Mexico’s investment immigration potential remains untapped

Mexico is the second largest country in Latin America in terms of HNWI population.

In a World Wealth Report 2021 released in early July, the Capgemini Research Institute revealed the global HNWI population increased by 6% during the pandemic era; and the Latin America HNWI wealth grew by 0.5%. Mexico, a country of 128 million people, has been severely affected by the pandemic, and its economy has taken a hit. However, despite the COVID impact, the global investment immigration industry is yet to properly explore the potential in the region, industry professionals say.

According to a Golden Sachs report, Mexico comes right after Brazil in terms of having the highest total HNWI population in Latin America. An estimated 95,423 HNWI have a wealth range of $1 million to $5 million in Mexico; 8,229 HNWIs are in $5M-10M range; 5,040 HNWIs in $10M-$50M range; 435 HNWIs in $50M-$100M range; and 39 HNWIs in $500M plus wealth range.

For a variety of reasons, including COVID and political instability, there is already a significant flight of capital taking place from the country. In a recent report, the U.S. Treasury Department showed that investors were pulling their money out of Latin American countries. It is estimated that a total of $11,531 million left Mexico in February 2021 compared to the same month last year. The global investment immigration firms have an opportunity to tap into this flow of capital since many HNWI individuals are interested in gaining second citizenship as well as residency as they try to invest their money in more stable markets abroad.

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Increased interest in investment immigration in Latin America

Dr. Yuu Shibata, who has a Ph.D. in EU Law and is a Legal Consultant at the Italian law firm, Mazzeschi, told Uglobal that their firm was seeing a great increase in RCBI queries from South America.

“Most of the clients are interested in coming to Europe due to the economic instability in most of the Latin American countries. However, such an increase might be also due to the fact that lately, we have been promoting information regarding Italian immigration and citizenship in Spanish,” Shibata said.

“…The proportion of inquiries we receive from them (South American investors) are quite high, which means that we can see a great interest in emigrating to Italy…” she said.

Mary Tsiganou, who is the vice president of Synergia SA -- an investment immigration firm in Greece, said the share of her South American clients, most of whom were from Brazil and Argentina, is about 5%.

“We do not anticipate any change in this trend," she said. "The number of requests from South America is almost the same during the last two years. There has been a slight increase during 2020."

Latin American investors have interest in E-2, EB-5 routes as well as many European programs

Mexican investors as well as clients from other South American countries are on the radar of Italian firms.

“We mainly receive inquiries from Argentina, Mexico, Colombia, and Peru. It can be said that they are mostly interested in obtaining their citizenship by descent. However, due to the delays caused by the Italian consulates processing their request, many clients are interested also in emigrating to Italy and to proceed with their projects (of getting their citizenship) directly in Italy,” Shibata said.

Tiago Gali Macedo, who is Managing Partner of NEXT/Gali Macedo & Associados in Portugal, said Latin America in general remains very driven to North American destinations, especially via the E-2 & EB-5 route.

However, Macedo, whose firm currently registers about 5% clients from South America – mostly from Brazil/Colombia and Argentina, said it seems as if times are changing in the post pandemic world.

“Only the true UHNWI look into Europe, mainly (UK/Switzerland/Luxembourg/Malta etc.), driven by tax and family traveling and easy study access,” he said. “Portugal has seen in the past a shift from HNWI and UHNWI to Portugal versus North America and other European destinations, thanks to the Portuguese RCBI GRP and also the NHR tax benefits.”

“The shift from Miami to Lisbon is clear, it started around six years ago with a major emphasis in the past three years. Triggered also by the popularity of world renowned VIP´s such as Madonna and Leboutin in Alentejo Comporta & Harrison Ford in Beoira Baixa - Castelo Branco etc,” Macedo said.

Richard Hallam, who is a CBI agent in Grenada, agreed that many South American clients are interested in the E-2 route to the U.S.

“All our Brazilian clients have the same motivation to get a Grenadian citizenship, it is to get an E-2 visa route to the U.S.,” Hallam said.

He said the entire process, from getting a Grenadian citizenship to an E-2 visa, takes just about six-seven months; it takes 90 business days for the Grenadian citizenship and about the same time for the E-2 visa.

Other Caribbean destinations such as Cayman Islands and Antigua and Barbuda are also seeing some interest from South America. Kaline Kennard, who is the Managing Partner at Citizens International in Antigua and Barbuda, said her firm receives about 5% clients from South America, most of whom are from Argentina.

Antonin Favreau, an investment immigration attorney at Favreau Law Firm Inc. in Canada, said he has been receiving few inquiries from Mexico. Instead, he has mostly seen an interest from Ecuador since he is an Ecuador citizen.

“I assume and focus on my marketing there. Second is Brazil for me,” he said.

According to him, South American clients were not interested in real estate options.

“Even if they are HNWI, Latin American people are looking for cheap ways to immigrate and that is why the conversion rate is way lower than anywhere else in the world. They don't really care about having a house or not here,” he said.

Global immigration firms have yet to tap into the South American market

One of the main reasons why investment immigration potential of South America remains unrealized is the fact that most immigration firms do not prioritize it, Hallam hinted.

“There are two main reasons why there aren’t that many clients from South America; first is a lack of awareness, or one should say education and the other is the language barrier in South America where most people speak Spanish, Portuguese etc. People still don’t understand the opportunities well enough.”

“South America has been somewhat left alone in terms of marketing about second citizenship opportunities and the investment immigration industry needs to work on that. Generally, one does not find the offices of marketing firms in South America and if companies start to do that then it would create a huge difference,” Hallam added. 

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