What the investment migration industry’s reaction to the pandemic augurs for the future

By Dr. Juerg Steffen

For thousands of years, homo sapiens was nomadic, wandering the earth to search for food and follow the seasons. However, gradually, around 10,000 BCE, the need for frequent migration ceased and we sedentarized, usually near water bodies to develop agricultural and livestock farming. But globalization is as old as humanity,[1] and in modern times it has led many of us to adopt again a lifestyle that is, to a certain degree, nomadic — whether consciously or unconsciously. Born in one place, we may study in another, work in a third country, invest in several others, and possibly retire to yet another location. This fluid lifestyle offers many desirable benefits and presents an unfathomable number of opportunities, both for one’s personal advancement and for business. Furthermore, the traditional passport and visa system has made it seamless for us to pursue this way of living.

Covid-19 highlights the fragility of the global economy

The outbreak of Covid-19 unexpectedly ground everything to a sudden halt. Governments imposed restrictions on their citizens’ freedom of movement. Employees were forced to work from home. People were prevented from traveling, be it for business reasons or personal purposes (in an unprecedented move, the EU temporarily suspended the Schengen Agreement). Some governments imposed extended quarantine periods (three weeks for passengers entering Hong Kong) while others made it difficult for people to return home from abroad (owing to a huge surge in cases in India, Australia banned Australians from traveling back to their home country if they had been in India 14 days prior).

Economically, many companies went bankrupt, and probably many more will follow suit. In 2020, the US’s GDP contracted by 3.5%[2] and the Eurozone’s by 6.6%[3] on average. Forecasts were a lot more optimistic for 2021, but halfway into the year, inflation and tax increases are looming for several advanced economies. As more SARS-CoV-2 variants are being discovered, it has been predicted that the virus in its many different forms might unfortunately be here to stay.

Diversification of domicile evolves into an indispensable asset

A few sectors have nonetheless flourished in the face of the pandemic and there is a reason (or several reasons) for this. The investment migration industry is a case in point, with advisory firms experiencing an astonishing increase in the number of requests with a notable spike in the third quarter of 2020, and their government advisory teams seeing a surge in countries re-evaluating their options in their quest to expand their sovereign equity — a term that describes how investment migration can endow nations with a significant source of sustainable revenue without incurring debt and thereby burdening future generations.

Although our client base has always been global, demand is rapidly increasing in the most affluent countries. Last year, we saw a significant upsurge of interest from the Anglosphere, particularly from US citizens (208%), Canadians, Australians, and Britons (+47%, +41% and +31% respectively). Demand from EU citizens is also rising, although the numbers are comparatively lower, with notable increases in enquiries by investors from Italy (+55%), Portugal (+39%), and France (+33%).

This is an understandable new trend — travel was banned overnight, retail outlets were closed for substantively long periods, and investment and business options became scarce. Perhaps most importantly, however, access to a whole gamut of services and opportunities, which we presumed would always be obtainable abroad if they were not available locally (for example, better education systems, more advanced healthcare services, a safer and cleaner environment, and a generally better quality of life), were suddenly beyond our reach. Before the pandemic, this freedom was almost taken for granted.


The reasons behind the burgeoning demand

The investment migration industry has recently gained wider acceptance and acknowledgement and owing to its somewhat unique capacity for imbuing host states with sovereign equity, more governments and decision makers are keenly observing its evolution.

The industry has grown considerably since the early 2000s and 2021 looks on track to be another year of successful expansion. For many years, acquiring an additional permanent residence option or a second citizenship was perceived to be a convenient luxury, whereas today, the magnitude of the optionality that such investments bring has propelled them to becoming fully-fledged and indispensable assets — prerequisites for 21st-century global citizens. With all the barriers and restrictions imposed due to the pandemic, affluent investors and high-net-worth families realize that now, more than ever before, having guaranteed access to multiple jurisdictions is no longer optional. It is a necessity. Interestingly, although not surprisingly, one of the new main drivers is the vital requirement of having access to more advantageous healthcare systems.

Countries focus on expanding their sovereign equity

Several advanced nations with the highest numbers of high-net-worth individuals pursuing multiple citizenships have nonetheless managed to cushion the spread of Covid-19 and its effect on both public health and the economy, with New Zealand and Australia being prime examples, and Canada to a certain extent. The United States, on the other hand, has suffered on both levels, and so have the top economies in Europe. Yet regardless of how their countries have performed in terms of health, the consequences of the pandemic — because they are colossal and unprecedented in recent history — are prompting the world’s wealthy to invest in multiple residence and citizenship solutions. Some are in search of a health sanctuary for their families to retreat to, others are looking at expanding or diversifying their businesses or having a new location from which to run their operations.

