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Dominic Volek is Group Head of Private Clients and a Member of the Executive Committee of Henley & Partners.
Terms such as climate change, global warming, rising sea-levels, climate disasters, and so on, have been bandied about for several decades, but today their impact is uncomfortably close to home, no matter where we live. The effects of our changing climate, from flooding to extreme heatwaves, are constantly in the headlines and we all need to become hardwired to cope with them as part of our everyday reality.
But while all countries experience a degree of vulnerability to climate change, some are more precariously positioned than others, and some are more ready to adapt. The best resourced states are better able to bolster their own resilience to protect their citizens, and a growing number of these countries offer residence or citizenship by investment programs, by which investors can proactively acquire residence rights in or citizenship of another country as a long-term asset location strategy. By investing in a more climate resilient country, in addition to benefiting from permanent residence or a supplementary citizenship, investors can gain the right to relocate their families, their assets, and critical infrastructure to a more optimal place that will be able to better withstand future climate shocks.
Henley & Partners’ Investment Migration Climate Resilience Index is aimed at investors, business owners, wealthy families, and entrepreneurs and includes over 900 data points within 5 parameters to assess 180 countries across the globe in terms of their resilience to the impacts of climate change. The sobering reality is that of the 180 countries, only 15 are classified as higher resilience, with Climate Resilience scores of 60 or more out of 100. Countries in the higher resilience band are far more likely to be well positioned to adapt to changes in climate. A further 23 countries, with scores of 45 to 59.9, are classified as medium resilience, meaning they are likely to be moderately prepared to adapt to climate change. The remaining 142 — the vast majority — are all lower resilience, with scores of 44.9 or less, and are far more likely to struggle with adapting to ongoing and future changes in climate. If any good news can be taken from these bleak results it is that there are seven higher resilience countries that host formal investment migration programs and eight that are medium resilience, providing global investors with fifteen different options to choose from if they find themselves in a lower resilience country.
Using this innovative Investment Migration Climate Resilience Index, investors concerned about safeguarding their personal and business interests against the impact of climate change can compare their country’s Climate Resilience score against that of these highly attractive program options, enabling them to make data-driven decisions when seeking out suitable destinations for building a climate resilient portfolio.
With a Climate Resilience score of 70.6 out of a possible 100, the USA ranks in 1st place overall out of the 180 countries assessed, and the global superpower also has a highly sought-after investment migration program. While changes in climate will no doubt continue to impact the USA, many parts of the vast country are well placed to cope. The US EB-5 Immigrant Investor Program was dormant for nine months, but Congress ringfenced 15 May 2022 as the date for it to become operational again, and prior to that U.S. Citizenship and Immigration Services resumed processing applications filed on or before the sunset of the previous program last June. With a minimum investment requirement of USD 800,000 into a targeted employment area project this is a great opportunity for future-focused entrepreneurs. Germany is in 2nd place globally, with a score of 70.3, but does not have a formal investment migration program.
Another economic powerhouse, the UK, ranks 3rd globally, with a score of 69.4. The UK has been leading the climate action charge for years and was the first country to establish a legally binding, long-term framework to cut carbon emissions and adapt to climate change. The UK Tier 1 Innovator Visa is another excellent option for entrepreneurs seeking a climate resilient base from which to operate. It’s aimed at those who can demonstrate relevant business experience, requiring them to set up or run an existing business in the UK. Applicants must invest GBP 50,000 into a new business endorsed and approved by the Home Office.
Small but steady Switzerland ranks 4th globally, with a score of 68.4. Being landlocked, Switzerland is less vulnerable, and its excellent infrastructure and innovative green technology enhance its ability to adapt to a changing climate. The Swiss Residence Program, which Henley & Partners designed for non-EU and non-EFTA nationals, is a gateway to this highly desirable country that offers political, social, and economic stability. Financially independent individuals who are not gainfully employed in Switzerland but who agree to pay a certain minimum in net annual taxes, starting at CHF 250,000, can acquire a residence permit. Foreign nationals not gainfully active in Switzerland may qualify for lump-sum taxation throughout the country apart from in five cantons, including that of Zurich, which effectively caps income and net wealth tax for qualifying foreign citizens.
