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Abu Dhabi, UAESaturday 17 November 2018

Passport to overseas success

Arabs from parts of the region are among thousands of people willing to pay big money for foreign citizenship. In places such as the Caribbean, UAE companies are facilitating the investment schemes with major resort developments.
For a $200,000 donation into Antigua and Barbuda’s national development fund, overseas investors receive passports that provide visa-free travel in 131 countries, including Canada and European countries. Robert Harding Productions / Robert Harding World Imagery / Corbis
For a $200,000 donation into Antigua and Barbuda’s national development fund, overseas investors receive passports that provide visa-free travel in 131 countries, including Canada and European countries. Robert Harding Productions / Robert Harding World Imagery / Corbis

As some areas of the Middle East lurch deeper into political tumult, wealth managers, law firms and financial brokers are earning big money as they advise on and manage the wealth of Arabs seeking citizenship in other countries through investment programmes.

The film star Robert de Niro may have chosen Antigua and Barbuda in December to invest in a US$250 million five-star resort as another exotic investment, but for a number of moneyed Arabs, investments in the Caribbean promise a citizenship status that can grant them much sought after global mobility.

For a $200,000 donation into Antigua and Barbuda’s national development fund, overseas investors receive passports that provide visa-free travel in 131 countries, including Canada and European countries, usually in the space of couple of months.

This programme is one of four in the Caribbean that is attracting investments from Arabs and other nationalities restricted from travelling by the passports they hold.

Starting from $100,000 in the Caribbean state of Dominica per application up to millions of dollars in western countries, Caribbean and European states are jumping on the citizenship by investment bandwagon.

While hundreds of US nationals are renouncing their citizenship to avoid paying taxes, many Arabs are hunting for easy programmes to provide them visa-free access to places such as the US, Canada and Europe. Thousands of Arabs apply each year for citizenship and residency programmes across the globe, led by Lebanese, Iraqis, Syrians, Jordanians and Egyptians, citizenship experts say, as they are otherwise unable to travel freely to many nations, if at all.

“The Arab Spring had an effect on the citizenship by investment and investor immigration markets as more businessmen and families realised the importance of having the freedom to move in the event that there was an unfortunate turn in the economic and political situation in their countries,” says Micha Rose-Emmett, the managing director of the international legal advisory group CS Global Partners.

The rise of ISIL, in Iraq, the turmoil in Syria, the takeover of Yemen by the Houthi movement and the split of leadership in Libya are all causes of concern to many Arab citizens who are nationals of those countries.

“Business has doubled year-on-year because people are becoming more acquainted with these programmes,” says Sam Bayat, the managing director of Bayat Legal Services, a Dubai law firm specialising in immigration law. “Secondly, people are looking to have a parachute in case they need to travel.”

UAE property firms are starting to capitalise on the demand for citizenship and are building hotels in the Caribbean that entitle investors to apply for citizenship. The UAE’s Range Developments is on track to this year finish constructing a $150 million, 134-room Park Hyatt hotel in St Kitts and Nevis, the Caribbean state that has the world’s oldest citizenship by investment programme. So far 80 per cent of the project, in which investors pitch in $430,000 to gain citizenship, has been sold and the firm is looking at another property project in a different location that qualifies investors for citizenship, says the Range chief executive Munaf Ali. He declines to name the location of the new development.

Another property firm based in this country, Al Caribi Developments, plans in the next month or two to start building an estimated $200m hotel project in Antigua that also entitles investors for citizenship for a $400,000 investment in redeemable shares in the development.

Caribbean countries are offering more and more such programmes as a way to boost foreign investment and tourism, create jobs and help to tackle government debt. For example, St Kitts and Nevis has managed to cut its debt from 164 per cent of GDP in 2010 to 104 per cent of GDP at the end of 2013, partly thanks to its citizenship by investment programme, according to the IMF. Grenada revived its programme in 2013 to help tame its public debt which reached about 110 per cent of GDP at end of that year.

European countries are also coming to the fore with citizenship by investment and residency programmes in a bid to ease financial woes. Malta and Cyprus currently provide citizenship investment opportunities, while Bulgaria and Hungry offer residency programmes among other European states. Cyprus, which was engulfed in a financial crisis in 2013, started last year granting citizenship by investment.

But many western states such as Canada are limiting their investment by citizenship programmes, as they tighten immigration requirements amid a wave of anti-immigration movements and abuse of passports, prompting investors to look for alternatives.

Canada recently removed its visa waiver for St Kitts and Nevis after reports of people abusing their passports, a move that has hit the programme and shifted applications to Antigua and Barbuda, experts say. Mr Munaf says the visa waiver has not adversely affected those with investments in St Kitts and Nevis.

Grenada stopped its previous programme in 2001 due to US security concerns and Canadian concerns over money laundering. Still, the international consulting firm Henley & Partners, which specialises in property, residency and citizenship services, has seen its business double since the start of the Arab spring but insists it practices prudence when dealing with citizenship investment programmes. It does not work with Iranians because of international sanctions and it has not engaged with the current Grenada programme so far, it says.

“It didn’t pass our due diligence,” says Marco Gantenbein, a partner of the firm based in Dubai. “We are in discussion with them and if they do a few moves in their programme and do what we would like to have, then we will consider doing it.”

With a greater focus on due diligence and tightening of regulations around such programmes, more Arabs are going for more than one citizenship.

“There is a fear there will be a more regulated industry and it is this fear that creates a lot of urgent demand now for plan b and plan c,” says Armand Arton, the chief executive of Arton Capital, a financial advisory business based in Montreal dealing in immigrant investor schemes.

Programmes such as the ones in the United Kingdom and Canada also demand physical presence, another deterrent for business people looking for options that allow them to travel freely.

“Programmes are changing. Big countries like Australia and the UK believe the economic impact does not justify their existence,” says Mr Arton.

But for Arabs looking to the Caribbean, the outlook remains sunny.

dalsaadi@thenational.ae