Dr. Christian H. Kaelin is Chairman of Henley & Partners. He is an expert in investment migration and is the inventor of the passport index concept.
The Covid-19 pandemic has significantly reduced economic growth and income and constricted global mobility due to various concomitant travel disruptions, restrictions, and blockages. Affluent individuals have not escaped these trends, and as a result the number of high-net-worth individuals (HNWIs) who physically migrated dropped during the worldwide lockdowns in 2020. Yet the global crisis is likely to bolster both the supply of and demand for investment migration programs in the year ahead.
In recent years, acquiring alternative residence or citizenship and owning real estate in alternative jurisdictions have increasingly gained in popularity among HNWIs for the security, opportunity, and diversification they are known to deliver. Yet there was a decline in HNWI migration in 2020, as due to the outbreak of the virus, many individuals were unable or unwilling to move.
...would-be travelers from countries perceived to have handled the current crisis inefficiently have seen the value of their passports diminish.
Reduced migration during the pandemic has not been a surprise, given the severity of the global health crisis. Going forward, global travel and migration are likely to continue to be impeded by quarantining and health checks. Yet the pandemic is also impacting the movement of wealthy individuals in unexpected ways. For example, would-be travelers from countries perceived to have handled the current crisis inefficiently have seen the value of their passports diminish as other nations refuse them entry. The most striking example is that of travelers from the US who face unprecedented travel restrictions in Europe, albeit on a temporary basis, until the country is considered epidemiologically safe. As a result, interest in investment migration programs — that provide access to alternative options — among Americans soared in 2020. Eric Schmidt, a former CEO of Google who obtained Cypriot citizenship for himself and his family, is just one of the more prominent examples.
In addition, the havoc the pandemic has wreaked on tourism-reliant economies has prompted several Caribbean island nations to introduce new options or discount the investment requirements on existing options. HNWI seeking safe harbors, to which their families can retreat should the need arise, have shown a keen interest in the Caribbean region as the small island nations have handled the pandemic extremely well. Furthermore, St. Lucia has launched the region’s first e-payment and processing platform, meaning applications can be made entirely online.
The expectation is that in the not-too-distant future, investor migrants will have even more choice.
The expectation is that in the not-too-distant future, investor migrants will have even more choice. New residence- and citizenship-by-investment programs and further options are likely be introduced by countries as solutions to alleviate the financial distress caused by the pandemic, as the programs have a proven ability to generate substantial income and create a positive economic impact for their host nations.
While it is too soon to tell how the pandemic will alter the mix of nations seeing the biggest flows of wealthy individuals, in 2020 China, France, India, the Russian Federation, Turkey — and recently Hong Kong — continued to experience the most significant HNWI outflows. Australia, Switzerland, and the US are expected to remain the preferred destinations for investor migrants over the next decade, and Cyprus, Greece, Italy, and New Zealand are likely to rise up the ranks of sought-after options for relocation.
...Cyprus, Greece, Italy, and New Zealand are likely to rise up the ranks of sought-after options for relocation.
Pre–Covid-19, mobility, personal security, and diversification were deemed the primary drivers of demand for alternative residence and citizenship, but the pandemic has introduced new motives for acquiring these assets. As the world’s wealthy emerge from the current crisis more acutely aware of their vulnerability to unforeseen events, they are likely to seek additional reassurance that frictionless travel and relocation and quick access to good healthcare will be available to their families in future.
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