Second-citizenship business booms amid global strife

Armand Arton. (Photo: Jonathan Glynn-Smith)
Updated 11 May 2017

Second-citizenship business booms amid global strife

JEDDAH: Business might be booming for Armand Arton, but that does not necessarily mean the world is a better place.
As president of Arton Capital, the self-described “ambassador of the global citizen movement” helps moneyed individuals — including an increasing number from the Middle East — gain citizenship elsewhere and the all-important second passport that can bring.
But it is a business that is strongly correlated with global upheaval and conflict. The more misery there is, the more people want to move — whether they are a wealthy investor of the kind Arton deals with or a forced migrant in what is the worst refugee crisis since World War II.
“Fortunately or unfortunately, our industry is very much linked… with the political stability around the world,” Arton told Arab News.
“Knowing where that is going — it is not rocket science — I can only imagine that our industry will grow directly with that. More of Trump, more of Brexit, North-South Korea, of China, of Russia…” And the list goes on.
Arton Capital, which is headquartered in Montreal, Canada, offers access to investor programs for residence and citizenship in about 12 countries, including Antigua and Barbuda, Bulgaria, Cyprus and Portugal.
It is one of the biggest players in a niche industry, with a total of about 25 countries offering citizenship-through-investment programs.
Applicants need to meet certain criteria and typically make a donation or investment in the country in which they wish to gain citizenship. For example, someone able to invest at least $500,000 in a targeted commercial sector in the US and create full-time employment for at least 10 qualified US workers, may be eligible for American passports for themselves and family.
This is clearly not something that is open to everyone: Arton estimates the industry as a whole sees about 20,000 to 25,000 families obtain second citizenship through investment each year — a blip on the radar of total global migration.

Middle East unrest
His company takes on between 500-600 cases a year, advising clients on destinations, conducting due diligence on investments and facilitating transactions. Most governments with citizenship-by-investment schemes do not deal directly with individuals, leaving a gap in the market for licensed companies like Arton Capital and its competitors.
The industry has raised billions in funds for participating countries, estimates suggest, and Arton believes that demand for citizenship-by-investment programs will only increase: “I think there will probably be 50 countries in the next 10 years doing it.”
About six in 10 of those looking for second citizenship are Chinese, Arton said. But the Arab Spring saw the number of applicants from the Middle East and North Africa (MENA) double.
“The Middle East and North Africa — from Morocco to Afghanistan — used to be about 10 to 15 percent of the global market. Right now, it is 30 percent. That includes Iran, which is a very wealthy country, with a lot of sanctions and restrictions,” Arton said.
Inquires from the Middle East have again picked up since the election of Donald Trump as US president, he added.
“(We’ve had) 50 percent more inquires for second passports from the Middle East since the election,” Arton told Arab News during an interview in London earlier this year.
“People are much more nervous about the extreme right overall… And definitely with the (proposed) travel ban, people are realizing that one passport can very easily be limiting your ability, tomorrow morning, to travel anywhere you want. But by having a few, it will always give you that extra freedom.”

Philanthropic responsibility
Such is the boom in inquiries from the Middle East, that Arton jokingly wonders whether Trump, forever the businessman, might ask for a cut of his revenues.
But another more serious concern is the bad press some citizen-by-investment programs have received. In 2014, for example, the US Treasury Department Financial Crimes Enforcement Network (FinCEN) warned that passports obtained through the St. Kitts and Nevis (SKN) program had been used to facilitate financial crime.
“Illicit actors are abusing this program to acquire SKN citizenship in order to mask their identity and geographic background for the purpose of evading the US or international sanctions or engaging in other financial crime,” FinCEN said at the time.
“For example, FinCEN believes that several Iranian nationals designated by the Office of Foreign Assets Control (OFAC) have obtained passports issued through the SKN Citizenship-by-Investment program.”
Arton, understandably, is quick to defend his business.
“For every bad guy, there are thousands of good people and good cases,” he told Arab News during a brief visit to the UK capital. “This industry has not only changed the lives of hundreds of thousands of people who now lead better lives, and have access to great education and medical systems, but also the countries have received so much money.”
Another issue, of course, is that the services Arton Capital offers — helping rich people, many from war-torn countries, gain second passports — is not available to the millions of refugees fleeing conflict zones.
Conscious of this, Arton Capital also has a philanthropic slant. The company insists that its own clients make a donation of between $100 and $1,000, which Arton Capital matches. And Arton himself has even proposed a “global citizen tax” in Europe, under which 2 percent of second-passport applicants’ investments would go to refugee causes.
“Since the refugee crisis of the last three or four years, we have really been in the forefront of making that link, between the wealthy immigrant and the refugee,” he said.
“They come from the same countries — Syrians, Egyptians … While I deal with some of the wealthiest people in these countries, who can afford to invest a couple of hundred thousand or millions to get a better access and better life with their kids, hundreds of thousands of their compatriots are risking their lives crossing the sea, for the same reason: Giving better options to their kids.”
Arton’s own history and Armenian origins have informed his current role and interests as “ambassador of the global citizen movement.” He was born in Bulgaria, but his childhood saw him move from Morocco to Europe and then to Canada.
He is convincing in his explanation of how his business is about much more than just arranging passports for the rich.
“What is a global citizen? It is somebody who understands that, with this extra access that has been provided to him through these programs, he has the obligation, not only an option, to make the world a better place,” said Arton.
“It is not somebody who has a few passports in his pocket and feels like Jason Bourne. It’s more somebody who understands that privilege comes with responsibility.”

