View all newsletters
Have the short, sharp Spear's newsletter delivered to your inbox each week
  1. Wealth
December 10, 2020

Watch: Covid-19, Cyprus and the future of citizenship by investment

By Rasika Sittamparam

To find out what the future holds for UHNW mobility, Spear’s – in association with St Lucia Citizenship by Investment – assembled a panel of citizenship experts and top private client lawyers to offer their experience and insight

The future looks bright for the investment migration industry, which, despite the travel restrictions of Covid-19, has attracted significant interest and engagement from the global HNW community, which is more likely than not to sustain the industry into 2021 and beyond, the panel at Spear’s most recent webinar with CIP St Lucia concluded. The clip is available to watch on-demand here.

Nestor Alfred who leads St Lucia’s Citizenship by Investment Programme, explained to host Alec Marsh, editor-at-large of Spear’s, that there is ‘a positive story to be told’. Alfred has in fact seen more than a 100 per cent increase in applications to his programme and the same can be said for the islands within the Organisation of the Eastern Caribbean States region, despite the Caribbean small island states experiencing ‘the most destabilising event since World War II’ in 2020. ‘I’m happy to say that our numbers from March up until now has been on a steady increase,’ he told the webinar. ‘I’m  sure that this country can continue to have a steady flow of foreign direct income through this programme.’

Paddy Blewer, the director at investment migration services provider Henley & Partners, reported ‘a massive growth of engagement’ from HNWs across the world with the firm, which has offices around the world. He said enquiries grew at a rate of 50 per cent in the smallest region and grew at a rate of up to 300 per cent within the largest regions. What drives the wealthy to the investment migration industry is the fact that they have seen the devastating effects of Covid-19 as the first major global volatility event since the 2008 financial crisis, he said. ‘That has created a similar movement to what the investment migration industry saw in ’08-’09, which is an understanding that the globally wealthy are very aware of the effects of volatility.’

The private wealth lawyers had seen a similar trend favouring global migration among the wealthy. Ceris Gardner, name partner of Maurice Turnor Gardner where she is also head of immigration, said that ‘people have felt so stuck’ during the pandemic because of travel restrictions: ‘They felt that “This must not be allowed to happen to us – we really need that extra mobility, we need to have an extra facility, perhaps a second passport, or some other location”.’ Islands have proved to be ‘extremely popular’ as a result, she added.

James Quarmby, a tax partner at Stephenson Harwood, noted that there’s now a ‘disenfranchisement of the office’ driving greater desire among HNWs to move away from traditional centres. Instead of being located in Mayfair, for instance, they could be handling their business and staff remotely from an island – which has been an attractive location during global lockdowns. ‘I hesitate to suggest that perhaps when Covid is over, people find islands boring again, but perhaps, people will get used to them by then,’ he joked, adding that it was interesting that the number of British HNWs who applied to move the Guernsey and Jersey has gone up by more than 100 per cent.

The event was interspersed with poll questions to audience members who tuned in. When asked if they expected possible tax rises on the wealthy imposed by governments to meet the costs of Covid-19 to drive increased investment migration – 50 per cent of viewers responded with an overwhelming ‘Yes’.

The Cyprus problem

The panel moved on to address the suspension this summer of the Cypriot citizenship by investment programme, the result of a serious breach of procedures which allowed those with a criminal record to obtain passports. Blewer said it was a case of ‘an individual that has done something wrong and they should be punished. There should be an investigation into the system’.

Content from our partners
How Flygreen is ascending into the future of private aviation
Stoneweg, Icona, and CBH Strengthen Partnership with Cromwell Acquisition, Adding €4 Billion AUM to Stoneweg
Why investors should consider investing in nature

Quarmby explained that Cyprus’ existing political tensions with the EU was a contributing factor to the story but responded that it is really a case of ‘bad luck’ for Cyprus instead of it having a cascading effect elsewhere. ‘Cyprus is not as totemic as you think,’ Quarmby said. ‘And I always believe that, ultimately, capitalism will sort things out.’ Gardner echoed this, adding that there is a possibility that the Cyprus incident would put ‘more pressure’ on Malta to improve its existing system of citizenship by investment. ‘It is bad luck, as James said, for Cyprus, it’s a shame that it’s happened. But I don’t think it should necessarily bring the whole of migration industry into disrepute.’ CIP St Lucia’s Alfred cemented this view, saying: ‘For St Lucia, I think what transpired in Cyprus clearly showed us that we are on the right track as a programme.’

When asked, the audience said they thought the suspension of the Cypriot citizenship by investment programme did bring the industry into disrepute – a strong majority of 66.7 per cent answered ‘Yes’.

Geopolitical pressures

Host Marsh asked the panel whether geopolitics was also now a factor that increasingly ‘pushes people around the world’, to which experts responded with an overwhelming ‘Yes’.

CIP St Lucia’s Alfred has seen a significant number of applications from the US which initially surprised him. ‘Geopolitics can be a very important trigger,’ he told the panel, adding that a number of reasons were provided by US applicants and stemmed from the administration of this present US government, supposed threat to their financial security, while others were concerned about issues such as the US’ foreign policies and taxation.

Henley & Partners’ Blewer named the geopolitical tensions in Hong Kong and the Trump administration as examples which drive UHNW migration. ‘Ultra-high-net-worths want to have optionality, and we see it across the world. It’s not just geopolitical, it’s environmental as well. We have seen our first clients come to us over concern that in 20 years’ time, their family homes will be underwater or desert. We see a multiplicity of risks.’

Gardner, from Maurice Turnor Gardner, said that despite having seen ‘very few’ UK investor visas issued in recent years, yet Q3 of 2020 saw the number go up from 23 in the previous quarter to 102. Of these 23 were applications from China and 20 from Hong Kong.

