Pandemic Fuels Demand For Investment Migration, Alternative Citizenship
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Pandemic Fuels Demand For Investment Migration, Alternative Citizenship

During the pandemic, high-net-worth individuals have sought citizenship in other countries.

By Kate Talerico
Mon, Jan 17, 2022 11:43amGrey Clock 5 min

“Never again”—that’s the feeling among high-net-worth individuals after 18 months in which global travel has been limited by the Covid-19 pandemic, said Jean Francois Harvey, global managing partner of Harvey Law Group, an international law firm based in Montreal that helps clients immigrate to new countries.

As international borders begin to reopen and the globe confronts a new, more contagious coronavirus variant, those who can are making plans to ensure they’ll never be so limited in their movement again. High-net-worth individuals are seeking real estate investments in historically safe real estate markets across Europe, the United Kingdom and the U.S., adding even more demand for prime properties in markets that are already seeing frenzied price growth.

“During COVID, the only way to get into another country was to be a resident or a citizen,” Mr. Harvey said. “Suddenly, people realize that to have only one residence or one passport is not the best.”

During the pandemic, the ultra-wealthy have pursued citizenship and residence-by-investment programs in record numbers. The industry, which has traditionally catered to high-net-worth individuals from emerging markets, has seen a newfound demand from residents of western countries like the U.S., Canada and Australia who are looking for second options in Europe and the Caribbean to live and work.

“If you’re a high-net-worth, ultra-high-net-worth individual, all you want is options in life and you want to diversify and hedge against risk as much as possible,” said Dominic Volek, group head of private clients at Henley & Partners, a London-based firm specializing in residence and citizenship by investment. “But then you have one citizenship and residence. It just makes no sense.”

Record Numbers of Inquiries

During 2020 and 2021, Henley Global saw record numbers of inquiries about citizenship- and residence-by-investment programs. Since the outbreak of the pandemic, the firm has seen an average increase in inquiries of 46% each month. Their client base has also changed—with an increase in demand of 47% from Canadians, 41% from Australians and 31% from Britons, and 208% from Americans.

“We’ve always had clients out of the U.S., but more recently, it’s by far our single biggest jurisdiction of new clients,” Mr. Volek said. “It’s bigger than any individual emerging market.”

Some Americans cite former President Donald Trump’s handling of the pandemic as a reason to find alternative residency, Mr. Volek said, since even the wealthiest couldn’t escape the U.S. when travel shut down. As more countries turned away people traveling from the U.S. due to high infection rates, the passport declined in value.

“It didn’t matter how many planes you had or that you had this great passport,” Mr. Volek said. “So all of a sudden, wealthy people realized they didn’t have as much flexibility as they thought they did.”

Interest also spiked leading into the November 2020 election, Mr. Volek added, as uncertainty led people to question how the U.S. government would handle major issues like the pandemic and taxation going forward.

“As soon as Mr. Biden was elected, there was a taxation-related wave of immigration,” Mr. Harvey said. “People suddenly expected that the government of the U.S. would be taxing more.”

At the same time, demand from U.K. citizens was peaking as Brexit finally became reality, and British citizens lost residency rights to the European Union.

Likewise, demand for foreign passports has been high in South Africa, as citizens there have sought refuge from the country’s political and economic instability, as well as visa-free travel to European countries.

Europe to Benefit From the Boom

Andy Brown began to look into alternative citizenship in 2019. The Johannesburg-based mining executive said he hoped to ensure a “safe, secure and predictable environment” leading up to his retirement.

“It’s all about securing my future now,” he said.

While he originally hoped to immigrate to the U.S., he changed plans in 2021 as it became evident that the pandemic had slowed the pace of the immigration process there.

He chose to look into one of the most popular paths to EU citizenship—Portugal’s Golden Residence Permit Program, which allows those who invest at least €500,000 (US$568,230) in real estate or €350,000 in venture capital the right to apply for residency. After five years of legal residency, investors can apply for citizenship.

The program has awarded 10,170 visas since its inception in 2012 and generated €5.5 billion in investment, with China, Brazil and South Africa leading the demand, and the U.K. and U.S. beginning to represent a larger share of applications.

