By Alec Hogg
At a time when some short-sighted South African politicians are encouraging the emigration of productive taxpayers, elsewhere on planet earth, citizenship-by-investment is booming.
I was first exposed to the concept five years ago when a close friend from Joburg, his brother and a pal each invested R5m into a business in California, primarily to secure an option on US citizenship. Their company now employs dozens of Americans and two of the three have relocated to run the firm.
Every year, the EB-5 programme attracts several thousand entrepreneurs to the US. A similar number of people invest a combined $2bn a year in property or bonds to buy citizenship of countries whose passports offer visa-free travel. Among the leaders are small Caribbean nations St Kitts and Nevis ($250,000) and Dominica ($100,000); through to European favourites Malta (€650,000)* and Cyprus (€2m)*. Even the UK offers a “fast track” citizenship option for £10m.
An in-depth article on the subject appears in the latest edition of 1843, a bi-monthly magazine published by The Economist. It says South Africans are among the keenest acquirers, a function of instability and “because the visa-free destinations they enjoy with their own passports has shrunk under the prickly government of Jacob Zuma.” Prickly? Rather a diplomatic way to describe it.
Additional info:
*Malta €650,000 refers to the donation made to the government of Malta but purchasing of a property €320,000 plus investing in Malta bonds €150,000 for 5 years means a total investment of €1,120,000
*With Cyprus passports the €2m is split as follows: €500,000 goes into primary residence held for life; which you can rent, balance into a property portfolio where one can earn 6-10%pa with an exit strategy after 3 years.
