Across the globe, interest in second citizenships is growing. This is particularly true for the affluent in emerging market states, where passports are generally weaker than those in the European Union (EU) and the United States (US).
Internationally, wealth patterns are changing. The World Economic Forum expects that over the next 10 years, there will be 30 million more households with an income of over $100,000 annually – and a third of these will be in emerging markets.
This expansion of wealth is occurring in parts of Africa, including South Africa. However, the South African passport is limiting for high net-worth individuals requiring mobility, as a visa is often required for travel. Most importantly, visas are needed to get into the countries that are most attractive for trade, such as the United Kingdom, the US, various EU countries, and China.
A passport that enables greater travel freedom is the most common motivation for South Africans considering a second citizenship and the current climate of political and economic uncertainty is only heightening their interest.
Concerns about the value of our currency, the risk of a ratings downgrade, and social unrest, are being expressed by many South Africans, and they are looking to acquire a second citizenship as a form of insurance against these threats to their future security and sustainability.
“The high net-worth market understands the need for proper and regular planning of their financial affairs,” said Sandra Woest, senior manager at Henley & Partners South Africa, which specialises in residence and citizenship planning.
“It is as important for these individuals to develop citizenship portfolios so that they can reduce the risk associated with a single citizenship, globalise their family’s opportunities (especially as regards educational and work opportunities), and expand their business interests in a rapidly changing and uncertain world.”
Certain states – Malta, Cyprus and Portugal in the EU for example, and various Caribbean states – offer their stronger citizenships to those who are able to make a significant financial contribution to their country, Henley & Partners said.
The investment is used to drive economic development in the state and benefit its citizens, while the investor benefits from a far stronger passport with greater travel and settlement freedoms.