There has Never been a Better Time to Discuss Domicile Diversification Options

Video transcript

1. What is domicile diversification?

Domicile diversification is something that's very much come to the fore now over the last 12 to 18 months. Of course, our services are very much for high net worth, ultra-high-net-worth families. And wealthy people are very familiar with the concept of diversifying what they invest into and where they invest. So, that would be across different asset classes, from equities to bonds to real estate, alternative investments, cryptocurrencies. They also diversify in terms of geographies, whether it's into Asia or Europe or the Americas. But for a very long time, they've never really thought about from where they're investing from. And so, what we've seen particularly over the last 12 to 18 months is these high-net-worth individuals have begun to very much look at the portfolio of residence and citizenships. They're looking to diversify that so that they have more opportunities, not only in terms of travel freedom, access to markets, for whether it's business or education, but now also lifestyle and health care. So, what we see particularly in tier one markets like the US, in the UK now, sort of post-Brexit, once it's clear that they can no longer spend unlimited time in certain countries in Europe where they may already have businesses or real estate, they're realising the benefits of actually having this portfolio of residence and citizenship, creating a more diversified domicile portfolio. So, we see clients coming to us and actually doing multiple programs with us. They're looking to get citizenship in the Caribbean, alongside potentially citizenship in Europe. And with that, also looking at potentially getting permanent residence down in Australia or New Zealand, or some type of residence visa in Thailand. Singapore, of course, is a very popular jurisdiction as well. So, this is what we're seeing now in terms of this domicile diversification; wealthy families realising the benefits of having more than one citizenship or residence and actually having multiple available to them. And of course, they can do that through the various investment migration programs around the world, which we assist them with.

2. What are some of the other trends that we've seen over the course of the last 12 months?

So, interesting. Really, what we've seen over the last 12 months, particularly going through the start of the pandemic, is continued interest and renewed interest in our typical source markets where a lot of our clients are based. These are usually emerging economies such as the Philippines and India and Bangladesh and China. So, the demand coming out of those markets has not changed. In fact, it's increased because of various factors. And of course, the pandemic and the way countries have been able to respond to the pandemic. Now, we see the rollout of the vaccine is, of course, not done equally in all countries. So, the interest from emerging markets has continued as it has over the last few years. But what we have noticed is more interest now coming out of what can be considered your tier one countries, like the US, Canada or the UK; markets that have not historically been significant for the investment migration industry but have now really taken off over the last 12 months. The US, as an example, is now our single, biggest jurisdiction. We are sourcing clients. I think people are realising not only the benefits of, but the fact that they can hold second citizenship or residence elsewhere, and that they can do it through an investment migration program. As long as they have the financial capacity and of course, that they can pass the necessary due diligence checks, they can acquire residence and citizenship now in almost 50 different countries around the world. So, that's very attractive for them. So, definitely, that's probably the big story coming out of the last 12 months, is the fact that you have sort of significant interests coming out of those types of countries. And then lastly, another area we've seen this is in the financial centres, whether it's here in Dubai or in Singapore or Hong Kong, there are big expat communities of financially-independent, affluent, high-net-worth individuals that are coming from markets like India and elsewhere, and they're realising as well the benefits of having access to other markets. It may not be possible to get any type of permanent residence or citizenship, or very difficult to get it in these financial centres. And so, they are definitely looking at having that, what we've always said is plan B, but it's now almost a plan C in place, by getting residence in Europe or down in Australia or New Zealand, as an example.

3. Why is this a great time to discuss residency and citizenship options with high-net-worth families?

Now, as you know, it's the perfect time to have that discussion with clients. We interact with a lot of private bankers, private client lawyers, tax advisors. And from those discussions, we know that clients are asking questions about residence and citizenship, potential moves. Covid and being locked down has, of course, allowed everyone, and then particularly wealthy families to reflect on where they currently are based and what opportunities there may be in other markets. And with various lockdowns, some countries not even allowing citizens back in, the value of having options available. And options include dual or multi-citizenship, dual or multi-residence or permanent residence in a number of countries. This is the topic that a lot of clients are now wanting to discuss. Alongside that comes all the other factors that families consider in terms of where to educate their kids, access to health care. All of these topics can be addressed through one or other investment migration programs. As you know, private bankers or lawyers are having discussions with their clients, we know their clients are asking them about various other aspects of family and wealth planning. And one of those key elements now is residence and citizenship planning. So, now is the time to really understand what's happening in the industry, what are the options available, what are the trends we're seeing. And that's a conversation, I think, that every intermediary or advisor should be having with their clients.

4. How does Henley & Partners work with private wealth advisors to help them optimise this opportunity?

The answer is very closely. Day in and day out, our teams across the 30 offices that we have around the world spend pretty much most of the day with various advisors, whether they're private bankers, lawyers, tax advisors, real estate agents, family offices, IMs. And the reason we're spending our time with them is to really educate them and update them on what's happening in the industry. We know that their clients are asking about the Portugal Golden Residence Visa, about options in Malta, Australia permanent residence. They're looking at countries that have coped very well with the pandemic. And so, they would naturally like to know a bit more about the options available in those countries. So, we work very closely with all clients or legal intermediaries. Typically, we get invited in and we come and have a discussion or nowadays, more of a Zoom chat. We present to the teams around what we're seeing in the industry in terms of trends and in different markets, whether it's the US or China or the Philippines or South Africa. So, when we discuss the trends, we go through the various objectives or reasons for clients wanting to consider residence or citizenship by investment. And there is quite a large spectrum of reasons why our clients come to us for our services. And then on the back of that, of course, those team members or advisors are well-informed, at least about the basics, of what we do and can have that discussion with their clients. And then of course, if their client is then interested to find out a bit more or even pursue one of the options, then we typically get introduced into the conversation where we take them through the process and the costs involved. And then, as I said, we then help them to actually execute that strategy from A to Z.