Tax, warned Quarmby ‘is political’ and could become a significant driver of investment migration, too. ‘If governments feel that as a consequence of the pandemic, we need to squeeze the rich until their pips squeak then I think we’d find huge droves of people leaving,’ he warned.

Future trends

The panel concluded by identifying the biggest trends in investment migration which will continue well into the 2020s. ‘The whole idea of being stuck, by itself is an idea that people and families are exploring and therefore the  issue of international mobility is now being discussed among families, among persons, and therefore I believe that this now upward trend will continue,’ said St Lucia’s CIP chief executive, Nestor Alfred. The  St Lucia government is looking into creating legislation for  an “extended stay visa programme” to allow persons to work remotely and other developments include having the alien land holding programme under the CIP with one of  the attractions being the issuance of the investor entry permit for foreign property buyers.

Gardner echoed Alfred’s point about continued migration in the 2020s, adding that her clients would certainly expect to ‘move very quickly if they have to’. Henley & Partners’ Blewer said there is most definitely a lasting trend towards ‘more enhanced standards and more security’. ‘It’s ensuring that every single investment migration programme can guarantee that the potential investor isn’t a major in the GRU or isn’t someone from Hezbollah,’ he cautioned.

‘Tax is going to drive politics and politics is going to drive migration,’ Stephenson Harwood’s Quarmby observed. ‘For most countries, it took seven, eight, nine years to get over the global financial crisis. The UK has borrowed way more in nine months than it had during the global financial crisis – the shockwaves of the increased government spending will affect every country,’ he said, noting that ‘if people’s pockets are being hurt, they will look for places to move’. ‘It’s natural human behaviour’.


The Panel

Nestor Alfred

CEO, CIP St Lucia

Nestor Alfred is the Chief Executive Officer of St. Lucia’s Citizenship by Investment Programme. Prior to this position, he served at a senior/executive position in varied areas within the financial services sector i.e. taxation, banking (offshore & domestic) and financial regulations. In his banking career he worked in the Islands of Barbados, Cayman Islands and Saint Lucia.

In his role as the Chief Regulator for Saint Lucia’s Offshore and Insurance sector, Nestor acquired extensive expertise in compliance; anti-money laundering and counter- terrorist financing and was the first ever Caribbean Financial Action Task Force Mutual Evaluator coming out of Saint Lucia.

Alec Marsh

Editor-at-large, Spear’s

Alec Marsh is the editor-at-large of Spear’s, and a contributor to the New Statesman. He was editor of Spear’s from 2017-2020 and has written for The Spectator, Country Life and the Financial Times, and written regularly for titles including The Times, Daily Telegraph, and Daily Mail. A BSME award-winning editor, Alec has interviewed many leading figures in British political and business life over the last two decades and writes on a broad range of topics including world affairs, politics and economics. His novels, ‘Rule Britannia’ and ‘Enemy of the Raj’, are published by Headline Accent.

Paddy Blewer

Director, Henley & Partners UK

Paddy Blewer is the group head of marketing and communications at Henley & Partners. He has over 15 years’ communications experience both as a consultant and an in-house advisor. He has worked with international corporate, individual, and sovereign clients on strategic communications, corporate brand identity and reputation, international relations, and crisis management. He also has strong media, stakeholder, investor, and issues management experience, with a wide range of contacts. He holds a Master’s in War Studies from King’s College London and is a specialist in capital markets and geopolitics, Blewer has advised on over $50 billion-worth of transactions.

Ceris Gardner

Partner, Maurice Turnor Gardner

Ceris Gardner is a name partner and head of charities and immigration at Maurice Turnor Gardner. She advises UK and non-UK domiciles and resident individuals, families, estates and trustees UK and international tax and succession issues, establishing UK and offshore trusts, family limited partnerships and other cross border asset holding structures. She has experience with advising on matters concerning immigration, philanthropy as well as art and heritage property matters. She is renowned for her work on grant making and operational charities on matters of charity law and tax. She is a regular contributor to Spear’s magazine, and is a Spear’s top ten tax and trust lawyer.

James Quarmby

Partner, Stephenson Harwood

The Legal 500 describes James Quarmby as a ‘very experienced tax lawyer with commendable professionalism and responsiveness’ and Chambers describes James as ‘the fount of all knowledge’. He has a wide ranging practice, advising on international trusts, taxation, pensions and disputes. In 2018, James was listed in the annual Spear’s Top Ten Tax & Trust Lawyers for the first time, having previously been Top Recommended. He is also the holder of various awards, including ‘Private Client Law Firm of the Year’ in the Wealth Briefing Awards (2015 & 2017) and the British Legal Awards (2015). He lectures widely and frequently appears in the press and broadcast media. As well as being a solicitor, James is a Registered Tax Technician and is regulated by the Association of Tax Technicians. He is an active member of STEP and the International Tax Planning.

Read more coronavirus coverage

Swif 2020: Exploring the world’s most viable passport option, in association with St Lucia Citizenship-by-Investment

Spear’s Covid-19 briefing – report and full audio

How the Coronavirus outbreak exposes the ‘central weakness’ of China’s regime

Watch the Spear’s Wealth Insight Forum 2020 on-demand now

Select and enter your email address The short, sharp email newsletter from Spear’s
  • Business owner/co-owner
  • CEO
  • COO
  • CFO
  • CTO
  • Chairperson
  • Non-Exec Director
  • Other C-Suite
  • Managing Director
  • President/Partner
  • Senior Executive/SVP or Corporate VP or equivalent
  • Director or equivalent
  • Group or Senior Manager
  • Head of Department/Function
  • Manager
  • Non-manager
  • Retired
  • Other
Visit our privacy policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
Thank you

Thanks for subscribing.

Websites in our network