Surge in second passport applications from UAE expats
The increase is due to Caribbean nations reducing their cost of entry to finance hurricane damage
Companies offering citizenship via investment have experienced a surge in applications for second passports from UAE residents after Caribbean nations lowered the entry cost following hurricane damage in the region last year.
Veronica Cotdemiey, the chief executive of Citizenship Invest, says the company experienced a 27 per cent increase in applications in 2017 compared to 2016, following the launch of limited-period offers from some Caribbean countries, a trend that is expected to continue in 2018.
“This recent change in the citizenship law was due to the devastation of Hurricane Maria that hit the Caribbean in 2017 in the hope to reconstruct the damaged areas,” says Ms Cotdemiey.
The reduction in prices coupled with the current political and economic difficulties facing some Middle East countries has made the concept of second passports attractive for many Arab families, she says.
The Caribbean countries, which have some of the world's highest debt-to-GDP ratios, are among a number of nations around the world that offer citizenship in return for investment in their property markets, buying government bonds or simply making a donation.
The buyers sign up to protect their wealth, give their family a better life, escape political troubles or to enjoy visa-free travel.
Saint Kitts and Nevis reduced the price of the financial contribution to the government fund by 50 per cent or more dropping the prices to $300,000 down to $150,000 for a family of four, says Ms Cotdemiey.
The application surge mainly took place in the last quarter of last year, according to Ms Cotdemiey, as residents sought to take advantage of the Saint Kitts offer, which runs until the end of March and will see the funds bolster the country's Hurricane Relief Fund. The island was one of several in the region to be battered by hurricanes, such as Maria and Irma, last year.
Antigua and Barbuda followed by dropping their prices to $125,000 from $300,000, she adds.
The Antigua and Barbuda programme runs until the end of September 2018, with the donation amount directed to the country's National Development Fund. Both Saint Kitts and Antigua also demand investors make a $400,000 real estate purchase in the country to qualify for citizenship.
Countries that offer citizenship by investment programmes offer powerful passports that allow visa-free entry to up to 146 countries, including key destinations in the Schengen Zone as well as the UK, Canada, China, Singapore and Russia.
Citizenship Invest says the majority of second passport applicants residing in the UAE are from Syria, Lebanon, Iraq and Palestine. Syrians led the number of applications in 2017, with a 20 per cent increase in demand on 2016, followed by Lebanese with a 17 per cent increase, Iraqis with 10 per cent and Palestinians with 9 per cent.
Ms Cotdemiey says over half of the applications they processed last year were from families looking for freedom of movement around the world and the ability to move their finances more easily. “Visa-free travel, family security, expanding businesses, preservation of wealth and double tax agreements are some of the few benefits that these individuals wish to attain when looking for an alternative citizenship,” says Ms Cotdemiey. The process can take less than six months and does not require investors to move to those locations.
With the exception of GCC countries, nations in the region have mostly lost ground on the Henley Passport Index, a passport ranking of the number of countries their holders can travel to visa-free, produced by the residence and citizenship planning firm Henley & Partners.
Syria sits among the bottom three countries on the index in 103rd position, with visa-free access to 28 countries, while Iraq comes second from last in 104th position with visa-free access to 27 countries. The Palestinian territories have remained stable, ranking 97th since 2008. The UAE, meanwhile, was the biggest climber on this year’s index, going up 11 places to 27th position as its passport benefits from visa-free access to 140 nations.
Bata Racic, the manager at Henley & Partners’ Dubai office, says the company has also noticed an increased demand for second passports from UAE residents.
“The demand for alternative residence and citizenship is rapidly growing, not only among UAE residents but also across the Mena region,” he says.
He points to Grenada, another Caribbean nation that recently altered its programme requirements; a permanent provision to its citizenship act has seen the donation amount for single applicants reduced to $150,000 from $200,000.
“Investment migration programmes are especially attractive for Arab expatriates — such as Egyptians, Lebanese, Jordanians, Iraqis and Syrians — based in the UAE," he says. "Many of the latter are seeking alternative citizenship or residence as a means of escaping political instability in their home countries and enhancing their mobility and quality of life."
According to Citizenship Invest, the most cost-effective options for single applicants currently comes from the Commonwealth of Dominica and Saint Lucia at $100,000, while for families it is the Saint Kitts and Nevis offer.
However, the most popular option for customers at Henley & Partners is the Malta Individual Investor Programme.
“It is a very popular and successful citizenship-by-investment option, as it offers fast and direct access to the EU,” says Mr Racic. “The programme was launched in 2014, and we have already received more than 1,400 applicants from all over the world, including the MEna region. Cyprus is also emerging as an attractive citizenship-by-investment destination.”
Updated: February 21, 2018 03:07 PM