By Moustafa Daly
2023 has been a year of change and turmoil for the global residency and citizenship by investment (RCBI) industry. On the one hand, demand and programs continued expanding worldwide as rising sociopolitical tensions inspired many high-net-worth individuals (HNWI) to seek other options to secure their mobility and wealth.
On the other, there’s been a marked uptick in anti-RCBI sentiments, mostly originating from the European Union (EU) and the U.S., which are working to tightly regulate the industry to ensure sanctioned or criminal individuals don’t access their borders.
However, their scrutiny didn’t stop the industry from growing; it could have helped it grow faster this year as potential RCBI investors seek to preempt any future regulations that may restrict their access to popular golden visa and passport programs.
As we ring in a new year, the RCBI industry anticipates many changes. With new programs opening and others becoming a memory, here are the top RCBI changes to anticipate in 2024:
Battling favorable taxes for foreigners seeking residence in Europe
To entice foreigners to inject their capital and invest within their territories, many countries worldwide offer favorable tax regimes for foreigners that either exempt or lower their taxes upon moving to a country – effectively preserving their wealth and increasing their purchasing power in their new chosen destinations.
This heightened purchasing power for foreigners is exactly what some countries now perceive as an inflation-causing factor for local populations, prompting many to contemplate lowering such taxes to level the playing field between foreigners and locals.
Portugal, which runs one of Europe’s most popular golden visa programs, announced in late November its intention to scrap the Non-Habitual Resident (NHR) preferential tax regime in late 2024. A political debacle involving then-prime minister Antonio Costa led to his resignation, and the subsequent shelving of the plan to end NHR. However, immigration specialists expect Costa’s Socialist Party to maintain its legislative majority – which could bring canceling or amending NHR back on the table.
In Italy, the “Lavoratori Impatriati” tax regime, which gives foreigners and returning Italian expats tax cuts amounting to 90% for up to a decade, could also be scrapped by the Italian government as it’s perceived to be unfair to locals and misused by applicants. If the program is ended, industry experts expect it might make Italy less attractive as a destination for foreign investors and entrepreneurs.
The EU and the U.S. zooming in on Caribbean CBIs
During 2023, the EU and the U.S. paid special attention to CBI programs, aka golden passport, in the Caribbean. Most countries in the region, including St. Kitts and Nevis, St. Lucia, Dominica, and Antigua and Barbuda, have visa-free access to Europe and also offer popular CBI programs that give third-country nationals access to citizenship for affordable prices starting at $100,000.
In the wake of the Russian war, the EU became particularly adamant about mitigating risks perceivably associated with these programs. To that end, following in the U.S.'s footsteps, the bloc introduced several rules for CBI programs; they remain unofficially declared by EU authorities albeit widely accepted as fact by Caribbean officials and immigration specialists.
The rules include increasing CBI thresholds in the region to start at a minimum of $200,000, establishing a due-diligence process involving all regional programs to ensure no foreign investor can apply for one program after being rejected from another, implanting a personal interview process for potential applicants, and, halting CBI promotional material that advertise visa-free access to the EU as a selling point.
So far, only St Kitts and Nevis has complied with the “unofficial” demands, doubling its program’s investment threshold and announcing that all due diligence for the program will be done with U.S., UK, or EU-based firms.
Other countries haven’t yet taken such measures, at least until the demands are made official. Thus, 2024 is set to be a defining year for the CBI industry in the Caribbean.
Turkey and UAE compete for top Middle East CBI destination
In the immediate aftermath of the Russian war on Ukraine, countries in the Middle East emerged as viable RCBI options for Russian HNWIs fleeing the war and unable to access EU and other RCBI programs.
With Turkey and the UAE having the two most established RCBI programs, both countries came ahead of the curve when it comes to attracting investors from Russia and elsewhere. In particular, the UAE’s golden visa program, established in 2019, proved a hefty regional contender, having issued over 80,000 in 2022 alone across different categories that range from investors and entrepreneurs to front-line medical staff during the COVID-19 pandemic and individuals with achievements in arts and cultural fields.
Turkey, on the other hand, has witnessed an uptick in demand to its popular CBI program that has led the country to raise its minimum investment threshold for the CBI real estate option to $400,000 instead of the original $250,000. As reported by local media, authorities there are contemplating raising the limit further to $600,000, but immigration specialists told Uglobal they doubt the likelihood of that happening imminently.
In 2024, both programs are expected to continue to be the most popular in the region, albeit due to the lack of other well-established alternatives. However, other countries in the region have begun eyeing a piece of the CBI cake, with Egypt recently launching a CBI program to compete on a regional level, and other countries like Bahrain, Kuwait and Saudi Arabia mulling their own RBI variations.
Also, despite the rise of both programs over the past two years, there’s been a reported slowdown in growth throughout 2023, with some expecting the programs’ popularity having reached a peak, which remains to be seen in 2024.
New RBI and golden visa programs coming online, scrapped programs relaunching
Many countries previously either scrapped or suspended popular RCBI programs, but many are coming back online in 2024. Top of the list is the Quebec Immigrant Investor Program, a pioneering program in the industry dating back to the 1980s. Previously suspended by the Quebec government, the program is set to be relaunched in January 2024 albeit with much stricter requirements, particularly good knowledge of the French language, which are widely expected to heavily impact the demand for and viability of the program to foreign investors.
Hungary, an EU and Schengen Area country, also announced relaunching its golden visa program in early 2024. Thus far, the program is set to be made available with a real estate investment threshold of €500,000. However, investors could opt to buy Hungarian public bonds for $250,000 to qualify for a golden visa, making it potentially a popular and affordable route to EU residency.
Meanwhile, in Southeast Asia, Malaysia is revamping its Malaysia My Second Home Program after it witnessed a marked drop in applications in 2023, and Thailand is launching an investor residency program targeting individuals seeking residency and investment in its eastern region.
Popular golden visa programs at risk
As it stands, Greece and Spain run the EU’s more popular golden visa programs, particularly with the restrictions recently introduced to Portugal’s.
They offer golden visas at thresholds that start at €250,000 for Greece and €500,000 for Spain – but opposition parties in both countries are setting their eyes on ending the programs in 2024. However, there’s no indication yet that this will come to fruition.
In Greece, opposition leader Nikos Androulakis recently announced his PASOK party is launching a ‘campaign’ to end the golden visa program in his country, accusing the program of increasing property prices for locals. His comments are in spite of the program’s astounding success in 2023, having secured $1 billion in investments during the first half of 2023 alone, which is set to make his party’s campaign to abolish the program an uphill battle.
In Spain, the Sumar, a minority leftist party that’s part of the governing coalition, also announced it will be working on ending the golden visa program in 2024, following an earlier proposal by the Más País party to do the same. Both parties accuse the program of making property unaffordable for locals and that some real estate are being taken off the market to the possession of non-resident “rich people,” as opposed to legit residents of the country, further exacerbating the housing dilemma.
Notably, these plans remain political, and they haven’t yet taken a legal or parliamentary route to be enacted. Investors and potential applicants should keep a close eye on political developments in these countries in 2024.
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