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Where is a millionaire to go these days? Spain is nixing its property-linked “golden visas”, joining Portugal and Ireland. The UK is scrapping its 100-plus-year-old “non-dom” regime enabling wealthy foreigners to skip tax on overseas income. The opposition Labour government vows it would crack down on non-doms even harder.
Sovereigns used to see selling residency or citizenship rights as a way to attract foreign investment. Island nations were early proponents, with St Kitts and Nevis offering citizenship via investment in 1984. In Europe, countries including Greece, Spain and Portugal joined the club about three decades later, in some cases to prop up flagging property markets.
But unintended consequences have come to the fore in recent years. As Spain and Portugal discovered, influxes of foreign money distort property markets, edging out domestic buyers and tenants.
Authorities also balked at the scope for more nefarious activities. The EU, flagging concerns including organised crime, money laundering and tax evasion, is trying to call time. Bowing to pressure, several Caribbean countries — some of which have passports granting visa-free access to European countries on short trips — plan to double the minimum investment requirement this year to $200,000. They have also agreed to improve transparency and regulation and beef up security checks.
Yet demand for second bolt-holes is rising along with wealth. No wonder. This, after all, is the ultimate bulwark against economic and political uncertainties, much sought after at a time of multiple elections, geopolitical tensions and regional wars. Wealthy Chinese investors, long fans of Caribbean passports, are the biggest group of those taking up the Portuguese visa. Russian investors were also buyers, until blocked by European countries following the war in Ukraine.
Henley & Partners, which advises wealthy individuals on the subject, forecasts a 15 per cent increase in the number of applicants to golden visa schemes to 128,000 this year. Rules are tightening and prices rising but plenty of schemes remain open for business. Italy, Greece and Malta are all attracting applicants. US millionaires, along with their wealthier centi-millionaire and billionaire brethren, are leading the charge.
That may be a feature of scale: roughly a third of global investable wealth — defined as cash, listed company holdings and debt-free property — resides in the US.
For sure, tighter scrutiny and rising investments will be an ongoing feature of schemes. But mounting wealth piles and the desire for bolt-holes means golden visas are likely to be around for quite a while yet.
