By Moustafa Daly
Uzbekistan, an emerging Central Asia economy, has announced it’s considering offering citizenship-by-investment (CBI) programs that will see foreigners invest $1 million into its economy to get citizenship.
The land-locked country, which has historically deep ties with Russia, hopes the program would “increase the investment attractiveness of the country, attract the attention of the international business community, and increase the country's prestige in the international arena,” as per the official draft law.
With a hefty price tag, the Uzbek CBI program may be one of the pricier options in the world.
“It may be hard to weed out people (applicants) that aren’t that wealthy, so that may be a reason for the high figure,” says Lola Zakharova, a US-based Uzbek immigration lawyer at the Bellevue-based firm MacDonald Hoague & Bayless, to Uglobal. “There is potentially a big population of people who have one million dollars and interested in Uzbekistan, but it’s hard to tell precisely [why the price tag is so high].”
The CBI program was introduced as the country is going through changes with its new leadership.
“I’m excited about the program. Uzbekistan has been going through big reforms since the installation of the new president, Shavkat Mirziyoyev. He’s a forward-looking leader and he’s trying to bring the Uzbek economy up to speed,” adds Zakharova.
Typically, countries that offer citizenship-by-investment programs are those with powerful passports, often with visa-waiver agreements with desirable destinations. This isn’t the case with Uzbekistan as its passport allows visa-free entry to only 56 countries. It has that in common with its northern neighbor Kazakhstan, whose passport only allows visa-free travel to 75 countries, and which also just launched its residency-by-investment scheme in late October.
Uzbekistan and Kazakhstan aiming to attract wealthy Russians
A motive for these Central Asia countries to launch such programs would be to attract wealthy Russians fleeing the dire crisis brought forth by the Russian war on Ukraine, made all the more urgent with the Kremlin-sanctioned drafting of male soldiers which sent Russians, wealthy and otherwise, on an exodus.
Kazakhstan has already been attracting much capital from Russia, with at least 100 Russian companies worth $27 billion, including Tinkoff, ride-sharing startup InDrive, game developer Playrix, and many more, having relocated to Kazakhstan or planning on it, according to media reports.
They wouldn’t be alone in these attempts; since the onset of the war, wealthy Russians have been moving across the world seeking second homes and passports. From the Caribbean, Georgia all the way to Turkey and the UAE, rich Russians have been relocating to havens in search of security and investment.
Why wealthy Russians apparently are boosting world economies
Turkey has been one of the top global destinations for wealthy Russians, with 5000 Russians having obtained Turkish citizenship-by-investment since the beginning of the Russian war on Ukraine, representing over 60% of real estate sales to foreigners this year.
“For the last six months, there is increased interest in CBI applications, asset and corporate investments by Russians in Turkey, and such investments impact the FDI figures and the economy of Turkey positively,” says Orhan Yavuz Mavioglu, managing partner of Istanbul-based ADMD Law Firm, to Uglobal.
Similarly, Georgia’s economy is expected to grow by a staggering 10% in 2022, reportedly due to rich Russians flocking to the country. In Dubai, the influx of wealthy Russians led to a boom in purchase of luxury real estate properties, as per a recent media report.
This all serves to potentially explain why countries like Uzbekistan and Kazakhstan are reaching for their share of the pie of wealthy Russians, attempting to take advantage of their geographical proximity to Russia. But it’s yet to be seen if either will manage to prove itself an attractive destination for wealthy Russians who, evidently, seem to have a myriad of options to choose from.
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