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Sale of "Golden Passports": Coronavirus Spurred Russians' Interest in Foreign Citizenship
July 27, 2020 00:43

(Source: https://i.etsystatic.com/16137180/r/il/11c97a/1483318461/il_1588xN.1483318461_8uvc.jpg)

During the pandemic, a residence permit in other countries and a second citizenship became for Russians an alternative to exit visas. Now, some "golden passports" can be bought cheaper than before the epidemic.

“We see an unprecedented boom in Russian interest in programs that allow them to obtain a residence permit abroad,” Marina Shalaeva, director of the department of foreign real estate and private investments at Knight Frank says. Knight Frank notes an increase in the number of requests by about 20% in March - May 2020 compared to the same period last year. A comparable growth in demand was recorded at UFG WM.

This is the second wave of Russian demand for a foreign passport or residence permit, the first was recorded after 2014, Alexey Ilyukhin, senior partner of the multi-family office of ITS Wealth says.

Knight Frank records high demand from Russians for a residence permit in the European Union, the most popular country in the region is Portugal. The second place is taken by the countries of the Caribbean (Grenada, Antigua and Barbuda, Saint Kitts and Nevis), the third - by the island countries of Cyprus and Malta. These jurisdictions are considered to be a more economical option for obtaining residence permits compared to most EU countries.



The growth in demand for the program of obtaining citizenship of Malta in exchange for investment, according to experts from Henley & Partners, is rather technical: according to the current program, documents can be submitted until July 31. The popularity of Cyprus was added by discounts on island real estate up to 30% of the current value of objects.

According to Henley & Partners, Russians are now actively considering the option of obtaining a Montenegrin passport among European countries. This country launched its citizenship by investment program only in November 2019, with an investment threshold of $ 250,000.

Discounted passports

Russian demand for the Caribbean has grown largely thanks to discounts on "golden passports" that these jurisdictions have introduced in the past few months. Saint Kitts and Nevis (the founder of Telegram Pavel Durov has such a passport) this year has lowered the investment threshold for obtaining a residence permit from $ 190,000 to $ 150,000. Many Caribbean countries provide an opportunity to obtain citizenship with investments of $ 100,000 or more, Shalaeva said. In 2013, the purchase of a passport of Saint Kitts and Nevis cost Durov $ 250,000. The cost of the citizenship-for-investment program in early July was adjusted by another country in the Caribbean - Dominica. In the new rules of this country, the size of the contribution to the economic fund has been reduced from $ 75,000 to $ 50,000.



According to Bloomberg, Caribbean countries have begun to cut prices for citizenship-in-investment programs in response to a sharp decline in tourism revenues amid the pandemic. So far, there is no talk of a two-fold decrease in the investment threshold, but, probably, the main struggle for the client is still ahead, Nikolay Vargasov, head of the legal department of UFG Wealth Management says. “The market remains quite competitive, which forces the main players to quickly respond to external challenges and compensate for the lost income due to the failure of this holiday season by lowering the bar for programs for granting citizenship in exchange for investment,” Vargasov said.

Experts explain part of the demand for residence permits by the continued EU restrictions on entry for Russians. Passports of the Caribbean countries are primarily an alternative to entry visas, which are not currently issued, Vargasov notes. In addition, during the pandemic, a residence permit and citizenship, unlike visas, could provide an opportunity to enter these countries.

According to Knight Frank's forecast, the growth in demand for foreign passports and residence permits will continue in the fall, when many countries open their borders to foreigners, and clients will be able to view investment objects on the spot. Experts also explain part of the demand from clients for a second passport by the free time that appeared during the quarantine and new priorities. “During the quarantine, many clients focused on personal assets and family matters, including migration issues,” Vargasov notes.
 




Author: Anna Dorozhkina

Tags: Russian International coronavirus    

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