Five Important Trends in the Investment Immigration Industry for 2022

An important lesson to be learned from the last two years is that change comes quickly from unexpected places - whether it’s the pandemic, natural disasters, political instability, and armed conflict.??

Here, we look at five important trends to prepare for in 2022:?

Instability fuels the industry?

“Instability fuels the industry and its growth, which has led to interest from clients in new regions in what we would call developed countries. It has sharpened people’s minds as to the decision that they need to make as an individual versus the collective,” says Micha Emmett, CEO of CS Global Partners.?

Investment Migration Insider’s editor called the industry an “anti-fragile” business and went on to explain that “the system that provides alternative residences and citizenship for people that need them gains from disorder. It means that shocks and blows make the system stronger.”??

The industry provides an alternative option for individuals to get out of a variety of crises. It is not just about gaining global mobility or living the life of luxury, but also safety and security, which has been highlighted in the World Citizenship Report (WCR). The WCR compares world citizenships from the perspective of a global citizen.?

Key Trend: No one can predict what the next crisis will be; however, investors are making plans to prepare for any such event that could happen in the future. The time is now to secure a Plan B in order to become more resilient in an uncertain world.??

Adapting to a New Kind of Investor?

HWNIs need to consider a myriad of factors when deciding something as monumental as where to obtain second citizenship. The WCR is the first endeavour to investigate the value of citizenship through the lens of the global citizen. ??

“When I originally envisioned this project, I wanted to rate countries on the mobility the citizenship offered, but through in-depth research and analysis, it could be noted that safety and security rank highest.?Ultimately, as human beings, we need a place in which to be rooted, and that home should offer adequate safety for one’s family,” said Emmett on her vision for the WCR.??

Before the pandemic the industry usually attracted investors from developing nations, however, the last two years have seen a new type of investor emerge in the industry. HNWIs in what is considered developed countries found themselves impacted by their government’s reaction to the pandemic, social unrest, and economic instability. ?

As the dust settles on the pandemic and countries begin opening up and relaxing their pandemic rules, it has left many thinking “never again.”???

Key Trend: 2022 will be a year of action for those investors who want to develop their contingency plans. A plan B can cover all sorts of “what if” scenarios, from pandemic flare-ups, political instability, social unrest, and military conflict.??

Cryptocurrency and Second Citizenship?

Cryptocurrency has proven itself to be one of the most important assets that one can have in the current climate. However, as nations begin to tighten up regulation and tax enforcement on this burgeoning industry, many crypto investors have started looking at innovative ways to protect their newfound wealth from hefty tax fines.??

One way to protect their wealth is by investing in second citizenship, however, they need to consider the country’s attitude toward cryptocurrency before investing.??

St Kitts and Nevis is a prime example as it is one of the most technologically advanced nations in the region regarding its crypto-friendly approach to banking. The nation is running a digital currency pilot programme known as DCash and recently passed a bill simplifying the trade of virtual assets. DCash, considered legal tender, is a real-time payment option available within the Eastern Caribbean Currency Union (ECCU) and offers a safer, faster and cheaper method for making payments. The dual-island nation also does not impose income, capital gains, or inheritance tax.??

For those who are looking to shield against future risks, the smart move would be to combine the nation’s crypto-friendly policies with second citizenship. This combination provides investors with the ultimate insurance policy during times of unpredictability. The nation remains the best destination for securing a future with a thriving financial services sector and a growing crypto hub.??

St Kitts and Nevis’ Citizenship by Investment Programme was established in 1984 and is the world's longest-standing in the investment migration industry. The programme enables investors a secure nation to call home in exchange for an investment into its Sustainable Growth Fund .??

Key Trend: Citizenship by Investment programmes will need to adapt to change their structures to accommodate this type of investor by enlisting the services of crypto specialists who specialise in due diligence.??

Due Diligence?

Due diligence is one of the most important factors in the success or failure of any CBI programme. In recent years, the immigration investment industry has come under scrutiny, in which due diligence issues within certain programmes were highlighted. This has led to the closure of some prominent CBI programmes in Europe.??

Many programmes have developed robust and thorough due diligence processes in order to address financial crime, money laundering, and criminal risks in the industry. And we have seen that the cornerstone of a respected CBI programme is its robust due diligence processes.??

The key to vigorous due diligence processes is a multi-layered system. Partnering with third-party firms, along with law enforcement and intelligence agencies. CBI Unit staff is required to have expertise in document review, anti-money laundering, and counter-terrorism financing, and need to ensure that all documents adhere to the Unit’s requirements.??

Additional to the vigorous due diligence processes, CBI programmes will need to increase their transparency as this will solidify a government’s commitment to running the programme legitimately.??

Key Trend: In the case of due diligence: more is more! It is of paramount importance that only reputable investors obtain citizenship. Therefore, each investor’s application must undergo stringent and comprehensive auditing processes to mitigate any security, financial, crime, and reputational risk.??

Expanding into African Markets?

Citizenship by Investment is a new concept for the majority of the African continent. A huge amount of awareness needs to take place.??

Nigeria and South Africa have been hot spots for a while. South Africa alone has got potentially five different client groups, that all have a different perspective, a need or pain point. South Africans have been emigrating for decades through more traditional channels, and while CBI is a relatively new concept for South Africans, they have become more aware of this option in recent years.??

According to Kumar Pratik, Global Private Client Manager at CS Global Partners, there has been steady business from Nigeria and South Africa in the last two years. Furthermore, CS Global Partners saw a 72% increase in inquiries from North Africa in 2021, particularly Egypt, Morocco, Algeria, and Libya.??

Now is the time to build on the awareness by offering solutions of safety and security to individuals in Africa. People are genuinely worried about corruption, crime and social unrest, and will be amenable to the importance of investing in an insurance policy.???

Key Trend: Africa is very large with many countries making up the continent. What a lot of people in the industry do is look at Africa as a whole, which you cannot do. With a myriad of cultures, languages, and ways of doing business, looking at it as a whole would be erroneous. You need to break down the regions by language, culture, and the amount of wealth in those countries. According to Emmett, there is potential in certain hubs, but there are a significant number of African nations that just aren’t interesting as all for this industry.??

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