This growing demand represents a huge opportunity for governments if they choose to create or develop investment migration programs. By May 2021, the damage caused by Covid-19 to the global economy is estimated to be triple that resulting from the 2008 financial crisis, and the road to recovery could be a long one.[4] The race for states to attract foreign direct investment and wealth has begun in earnest and it will impact the investment migration industry positively in the foreseeable future.

In the past decade, several countries in Europe, such as Greece, Ireland, Malta, Portugal, and Spain, set up and launched successful investment migration programs that have proven to generate billions in terms of revenue — currently, the EU programs alone attract around 3 billion euros in investment to the EU annually.[5] But today, although the EU member states are competing to attract foreign direct investment as much as the rest of the world, there is a debate as to whether they should be allowed to do so through investment migration. Some member states have argued that the detriment caused by the loss of talent and wealth outweighs the benefits it brings.[6]

Despite the rumblings in Europe, elsewhere, residence- and citizenship-by-investment is booming. In the Caribbean, five countries have long had investment migration programs in place — in 1983, St. Kitts and Nevis was the first country ever to start one[7] — and are fully cognizant of how citizenship programs can assist fragile, single-product economies that are frequently subject to natural disasters. As soon as the first lockdowns were implemented last year, several of these small-island nations had the foresight to introduce new options to their programs, many tailored to families and extended families.[8]

Other countries, from Central Europe to the Caucasus or the Pacific Ocean — and very recently, Malta in the EU — and notably those reliant on tourism, have launched digital nomad visas, allowing foreign nationals to stay longer if they are working remotely, which is the norm nowadays. In theory, these visas can not only compensate for lost tourism revenue, but they potentially allow greater financial flows owing to their beneficiaries staying for more than the average holiday period.

The power of sovereign equity has drawn the attention of numerous governments. In the past year, Egyptian and Russian lawmakers have passed laws creating a citizenship-by-investment program and a residence-by-investment program, respectively, and Slovenia and Kenya have announced they are considering the same. In response to this burgeoning trend, countries with established programs have proposed new options: Vanuatu made its real estate investment opportunity available again and Malta launched a new permanent residence program. With its recent developments in technology, Bulgaria now offers faster processing of applications, and the UAE, which already had a residence program, has now allowed a citizenship counterpart. These are only a few examples — many other countries are likely to follow suit.

One size does not fit all: Countries adopt different strategies

Interestingly, although all countries wish to attract foreign direct investment, they don’t always focus on attracting the same audience. Australia, for instance, which so far has done remarkably well in containing the spread of Covid-19, launched a Global Talent visa in late 2019 after a 12-month trial period with the main objective of stimulating innovation in the upcoming years. The decision to grant the visa is not based on investment but rather on achievements. Successful applicants with internationally recognized records of exceptional achievements in sports, arts, academia, or research are eligible for permanent residence, but priority is given to professionals specializing in technology-related areas, ranging broadly from the food industry to fin-tech or education.[9]

New Zealand, on the other hand, aims at attracting wealth. Prime Minister Jacinda Arden’s government proposed a plan making it more difficult, if not impossible for companies to sponsor foreign workers if their qualifications and experience are not in line with the national labor market’s needs. The plan allows high-skilled workers to relocate, but its main target group is high-net-worth individuals. Much like Australia, New Zealand has been relatively spared by the Covid-19 pandemic and is now looking at welcoming individuals in search of a good quality of life and a friendlier tax regime.

The pandemic has caused the landscape to change rapidly. Some innovated. Others adjusted their existing programs. Amid this ever-changing and intricate economic context, the investment migration industry has continued to prosper. Residence- and citizenship-by-investment has proved its appeal, and the latest evolutions in the field provide compelling evidence that the industry is going to thrive in the long term.


[1] https://www.weforum.org/agenda/2019/01/when-did-globalization-begin-the-answer-might-surprise-you/

[2] World Economic Outlook (April 2021) - Real GDP growth (imf.org)

[3] Statistics | Eurostat (europa.eu)

[4] An economist explains what COVID-19 has done to the economy | World Economic Forum (weforum.org)

[5] https://qrius.com/are-golden-visas-a-golden-opportunity-for-economic-development/

[6] Investment Migration And The State Of Play In Europe - Investment Migration Council

[7] From imperial sugar to golden passports: the Citizenship Industry – Migration Mobilities Bristol

[8] Caribbean Investment Migration | Henley & Partners (henleyglobal.com)

[9] Subclass 858 Global Talent visa (homeaffairs.gov.au)

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About the Author

Juerg Steffen
Juerg Steffen
Juerg Steffen has over 30 years’ experience in the financial services industry and is widely regarded as a leader of the investment migration industry. Before joining Henley & Partners, Steffen was a personal advisor in the family office of one of Europe’s wealthiest families. Prior roles include serving as a member of the management board and head of the Wealth Planning department of a leading private bank in Austria. He has also established and developed a private bank operation for one of the leading banks in Switzerland and is the editor of the definitive books on HNW relocation to Austria and Switzerland.

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