Governments Threatening to Close Programs is “Great for Business”: IM People in The News This Week
Investment migration people (and firms) in the news this week included:
- Dr Kristin Surak
- David Lesperance of Lesperance & Associates
- Range Developments
- Juerg Steffen and Marios Rafail of Henley & Partners
- Carel van der Merwe of EB5 Coast To Coast
- Nuri Katz of Apex Capital Partners
- Patricia Casaburi of Global Citizen Solutions
- Get Golden Visa
- Peter Franke of Franke & De La Fuente Abogados
- Pedro Branco of Portugal Residency Advisors
- Daniela Rebouta of Engel & Völkers
- Gonçalo Roxo of Your Property Advisor
Dr Kristin Surak, author of The Golden Passport, is garnering widespread media coverage and has appeared in a variety of outlets the past week:
ABC – The global market for ‘golden passports’
While those seeking asylum increasingly meet harsh border policies, if you can afford to pay, there are a growing number of states willing to sell their citizenship and the privileges it brings. Kristin Surak has conducted the first on-the-ground investigation of the lucrative trade in “golden passports” and what it reveals about the dark side of capitalist globalisation.
The Guardian – Dominica may have sold thousands more ‘golden passports’ than it disclosed, analysis suggests
Adding 19,000 new citizens would place Dominica among the biggest sellers of second nationalities, alongside Turkey and the Caribbean island of St Kitts, according to government declarations collated by Dr Kristin Surak, an associate professor of political sociology at the London School of Economics.
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“It varies country to country, and it also varies over time,” she said, citing improvements in schemes operated by Malta, Grenada and St Lucia. “Compared to some other countries, Dominica leans toward the ‘having issues’ side of the spectrum.”
Jacobin – The Global Trade in Passports Is the Latest Boom Industry Catering to the Superrich
Kristin Surak shares some snippets from her book with Jacobin.
It’s a way to attract people who have knowledge and experience to come and teach others, and to move the country forward. If executed and monitored properly, it’s a big opportunity for countries like Montenegro. . . . We don’t want to sell passports, we want to buy excellence.
[…]
Until recently, CBI schemes have been the preserve of small island countries with populations of less than one million. For such microstates, a sizable injection of foreign funds brought through citizenship by investment can have a considerable economic impact. However, the scene has recently begun to change as more substantial nations, like Russia and Egypt, enter the game.
The Mirror – ‘I help crypto millionaires plan for apocalypse – they want to create floating sea islands’
David Lesperance has spent 30 years helping “ultra high net worth” individuals make ‘Backup Plans’ in case everything goes south. He told The Mirror.com: “These are people worried something could happen. Could be an earthquake (California is well overdue), could be that the political situation disintegrates, could be taxation, could be climate, you know, Day After Tomorrow kind of thing. But they want to bug out.”
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He said: “There’s a whole industry of people who are just here milking it. So there is a whole industry feeding this very human fear of a disaster. Because there will probably be an earthquake, probably pretty devastating. And climate change is real.”
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Mr Lesperance added: “So they want to create this utopia. These guys think they’ll create these little Nirvanas. But from a practical view it’s very difficult to do and expensive to do. And you don’t really need to do it.”
NBC News – They paid thousands to give up their U.S. citizenship. Now they want a refund
“For a lot of Americans, the hassle of being an American from a day-to-day financial being, it’s just not worth it. You’ve got interest penalties and even criminal penalties,” said David Lesperance, a managing partner at the Gibraltar-based law firm Lesperance & Associates.
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Lesperance said he has seen an unprecedented increase in the number of his clients wishing to give up their citizenship, and sometimes even the process fee is not the biggest hurdle.
The Guardian – Luxury rooms and a swim-up bar: hotel with funding from Dominica’s golden passport scheme
Cabrits is owned by Range Developments, an independent business founded in 2012. Range was approved by the government of Dominica to raise money from passport buyers to fund the project, and runs it in partnership with big hotel brands. The partner at launch in 2019 was the German luxury hotels operator Kempinski, which received a fee and a share of the revenues in exchange for managing the hotel. It was replaced last year by London-headquartered InterContinental Hotels Group.
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Range said it conducted initial reviews on investors, but that responsibility for background checks lay with the government and with the agents – typically specialist firms or law firms – which are officially approved to market the scheme and refer applicants.
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Range said: “It is the government which undertakes due diligence on applicants to the programme. Interested applicants were able to invest in the project only once they were qualified by the government, meaning they passed the government’s due diligence processes and were assessed … as suitable to be granted citizenship.” The company added it had “materially contributed” to the local economy thanks to the scheme.
CNBC – The number of people with at least $100 million has doubled since 2003
Although the media tends to focus more on billionaires, the report said centi-millionaires are more representative of the world’s super wealthy. The dollar threshold for what it means to be “super wealthy” has increased rapidly over time, said Juerg Steffen, CEO of Henley & Partners.
