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Huge increase in demand for second passports

Most of them from non-white South Africans looking for a bolt-hole.
Many would like to keep their South African passports – maintaining a direct link to family and home – while taking advantage of the benefits of living and working abroad. Picture: Shutterstock

South Africans looking for a bolt hole in case things go pear-shaped in SA are applying in record numbers for foreign passports. Most of these are high net worth individuals looking for a Plan B in case the political or economic future deteriorates, or for ease of foreign travel and doing business abroad.

Not all of these are planning to emigrate, says Amanda Smit, managing partner at Henley & Partners SA, a global citizenship and residence advisory firm. Many would like to keep their South African passports – maintaining a direct link to family and home – while taking advantage of the benefits of living and working abroad.

Benefits and privileges

“South African high net worth individuals (HNWIs) recognise that dual citizenship or residency provides more benefits and privileges for them and their families including ease of travel, security for the future and expansion of business and banking,” says Smit.

She says the number of foreign citizenship inquiries from South Africans shot up 125% in the second half of last year over the same period in 2017.

This translated into a 53% increase in applications for foreign citizenship in the second half of 2018. There was a 364% spike in inquiries in October 2018 over the same month in 2017.

In other words, it appears that South Africa’s human capital is taking the same flight path as its financial capital.

According to data from the UN Conference on Trade and Development (Unctad) for 2017, South Africa was the third biggest exporter of capital as a percentage of GDP in the world. The so-called Ramaphoria effect appears to be doing little to stem an exodus that started under former President Zuma.

Read: Tragic data shows capital fleeing along with jobs 

Of those inquiring about second passports, 85% were male, and 70% were aged between 45 and 64. Three-quarters of the inquiries came from Gauteng and Western Cape, split almost equally between the two provinces.

Interestingly, only 45% of the inquiries were from whites. Non-whites now make up the majority of high net worth emigres.

The most popular destinations are for European residency programmes such as those offered by Portugal and Greece, as well as citizenship programmes in the Caribbean and the Mediterranean islands of Malta and Cyprus.

While most of the applicants are male, women have been applying in growing numbers over the last two years.

Education, ease of movement

Some of the applicants are parents wanting to give their children the best education abroad, but also for ease of movement: the SA passport has access to only 102 destinations and this number excludes the world biggest economies, such as the US, UK, Europe’s Schengen Area and Canada.

“There is more global mobility than ever before,” says Smit. “There are also more wealthy people as opposed to many years ago when wealth was usually concentrated in a certain portion of society.”

The demand for second passports is not unique to SA. A second passport or permanent overseas residency is now the ultimate luxury item for HNWIs, says CEO of deVere Group, Nigel Green. His company reports a 45% year-on-year jump in inquiries from individuals across the globe who are seeking citizenship or residency outside their country of origin. “Wealthy individuals around the world are now increasingly considering investing in a second citizenship or overseas residency.”

Most HNWIs looking for dual citizenship or residency are coming from India, China, South Africa, the Middle East and Russia, says Green. The reasons include visa-free global travel, political stability, world-class education and healthcare, tax efficiency, and wider business growth opportunities.

Residency as a first step

Most applicants opt for residency in the first instance as it is typically less costly and an easier process to complete – and is a recognised gateway to full citizenship. Plus, some countries like China and India do not recognise dual citizenship, so residency is the only option.

Smit says the countries with the best residence and citizenship programmes are:

  • Malta, which gives you the right to live, work and study in any of the 28 European countries and Switzerland, with visa-free travel to 182 countries.
  • An Antigua and Barbuda passport provides visa-free access to approximately 150 destinations including the UK, Europe’s Schengen Area, Singapore and Hong Kong.
  • Portugal, which allows visa-free travel within the 26 countries of the European Schengen Area, with the eligibility to apply for citizenship after five years as a legal resident while keeping other citizenships.
  • Launched in the second half of 2018, the Moldova Citizenship-by-Investment programme offers visa-free access to 121 countries including Russia, Turkey and the Schengen Area. Citizenship is transferable to future generations without restrictions.

Investment-for-residency schemes are typically based on real estate investments and start from around 250 000 euros (about R4 million) in Greece.

“Portugal’s programme is proving to be the best option for many clients as it requires only two weeks a year residency obligation. It gives full residency benefits to live, work, open a business and study there with complete access to travel across Europe’s Schengen Area. Plus, there is the option of obtaining full citizenship after six years if required,” says Green.

“This option is a straight real estate purchase of 500 000 euros (R8 million) into a new build property. There are lower property options available, however, they are only for properties over 30 years old and most investors prefer the newer real estate as they typically provide better investment opportunities and are less hassle to maintain.”

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“In other words, it appears that South Africa’s human capital is taking the same flight path as its financial capital”.

*Gosh* ya reckon? who woullda thunk that the ANC are driving their best human capital out with their racist workplace ethnic cleansing policies thus accelerating the inevitable collapse. You don’t need to be white nor privvy to the prognostications of St. Ciaran to realise this.

And to think people used to judge others emigrating, calling them sellouts – now those same people are asking how to get foreign passports in case they need it themselves.

As a millenial in the asset management industry, my primary goal is not buying a house – its getting citizenship elsewhere or work that is transferable (can be done in any country).

I wonder how many of those buying foreign citizenship are sitting in the ANC NEC or in parliament itself.

Now that would be telling!

A case of loot as much as you can and then flee.

Much like a common thief working in slow motion.

