JOHANESSBURG - Citizenship-by-investment is on the rise globally, with more than $2.4billion (R37bn) spent each year, derived mostly from China, the Middle East and Russia, with South Africa not far behind.
Next Generation Equity (NGE), global specialists in second citizenships and residency options, says applications from South Africa are increasing at an alarming rate.
“Recent media reports highlight an increase in applications by a staggering rate of 229percent since 2017. And the number continues to grow, with our head office inundated with applications,” said NGE sales head Paul Heijsman.
Defined as citizenship granted to an individual or immediate family on the premise that they invest in the country, NGE notes the application age to lean heavily towards the 40-plus mark, mostly with families, from the Cape Town, Johannesburg and Durban regions, with a smattering of retirees and farmers now applying for second citizenship.
“Over the past 25 years, we have seen our fair share of client success stories, and they generally boil down to the same rationales.”
NGE shares five reasons South Africans are applying for citizenship-by-investment:
1. Security. With many countries experiencing turmoil, residents are now seeking ways for themselves and their families to find relief and safety.
2. Investment scope. A second citizenship provides more investment, trades and travel opportunities.
3. Travel freedom. For the frequent business traveller, it can be a time-consuming and expensive process to apply for a visa. Citizenship-by-investment alleviates these challenges, making business travel both a pleasure and a way to increase income.
4. Tax relief. A 0percent corporate income tax rate and the benefit of other low rates within the country of choice make dual or second citizenship the perfect reason.
5. Property. Local property prices are very high, while mortgage rates abroad are generally stable and lower, making it easier to purchase a property.
“Applicants apply because they are frequent travellers, and a second citizenship makes travelling easier. They are also troubled by the status of political and financial standing within their own country,” said Heijsman.
The South African numbers have increased drastically over the past year because the main criteria in eligibility is financial.
“If a South African has the means, they will most likely be approved.”
The most popular destinations for locals are Malta, Cyprus, Portugal and Ireland due to their proximity to South African shores and climate conditions. He said that European residency requires only a few years for an EU passport to be granted, and Cyprus is the only country in Europe that offers a fast-track EU citizenship, in less than six months.
The South African passport also dropped another two rungs in the Passport Index published last week, continuing a long slide in the global rankings since 2008.
“The ranking measures the power of passports by the number of countries the holder can access either visa-free, or with a visa obtainable on arrival, and I imagine this will continue to drive citizenship demand,” said Heijsman.