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  They're overstating things because this is an advertorial for the agency, who is probably not getting the sales they'd like. To be sure, there's a brain drain, but I'm not sure we have to worry too mu...  

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Uber rich splurge on ‘plan B’ citizenship schemes

Interest in citizenship by investment spikes after ratings downgrade.

High Net Worth South Africans (HNW), in pursuit of alternative citizenship and residency, are forking out millions in job creation and investment initiatives abroad.

New United States Citizenship and Immigration Services (USCIS) data shows wealthy South Africans consistently rank among the top 15 investors by origin in pursuit of EB-5 visas.

South African ‘Immigrant Petition by Alien Investor’ Filings

 

2013

2014

2015

No of filings

15

18

40

EB-5 Investment Value

$8

$ 9m

$ 20m

Year-on-year growth

-6%

20%

122%

Source: Invest in the USA

South African filings for “immigrant investor” status more than doubled to 40 in 2015, with the applicants spending $20 million on creating around 400 jobs in the US. South Africa’s unemployment rate stood at 24.5% in the fourth quarter of 2015.

To qualify for the visa, which enables applicants to obtain US green cards, foreigners must invest $500 000 in businesses or real estate projects that create or preserve at least ten full-time jobs for American workers.

Listen to the podcast: US residency viable through investment

Although no data is available for 2016, it is highly likely that the number of filings doubled again in 2016, said LCR capital. The international private equity investment firm, which facilitates local applications, says political developments drive interest among HNW South Africans.

Following South Africa’s credit rating downgrade to junk status, the firm has seen a spike in interest with new enquiries being made on a daily basis rather than weekly.

“It is an extremely niche market as individuals need a lot of money [to secure the visa]. Some of the enquiries are from people who want to relocate and some are just looking for a ‘plan B’ or to secure better education opportunities for their children,” said Douglas van der Merwe, LCR’s local representative.

He added that the Fees Must Fall protests and Nenegate also triggered significant interest. Additionally, some applicants cite Black Economic Empowerment (BEE) laws and glass ceilings in the corporate world as motivating factors.

LIO Global’s Nadia Read Thaele also reported an increase in interest in citizenship by investment and second residency programmes following the cabinet reshuffle, which ultimately lead to the credit ratings downgrades.

“This industry is based on public perception. Demand is almost never consistent as the industry and markets are always changing. Lately, politics has been driving interest, there was definitely a strong spike in interest after the cabinet reshuffle,” she said.

According to Thaele, the majority of HNW individuals don’t necessarily want to leave South Africa but are seeking freedom – freedom of business travel for entrepreneurs and freedom to study abroad for their children.

She said that more than 80% of the applications facilitated by LIO were for programmes in Malta and Antigua, both of which offer strong passports.

The Maltese programme requires an investment of €1 million. Antigua requires a $250 000 donation to the government or a $400 000 investment in real estate projects largely geared toward hotels and hospitality.

Read: South Africans looking to buy foreign citizenship increasing

She said programmes in Portugal and Grenada are also proving popular especially as the latter has signed an E-2 investor visa treaty with the US. The treaty allows citizens of Grenada to obtain US residency permits provided they operate businesses in the US.

Read Thaele said tighter immigration controls being implemented by a number of countries is expected to drive the markets for citizenship by investment and second residency as wealthy individuals are likely to seek more global freedom and mobility.

In the US, the EB-5 visa programme is expected to be reviewed at the end of the month. Despite new US President Donald Trump’s promises to clamp down on immigration, Van der Merwe said the EB-5 visa programme is likely to continue.

“Both the republicans and democrats like it because it is of no cost to US taxpayers and creates American jobs. They also like the profile of the applicants – they’re entrepreneurs and they have money.”

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Stephen Katzenellenbogen

Stephen Katzenellenbogen

NFB Private Wealth Management
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Its a little sad that these HNW individuals are creating jobs in foreign countries when we have massive unemployment in SA. Its not their fault though. If schools, universities and job opportunities were better here, they would probably not see the need. The new “super wealthy” tax bracket is also not helping the cause…

They’re overstating things because this is an advertorial for the agency, who is probably not getting the sales they’d like. To be sure, there’s a brain drain, but I’m not sure we have to worry too much about HNWI capital flight.

