According to a report by Knight Frank, Vietnam’s high-net-worth population stood at 15,132 in 2016. These high-net-worth individuals reportedly hold US$543 billion of the country’s wealth amongst them. The largest concentration of Vietnamese high-net-worth individuals are situated in the economic hub of Ho Chi Minh City which had around 5,900 millionaires in 2016.

In the ten-year period between 2007 and 2017, Vietnam experienced an astonishing 210% increase in its wealth. In light of this figure, it is not surprising that in the 2006-2016 period, Vietnam also saw a 320% increase in its high-net-worth population. Further exponential wealth growth is expected in the coming decade (200%), encouraged through the expansion in the local healthcare, manufacturing, and financial services sector. As wealth and the high-net-worth market in Vietnam expands, wealthy individuals, investors, and families, are expected to increasingly divert their attention to what the world has to offer outside their own country.

Vietnamese HNWI- Aspiration beyond migration

Vietnam is one of the 10 countries with the highest emigration rates in the Asia-Pacific, with an estimated 100,000 of its people emigrating each year. Not only that, but in the last five years leading to 2017, approximately 40,000 cases of resumption and relinquishment of Vietnamese nationality were reported from the Ministry of Justice to the State President. The US, Singapore, South Korea, Germany, France, Australia and Canada, have all been popular destinations for Vietnamese emigrants.

Vietnamese HNWIs, however, have the means to invest in programmes that facilitate the process or migrating and integrating within a new country. There has been a keen interest among Vietnamese in the US’ EB-5 immigrant investor program- Vietnamese applicants are now the second biggest nationality to be granted the visa. In fact, 471 EB-5 visas were granted to Vietnamese applicants in FY2017, following a steady yearly progression in interest and visa grants as shown below:

The US programme, however, has restrictive clauses for property investments, a reputation for waiting backlog, and maintains uncertainty among prospective applicants over the success of application. Attention has been slowly turning to more accessible European programmes, which offer various benefits and a relatively straight-forward procedure.

The Malta Individual Investment Programme and the Cyprus Investment Programme in particular could see a heightened appeal with Vietnamese HNWI since through an investment in either country’s economy, the individual could be granted dual citizenship and all the benefits it brings, including expansive visa-free access, advantageous business opportunities, a lavish Mediterranean lifestyle and exceptional education standards which are greatly sought after by the Vietnamese.

Restricted travel- the biggest driver

The people of Vietnam face considerable limitations exist when it comes to political and civil rights, including freedom of speech, opinion, association, and assembly. However, travel restrictions have played the biggest role in prompting Vietnamese HNWI to invest in residency or citizenship programmes.

Vietnam is one of the Southeast Asian countries which are most restrictive when it comes to global visa-free access. Unrestricted visa-free travel from Vietnam is only allowed when travelling to 51 countries, meaning all kinds of travel to the rest of the world face complications, since acquiring a visa is more often than not, a lengthy and tiresome procedure. For high-net-worth individuals in other countries it is inconceivable that they should have to go through so much trouble simply for travelling. This desire for facilitated travel has therefore played a monumental role in prompting Vietnamese HNWI to invest in residency or citizenship investment programmes.

The outward investment outlook in Vietnam

Notably, a number of obstacles also exist when conducting business in Vietnam. Infringement on intellectual property rights are a common deterrent to business in the country. Beyond bureaucracy and regular inspections by state management agencies, companies may also experience the challenges of corruption such as bribery and facilitation payments. It is for these reasons that local businesses are eager to relocate or invest in more favourable jurisdictions.

Over the first seven months of 2018 alone, Vietnamese businesses diverted US$238.33 million in 81 new ventures abroad and an additional US$41.3 million into 21 existing overseas projects. According to the Foreign Investment Agency, the greatest investment was geared towards the finance and banking sectors, followed by the agro-forestry-fishery sector and the processing and manufacturing industry. Top destinations among the Vietnamese investors include Laos, Australia, Slovakia, Cambodia, Cuba, and Myanmar. Naturally, as more Vietnamese HNWI look into investing abroad, investment in immigrant investor programmes will also become more commonplace. 

