COVID makes those in doubt join citizenship programmes more actively

While the whole world is constrained in travels because of the pandemic and tourism and airlines are slowly eating the last subsidies, the interest of Russians in obtaining gold visas and passports increased by 20% as stated by Forbes in their recent published data.

According to a late 2019 survey, 21% of Russians would like to live abroad. Experts note that this figure might have increased in recent months due to the pandemic and political changes in Russia. British company New World Wealth puts Russia in sixth place in the list of countries with the highest outflow of citizens, whose fortune exceeds $1 million.

Years of statistics demonstrate that the most popular location for obtaining a second passport is the European Union. But if a few years ago Russians deemed that doing business safely and obtaining property were the main reasons for acquiring a European passport (according to The Wealth Report 80% of respondents were concerned about inheritance issues), today they are concerned about the quality of health care and freedom of movement around the world.

Although both points seem illogical in modern conditions: the Russian medical system proved its ability to withstand the first wave of Coronavirus and freedom of movement in conditions of closing borders on the local level, on the contrary, turned out to be an illusion. However, just a year ago, Russian media published these headlines, “European passport sales allowed such countries as Malta and Cyprus to attract investments and even rectify budgets. But the party is coming to an end”. As it turned out, COVID only stimulated potential clients who were in doubt to make a decision to participate in the programmes.

Fresh research by CNN confirms increased interest in gold programmes, but already on a global scale: “...with COVID-19 dramatically transforming our 2020, some elite families are also considering healthcare, pandemic responses and potential safe havens to ensure they have a backup plan for the future”. CNN has called this phenomenon “investment migration”.

In 2020, the geographical vector has also shifted. For Russians, Malta has never been the most obvious choice, despite the many Slavs wandering around Valletta searching for an oath of allegiance office. Previously, high-nets were primarily interested in British residence permits and citizenship. Today, the first place in terms of interest and requests is held by Portugal, then by the Caribbean countries and then by the EU − and here we see Malta, dividing the number of requests with Cyprus (according to statistics from Knight Frank agency).

While there are many offers to acquire an EU passport, almost all members of the Union have such programmes, but applicants are choosing the programmes of Cyprus and Malta not by chance. These countries issue passports quickly and not too expensively. For example, in Spain, you will be in the status of a resident for a long time and all your departures and arrivals will be monitored. In 2020, some countries have revised their programmes to mitigate the requirements. Thus, Italy has halved the minimum admission threshold; and Cyprus has made a “COVID sale“: applicants were offered discounts on real estate.

Malta snatched the lead in terms of the number of applications from another Mediterranean island this summer. But this was due to technical issues: the deadline for applying before the change of rules was 31 July. From 30 September, applicants will need to buy real estate for €700,000 against the previous threshold of €350,000; the five-year rent option has remained but the amount has also increased. Besides, the non-refundable contribution has increased by €100,000 to €750,000 and an additional €10,000 will have to be given to a charity organisation. However, there is no need to invest in government bonds for five years anymore.

The programmes offered by the two island countries are quite similar: up to €2m will be needed in both cases. Cypriot citizenship is considered more expensive, but more advantageous when you have a closer look. Firstly, the applicant does not give the money to the state but invests it with the option to get it back after a certain period of time. Secondly, investments in Cyprus securities, according to financial consultants, have been yielding an 8% annual return in recent years. More Cypriot passports were issued: quotas for the sale of documents were introduced recently (now it is 700 applications per year, against 1,800 for the entire period of Maltese). Russians, however, prefer Cypriot citizenship for some other reasons. Cyprus is an absolutely Russianised island. Each restaurant has a Cyrillic menu, you can find any specialist, all kinds of Russian media (radio is extremely popular). A huge number of companies keep pseudo offices in the country for tax purposes. Orthodoxy and a more familiar landscape (there are even mountains on the island) make people feel at home. “This is Russia, just without snow,” joke tourists who visit Cyprus. Thanks to this love, Malta was able to adjust its budget without turning into an informal Russian satellite.

Curiously, the social profile of applicants has been changing lately − this is another trend of 2020. In 2018, according to the hot pursuit of published lists of participants in the Maltese programme, Russian media counted the number of Forbes list members. An attentive look could note the names of some Russian officials, not “first line”, of course, but quite significant (most likely relatives).

Today, wealthy white collar employees also consider getting a second passport. A considerable part of these people really wants to feel like citizens of the world that support globalization despite the intensifying state propaganda and talks about nationalism and “Russian world” within Russia. Lawyers, financiers, partners of foreign firms: people with good education, knowledge of languages and a desire to learn the culture of the “second homeland” finally appear among the applicants. We talked to two of them.

Tatiana visited Malta for the first time several years ago. The acquaintances made citizenship for the shareholder’s family and offered to spend a mini-vacation at sea. “I became interested in obtaining the Maltese citizenship long before the pandemic. There are not many states that allow dual citizenship with Russia and the visa regime is a heavy burden − there is no free space in the passport, so you need to get a new one all the time. For each person having regular business trips, it is important. Since my friends also obtained citizenship under the Maltese programme, it was logical to consider it, especially because they introduced me to their agent, who made a good impression,” explains the auditor of an international firm. Malta attracted Tatiana with its “comfortable urban life and everything is nearby: bakery, vegetable store, butcher, fish store, florist. Wonderful parks are not numerous, but it is amazing to walk in January through a mandarin garden, covered with ripe fruits“. She says it all with real admiration. Currently, Tatiana is in Malta with her family. Arriving from Russia, they spent two weeks in a rented villa during the quarantine.

Olga, a lawyer and a wife of an entrepreneur from Moscow, lives in the centre of Sliema. As she said, it is a perfect location. “Malta has excellent air quality and is a place where you can take a deep breath and find harmony. I come to Malta regularly and there were no disappointments ever.” Her family has already got acquainted with Maltese; these Russians do not strive to establish their settlements; they are interested in joining the culture and understanding the values of the local population. However, the new citizen acknowledges that, at the beginning, she had a limited image of the country. “I already had enough time to see everything and learnt a lot of interesting things about Malta. I speak of Malta to many people in Russia. I say: do not expect Malta to immediately impress you when you come for the first time, but when you get to know it better, from the inside, you will love it for sure.”