Hot on the heels of Switzerland is Canada in 5th place globally, with a score of 68.3. The country’s first national adaptation strategy is due to be launched this year, aimed at making the economy and society more climate resilient. Canada’s relatively high latitude means certain industries such as agriculture and tourism may benefit from rising temperatures, and the country is also largely shielded against productivity losses from heat stress. Frequently voted one of the best countries to live in, Canada is well known for its high standard of living, clean environment, low crime rate, and outstanding infrastructure. One of several ways to become a permanent resident is via the Canada Start-Up Visa Program, which is the fastest way for entrepreneurs and wealthy individuals to access Canadian residence as well as the North American market. Successful applicants can acquire a work permit within a short time or permanent residence within one to three years for a minimum contribution of USD 275,000.
The only southern hemisphere investment migration country in the higher resilience band, Australia ranks 8th globally, with a score of 67.5. The country recently announced a new National Climate Resilience and Adaptation Strategy to build resilience, protect its assets, and generate economic opportunities more effectively in a changing climate. It also set up a new government agency, Australian Climate Service, in 2021 to better understand climate change and natural hazards. Investors who are drawn to live in one of the world’s wealthiest countries, which enjoys an excellent reputation and a high quality of life, economic freedom, and good protection of civil liberties and political rights should look no further. There are many options available, including four visa streams under the Business Innovation and Investment Program, with a minimum contribution of AUD 2.5 million under the Investor Stream.
Another landlocked European gem in the higher resilience band is Luxembourg, ranking 11th, with a score of 63.3. As the EU country with the highest per-capita GDP, Luxembourg is well resourced for addressing climate change, with an adaptation strategy and an action plan in place. The Grand Duchy of Luxembourg’s AAA credit ranking makes it an ideal destination for investors and entrepreneurs seeking a rich business landscape and an attractive alternative location for private residence with an excellent quality of life and advanced infrastructure. The Luxembourg Residence by Investment Program has a minimum investment requirement of EUR 500,000, and after five years of continuous residence, investors can apply for Luxembourgish citizenship, thereby gaining a passport to this EU nation.
One of the seven investment migration countries in the top 15 globally for climate resilience is Italy, in 13th place overall, with a score of 61.5. As the eurozone’s third-largest economy, Italy offers high standards of living, education, and healthcare, and in line with the EU Adaptation Strategy’s (2021) long-term vision, aims to become a climate resilient society, fully adapted to the impacts of climate change, by 2050. In August 2021, Italy launched an experimental program for climate adaptation in urban areas, aimed at increasing the resilience of its cities to climate change risks. The Italy Residence by Investment Program is designed for foreign investors committed to making a significant contribution to the country’s economy, ranging from EUR 250,000 to EUR 2 million, granting them Italian residence and visa-free access to Europe’s Schengen Area. Under special conditions, citizenship may be available after 10 years of residence.
Singapore is one of eight investment migration countries in the medium resilience band, ranking 16th globally, with a score of 59.5. The wealthy, technology-driven city-state is investing heavily to be thoroughly prepared for the impacts of climate change. The government is working on a USD 72 billion plan to protect against rising temperatures and floodwaters. Foreign nationals may apply for permanent residence through the Singapore Global Investor Program to benefit from the country’s political stability and economic prosperity, reputable education system, and reliable healthcare system. Singapore has a friendly tax regime and over recent years has continued to introduce tax regulations that favor foreign investors. The minimum investment is SGD 2.5 million into a business, a fund, or a single family office.
Close behind Singapore is Ireland, in 17th place overall, with a score of 59.4. Ireland’s climate adaptation strategy aims to reduce its vulnerability to the negative effects of climate change as well as to capitalize on any positive impacts. An EU member, Ireland has one of Europe’s fastest growing economies, and had one of the highest GDP per capita in the world in 2021. Its Immigrant Investor Program offers four options, with the minimum investment requirement being an endowment of EUR 500,000 to a philanthropic cause of public benefit (or five investors may donate EUR 400,000 each).
Considered one of the world’s most stable countries, Austria ranks 18th globally for climate resilience, with a score of 59.0. Its climate adaptation strategy aims to strengthen the country’s natural, social, and technical capacity to adapt to climate change and acknowledges the importance of integrating climate adaptation into all political decision-making processes. An excellent place to establish residence in the EU, Austria is the only Western European country that offers the possibility to obtain citizenship by investment and an EU passport without prior residence requirements. Austria Citizenship by Investment requires a substantial contribution, such as a joint venture or business investment and offers the right to reside anywhere in the EU and Switzerland.