GDP growth in St. Lucia rose by 3% in 2017 due to robust activity in several sectors of its economy. With the tourism sector recently undergoing a revamp and an increase in both FDI flows and infrastructure investment, a favourable outlook continues to be expected, characterised by buoyant economic growth. The tourism sector, which makes up around 65% of the island’s total GDP, has expanded over the years. This has been an inevitable result of favourable external conditions, several hotel expansions across the island as well as added flight routes. Subsequently, unemployment on the island is down by more than 1%, undeniably exhibiting a hopeful potential for further economic expansion and improvement. Strong FDI and infrastructure investments have also encouraged more activity in construction and other sectors, most notably those of retail and wholesale trade.

Projects Inducing St Lucia Economic Growth

Due to long-term infrastructure, as well as tourism-related FDI and continued tourist inflows, the short-term outlook for the St. Lucia economy is a favourable one. This has also been in contribution to the global recovery and increased capacity around the island. A freshly recovered tourism sector has meant that stay-over arrivals have risen by 11% – the fastest growing rate in the Caribbean. Additionally, according to the International Monetary Fund, real economic activity is projected to continue to grow by 3.5% in 2018 and, in turn, experience a 3.7% growth rate for 2019. 

Nevertheless, St. Lucia is a regional leader in climate change preparedness. It aims to implement a Climate Change Policy Assessment, to avoid any potential economic losses resulting from unfortunate natural disasters. This encompasses a balanced mitigation strategy, supported by costed investment plans and, moreover, a qualitative adaptation strategy with identified priorities.

Fiscal Improvements and St Lucia Citizenship by Investment Programme

The government, additionally, is continuously improving and expanding its efforts to address the challenges which pose a threat to the island’s current economic stability. Projects are presently in the works to boost growth and restore fiscal sustainability by enhancing the tourism sector’s potential through stronger marketing campaigns and newly-established hotel operators. Fiscal improvement measures to be implemented include a few tax reductions, namely that of VAT, and fostering the revenues made through the St Lucia Citizenship by Investment Programme (CIP). Interest in the programme has been gradually increasing following significant changes to the programme requirements in 2017, with 259 individuals reportedly having been granted St Lucian citizenship in 2017. Additionally, there has also been talk of introducing the IFRS9 to banks, which would ultimately require them to increase their capital to reach regulatory thresholds.

Investment for the National Adaptation Plan will soon be fully costed and integrated into development plans and medium-term frameworks for further economic growth in St Lucia. Nonetheless, a stern and well-rounded financial strategy and regulations are soon going to be implemented, with the Harmonized Credit Reporting Act’s implementation. Revenue from the CIP Program and the new residency programme together, nevertheless, have helped to finance this fund.

St Lucia Citizenship by Investment

What is a Citizenship by Investment Programme?

A citizenship by investment programme is a unique way of receiving citizenship of a country by making a considerable investment to said country’s economy, in accordance with any investment and eligibility criteria laid out in the law. Same as with any other modes of obtaining second citizenship, such as birth, marriage, and naturalisation, a citizenship by investment programme calls for a genuine link to be established with the country issuing the citizenship. Today, several citizenship by investment programmes exist around the world, all with distinguishable characteristics that cater to the different needs and priorities of investors.

As of now, eight successful citizenship by investment programmes are currently actively operating. Three prestigious programmes are available in Europe from Malta, Cyprus and Austria. These three programmes are optimal for high-net-worth individuals who covet access to the Schengen area and desire to reside and do business more comfortably in any country in the EU. Otherwise, for investors who would prefer further flexibility in investment options, five other countries in the Caribbean also offer their own citizenship by investment programme- St Kitts and Nevis, Saint Lucia, Antigua and Barbuda, Grenada, and Dominica.