Learnt from the hand of criminal governments the world over, particularly in Africa. In SA, the ANC “leadership” are hypocrites to a man or woman. Hardly credible that their loyal voters cannot see through this scam.

And, there is just no telling the exact numbers that are leaving because many just go without officially immigrating. Only years down the line when they don’t vote, are not longer taxpayers, does anyone realise. Then there are those who have other passports and just pack up and leave. There is not need for them to ask permission from anyone to go. The figures are higher than estimated.

Percentages is meaningless – What are the actual numbers – Did it go from 50 to a 100 or from 1000 to 2000… Just how many South Africans have the odd R4 mil to 8 mil lying around? What is the return on that capital? It’s not like the property market in Portugal is shooting the lights out. Fear is a wonderful motivator and the marketing guys knows it.

Spot on comment.

There are plenty of Hollanders, Swiss, French and other N.Euro people eager to plant off 6 months of a year in SA…

The world is becomming a hop-on-hop-off existance for many and multi-citizenship…why not. I have no loyalty to any corrupt government

And I bet not one of them wants a second passport from South Africa! The ANC has to realise that they are not losing the unskilled basic income grant recipients . They are losing the well educated young people who can work in decent places and rich older people whose capital gets invested elsewhere. global growth is about triple South Africas so there are jobs for skilled people.

A friend of mines son( a medical radiation oncologist) just joined a practice in Canada-he does not know if he locked his house up when he leaves it, has a mortgage at less than 4% interest and despite the snow everything works

@Gemini – Human capital flight is the most disturbing trend I see in SA – speak to some 27-35 year olds with degrees (actuaries, teachers, ca’s, marketing, fashion, you name it) – most will be able to rattle off more close friends who have left the country than stayed – especially the smart ones. Fear-marketing aside – human capital leaving SA is excessive. Whether through second passports for the rich or just leaving for the educated ‘youth’, it’s going to have an immeasurable negative impact on SA for years (decades?) to come. I’m still here but it’s sad to see.

I think Mike Schussler did the arithmetic based on what it has cost to educate such a professional and what SA will subsequently lose in tax revenue, expertise etc. It is staggering. Even when it’s reported that engineers have to be brought in from Italy to “fix” Eskom, the penny doesn’t drop. Would you invest capital in a country actively driving its most productive citizens out?

Young people have skills, older people have money. Family members sponsor each other. Many are finding a way to vote with their feet. This has been going on since the Angola war. We seem to be dropping below a critical level that is needed to maintain the country.

When Mandela came to power there were many trying to find a reason to come back, we do not hear much about them any more.

You can’t criticize anybody for emigrating, it is their choice, we only have this one life to live. Having said that, I have often wondered whether black South Africans would treat white South Africans differently, if it was not for the (incorrect, I think) perception that most white South Africans are packed for Perth. The reality is that after 400 years, I have nowhere else to go. This is my home. In the words of John Kani, the actor, white and black South Africans are stuck with each other, whether we like it or not. We can just as well work together.

SA has a long, long list of problems… and it doesn’t seem to be getting shorter either. But so has Europe, the US, Oz, you name it. I’ve looked at emigrating numerous times, but every time the fear have subsided a bit and emotions calm down, I sit down and carry on. Ultimately you can loose your life savings (or your life) anywhere in the world, so this is something that I will do only when I have the odd R8m burning my pocket, or the EFF takes over, whichever comes first.

I agree with you all the way Batman. I struggle to find a sound bank in Europe or the USA. It is bo use running away from the ANC and you end up losing your assets when your offshore bank goes belly up. better the devil you know hey?

Concern about my life savings (and job) is not top of my list; it’s my life I am concerned about (and that of my family members).

“Interestingly, only 45% of the inquiries were from whites. Non-whites now make up the majority of high net worth emigres.”

Interesting indeed, if you voted ANC in the past then you should not be allowed to leave.

If i have the means i will leave

You should know it is best to have at least 2 passports, live in a third country and keep your money in a fourth.
Something to aspire to where ever you are.

My son-in-law has just got Malta citizenship for his family and my partner got told at her hairdresser that 30 clients had sold up and left for the UK in the last three months.

Good money gone … for good.

The concentration of older persons applying is perhaps an indication of the Purchases Passport costs. There are far far far more people that leave in the 20-35 category but outside the Purchased Passport classes (they can not afford the entry price).

I get the youth motivation and expect that half my kids will live elsewhere. Opportunities.

I don’t get the thing with old people. By now you can invest offshore virtually unlimited. Unless grand papa was a gold or diamond baron and then in any event the trustees determine what you can spend. So global investment diversity is NOT a factor unless you are stupid.

Travel visa are a pain but if you do ACTUALLY travel often then you probably already have a multiple entry for EU, US etc. on the odd occasion you need a visa for XYZ, it is not really that big an issue.

Unless you are in the trust baby category, you will NOT find better medical service than at our prices. If you are Runt Rich Old Person and believe you can go on free public health in EU or wherever for medical, you need a shrink.

So what is left? End of Days scenario?

There’s a certain amount of demand and supply going on here – people leave to get jobs, and that actually makes it easier for those of us who stay.

And BTW, people were leaving in massive numbers from early 1980’s – you can’t blame it all on the ANC. The ANC is the result of the injustices that went before it.

And another BTW: it’s pretty awful everywhere else too.

very ignorant comment… if capital leaves, the opportunity is lost…gone; you build from a lower base , you compound from a lower number

End of comments.





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