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“Not long ago, in the late 1990s, $30 million was considered by most banks as the fortune that was needed to meet this status,” he said. “However, asset prices have risen significantly since then, making $100 million the new benchmark.”
Forbes – Inside Dominica, The Tiny Caribbean Island Offering “Golden Passports” To Billionaires And Oligarchs
Despite the controversy, the program has been a massive revenue generator for the Dominican government since it was first established in 1993. Skerrit, who has served as prime minister since 2004, announced in 2020 that the country had raised $1.2 billion from the program in the previous three years alone. In the 2021-22 financial year, the most recent year where full records are available, Dominica received 459 million East Caribbean dollars ($170 million) from the citizenship by investment program—54% of total revenues. And interest in the program is rising: according to London-based law firm Henley & Partners, which assists clients in getting residence and citizenship by investment, enquiries regarding Dominican citizenship by investment rose 729% in 2020, 131% in 2021 and 13% in 2022.
Financial Express – EB-5 Immigrant Investor Program: Key factors to consider in selecting a project
Carel van der Merwe of EB5 Coast To Coast pens an op-ed discussing the criteria to consider when selecting a project.
The most important aspect is that the project makes financial sense. Regional Centers need to determine whether the business plan is credible considering the projected economic conditions, the location of the project, and the demand for the product or service. Regional Centers need to carefully review the financial models and projections to make sure the underlying assumptions are reasonable. EB-5 regional centers often use a credible third party to do an appraisal of the existing property or business to ensure valuations are accurate.
Ekathimerini – Rally in property prices will continue, says expert
The head of the Geneva office of the multinational that specializes in consultancy services for residency and citizenship by investment program, Marios Rafail, explains that the Greek Golden Visa program remains attractive to international investors, not least because it does not require their physical presence. According to Henley & Partners, foreign real estate buyers in Greece are positioning themselves for the long term and 70% are not using the property themselves. Meanwhile, apart from China, the United States and India are fast developing into promising investor pools.
Bloomberg – Europe’s Golden Visas Are Booming, Despite Calls to Get Rid of Them
“We haven’t observed any significant changes in the difficulty of obtaining a visa,” said Patricia Casaburi, managing director at immigration consultancy Global Citizen Solutions.
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“For people worth about $5 to 7 million, richer millionaires, a $500,000 investment to get EU residency is fine,” said Nuri Katz, founder of Canada-based immigration consultancy Apex Capital Partners.
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“Every time governments threaten to shut these programs down, there’s a surge of demand of people trying to get through the door before they close,” said Katz. “It’s great for business.”
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Uncertainty about the future of golden visa programs has been a boon for immigration consultancies. The London-based firm Get Golden Visa recorded a 127% increase in inquiries about Portuguese and Greek golden visas in the first half of this year, compared to the same period last year. Consultancy Henley Partners said interest was at an all-time high, with inquiries up 125% for programs in Italy. Global Citizen Solutions pointed to a 20% increase in queries about Portugal’s golden visa compared to last year.
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“We still advise our clients to get it,” Peter Franke, an immigration lawyer in Spain, said of the visa. “They’re too big to fail.”
Nuri Katz, the founder of Apex Capital Partners and an advisor to high-net-worth individuals, some of whom have immigrated to Portugal, says there was a similar panic among his clients to get moves over the line following the end of the Golden Visa program.
“What he [Costa] didn’t understand is that whenever you announce that a program is going to stop or it’s going to change, you trigger a huge amount of demand from people who are trying to get in before it changes, and that’s what has happened.
“As soon as they announced it, we had people calling us saying ‘we have three more days, let’s get it in.’”
Pedro Branco, managing director at Portugal Residency Advisors, said in an email he has also seen an increase in clients seeking to rush through their moves to the country since the closures of the schemes were announced.
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Daniela Rebouta, a sales director at Engel & Volkers’ Lisbon branch, says prices have probably been impacted by demand from foreign buyers. But right now, it’s unclear how much barriers to foreign ownership will alleviate that.
Rebouta blames other factors more for spiraling prices in the country, and in Lisbon in particular.
High interest rates and rising taxes for Portuguese citizens are two causes, as is an inadequate level of housing supply in the country, according to Rebouta.
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Gonçalo Roxo of Your Property Advisor, a buying agent for wealthy foreigners moving to Portugal, told Fortune the policy helped bring investment to more rural areas, and usually came through hotel developments, rather than people taking up available homes.
Roxo says there has been a “virus” against foreign visitors initiated by the Portuguese government, which he says could filter down to public sentiment on economic migrants in the country. He also saw an upsurge in attempts to buy properties following the golden visa announcement.
Ahmad Abbas is Director of Content Services at Investment Migration Insider and an 8-year veteran of the investment migration industry.