Sa ffers seek a second citizenship

Citizenship-by-investment is on the rise globally with over US$2.4 billion spent each year derived mostly from China, the Middle East and Russia.

Now South Africans are going that route at an alarming rate.

Recent media reports highlight a 229% increase in applications since last year.

Defined as citizenship granted to an individual or immediate family on the premise that they invest into the country, the application age leans heavily towards the over 40 mark.

Applicants mostly have families and tend to be from Cape Town, Johannesburg and Durban.

A smattering of retirees and farmers are now applying for a second citizenship too.

Why South Africans are applying:

Security: with many countries experiencing turmoil, residents are seeking ways for themselves and their families to find relief and safety;

Investment scope: a second citizenship provides more investment, trades and travel opportunities;

Travel freedom: for the frequent business traveller, it can be time-consuming and expensive to apply for a visa;

Tax relief: a 0% corporate income tax rate and the benefit of other low rates within the country of choice;

Property: local property prices are very high with mortgage rates abroad generally stable and lower, making it easier to purchase a property.

The main criteria for eligibility is financial; if a South African has the means, they’ll most likely be approved.

The most popular destinations for locals are Malta, Cyprus, Portugal and Ireland.

European residency only takes a few years and Cyprus is the only European country offering EU citizenship in less than six months.

The SA passport also dropped another two rungs in the Passport Index published last week, continuing a long slide in the global rankings since 2008.

The ranking measures the power of passports by the number of countries the holder can access visa-free or with a visa on arrival.

Paul Heijsman is at Next Generation Equity