicable not only from a personal perspective, but are also crucial for the longevity, profitability, and efficacy of businesses.
High- and ultra-high-net worth individuals and company owners acknowledge the pressing need to futureproof their businesses and, as such, they have one common intention: to source stable and central business locations from which they can conduct their business with ease on a global or regional scale. As the Best Residence-by-Investment for Cities Index reveals, many cities offer attractive environments in which to do business in addition to being appealing relocation destinations for wealthy and talented individuals and their families.
The upheaval caused by the Covid-19 outbreak has accentuated not only the cruciality of planning for future contingencies but also that it needs to be a top priority when it comes to wealth portfolio and legacy strategies.
The sudden restrictions imposed by the pandemic, coupled with substantial political changes in many countries — both world-leading and otherwise — have prompted high- and ultra-high-net worth individuals, business owners, and entrepreneurs to reassess their options, both in terms of lifestyle as well as the best locations to further their business interests.
As a result, growing numbers are remodeling their approaches to business management, investment, and wealth planning to incorporate resilience and longevity. With more choices being presented to wealthy company owners through residence-by-investment programs, settling in a single location for perpetuity, or even investing in a single alternative residence option that could cater to the whole family as well as your business operations, is no longer sufficient and the quest for global access is proceeding at full throttle.
The world has witnessed the range of measures implemented by different countries to contain the virus and mitigate its negative effects. Some have managed well — others have mis-managed to an unsettling extent. And the result has been exactly that — unsettling. Millions of people are moving, or if they are not moving, they are thinking about moving, or planning where to move to.
New trends are emerging. Forbes reported in June 2021 that companies are leaving China in droves and it is predicted that 33% of supply chain leaders are planning to move at least part of their manufacturing by 2023, to some extent because of the trade war between the USA and China, and in part because of Covid.
Changes in taxation policies also contribute to the trend. In 2020, the number of Americans who renounced their citizenship in favor of a foreign country reached a record high, with a 237% increase over 2019. This movement was triggered by the new tax and estate measures proposed by the Biden administration. Where are they going? To countries such as China, Vietnam, South Korea, Thailand, and Malaysia — the latter three of which offer residence-by-investment programs.
In addition, the Irish government was quick to announce its refusal to endorse the recent ground-breaking G20 proposal for a global minimum corporate income tax of at least 15% in a bid to stop multinational corporations from shifting their profits to low-tax countries. The new tax system — expected to take effect in 2023 — has been agreed to by 132 countries and will redirect some of the taxes that large multinationals pay to the countries where their products or services are sold, instead of the taxes going only to the country in which they are headquartered. If this indeed happens, fiscally motivated migrations are expected to intensify, giving an edge to tax-friendly jurisdictions.
Meanwhile in the UK, firms and companies are still trying to mitigate the unpredictability they face because of Brexit, although it has already been reported that almost 450 UK financial services firms have relocated to other EU cities, such as Luxembourg as well as Dublin and Limassol, both of which are featured in the Best Residence-by-Investment Programs for Business Index.
The statistics speak volumes. Like people, wealth and companies are migrating, moving away from familiar business and supply chain hubs that no longer serve the purpose they did in the past, to locations with more advantageous logistics, lower production costs, competent workforces, and equally or more sophisticated infrastructure. The growing necessity for enterprise agility and mobility to succeed in the pandemic world is now firmly entrenched.
Many countries with attractive residence-by-investment programs provide excellent locations for companies to establish strategic hubs for international trade. The UAE is one example, which has the added benefit of no income tax, capital gains taxes, or net worth taxes levied on individuals.
With digitalization and the advancement of technology, business owners need no longer be confined to the same jurisdictions as their businesses — they now have a choice. This choice will afford them the opportunity to satisfy most, if not all, of their personal and business needs without having to make compromises.
Through investment migration, it is now a reality that high- and ultra-high-net worth individuals and business owners can be ‘present’ in multiple locations at the same time. This ubiquity allows them to capitalize on the benefits a particular city in a country that hosts a residence-by-investment program and optimize the desired results in any given project, be it for themselves, their families, or their business operations.
An entrepreneur can now live in City 1 as it offers the best education, security, and private healthcare system for themselves and their family, while running and directing their business, which they choose to base in City 2 owing to significantly lower production costs and stronger labor force.
Having a ubiquitous presence enhances efficiency and profitability alike and at the same time delivers the lifestyle one desires from a personal perspective. Residence-by-investment programs are the ideal mechanism to facilitate the demand for this global omnipresence, providing a channel for building a migration portfolio of multiple complementary residence and citizenship options to hedge against the unpredictability and volatility the new world order may bring.
As we approach 2022, many are reflecting on the constraints of a single citizenship, not just for themselves but for their families, the generations to come, and their businesses. Governments are also recognizing the significance of investment migration programs as a debt-free and vital revenue source. In fact, since the beginning of the Covid-19 pandemic, many countries such as New Zealand have broadened their residence-by-investment offerings to attract wealthy and talented individuals and thereby enhance their “sovereign equity”, while others such as Russia are creating new programs to welcome foreigners to invest and live within their borders to boost their economies.
With this awakening, even premium passport holders now have another compelling incentive to build a suite of domiciles worldwide, to spread any country-specific risks and protect their families and businesses with the mobility, adaptability, resilience, and stability principles in mind. Our Best Residence-by-Investment Cities for Business Index will be an invaluable tool to help individuals to achieve this goal and effectuate true ubiquity.