In 19th place globally, with a score of 58.7, is Spain, one of Europe’s first countries to develop a climate adaptation policy in 2006. Its plan builds on previous lessons learned, incorporating the latest knowledge about climate change and international commitments. Spain is a full member of the EU and the eurozone and has one of the most important economies in Europe. Under the Spain Residence by Investment Program, for a minimum real estate investment of EUR 500,000, investors and their immediate families can become residents of Spain through a temporary residence permit in less than a month. Subject to general immigration rules and requirements, residents by investment can acquire permanent residence status after five years of residing in Spain continuously and may gain Spanish citizenship thereafter.
New Zealand ranks 23rd globally, with a score of 55.8. The dual island nation introduced new climate legislation in 2019, mandating regular risk assessments and national adaptation plans. In late April 2022, the government revealed plans to prepare for climate catastrophes. Affluent investors seeking one of the world’s most stable and well governed nations that offers an attractive destination for investment, business, and raising a family can apply for the New Zealand Residence by Investment Program by making a minimum contribution of NZD 3 million, to be held for four years. The country consistently ranks in the top 10 globally in terms of protecting investors, starting a business, and ease of doing business.
The UAE is in 26th place with a score of 49.6. The country has the economic wealth to adapt to climate change and is already doing so using capital funded by oil and gas exports. The UAE’s 2017–2050 National Climate Change Plan focuses on adaptation and aims to protect the economy, infrastructure, people, and ecosystems. At an emirate level, Dubai has introduced a climate change adaptation strategy and is aiming to improve its quality of life. In 2021, the government launched the Smart Dubai Strategy, with initiatives including becoming the first city in the world to be 100% powered by blockchain. The country has announced new visa rules effective September 2022, including expanding its golden visa offering.
The last of the six EU investment migration countries in the medium and higher resilience bands, Portugal, is in 30th place overall, with a score of 47.6. Portugal adopted its first climate adaptation plan in 2019, covering the years to 2030. An accompanying long-term adaptation roadmap to 2100 is expected to be completed in 2023. The Portugal Golden Residence Permit Program is a five-year residence by investment program for non-EU nationals that gives the right to live, work, and study in Portugal and allows free circulation in Europe’s Schengen Area. The program requires an average stay of only seven days per year in Portugal over this period, which can count towards citizenship eligibility after five years. Investors can choose from several options, with the minimum contribution being a EUR 200,000 capital transfer in a low population density area. There is also an extremely popular real estate option, starting at EUR 280,000.
The 15th investment migration country in the medium and higher resilience bands is transcontinental Turkey, which ranks 34th globally in climate resilience and scores 46.2. The country is updating its climate change adaptation strategy and action plan that has been in place since 2011 and covers the years to 2023. Turkey’s Ministry of Environment, Urbanization, and Climate Change has launched a Regional Climate Change Course of Action that identifies activities to combat the adverse effects of climate change. The Turkey Citizenship by Investment Program has become one of the most popular programs in 2022, allowing investors to access European and Asian markets, as well as gain lifelong citizenship of a country that is in the process of full membership negotiations with the EU, with strong economic and industrial relations with the Middle East. There are several investment pathways, with the minimum investment currently USD 250,000 in real estate, but this is likely to rise to USD 400,000 in the near future.
As the Henley Global Mobility Report Q2 revealed, there are close correlations between a country’s ability to adapt to climate change and its passport strength. In future, where localized adaptation to climate change is not possible, there will no choice but to relocate within countries — in fact this is already happening. International resettlement is also likely to be important for populations facing exceptional circumstances such as large-scale environmental destruction or dramatic sea level rise or where internal relocation is not possible. This will likely lead to significantly greater flows of attempted movement from the Global South to the Global North. In the same report, independent researcher and consultant for Oxford Business Group Charles Phillips wrote, “These trends bring into stark reality the fact that your wealth, citizenship, and passport really matter when it comes to climate risk. Most people attempting to move across borders due to climate-induced pressures will likely face significant difficulty. However, the wealthiest citizens in countries facing high climate risk are likely to consider investment migration as an option to reduce the climate-related risks that they and their families are likely to face. They will look to invest in countries less at risk and that have a greater capacity to adapt to changes in climate.”
The reality is daunting, but rather than a knee-jerk response when climate catastrophe strikes, we encourage global investors to use the data in the Investment Migration Climate Resilience Index to plan ahead and optimally position themselves and their assets — including their most precious assets of all, their families — for the long term by selecting a more climate resilient investment migration country.
Henley & Partners assists international clients in obtaining residence and citizenship under the respective programs. Contact us to arrange an initial private consultation.