Below is a comparison of the available citizenship by investment programmes, excluding the Austria citizenship by investment programme which is less clear-cut and conventional than the others. Numbers displayed in the table indicate the minimum investment requirement for a single applicant.

Malta Citizenship by Investment Programme

The Malta Individual Investor Programme (MIIP) was launched in 2014 and has now become one of the most successful and reputable EU programmes, setting an example for all other citizenship by investment programmes, particularly with regards to impeccable due diligence standards. The processing time for the programme is that of four months, and the passport is granted after a period of 12 months. Maltese citizenship offers visa-free travel to over 173 countries, an excellent international reputation, attractive business conditions, high-quality education, and the opportunity to live, work and do business in any country within the EU- all of which can be attained through the Maltese Citizenship by Investment Programme. Under the Maltese programme applicants are required to invest in three different ways; in the form of a contribution, property purchase or rental and in government bonds.

Cyprus Citizenship by Investment Programme

The Cyprus Citizenship by Investment Programme, known as the Cyprus Investment Programme, was launched in 2013 and is now considered to be one of the most attractive citizenship investment programmes. Cyprus citizenship is granted with a 6 months processing time through a simple and straightforward process. Applicants are not required to live in Cyprus, making it ideal for applicants who wish to invest in the country, while residing elsewhere. Cyprus allows for visa-free travel to 163 countries and also permits dual citizenship. The Cyprus Investment Programme offers two main investment routes- property or a combination of different investments- granted that a minimum of €2 million is invested and the applicant purchases residential property of a minimum value of €500,000.

St Kitts and Nevis Citizenship by Investment Programme

The St Kitts & Nevis Citizenship by Investment Programme, established in 1984, is the first and longest running economic investment programme in the world. The application process is between four to six months, making it relatively fast, and an Accelerated Application Process (AAP) is also available. Some of the benefits of the programme include zero residency requirements, visa-free travel to over 141 countries, and a favourable tax regime that exempts new citizens from on worldwide income, wealth tax and inheritance in St Kitts. The two qualifying investments for the programme are either an investment in real estate or a monetary contribution to the Sustainable Growth Fund (SGF).

Saint Lucia Citizenship by Investment Programme

Saint Lucia’s Citizenship by Investment Programme, introduced in 2015, offers a variety of investment options for high-net-worth individuals. St Lucian Citizenship through the programme comes with a swift processing time of three months and offers visa-free travel to more than 132 countries. There are also no physical presence requirements and successful applicants would not be subject to tax on worldwide income. The Saint Lucia citizenship by investment programme provides a number of investment options which an applicant may choose from, namely through a contribution, real estate, government bonds and an entrepreneurial investment. 

Antigua and Barbuda Citizenship by Investment Programme

Antigua and Barbuda set up its citizenship by investment programme in 2014, grating citizenship through sufficient investment following a short three-month processing time. Other benefits of attaining citizenship through the country’s programme include visa free access to 140 countries and exemption from taxation on foreign income, wealth, inheritance, gifts or capital gains. In order to gain citizenship in Antigua and Barbuda an applicant must invest in one of the three following options; a donation to Antigua’s National Development Fund (NDF; an investment in real estate which must be kept for a minimum of 5 years, or an investment towards establishing a business in the country.

Grenada Citizenship by Investment Programme

Established in 2013, the Grenada Citizenship by Investment Programme was introduced so as to further diversify the island’s economy and attract foreign investment. The processing time for the programme is that of 3 months and there are no residency requirements before, during or after the application is finalised.  Grenadian citizenship comes with unrestricted right to live, travel and study in the CARICOM, as well as visa free travel to 131 countries, and may be passed down to any future descendants. The two main investment options available through the programme are real estate investment, or a contribution to the Grenada National Transformation Fund (NTF).

