17 May The benefits behind the surging popularity of investment migration
Pavel Reshetnikov, Managing Director, Immigrant Invest, shares his insights into the appeal of citizenship through investment
Could you give us a brief summary of the organization’s history, and how it evolved to become a recognized investment migration consultancy?
Our company was established in 2006, so we have a solid 15 years in the industry. The head office is in Vienna, Austria, and we have companies in Russia, Portugal, Malta, Grenada and China. This presence allows us to provide full on-site support for our clients. If they are required to visit a certain location to formalize any step of the process, we personally accompany them and their family, organising every detail, and we are always on-site to assist with any issue which may arise. In total, we have 50 highly qualified employees with expertise in the industry, among them lawyers, compliance experts, real estate experts, and experts in citizenship and residence by investment. This know-how and prime HQ location in the EU put us in a position to provide the full scope of services and consultancy required for clients who are seeking citizenship through investment.
What are the top priorities for Immigrant Invest in 2021?
In 2021 we are working on the quality—as opposed to the quantity—of our services. We invest in regular training for our employees and, as a rule, we perform two stages of due diligence. Ineligible clients will not be on-boarded. This means that if our preliminary due diligence finds that a given person or family does not meet the criteria for obtaining citizenship or residence, we do not even sign a contract with them. The client is notified that the application cannot be pursued, and we provide the reasons for non-compliance. This is highly appreciated by clients because they are looking for the most efficient and rapid solutions possible, within the existing requirements.
Could you share some insights into the due diligence standards across the industry, and how Immigrant Invest works together with the IMC and other key stakeholders to ensure investment migration remains transparent and accountable?
At Immigrant Invest, we make a significant investment in the due diligence process. In fact, we consider our high standards in this area to be the major factor behind our success, and one of the key processes within the whole citizenship by investment space. We follow the EU’s legislative standards, and we are very much focused on the 5th European Anti-Money Laundering Directive. Our standards and procedures are designed according to this version and within this framework. Strict compliance is also maintained with the GDPR data protection regulation, assuring our clients that their data is properly processed and protected. The depth of experience within the compliance and legal area that we bring to the table allows us to quickly identify the program that is right for them in today’s landscape.
Many authorities express concern about the industry’s due diligence. There is a need to be sure that this is a clear, accountable and transparent process, with a specific set of standards that are followed uniformly by all the stakeholders in the industry. In this way, governments, authorities and neighbors know who the persons or businesses are and where they originate from.
What are your views on the latest trends in investment migration, especially those related to Covid-19, and how has this affected the services you currently offer?
Before the pandemic, one of the primary reasons for participation in citizenship by investment programs was visa-free access to as many countries as possible. As the pandemic unfolded and regular lockdowns became the norm, people began to realize how important it is to be able to leave one’s country of residence. Complete border closures in many countries have become a reality. At the very start there was an initial shock, and we saw a slight decrease in activity, but shortly afterwards there was hike of about 40%. People were very interested in the opportunity of having a second citizenship or residence in other country. Before the crisis, people were considering these options more as a vehicle for additional mobility and investment. Investment migration has taken on vital importance, not only as a chance to leave the country, but also as a way to get access to high-quality medical care, additional coverage for your family if it is required, or education options for your children. The first questions our clients have are: How can I live here? When can I leave my country of residence? How many countries in total can I visit during lockdown?
Where would you say are the biggest source markets today and what are the most popular jurisdictions?
China continues to be the leader, as it has been for quite some time. Sources vary, but the Chinese have been the most frequent participants in CBI programs ranging from about 50-80%, depending on the program. For instance, if you take the residence program in Greece, around 73% of investors are Chinese, whereas in Portugal the Chinese customers comprise only 30-40% of the whole. In the European programs, Russians or people from countries in the former Soviet Union are between third and fifth place in the rankings, but come in at second after the Chinese in the Caribbean programs. The latest trend is the popularity of programs among some South American countries. Our overall expectations for the future are that the Chinese will be in in first place, with India second, Hong Kong third, Russia and the former Soviet Union fourth, and Mexico and Brazil at fifth and sixth, respectively.
In terms of destinations, this always has to do with the personal needs and interests of each individual. Price is not always the determining factor, meaning the cheapest programs are not always the most interesting ones. For someone who wishes to obtain European citizenship right now, Malta is the only option. If you would like to have more mobility, you can choose some of the Caribbean programs, or Vanuatu, for example. For the most part, in those cases, people are not living on the island, because their principal business is still in the country of their actual residence. I would say ideal destination country depends on the personal preferences of the individual or family applying.
Can you please elaborate on the dynamics behind offerings such as education migration, medical tourism, and even birth tourism, and which markets are in highest demand for these?
In this area, if we take Russian clients specifically, the most attractive location is the EU. This is due to a variety of reasons, and the ones you mention certainly are at the forefront. We cannot ignore the environmental situation either, or the fact that it is the closest region, geographically speaking: Europe to Russia is a two-hour return flight. In addition, of course, it provides the opportunity to be truly mobile within the whole world. Citizenship by investment is an instrument for high-net-worth individuals, but let us not forget they can provide for their whole family, including children and close relatives, and that is where questions such as medical tourism and educational tourism become even more important. Someone may urgently need to have a transplant in a special hospital. They will not need to apply for a visa because they already have a European passport which allows them to enter the country, and even gives them the opportunity to work within the EU if necessary.
What would you say are the core benefits of citizenship by investment migration?
Again, if a person has been vetted through proper due diligence and shown to have a clear history, background and source of wealth, a mutually beneficial relationship can be enjoyed. On the one hand, you have a talented businessperson running a successful venture who would like to invest—whether through a donation, real estate or funds—in return for citizenship or residence. On the other hand, you have a country interested in attracting this asset, who will live there, become a tax resident, and spend their money, bringing in a great deal of value.
Would you like to share a final message with our readers?
There is a booming trend right now within the different types of immigration due to Covid-19, as well as the fact that many more people are working from home or remotely. Many countries are working on policies that involve not only citizenship by investment but also visas to attract talented people to their shores. We are most definitely going to see a steady increase, and it is sure to become more and more attractive in the future. I would say that our key message to all the participants and stakeholders in this process is that it is extremely important to work on reputations, keeping the highest standards and following all the rules of the game to make the industry and its products clear, accountable, reputable, and usable for all eligible people. Consequently, people will be more easily afforded the opportunity to choose a better place to live, and countries will have more diverse, talented, and successful businesspeople as residents and citizens supporting their growth.