Second passport, anyone?
More South Africans invest in property-related investment programmes abroad as the search for ‘plan B’ intensifies
Pandemic-induced limits on travel may well have placed a temporary damper on international mobility, but demand for residency and citizenship opportunities has nevertheless spiked in recent months. In fact, it seems that all the uncertainty has promoted a fresh wave of interest among South Africans wanting to acquire a second passport via an offshore real estate aquisition.
Many view the purchase as a hedge against economic, currency and political pressure. It also provides the opportunity for children to study, live and work abroad.
Most of the property-related investment programmes require a minimum investment of between $220,000 and $500,000 (between R3.15m and R7.15m) in a dedicated development in exchange for a residency or citizenship rights.
But it’s not only SA investors looking for a “plan B”. International migration specialists Henley & Partners recently reported a global surge in interest in residency- and citizenship-by-investment.
“It is clear that diversifying country risk has become a global priority. The main reason that high-net-worth individuals invest in these opportunities is access to greater choice — in terms of lifestyle, business, education and investment,’’ says Henley & Partners CEO Juerg Steffen.
Though there has been pressure in some countries to close or limit their residency and citizenship opportunities to foreigners, Steffen expects more countries to start introducing investment migration programmes over the next year or so to help revive economies hit by
Covid. Middle East states, including the United Arab Emirates, announced new citizenship opportunities for foreigners last year.
According to Henley & Partners’ mobility rankings, the most popular countries for residency- and citizenship-by-investment globally include Malta, Portugal, Austria, Australia, St Lucia (Caribbean), Montenegro and Thailand.
Local real estate agents and migration advisers say Portugal, Grenada (Caribbean), Montenegro, and to a lesser extent Mauritius, are top of mind among South Africans looking to invest abroad to obtain residency or citizenship rights.
Though Malta and the US remain popular destinations for relocation, they have become markedly more expensive in recent years. Malta now requires a minimum property purchase of €700,000, or a yearly rental of €16,000, plus a government contribution of between €600,000 and €750,000, depending on the residency period applied for. An
What it means:
Property-related investment programmes are a hedge against economic and political volatility additional sum of €50,000 per dependant is also payable.
To qualify for a US green card via the EB-5 programme, you need to make a minimum investment of $900,000, up from $500,000.
Portugal and the Caribbean islands are still considerably cheaper. Portugal requires a property purchase of a minimum value of between €280,000 and €500,000, depending on what and where you buy. Entry levels for some Caribbean islands are as low as $220,000.
Sean Ritchie, the marketing manager for Cape Town-based Sable International, says that Montenegro in the Balkans in southeast Europe is also gaining traction among SA investors.
The former East Bloc country offers Montenegrin citizenship to foreigners in exchange for a direct investment starting from €350,000. The latter includes a cash donation to help uplift underdeveloped areas as well as an investment into an approved real estate development project.
Montenegro’s investment programme offers a relatively quick and easy route to a second passport: full citizenship for the applicant and family members (spouse, minor children and adult dependent children over the age of 18) can be obtained in roughly six months. Only one visit to the country is required and no physical stay is necessary.
LIO Global CEO Nadia Read Thaele says there has been strong interest in Grenada recently as it is relatively affordable and provides a back route to the US via the E-2 visa treaty.
The Grenada programme requires a minimum investment of $220,000 for fractional ownership in a property, typically a share in a hotel or resort unit, and $350,000 for full ownership.
Access to the E-2 visa treaty requires an extra investment of $200,000, and allows Grenadian citizens to live and work in the US as well as send their children to US schools and universities.
Read Thaele says a major advantage of the programme is that South Africans do not need to leave home to secure citizenship. She says: “There are no language tests or requirement to reside in the country for any period of time. It is also a tax-friendly jurisdiction.”