August 2, 2022
There is a programme that has the power to transform options in investment diversification for high net-worth individuals (HNIs), even in the current climate of pandemic-induced and conflict-led economic uncertainty.
Introducing, Citizenship by Investment (CBI).
Citizenship by Investment enables HNIs and their families to qualify as citizens of another nation if they make a monetary commitment to that territory, either via a contribution to a government fund or through investing in a real-estate project. An HNI is motivated to seek alternate citizenship for any or all of the following reasons—personal safety, overall quality of life, economic opportunity, global mobility and financial freedom.
According to the World Citizenship Report 2022, which evaluates 187 countries against the five motivators whose relevance is strong among HNIs, economic opportunity was weighted at 25%, global mobility at 15%, and financial freedom at 10% (safety & security and quality of life were each weighted at 25%).
Dual citizenship offers financial freedom in that it enables the HNI to make the most of economic opportunities available in a host of markets and trade zones, and take advantage of an encouraging economic climate. But what global mobility brings is the freedom to travel to and access top financial centres and business hubs.
For instance, the five Caribbean countries offering Citizenship by Investment programmes—which include Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis, and Saint Lucia—regularly rank high in global mobility criteria. Having citizenship in any of these island nations opens a window to new economic opportunities, which facilitate increased financial freedom and global mobility. And additionally, for HNI travellers, proximity to the large US market acts as a crucial driver for them to plump for the Caribbean option in a second citizenship.
As mentioned earlier, one of the ways to Citizenship by Investment is by putting money in a pre-approved real estate project. This can act both as a springboard to diversify your portfolio of investments or to focus more strongly on the real-estate sector. Because, in politically and economically stable countries, the risk of the property market crash is very low indeed. For the investor, then, real estate is the safest of bets.
An HNI can also invest in health and education, segments that perform exceptionally well in the Caribbean territories, so much so that their social development indicators are at par with, or even exceed that of, the wealthy countries in Europe, East Asia, Australasia and North America. And while the funds coming out of the CBI programmes in the Caribbean region are channelled back into health and education, HNIs might contemplate diverting their profits to these key segments, further ramping up the quality, service and delivery of hospitals and schools, and leaving a legacy for future generations.
The financial freedom that flows from Citizenship by Investment also provides a safety net against tanking markets, hyperinflation, political instability, trade wars and currency fluctuations. In such circumstances, the global high net-worth individual needs a safe haven, a place where they can securely and confidently deposit their assets and investments, and embrace flexibility in business and tax planning while being immune from financial and political shocks.
While just over a dozen countries offer Citizenship by Investment, the Caribbean is considered the cradle of the programme. The quintet of nations in the region score high in all parameters, making it the ideal destination for investors and their families in search of a more stable and prosperous future, one that includes, besides the economic incentives, a stress-free work life, and the promise of world-class healthcare and schooling.
To conclude, second citizenship offers the HNI a gamut of Economic Opportunities across industries and geographies, the financial freedom to invest in an unlimited number of jurisdictions, and global mobility that allows them access to the most lucrative business locations that guarantee the best returns. It truly is the insurance policy of the 21st century.