The demand by wealthy South Africans looking for Caribbean property as a means to obtain a second passport has spiked, following a lacklustre Budget 2021 and State of the Nation Address by President Cyril Ramaphosa.
This is according to Nadia Read Thaele, founder and chief executive of LIO Global, a specialist firm in second residency and citizenship by investment, who said that South Africans are now actively looking for “Plan B” options, as well as greater travel freedom.
“They are concerned not just about the economic outlook for the country but policies around expropriation and taxation of the wealthy,” Read Thaele said.
Investment in the Caribbean has also been relatively unaffected by the Covid pandemic, she said. The Grenadian passport is the most popular and attractive to South Africans as it gives access to ‘work and live’ in the USA via the E-2 investment Visa Treaty.
A major advantage of the Caribbean programmes is that South Africans do not need to leave home to secure citizenship and there are no language tests or requirement to reside in the countries for any period of time. The countries are also tax friendly jurisdictions, the immigration by investment expert said.
The costs of these have come down recently making them very affordable even for upper middle-class earners. The citizenship programmes start from R2.5 million, or a property investment of over R3.3 million for a family of four.
This is basically the price of an upper middle-class home these days or an investment property on the Atlantic seaboard, Read Thaele said.
The Caribbean programmes offer an easy route to citizenship in as little as three to six months depending on the programme. The passports offer visa-free travel access to the UK and Euro Zone for up to 90 out of 180 days, and either China or Hong Kong depending on the country.
“You can choose to make a non-refundable government donation or invest in a government approved real estate project, which is typically a five-star luxury resort property offering a USD rental yield. The added benefit of investing in property is that it gives you a second or holiday home and there are rental pools available, she says.
“In most instances, the property can be sold after a holding period of five years without losing your citizenship. The properties are generally situated in incredible locations and come fully furnished and managed with no annual fees,” Read Thaele said.
The most popular programme for South Africans at the moment is Grenada for its access to the US via the E-2 Visa Treaty, she said. It requires a property investment of $350,000 (R5.1 million) or $220,000 for fractional ownership, or alternatively, a government donation of $150,000 for a single applicant ($200,000 for a family of up to four).
The E-2 Visa Treaty allows Grenadian citizens to invest in the US, and live and work there; as well as send their children to US schools and universities.
The St Kitts and Nevis programme starts at $200,000 (R3 million) for a property investment which must be held for seven years. Alternatively, a government donation of $150,000 for a single applicant ($175,000 with spouse plus $10,000 per additional dependents).
The Dominican programme starts at $200,000 (R3 million) for a property purchase or government donation of $100,000 for a single applicant. St Lucia starts at $300,000 (R4.4 million) for property and $100,000 for a government donation for a single applicant (up to $190,000 with spouse and two dependants).
The most expensive in terms of real estate, is Antigua and Barbuda which requires a property investment of $400,000 (R5.9 million) or $200,000 for a half share. It is the most cost effective should a family wish to go the donation route, starting at $100,000 for a family of four, plus additional costs.
By comparison, the Euro Zone routes such as Portugal’s Golden Visa and Malta are significantly more expensive.
For easy access to the Euro Zone, South Africans are predominantly looking at Malta and Portugal as options, said Read Thaele. Portugal for example requires the purchase of real estate with a minimum value of EUR 350,000 or EUR 280,000 if in a low density area.
It requires visitation and a language test and a five-year process to potentially achieve citizenship, however the program is geared towards residency and citizenship is unlikely.
The cost of a Maltese passport has risen significantly and gives two options for citizenship, either within 14 months or 36 months, depending on the investment made.
It now requires a property purchase of EUR 700 000 or rental of EUR 16,000 annually plus a government contribution of EUR 600,000 if the applicant opts for a 36-month residency; or a contribution of EUR 750,000 if the applicant opts for less than 36-month residency.
An additional sum of EUR 50,000 per dependent is payable. It is, however, still one of the most exclusive citizenship programs.
To get to the US via the USA Eb-5 Programme, a minimum investment of $900,000 (R13.5 million) is now required. This was $500,000 previously.
Another exciting alternative option for South Africans, is the Vanuatu citizenship program, said Read Thaele. Vanuatu is a South Pacific Ocean Island nation regarded as the fourth happiest country in the world.
It offers a quick route to citizenship within 2 to 3 months with no minimum stay or language requirement. The passport offers remarkable global travel access including to Australia (just three hours to Sydney) and New Zealand (three and a half hours to Auckland), as well as the UK and Schengen zone countries.
A government donation of $130 000 (R2 million) is required for a single applicant ranging to $180 000 (R2.8 million) for a family of four.
Read Thaele said the Caribbean countries strongly favour foreign investment and offer investors privacy, reduced tax liability and more, cementing their reputation as the global capital of Citizenship by Investment.
“Having granted more than 2,000 passports each year, this has seen significant growth in CBI over the last five years,” she said.