Dominica Citizenship by Investment Programme

Dominica’s Citizenship by Investment Programme is one of the longest-established of its kind, having been introduced in 1993. The programme boasts of a number of benefits, including a swift three-month processing time, favourable tax system whereby new citizens are exempted from tax on wealth, inheritance, capital gains, no minimum residency requirement, and 127 visa-free travel destinations around the world. The two investment options that an applicant may choose to proceed with involve a contribution to the Economic Diversification Fund (EDF) or an investment in real estate.

Why seek second citizenship through a citizenship by investment programme?

Attaining a second citizenship offers an unprecedented amount of freedom, augmented opportunities and extended global reach. For those who find themselves unjustly restricted by the bounds of their citizenship, obtaining a second citizenship, or a dual citizenship if possible, would expose them to a newfound wealth of options. Because of the investment requirements, citizenship by investment programmes are targeted towards high-net-worth individuals, whether their primary aim for investing is for personal or business intentions. 

Among the benefits of attaining dual citizenship through one of the citizenship by investment programmes, there are the following:

• Visa-free travel: Attaining citizenship in a country with an extensive list of visa-free access countries can considerably widen mobility options for high-net-worth individuals who routinely face visa restrictions based on their country of original citizenship. This enhanced mobility would serve as a treasured asset both for the smooth operation of business transactions and for personal-motivated travel.
• Tax benefits: The different jurisdictions which offer citizenship by investment programmes all offer their own tax incentives to prospective investors, which would allow them to better safeguard and maximise their wealth, particularly in a way that the attainment of US citizenship would not.
• Haven from political and economic insecurity For high-net-worth individuals that originate from politically or economically unstable countries, investing in a citizenship by investment programme can prove to be particularly invaluable as it offers an unparalleled peace of mind. By attaining dual citizenship in a relatively short period of time, investors can conveniently evade fall-outs in their personal and business lives in times of conflict, political turmoil, local economic recession or environmental catastrophes.
• Optimized quality of life: By investing in one of the CBI programmes, main applicants and their families can enjoy a life which they had only dreamed of in their choice of country. Furthermore, if an applicant were to invest in one of the European programmes, any country in the EU may serve as their living and business destination. Investors can also benefit from excellent levels of healthcare and education, while also passing down this lifestyle to future generations.

Indian HNWI wealth

There is around US$140 billion in India tied up in venture capital companies and foundations usually owned and run by the HNWIs. However, Indian HNWIs hold a considerable 41% of their financial wealth in foreign countries, with 22.2% of this international wealth allocated to Singapore, 14.4% in Dubai, and 13.4% in London, meaning half of their offshore wealth is held in these three countries alone.

In terms of foreign holdings locations, the Indian HNWI prefers to invest in the Asia-Pacific region with a share of 34.9%, followed by North America 30.9%, and Europe with 12.9%. Economic and political uncertainties are among the main drivers for Indian HWNI offshore holdings. 

Indian HNWI are also increasingly looking at diversified wealth management options. Established HNW families are adopting an international perspective to wealth management such as diversification through international real estate investments, whilst younger HNWI are moving away from the traditional family structures and adopting a global perspective to wealth planning.

With regards to real estate, Indian HNWIs view it as a secure investment, and consequently they are looking overseas to invest in popular real estate markets. According to research by property consultancy Cluttons, in 2017, Indian property investments in central London accounted for 22% of all sales. As India has become a more challenging place to invest in, with high loan interest rates and rising prices in the main urban centres, together with increasing global political and economic uncertainty, Indian buyers with a larger amount of capital to spend have increasingly turned to London and other foreign jurisdictions as an investment destination of choice.

