“Global citizenship” is becoming an increasingly popular tool for the world’s ultra wealthy. There are many different reasons why an ultra-high-net-worth (UHNW) individual—for the purposes of this study, those with $30 million or more in assets—might seek a second citizenship, including but not limited to greater stability and security, tax efficiency, ease of travel, higher standard of living, increased options for children’s education and investment opportunities.
Location still remains an important factor for UHNW individuals, but on a country level rather than a street level. For many ultra-wealthy people purchasing homes abroad, the passport is becoming as important as the neighborhood, according to Wealth-X and Sotheby’s UNHW Luxury Real Estate Report: Homes As Opportunity Gateways report.
For UHNW individuals seeking citizenship or visa status in a foreign country, buying a home is often the best route. An increasing number of nations offer citizenship through investment programs that give people residency in return for a significant investment in the country.
The centerpiece of many of these programs is property investment. Financial requirements range widely—from a $200,000 minimum real estate investment in Dominica to a $700,000 minimum in Spain and Cyprus. In return, investors gain residency or citizenship status after a multi-year waiting period.
Such programs are divided into immigrant investor programs (IIPs) and citizenship by investment programs (CIPs). IIPs require a residence permit as a condition for receiving citizenship, while CIPs do not.
Interest in such programs comes from individuals in a wide range of nations, but much of it arises from the Middle East (See Figure 1).
Figure 1: Countries With The Highest Percentage Of UHNW Citizens With Second Citizenships
Slightly less than 60 percent of all UHNW second citizenship applicants come from countries in the Middle East. One possible explanation for this is that 40 percent of UHNW wealth in the Middle East belongs to billionaires—among the highest percentages in the world. Billionaires are five times more likely to apply for a second citizenship, as they have more to gain from obtaining one and the costs of obtaining it are also lower as a proportion of their wealth.