For Mr. Brown, the most important part wasn’t the return on his investment—but to secure citizenship and get access to visa-free travel across Europe.

“I wanted to invest in a program that was regulated, in this case, by the Portuguese government, therefore presenting low risk to my investment,” he said. “At my age, I realized I have a limited window of opportunity to capitalize on the investment portfolio before I retire and relocate.”

While Portugal offers the quickest path to citizenship, it has developed a backlog in recent years, Mr. Harvey said. Other countries with similar programs have attracted more applicants lately, such as Spain, which has a 7-year path to citizenship, and Italy, which has a 10-year path. Another popular option, Malta, requires an investment of €600,000 and a three-year residence period, or in some cases, €750,000 and a 12-month residence period.

Other Destinations Beyond Europe

Most clients, though, are looking for multiple options.

“I don’t have a client from the U.S. getting just a single citizenship,” Mr. Volek said.

The Caribbean nations of Antigua and Barbuda, Dominica, Grenada, St. Kitts and St. Lucia—which all have been traditionally attractive to affluent individuals holding passports from countries with limited travel access—have become attractive even for Americans, due to their more isolated locations. There, citizenship is possible for $150,000 or less, and can take less than three months.

“It’s just optionality,” Mr. Volek said. “If I have the financial capacity to do it—why would I not just do it?”=

Meanwhile, Foreign Investment to the U.S. Returns

Since Nov. 8, Ilyse Dolgenas has been busier than usual.

That was the day that the U.S. borders reopened, and it also meant a wave of incoming calls to Ms. Dolgenas, special counsel at Withers, a firm that assists high-net-worth clients with luxury real estate, primarily in New York.

“Right away, I had some international clients call me just to talk about the market,” Ms. Dolgenas said. Despite concerns about city life returning back to normal, New York’s real estate market has been in a frenzy—fueled mostly by demand from domestic buyers, and now boosted by an increase in foreign investors.

“Foreigners don’t want to be late to the party,” she added. “They are in touch with their brokers and they are definitely shopping.”

Ms. Dolgenas said that New York would usually see several dozen contracts signed on residential apartments over $4 million each month. In the last few weeks, she’s seen between 40 and 60.

“There’s a cachet to owning a property in New York,” Ms. Dolgenas said.

Despite fears that Covid-19 would upend the housing market and change where people wanted to live, foreign investors have returned to the same urban markets that had been desirable pre-pandemic, like New York, Miami, London and Vancouver.

While American and British clients have primarily been interested in countryside vacation homes and villas, investors from China, Vietnam and other Asian markets are still tempted to buy in downtown areas where they can find an investment property or pied-a-terre.

“They’re sticking to what they know: a high-density district,” Mr. Harvey said.

Is Increased Investment Migration Here to Stay?

In the last few weeks, as news of the Omicron variant sparks worry that countries might implement new restrictions, Mr. Harvey has seen a rise in demand.

Moreover, those seeking citizenship through real estate investment are no longer just looking for visa-free travel—they’re also applying in order to secure better educational opportunities or government-supported healthcare.

“It went from a product of convenience to a life choice,” Mr. Harvey noted. “Motivations are a lot more personal… People are saying, ‘Let’s have an exit strategy.’”


Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’

Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual

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What’s still keeping American workers out of the office?

At a time when restaurants, planes and concert arenas are packed to the rafters, office buildings remain half full. Thinly populated cubicles and hallways are straining downtown economies and, bosses say, fragmenting corporate cultures as workers lose a sense of engagement.

Yet workers say high costs, caregiving duties, long commutes and days still scheduled full of Zooms are keeping them at home at least part of the time, along with a lingering sense that they’re able to do their jobs competently from anywhere. More than a dozen workers interviewed by The Wall Street Journal say they can’t envision returning to a five-day office routine, even if they’re missing career development or winding up on the company layoff list.

Managers say they will renew the push to get employees back into offices later this year. The share of companies planning to keep office attendance voluntary, rather than mandatory, is dropping, according to a survey released in May of more than 200 corporate real-estate executives conducted by property-services firm CBRE, one of the largest managers of U.S. office space.

