Despite the global travel restrictions in place to curb the spread of coronavirus, there has been a marked increase in demand for property-linked second passport residency programmes.
Speaking to BusinessTech, Nadia Read Thaele, who is the managing director of residency planning firm LIO Global, said there are two reasons for this increase in demand.
“Firstly, the unexpected Covid-19 onset and then the consequent global economic slump. While it was expected that global growth would slow in 2020, no-one expected it to be so sudden and off the back of a global health emergency. It has caught many investors off guard,” she said. “Secondly, for South Africa’s wealthy, the effect was compounded by Moody’s final downgrade on March 27, just as the devastation on the local economy began to sink in and the length of the national lockdown became a reality.”
Thaele also noted that stock volatility and the oil crisis have contributed to the demand as people across the world try to realign their investment portfolios. Both residency and citizenship have become important in the planning families are doing to ensure their future is stable.
The rand has lost more than 20% of its previous value, and this makes it harder for South African families to gain access to these programmes as they are more expensive now. Thaele noted, however, that many investors are making use of offshore funds to gain access.
“Had you for example invested in a residency programme with a property into a Caribbean island country such as Grenada for $350,000 at the start of the year when the dollar/rand exchange rate was at around R14, you would have invested about R4.9 million,” she said. “This investment is equivalent to what an upper-middle-income house in South Africa would cost you and well below what you would pay for an apartment in Clifton or Camps Bay.”
“On top of that the Grenada Programme is one of the few with a fast, 4-6 month route to citizenship which will give you visa-free access to 140 countries including the UK, China and Schengen region, a significant benefit for any South African,” Thaele said. “It also has the added benefit of the E-2 Visa treaty with the USA, which allows citizens of Grenada the option to invest and reside in the USA, should they want to.”
Thaele believes that Caribbean countries such as St Lucia, Antigua and Barbuda offer attractive opportunities for those looking to invest.
If you would like to find out when your local Home Affairs office is open, click here: http://www.dha.gov.za