In some circles 2020 became the year of the second passport.
St. Kitts and Nevis slashed the cost of its golden visa by $45,000 and Russia, a latecomer to the golden visa world, reportedly will soon open to investors looking for a second home. Applicants must prove they are genuine: A language test may be involved.
High-net-worth individuals have a heightened value in these pandemic times, and some are looking to be courted. Golden visa schemes have flourished in times of economic stress, but they’ve taken on a special significance in the era of COVID-19. Potential tax savings aside, the attraction for investors living in countries that have weak passports and are subject to visa approvals is strong and will continue to be, even after general travel restrictions are lifted.
Governments know this, causing some places to try to cash in on the golden visa market. Dominica is famous in the Caribbean for being the “Nature Isle,” an eco-tourism haven with large stretches of untouched land. The country unveiled a new entrepreneur visa program at the end of 2020 offering a pathway to citizenship for a minimum $50,000 investment, which is a very low cost for citizenship. But one of the real benefits is likely the access to the broader world — a Dominican passport offers visa-free travel to 140 countries and the EU Schengen Area. Also, Dominica does not impose a wealth or inheritance tax.
The EU provides a perfect example with the European Commission litigating against golden passport programs offered by Cyprus and Malta.
Above all, these activities highlight the tension governments face in trying to boost investment and attract capital in an uncertain time in which they also must take actions that may drive investment and capital away. Repair and recovery during the next COVID-19 pandemic phase could highlight this push and pull even more depending on how governments respond.