A battle of wills could be ahead. The gap between what employees and bosses want remains wide, with bosses expecting in-person collaboration and workers loath to forgo flexibility, according to monthly surveys of worker sentiment maintained by Nicholas Bloom, a Stanford University economist who studies remote work.

Escalating expenses

One reason workers say they’re reluctant to return is money. Some who have lost remote-work privileges said they are spending hundreds, or in some cases thousands, of dollars each month on meals, commutes and child care.

One supercommuter who treks to her Manhattan job from her home in Philadelphia negotiated a two-day-a-week limit to her New York office time this year. Otherwise, she said she could easily spend $10,000 a year on Amtrak tickets if she commuted five days a week.

Christos Berger, a 25-year-old mortgage-loan assistant who lives outside Washington, D.C., estimates she spends $2,100 on child care and $450 on gas monthly now that she is working up to three days a week in the office.

Berger and her husband juggled parenting duties when they were fully remote. The cost of office life has her contemplating a big ask: clearance to work from home full time.

“Companies are pushing you to be available at night, be available on weekends,” she said, adding that she feels employers aren’t taking into account parents’ need for family time.

Rachel Cottam, a 31-year-old head of content for a tech company, works full time from her home near Salt Lake City, making the occasional out-of-town trip to headquarters. She used to be a high-school teacher, spending weekdays in the classroom. Back then, she and her husband spent $100 a week on child care and $70 a week on gas. Now they save that money. She even let her car insurance company know she no longer commutes and they knocked $5 a month off the bill.

Friends who have been recalled to offices tell Cottam about the added cost of coffee, lunch and beauty supplies. They also talk about the emotional cost they feel from losing work flexibility.

“For them, it feels like this great ‘future of work’ they’ve been gifted is suddenly ripped away,” she said.

Parent trade-offs

If pandemic-era flexible schedules go away, a huge number of parents will drop out of the workforce, workers say.

When Meghan Skornia, a 36-year-old urban planner and married mother of an 18-month-old son, was looking for a new job last year, she weeded out job openings with strict in-office policies. Were she given such mandates, she said, she would consider becoming an independent consultant.

The firm in Portland, Ore., where Skornia now works requests one day a week in the office, but doesn’t dictate which day. The arrangement lets her spend time with her son and juggle her job duties, she said. “If I were in the office five days a week, I wouldn’t really ever see my son, except for weekends.”

Emotional labor

For some, coming into the office means donning a mask to fit in.

Kenneth Thomas, 42, said he left his investment-firm job in the summer of 2021 when the company insisted that workers return to the office full time. Thomas, who describes himself as a 6-foot-2 Black man, said managing how he was perceived—not slipping into slang or inadvertently appearing threatening through body language—made the office workday exhausting. He said that other professionals of colour have told him they feel similarly isolated at work.

“When I was working from home, it freed up so much of my mental bandwidth,” he said. His current job, treasurer of a green-energy company, allows him to work remotely two or three days a week.

Lost productivity

The longer the commute, the less likely workers are to return to offices.

Ryan Koch, a Berkeley, Calif., resident, went to his San Francisco office two days a week as required late last year, but then he let his attendance slide, because commuting to an office felt pointless. “I’m doing the same video calls that I can be doing at home,” he said.

Koch, who works in sales, said his nonattendance wasn’t noted so long as his numbers were good. When Koch and other colleagues were unable to meet sales quotas in recent weeks, they were laid off. Ignoring the in-office requirement probably didn’t help, he said, adding he hopes to land a new hybrid role where he goes in one or two days.

Jess Goodwin, a 36-year-old media-marketing professional, turned down an offer to go from freelance to full time earlier this year because the role required office time and no change in pay.

Goodwin said a manager “made it really clear that this is what they’re mandating right now and it could change in the future to ‘you have to be back in five days a week.’”

Goodwin, who lives in Brooklyn, N.Y., calculated that subway commutes to Midtown Manhattan would consume more than 150 hours annually, in addition to time spent getting ready for work.

Goodwin’s holding out for a better offer. She said she would consider a hybrid position if it came with a generous package and good commute, adding: “And I would also probably need something in my contract being like, ‘We’re not going to increase the number of days you have to come in.’”


Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’

Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual

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