Singapore

Passports as a measure of wealth

Acquiring an alternative residence or citizenship is seen as a key investment for the rich

Global mobility is on the cusp of massive change.

Acquiring an alternative residence or citizenship is often seen as the most worthwhile investment you can make as it reduces your exposure to risk, and secures your family's future.

Amid all the uncertainty clouding global mobility, South-east Asia is seeing an increase in entrepreneurs and business magnates looking towards alternative or second citizenship and residency options.

DEFINING THE MIGRATORS

With the interest in and uptake of investor migration programmes in South-east Asia on a steep rise, let us take a look into what's behind the trend.

Financially, this demographic is made up of high-net worth individuals (HNWIs) and ultra-high net worth individuals (UHNWIs) and their families.

The most commonly quoted figure for membership to the HNWIs club is US$1 million (S$1.4 million) in liquid financial assets.

UHNWIs are individuals with investable assets of at least US$30 million, excluding personal assets and property such as a primary residence, collectibles and consumer durables.

These individuals are cash-rich, time-poor and on the look-out for alternative investment and migration options.

For many wealthy individuals, the decision to pursue alternative investments extends past personal and business benefits and is based significantly on increasing opportunities for their families.

Diversifying their citizenship portfolios provides them and their loved ones greater international opportunities, stability, freedom and security.

Amid all the uncertainty clouding global mobility, South-east Asia is seeing an increase in entrepreneurs and business magnates looking towards alternative or second citizenship and residency options.

INVESTMENT MIGRATION

For the ultra-wealthy, the notion of investing their wealth into multiple avenues is not new.

Since the concept of residence and citizenship planning was created by Henley & Partners in the 1990s, investment migration has proliferated greatly, particularly in South-east Asia.

As globalisation grows, residence and citizenship planning have become topics of significant interest among an increasing number of internationally mobile entrepreneurs and investors.

It is a common misconception that investor migration programmes are centred around physical relocation.

For many, the main advantage of obtaining an alternative citizenship is greater travel freedom and convenience.

By leveraging an additional passport, these HNWIs can experience greater travel mobility, and focus their time on financial growth, business opportunities and travel freedom.

SIGNIFICANT SHIFT

Traditionally, countries such as Canada and the US topped the list as primary options for international investors and wealthy families.

With recent geo-political events such as Brexit and the US administration under President Donald Trump posing possible limitations to global mobility, there has been a significant shift in popular destinations.

More and more wealthy individuals are turning to countries like Malta, Grenada and Cyprus to leverage their wealth and gain residence or citizenship by investment, without the need to ever live in these countries.

Within South-east Asia, Singapore has grown tremendously to become an increasingly popular location for wealthy individuals to invest in, due to its stable infrastructure.

In addition, there has been a rise in Russian, Indian and Chinese nationals living in Singapore who are now also looking for alternative citizenships.

We have also seen a growth in interest from South Koreans, Japanese and Americans, whose passports rank well, but are seeking alternative options in more tax-efficient jurisdictions.

More opportunities are now available for HNWIs to not only grow and diversify their financial portfolio, but also their citizenship and/or residence portfolio.

In doing so, these worthwhile investment options also reduce their exposure to risk, secures their families' future and opens up new prospects from a personal and business perspective.

By offering greater choice, opportunity, freedom and security to talented and wealthy individuals from other countries, governments in turn benefit from much-needed foreign investment and enrich their own citizens by attracting individuals with proven business success and valuable networks.

With such positive outcomes, it is not a surprise that more governments around the world look to provide similar programmes catered to the increased migration of the wealthy.

The writer is managing partner at Henley & Partners.

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