Saudi crown prince’s India visit to boost bilateral investment

Saudi Aramco CEO Amin Nasser leaves after attending the Saudi-India Forum in New Delhi on Wednesday. (Reuters)
Updated 32 min 30 sec ago

Saudi crown prince’s India visit to boost bilateral investment

  • Vision 2030 offers huge opportunities to Indian businessmen in non-oil sector

Many Indian businesses that already operate in the Kingdom are interested in expanding as part of Vision 2030. Retail company Lulu Group International, for example, plans to open 12 new hypermarkets and five malls in Saudi Arabia by next year. 

It already employs more than 2,700 Saudi nationals and plans to increase this number to about 5,000 by 2020.

“Saudi Arabia is a very important market and we will invest in the booming retail sector as we are upbeat about the vast opportunities in the Kingdom through its Vision 2030 initiative,” said Yusuff Ali M. A., the chairman of Lulu Group.

Saudi Crown Prince Mohammed bin Salman’s first visit to India will propel trade and bilateral business relations between the two countries to new heights, experts predict.

Saudi Arabia has long been an important trade partner for India, said Mir Gazanfar Ali Zaki, the general secretary of the Saudi Indian Business Network, and the crown prince’s trip could expand and enhance ties in diverse fields.

According to Saudi Arabia’s General Investment Authority, more than 420 Indian companies operate in the Kingdom through joint ventures or with 100 percent ownership. They have capital of more than $1.5 billion and cover sectors including management and consultancy services, construction projects, telecommunications, information technology and pharmaceuticals.

Saudi Vision 2030, the crown prince’s brainchild, aims to transform the country by diversifying its economy through a series of reforms in non-oil sectors. India hopes to play a significant role in this expansion. The key sectors that India can target to expand and boost trade ties with the Kingdom include software development, solar energy, jewelry, fashion, tourism, education and food, said Zaki.

The cultural reforms initiated recently by the crown prince also clear the way for a wide range of business opportunities in the entertainment sector that India is well placed to cash in on. Bollywood films and music rank high on the list of popular entertainment among many Saudis, and with the recent reopening of cinemas in the Kingdom, and ambitious plans to build hundreds of theaters across the country, there is a huge opportunity for an Indian film to grab a large share of the market.

India’s bilateral trade with Saudi Arabia was worth $27.48 billion in the financial year 2017-18, according to the Indian Ministry of Foreign Affairs, making the Kingdom the country’s fourth-largest trading partner. It is the main supplier of energy, providing more than 18 percent of India’s oil. However, bilateral trade has dropped by almost a half from a high of about $48 billion five years ago because of the fall in global demand for oil. This might soon change, analysts say, as more investors from India are tempted by the Vision 2030 opportunities.

This view is shared by a Middle East Institute analysis that said: “As reforms related to Saudi Arabia’s Vision 2030 are implemented, Indian investors are likely to be attracted to several sectors, including infrastructure, hydrocarbons, desalination, renewable energy, education, research and development, health and pharmaceuticals.”

“We have trained about 200 Saudi nationals to take our business forward,” P. A. Ibrahim, the chairman of Indian company Malabar Gold and Diamonds said. “It is really a huge success that gives us the confidence to open more branches in the Kingdom. Vision 2030 and the Neom project have opened up good opportunities for us to invest more. We are planning four more jewelry outlets in the Kingdom soon,” he said.

A growing area of trade cooperation between the two countries is the field of petrochemical projects. Saudi oil company Aramco, in partnership with the UAE’s Adnoc, recently announced a joint venture for a stake in the $44 billion Ratnagiri Refinery and Petrochemicals project. Cooperation in the sector is expected to grow and it is thought new agreements might be signed during the crown prince’s visit.

An enduring and tangible aspect of the bilateral relations is the presence of a strong, vibrant community of 2.7 million Indians in Saudi Arabia, the largest single group of expatriates in the country. In addition, the Kingdom welcomes more than 175,000 Indian Hajj pilgrims every year.

“We can transform the trade links and cooperation to people-to-people coexistence because of this,” said Zaki. “By promoting foreign direct investment at Saudi trade shows and Indian trade shows, businesses from both countries can benefit. India and Saudi Arabia can organize Indo-Saudi trade exhibitions in both countries so that it can be a common platform for bilateral trade. Both countries should organize as many business-to-business meetings as possible.”

He highlighted the recent efforts by the Saudi Indian Business Network to achieve this through exhibitions such as the Kerala Gems and Jewelry show, the Kolkata Gems and Jewelry Show, Indus Food 2019 in Greater Noida, the International Indian Jewelry Show Signature in Mumbai, the Food Festival of India in Jeddah, the Film Festival of India in Jeddah, Global Exhibition on Services in Mumbai, Business Opportunities in India in Jeddah, and Tea Around the World in Jeddah.

The crown prince’s visit has great political significance, too. While energy and economic cooperation will remain the mainstay of bilateral ties, the two nations are trying to strengthen their cooperation in defense and security. The Ministry of External Affairs has talked of a growing desire in Riyadh for stronger strategic relations and improved intelligence sharing.