Wealthy Britons ‘buying’ citizenship to offset Brexit

LONDON: The number of British entrepreneurs looking to “buy” citizenship from countries offering visa-free access to the EU has risen sharply, investment migration firms say, as prospects of a post-Brexit trade deal between Britain and the bloc darken.

Investment immigration firm Astons said it had seen a 50 percent and 30 percent year-on-year increase in interest from clients seeking Cypriot or Greek citizenship respectively this quarter, less than four months before UK passport-holders are likely to lose their rights to freedom of movement across the EU.

Henley & Partners also reported a rise in requests for advice on investment migration applications to Malta, Portugal, Austria and several Caribbean islands, which offer a range of residency rights, visa-free travel to the EU and citizenship to investors in local business or property.

Citizens of certain Caribbean sovereign states including St. Lucia and St. Kitts & Nevis also enjoy preferred access to the EU, thanks to close ties with EU members as a result of historic, diplomatic and modern trade agreements.

“This isn’t about tourists. This is the UK high net worth community that have a constant need to travel to and spend significant time in the EU,” said Henley & Partners director Paddy Blewer.

“This is investment migration as a volatility hedge and a component in a high net worth portfolio value defense strategy,” he said, adding that volumes of client engagement were higher now than immediately after the 2016 Brexit vote.

Interest in additional citizenships is rising even as the European Commission examines possible steps to curb EU states selling passports and visas to wealthy foreigners, due to concerns it can help organized crime groups.

Cypriot residency can be secured in two months with a €300,000 ($351,870) property purchase. Securing citizenship takes six months and requires a minimum property investment of €2 million.

In December, Reuters reported that Cyprus government documents showed several donors to Britain’s ruling Conservative Party donors had sought citizenship of the island since the 2016 Brexit referendum.

“Both Cypriot and Caribbean investments are proving very popular ... primarily driven by high-net-worth individuals (HNWIs) from the UK who have an eye on the future and life after Brexit,” said Astons spokesman Konstantin Kaminskiy.

Henley & Partners said its volume of engagement with clients seeking alternative citizenship or residence by investment climbed 40 percent in the first quarter of 2020 versus Q1 2019, before flattening during the COVID-19 lockdown in Q2.

But interest has rallied since July 1, with a 15 percent year-on-year increase in engagement to Sept. 10, as the end of the Brexit transition phase nears.

Henley & Partners’ Blewer said clients were increasingly drawn to Caribbean citizenship applications — which is likely to give them better travel access to the EU than Britain — but which have a lower minimum investment and a quicker approval process.

Saint Lucia citizenship, offering visa-free travel to 146 countries, can be obtained in around four months for a minimum investment of £76,152 ($97,000), data supplied by Astons showed.

For less than £40,000 more, investors can obtain citizenship of St. Kitts & Nevis — and visa-free travel to 156 countries — in around 60 days.

In contrast, Malta offers citizenship in exchange for around £1 million of investment, but the process takes up to 14 months.

Portugal, meanwhile, typically processes investment migration applications in three months but only grants EU residency to investors and visa-fee travel to just 26 countries.

“With HNWIs, time is often more important than what is essentially a small fluctuation in cost and many are looking to secure additional citizenship as fast as possible in the pandemic landscape,” Arthur Sarkisian, managing director of Astons, said.

EU authorities are under pressure to clamp down on investment migration programs by member states.

Sven Giegold, a member of the European Parliament from Germany’s Green party, said these kind of citizenship sales “posed a serious threat to EU security and the fight against corruption” in the bloc.

“EU passports and visas are not a commodity. Money must not be the criterion for citizenship and residence rights in the EU,” he said.