Wealthy Britons ‘buying’ citizenship to offset Brexit

Cyprus offers British business operators access to EU trade and finance. Demand for Cypriot citizenship has risen 50 percent in the past year. (Shutterstock)
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Updated 27 September 2020

Wealthy Britons ‘buying’ citizenship to offset Brexit

  • Migration firms see growing demand amid fears over future of free movement

LONDON: The number of British entrepreneurs looking to “buy” citizenship from countries offering visa-free access to the EU has risen sharply, investment migration firms say, as prospects of a post-Brexit trade deal between Britain and the bloc darken.

Investment immigration firm Astons said it had seen a 50 percent and 30 percent year-on-year increase in interest from clients seeking Cypriot or Greek citizenship respectively this quarter, less than four months before UK passport-holders are likely to lose their rights to freedom of movement across the EU.

Henley & Partners also reported a rise in requests for advice on investment migration applications to Malta, Portugal, Austria and several Caribbean islands, which offer a range of residency rights, visa-free travel to the EU and citizenship to investors in local business or property.

Citizens of certain Caribbean sovereign states including St. Lucia and St. Kitts & Nevis also enjoy preferred access to the EU, thanks to close ties with EU members as a result of historic, diplomatic and modern trade agreements.

“This isn’t about tourists. This is the UK high net worth community that have a constant need to travel to and spend significant time in the EU,” said Henley & Partners director Paddy Blewer.

“This is investment migration as a volatility hedge and a component in a high net worth portfolio value defense strategy,” he said, adding that volumes of client engagement were higher now than immediately after the 2016 Brexit vote.

Interest in additional citizenships is rising even as the European Commission examines possible steps to curb EU states selling passports and visas to wealthy foreigners, due to concerns it can help organized crime groups.

Cypriot residency can be secured in two months with a €300,000 ($351,870) property purchase. Securing citizenship takes six months and requires a minimum property investment of €2 million.

In December, Reuters reported that Cyprus government documents showed several donors to Britain’s ruling Conservative Party donors had sought citizenship of the island since the 2016 Brexit referendum.

“Both Cypriot and Caribbean investments are proving very popular ... primarily driven by high-net-worth individuals (HNWIs) from the UK who have an eye on the future and life after Brexit,” said Astons spokesman Konstantin Kaminskiy.

Henley & Partners said its volume of engagement with clients seeking alternative citizenship or residence by investment climbed 40 percent in the first quarter of 2020 versus Q1 2019, before flattening during the COVID-19 lockdown in Q2.

But interest has rallied since July 1, with a 15 percent year-on-year increase in engagement to Sept. 10, as the end of the Brexit transition phase nears.

Henley & Partners’ Blewer said clients were increasingly drawn to Caribbean citizenship applications — which is likely to give them better travel access to the EU than Britain — but which have a lower minimum investment and a quicker approval process.

Saint Lucia citizenship, offering visa-free travel to 146 countries, can be obtained in around four months for a minimum investment of £76,152 ($97,000), data supplied by Astons showed.

For less than £40,000 more, investors can obtain citizenship of St. Kitts & Nevis — and visa-free travel to 156 countries — in around 60 days.

In contrast, Malta offers citizenship in exchange for around £1 million of investment, but the process takes up to 14 months.

Portugal, meanwhile, typically processes investment migration applications in three months but only grants EU residency to investors and visa-fee travel to just 26 countries.

“With HNWIs, time is often more important than what is essentially a small fluctuation in cost and many are looking to secure additional citizenship as fast as possible in the pandemic landscape,” Arthur Sarkisian, managing director of Astons, said.

EU authorities are under pressure to clamp down on investment migration programs by member states.

Sven Giegold, a member of the European Parliament from Germany’s Green party, said these kind of citizenship sales “posed a serious threat to EU security and the fight against corruption” in the bloc.

“EU passports and visas are not a commodity. Money must not be the criterion for citizenship and residence rights in the EU,” he said.

Researchers say new model shows Turkish inflation well above official tally

Updated 22 October 2020

Researchers say new model shows Turkish inflation well above official tally

  • Since last year, opposition lawmakers have raised questions about the accuracy of official inflation data
  • Year-on-year inflation was 11.75% according to the official tally announced earlier this month

ISTANBUL: Turkish monthly inflation was more than triple the official rate in September, according to a new model developed by a group of academics and researchers based on more frequent data than the government statistics office.
Veysel Ulusoy, a professor at an Istanbul-based university and head of the independent Inflation Research Group (ENAG), said the model collects “several times more” price data than the official Turkish Statistical Institute (TUIK) tally, and is meant to complement it.
Since last year, opposition lawmakers have raised questions about the accuracy of official inflation data, arguing that the published rate was lower than the market realities.
According to ENAG’s first published finding, consumer prices in September rose 3.61% from the previous month, compared to TUIK’s calculation of 0.97% increase.
Year-on-year inflation was 11.75% according to the official tally announced earlier this month. ENAG has not yet published a year-on-year figure.
TUIK was not immediately available for comment.
“We observed price differences and volatility in almost all groups in the basket,” Ulusoy said in an interview. ENAG brings together academics from multiple Turkish universities.
“TUIK collects 550,000 prices for all the basket items in a month. ENAG calculations include several times more than that, constructing a richer set of data,” Ulusoy said.
Turkish annual inflation has remained in double digits this year despite a sharp economic contraction in the second quarter due to the coronavirus pandemic. High prices and a record low lira prompted the central bank to raise interest rates last month, and it is expected to hike again on Thursday.
The ENAG model can calculate inflation as frequently as every hour, meaning it can fill gaps for researchers and investors, Ulusoy said. It weighs items in the same way as TUIK, but excludes price data from health, education spending and alcoholic drinks.
The September calculation showed that school-related items had the most price spikes including computers, tablets and mobile phones, as well as children’s’ clothing and some agricultural goods.
Ulusoy said the ENAG model showed that tablets and computer prices were up more than 30% in September from August due to school reopenings, while TUIK put these items at around 4% month-on-month.
Last year opposition parties submitted parliamentary questions to Finance Minister Berat Albayrak over claims that TUIK tweaked inflation data for political reasons, claims dismissed as groundless by the head of the institute.