- Globalisation has brought us to a moment in time where it is increasingly common to be born in one country, educated in another, and have roots, connections, and residences in any number of places in between.
- African High Net Worth Individuals are optimally placed to take advantage of the world’s investment migration programs.
- Amanda Smit, Henley & Partners South, East, and Central Africa Managing Partner writes on how Kenya can maximise its influence on the global stage.
Wealth in Africa is on the rise. AfrAsia Bank’s proprietary Africa Wealth Report, published last month, revealed that Kenya has the fourth largest concentration of US dollar millionaires on the continent, after South Africa, Egypt, and Nigeria. However, in a volatile global climate, with political, ecological, and economic uncertainty all on the rise, there are compelling reasons to reassess exactly what it means to be wealthy today — both in Africa, and beyond.
Globalisation has brought us to a moment in time where it is increasingly common to be born in one country, educated in another, and have roots, connections, and residences in any number of places in between. It is due to these circumstances that the burgeoning investment migration movement began to explode a few years ago. Nowadays, more and more people around the globe are feeling persuaded to explore the concept of citizenship planning in the form of investment migration. For the as-yet-uninitiated: investment migration refers to the process whereby qualifying individuals can acquire alternative residence or citizenship in a new country in exchange for a significant economic contribution to that country.
High-net-worth Kenyan citizens, like high-net-worth citizens across the African continent, fall into the category of ‘strong economic profile and limited global access.’ In essence, they have the financial means to travel, do business, invest, and live anywhere in the world, but are hamstrung by a restrictive passport. On the recently updated Henley Passport Index, which ranks all of the world’s passports in terms of the visa-free or visa-on-arrival access they grant their bearers, the Kenyan passport comes in at 72nd place, granting visa-free or visa-on-arrival access to just 71 countries worldwide. In comparison, the South African passport fares better, coming in 53rd with visa-free or visa-on-arrival access to 100 destinations. Egypt’s passport scores 92nd with visa-free or visa-on-arrival access to 49 destinations, and Nigeria comes in at 95th place, granting its bearers visa-free or visa-on-arrival access to a paltry 46 destinations across the world.
The clear disparity between wealth and global mobility for African high-net-worth individuals (HNWIs) means that African HNWIs are optimally placed to take advantage of the world’s investment migration programs.
One passport good; two passports better
Despite being one of the strongest passports in Africa, the Kenyan passport grants its bearers frustratingly limited movement in the global context. To put the travel benefits of having secondary citizenship into perspective: if a Kenyan citizen were to invest in a Maltese passport, they would immediately boost the number of destinations they could access visa-free from 71 to 183, including Canada, the whole of Europe’s Schengen Area, and the US. Furthermore, holding alternative citizenship also eliminates a great deal of the inconvenience and waiting time associated with visa applications and passport renewal or replacement processes.
However, while the most glamorous aspect of having alternative residence or citizenship is the increased mobility it confers, the less glamorous benefits are also arguably the most valuable.
Education and other benefits that go beyond improved mobility
The added benefits of holding alternative citizenship are multifaceted and numerous. On top of bestowing individuals with the right to travel, trade, and settle in a vastly expanded set of countries and regions, together with the right to access all the benefits enjoyed by other citizens of the citizenship-granting state, alternative residence and citizenship are an increasingly popular strategy for investors looking to grow their business networks,protect their existing assets, and boost educational opportunities for their children.
Indeed, one of the strongest motivations for HNWIs considering investment migration is the advantageous position in which it places their children when it comes to profiting from a world-class education. An international education is seen as an extraordinarily valuable investment in human capital, key to both academic and professional success in a globalised world. However, as immigration policies change and the process of acquiring a student visa becomes more complex and challenging, a place at a top independent school or university cannot necessarily be counted upon.
Study as a resident, graduate as a citizen
In the current isolationist climate of the UK and the US, it is getting harder to secure study visas, especially for African students, due to tighter immigration controls and a worryingly anti-African bias when it comes to rejected applications reported by a number of top universities. To avoid becoming entangled in a perilous student visa application process, investment migration programs offer a chance to safeguard one’s residence rights prior to making a university application.
Moreover, as most aspiring young professionals nowadays are realistically required to study at least up to master’s level to get into the job market, the time they will spend at university is approximately five to six years. Here is the interesting thing: many residence programs, which tend to be cheaper than citizenship programs,have the inbuilt facility to convert one’s residence to citizenship after more or less the same time frame. In other words, if one were to obtain residency by investment in a European country at the beginning their child’s university career, there is a good chance that their child could convert that residence right into full citizenship status by the time they graduate.
Whether one’s children then return home after graduating to reinvest their skills in the domestic market, or whether they choose to further their careers abroad, they would be ideally positioned to thrive. A not insignificant secondary benefit is that the home country’s global footprint would also undoubtedly grow, as a new generation of Kenyans grow up with a global world view and international networks.
For wealthy parents wanting to make sure their children secure a place among the elite international student body and lay the foundations for future success, citizenship or residence rights in a country with high educational standards are the best investment they can make.
Tipping the balance
With the recent launch of the Montenegro Citizenship-by-Investment Program, it is clearer than ever that investment migration is becoming an increasingly common wealth management strategy. Investment migration programs are fundamentally designed to manage the combination of risk and opportunity — and when coupled with the potential for securing educational opportunities for one’s children, represent a steadfast strategy for any HNWIs looking to expand out of Africa.
The opinions expressed in this article are those of the author. They do not reflect the opinions or views of the Business Insider by Pulse or its writers.