Indian HNWI migration

India’s economic growth has fuelled an impressive demand for travel in India, with the number of passenger trips doubling over the last four years to 200million. Most luxury purchases are also usually made abroad, thus creating more demand for luxury travel. On the other hand, there is also a substantial amount of Indian HNWIs that are leaving the country for good. In 2017 it was reported that between 6,000 and 7,000 HNWI left India, following 6,000 in 2016, and 4,000 in 2015. Indian citizens are restricted to 56 visa-free access destinations, a factor which substantially contributes to their demand in residency or citizenship by investment programmes as they would greatly increase their international mobility by providing, for instance, visa-free travel within the Schengen area. Their outward investment and residency outlook is also rooted in tax planning purposes, greater economic freedom which can be found in foreign jurisdictions, domestic safety and security concerns, greater ease in doing business, a better quality of life, and fewer environmental risks.

With regards to preferences for migration locations, the recent trends for Indian HNWI have centred around the USA, UAE, Canada, Australia and New Zealand. Their demand for residency programmes is substantiated in recent statistics- Spain granted 626 residence permits to Indians from the period of 2013-2016. Meanwhile, the EB 5 Immigrant Investor visa received 580 applications from Indians from April 2017 to March 2018- a 222% increase from the 2016-2017 period.

Surge in Indian HNWI wealth and population

This trend of HNW migration would not be possible without the increase in the population of Indian HNWIs and the wealth they hold. India is fast becoming a leader in the generation of wealth. It is expected that India will account for 13% of the world’s HNW population by 2025. According to the 2018 Capgemini World Wealth Report, India was the fastest growing HNWI market in 2017, seeing a 20.4% increase in its HNWI population, and 21.4% increase in its HNWI wealth. The graph below demonstrates this gradual progression of Indian HNWIs, with latest figures showing that the Indian HNWI population stood at around 263,000 in 2017.

Data source: Capgemini World Wealth Reports

Following the success of the first Dual Citizenship Report dedicated to the European Region, CCLEX are now pleased to announce the second report on Dual Citizenship covering Russia and the CIS region. This new report highlights migration trends and presents a comparative analysis of the regulation of dual citizenship in various countries of the CIS Region.

The first Dual Citizenship Report has been well-received and praised by clients and collaborators alike. Dr Jean-Philippe Chetcuti, Global Manging Partner of the firm commented that “this second report aims to build on the success of the first issue and reflect the breadth of knowledge on residency and citizenship law administered at CCLEX. This report offers a clear understanding of the laws and regulations of the countries, and acts as an initial reference for individuals looking into attaining dual citizenship.”

Dual Citizenship laws in Russia and the CIS Region

The report looks at countries in the concerned region and highlights if dual citizenship is allowed, prohibited or restricted, and provides an overview of the way citizenship is granted and under which conditions dual citizenship is allowed. Equally to the previous report, CCLEX collaborated with various specialist Immigration law firms in the region that provided information and commentary on the citizenship laws in their respective country. The primary research was carried between January and April of 2018, through a data gathering exercise. The findings and analysis, based on the feedback gathered, are presented in a country chapter format and in graphical format highlighting the difference in status for the various countries. The report provides an assessment of whether a country allows dual citizenship – meaning it does not forbid having a second citizenship – irrespective of whether the second citizenship is recognised or not.

The research reveals that the CIS countries have different ways of regulating dual citizenship. Most countries do not outright prohibit dual citizenship, however they do not recognise the second nationality of their citizens. Some of the countries legally recognise dual (or multiple) citizenship under international treaties, with an example being the agreement between Russia and Tajikistan. The report shows that the citizens of Russia, Moldova and Armenia are free to acquire citizenship of another country. However, under Russian Federal law, Russian citizens must notify the authorities in the case of obtaining a second citizenship, whereas in Moldova and Armenia there is no such requirement.

The report also highlights which countries completely prohibit dual citizenship under any circumstance. The legislation in these countries only allows an individual to be a citizen of that particular country and those who wish to attain a second citizenship must first renounce their original citizenship.

Going forward, the research team at CCLEX in collaboration with our international partners, will continue to expand this research to cover more regions of the world.  We are constantly carrying out and publishing research related to our main line of services with a view to assist businesses and private clients seeking professional guidance on matters relating to residency and citizenship law.