Big spike in South Africans looking for second passports during lockdown

Demand for investment into property-linked second passport residency programmes has spiked despite the travel restrictions brought on by the global Covid-19 pandemic, says Nadia Read Thaele, managing director of residency planning firm LIO Global.

Thaele said that the reason for this increase is two-fold.

“Firstly, the unexpected Covid-19 onset and then the consequent global economic slump. While it was expected that global growth would slow in 2020, no-one expected it to be so sudden and off the back of a global health emergency. It has caught many investors off guard,” she said.

“Secondly, for South Africa’s wealthy, the effect was compounded by Moody’s final downgrade on the 27th of March, just as the devastation on the local economy began to sink in and the length of the national lockdown became a reality.”

Thaele noted that stock volatility and the oil crisis, which has seen the oil price fall right through the floor means that individuals, not just in South Africa but globally, are on edge and urgently looking at realigning their investment portfolios and ensuring they have planned appropriately for their family’s future.

Residency and citizenship planning has become more important than ever as family’s look at diversifying their citizenship, she said.

Property

One one of the key ways that South Africans are looking at getting a second passport is through property, Thaele said.

While the rand has lost just over 20% of its value, making these programmes more expensive, this is negated by the significant capital growth and many investors are using funds already offshore, she said.

“Had you for example invested in a residency programme with a property into a Caribbean island country such Grenada for $350,000 at the start of the year when the dollar/rand exchange rate was at around R14, you would have invested about R4.9 million.

“This investment is equivalent to what an upper-middle-income house in South Africa would cost you and well below what you would pay for an apartment in Clifton or Camps Bay.”

By mid-April, the decline in the rand to around R18.80 to the US dollar means that your investment value now stands at around R6.58 million, a significant 34% growth in a matter of 4.5 months.

“On top of that the Grenada Programme is one of the few with a fast, 4-6 month route to citizenship which will give you visa-free access to 140 countries including the UK, China and Schengen region, a significant benefit for any South African,” Thaele said.

“It also has the added benefit of the E-2 Visa treaty with the USA, which allows citizens of Grenada the option to invest and reside in the USA, should they want to.”

She noted that Caribbean countries such as St Kitts & Nevis, St Lucia, Antigua, and Barbuda offer particularly attractive opportunities, with investments of between $220,000 and $350,000 providing citizenship.


Read: The most expensive streets and suburbs in South Africa

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Big spike in South Africans looking for second passports during lockdown