Dominic Volek is a member of the Executive Committee and Group Head of Private Clients at Henley & Partners.
In an increasingly precarious and unpredictable world, securing the freedom to choose where you and your family want to live, study, invest, conduct business, and even retire is a prime concern.
Inevitably, volatility is accompanied by uncertainty. The incessant barrage of factors eroding our sense of stability at the same time enhances the appeal of investment migration programs. After a steady increase in popularity over the past two decades, interest in alternative residence and citizenship is at an all-time high. In increasing numbers, affluent individuals are turning to these programs both to mitigate the risks that threaten their wealth, lifestyles, and legacies, and to create new opportunities for themselves and their families across a range of different destinations and jurisdictions worldwide.
In the past, one of the primary reasons high‑net‑worth investors sought alternative residence and citizenship options was to enhance their global mobility, by investing in a country with a stronger passport that would enable them to travel more freely and without the need for acquiring visas. In the evolving post-Covid landscape, where change is guaranteed, conflict is ubiquitous, and climate change has arrived, interesting new ‘push’ and ‘pull’ factors are emerging. Talented and affluent investors and their families need not limit their lives and business operations to one country or jurisdiction alone. This realization is seeing growing numbers of high-net-worth investors across the globe diversifying their domicile options through investing in one or more residence or citizenship by investment program, according to their families’ unique requirements and global outlook.
Having the option to change residence to a country with more opportunities is an increasingly important aspect of international planning for private clients, and there is a wide range of attractive programs in some of the world’s most sought-after places in terms of business environment, quality of life, access to top-tier tertiary education institutions and private hospitals, and even resilience to climate change. If the residence by investment path is chosen, many programs include the possibility of acquiring citizenship after a stipulated period of legal residence, among other eligibility requirements.
In the 2020s, four Cs, so to speak, have contributed to the growing interest in residence and citizenship by investment: Covid-19, conflict, climate change, and crypto-friendliness. The pandemic saw efficient governance and access to first-rate healthcare become important drawcards for our clientele. This shift was predicted by FutureMap founder Dr. Parag Khanna, who wrote that as the coronavirus curtain lifted, people would seek to move from poorly governed and ill-prepared places to more proactive countries with greater resilience and better medical care. The war in Europe has been a jarring reminder that we are living through turbulent times worldwide, with war, political instability, and violence in our daily newsfeeds. In this context, having an alternative place to call home may in some circumstances even be a matter of life and death.
Turning to the accelerating climate crisis, the Intergovernmental Panel on Climate Change is very clear in its severe warnings on impending climate breakdown, confirming in early 2022 that the planet will warm by 3.2o C this century. And while another crisis — the cryptocurrency crisis — is playing out, this has not dampened the spirits of many stalwarts. Prior to the downturn, a wave of crypto investors began investigating crypto-friendly jurisdictions to realize their newfound gains.
Another new driver that has come to the fore is the global minimum tax driven by the Biden administration in the USA and backed by all G20 countries. Interestingly, seven of the top 10 countries in terms of enquiries received by Henley & Partners in 2022 are G20 members. After an astonishing spike in enquiries from US citizens in 2020 of over 200%, the years since have been characterized by even further growth, albeit at a slower pace. Nevertheless, in 2022, the USA was the top nationality in terms of web enquiries the firm received for the first time, overtaking India which had held the top spot since 2019. Enquiries have been picking up in the UK, Canada, and Australia in recent years, with 2022 a record year for all three countries.
The field of investment migration has been growing steadily for more than two decades. Astute investors now recognize that by extending their wealth planning and legacy management strategies to include investment migration, they can catalyze the transition to new lives in countries of their choice, where they feel more comfortable and secure, and can envisage a future that is better aligned with their aspirations, not just for now but for generations to come.
Investment migration has also captured the attention of several new wealth markets in recent years. Over the past three years, there has been a notable increase in the number of enquiries from citizens of developing economies in the Global South. In times of such uncertainty, the global demand for dual citizenship and investment migration is increasing, as expected, and we predict that these markets will grow even further, particularly considering that emerging economies are expected to see faster wealth growth than in developed markets between now and 2030.
Through investment migration, affluent investors can overcome the limitation of being restricted to a single jurisdiction. For ultra-high-net-worth investors, a single alternative residence or citizenship will always create value, but strategic yield can be created only through strategic advisory, and a portfolio investment approach to investment migration. To cover all eventualities, an integrated portfolio of complementary investment migration options will create optimal value, by permitting wealthy individuals and their families to live, work, and invest in a suite of locations worldwide, thereby hedging manifold levels of volatility and creating enhanced yield.
When catastrophes such as wars or pandemics strike, and in the wake of climate emergencies and natural disasters that occur with greater frequency each year, the countries that host investment migration programs can rely on program inflows to recover their economies, build capacity, reduce debt, and make capital investments. Residence and citizenship by investment programs are designed by sovereign states as an alternative, debt-free, capital‑raising platform to diversify their economies, thereby creating societal and sovereign value, or ‘sovereign equity.’ Just as ultra‑high‑net‑worth demand for residence and citizenship by investment programs has been growing in recent years, so has the supply of these programs. More than 100 countries have investment migration legislation in place, and there are over 60 active programs globally, of which about 30 are relevant and successful.
As more governments set up investment migration programs, and those with programs introduce more options to boost their economies by attracting capital and sought-after talent, residence and citizenship by investment programs will continue to be invaluable both to investors intending to futureproof their families and to change the trajectories of their legacies, as well as to sovereign states in need of alternative revenue streams. Participating in any investment migration program is therefore not only an investment in the future of one’s family; it is also a sustainable investment, as host nations depend on program inflows as a form of innovative financing to support progress.
Investment migration will function as a hedge against significant continuing macro-economic volatility, creating even more sovereign and societal value across the world. The sector continues to boom, and there is an ever-increasing range of competitive and desirable options, particularly for investors looking to start afresh and relocate their families to safer shores.
Dominic Volek is Group Head of Private Clients at Henley & Partners and a member of the Executive Committee. Originally from South Africa, he now spends his time between London, Dubai, and Singapore as a private client specialist in residence and citizenship planning, advising ultra-high-net-worth individuals and their families across the globe. His work targets countries that are deemed most attractive to wealthy individuals in terms of mobility, security, privacy, personal tax, estate planning, and lifestyle. He is also a member of the firm’s Government Advisory practice, providing strategic advice on the design, implementation, and promotion of successful investment migration programs.
Dominic is a member of the Investment Migration Council and a certified Chartered Accountant CA (SA), holding both a Bachelor of Commerce in Accounting with Honors and a Bachelor of Arts in Corporate Communication. Prior to joining Henley & Partners, he had a successful career as part of the senior management team in one of the big four accounting and advisory firms in Singapore, South Africa, and the USA. He is frequently sought as a speaker and thought leader on residence and citizenship planning, regularly providing commentary on the Henley Passport Index, which is published in the Henley Global Mobility Reports. He has been interviewed by media such as the BBC, Bloomberg, and Quartz.