There no doubt there’s been a remarkable spike in people looking at Plan B – so many people are not informed when they make these decisions. Please please INVESTIGATE your options thoroughly! Don’t only look at the cost of entry, look at how to sustain that decision and what are the longer term risks. Is the economy robust, what are your running costs, indirect costs, what Investment are you tied to and in the long term will you be able to ‘get out’. As a South African living in Malta @maltalifestyle.com. I assist many people making these decisions. I’ll be at the MoneyWeb investors show and hope to meet you and help you ‘rationally’ look at the options. It’s not JUST financial, it a lifestyle decision. Keep level headed!

I have made my views on these “golden visas” very clear. Enter at yr peril! Getting residency is only part – it’s getting citizenship which is the end goal. What I can’t understand is why anyone wld want to move to the EU. It’s a broken idea & the coming French election cld be its death knell. So of the people you have helped-how many have gone onto to get EU citizenship?

What a pity – the poor – living in rural SA and praying for children to get a job has no way of knowing this or realising how the new ANC is affecting their livelihood.
If they knew, I doubt ANC would be returned as ruling party – but with the media control in favour of Mr Zuma they will never know – they will only suffer, hoping things will get better.
That is the main reason I differ from Mr Maimane and others – ANC will remain ruling party for decades to come.

+IIIphil

…I doubt the ANC can be blamed for the rural poor.The rural poor globally will always be “there”, irrespective if the ANC were in power first or not.

But your point on media control or media self-censorship is 100%. Even MoneyWeb practices self-censorship in favor of the ANC.

Looking back at the 90’s, newspapers were brow-beaten by the ANC for narratives that were harshly critical. Now the news papers have come inline (Moneyweb included).
And because of this the ANC, much like political parties in other African countries, will be in power for at least 45 years and the poor will still be allocated just enough to contain their frustrations about life.

What a pity – the poor – living in rural SA and praying for children to get a job has no way of knowing this or realising how the new ANC is affecting their livelihood.
If they knew, I doubt ANC would be returned as ruling party – but with the media control in favour of Mr Zuma they will never know – they will only suffer, hoping things will get better.
That is the main reason I differ from Mr Maimane and others – ANC will remain ruling party for decades to come.

good for these countries, sell something desirable and with no cost to yourselves. In fact, these countries are better off as the post says, because you want immigrants with funds etc. and it isn’t like creating a cheap tax rate to encourage investment which usually provides no local country benefit.

Yes, good on these nations I agree. This speaks to the truths which our dear authorities and indeed all socialists and those of a generally leftish bent worldwide totally miss (and always will):

1. Wealth is not a zero sum game. Me having more does not mean you have less, usually the opposite in fact.

2. Wealth is increasingly cerebral and mobile – it exists in the mental vision and abilities of entrepreneurs. Nationalise everything under the sun and raise the tax rate as much as you want and you will still never improve the general well-being of any population as much as you would by letting wealth creators do what they do best. Again, the likely consequence would be quite the opposite.

Same old same old.

I have issued SERIOUS warnings abt these golden visa’s. Most – if not all – do not give citizenship – just residency which can be taken away – as we have seen in Aus with the 457 visa programme being ditched leaving 95,000 visa holders in serious trouble. A fair number of those would be seth efrikens. To become a citizen need to pass citizenship test. Ever tried to speak Maltese!

Hi Robertinsydney, I most definitely agree with you on your point. We include a section in our materials that we provide clients outlining the differences between residency and citizenship as we find many South Africans are being provided incorrect information. We generally prefer citizenship programs as they are far more secure than residency, which as you say, do have risk. With regards to Malta, for the citizenship program you are not required to learn the language in order to acquire citizenship. https://lio-global.com/malta-citizenship/. If you have any questions, I would be happy to assist: info@lio-global, please address to Nadia.

How nice to get a civil response. No thanks we did our forward scenarios a long time ago & moved to Aus. Even tho I have an euro passport thru the uk – I would never ever contemplate living in Europe other than for a extended holiday.

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