Why So Many Americans are Considering Alternative Residence and Citizenship

As Managing Director Private Clients for Henley & Partners, I have the pleasure of speaking with clients on a daily basis who are interested in learning more about investment migration. My role is first to understand what they would like to accomplish and then to recommend a program or portfolio of programs that can meet their needs.  It is always very interesting to hear what each person’s prime motivation is.  Over the past year, as interest in residence and citizenship by investment has surged among Americans, I’ve spoken with hundreds of high-net-worth individuals and families. While everyone has a unique story, there are certainly some common themes.

A Plan B for a wide range of reasons

“Am I your craziest client?” “I can’t believe I am even thinking about wanting a way to leave the United States.”  These are sentiments that I hear regularly from prospects who are considering an alternative residence or citizenship because they want a Plan B.

While the US passport is one of the strongest in the world, allowing us to travel visa-free to 180+ destinations, we all learned during the pandemic that this mobility freedom is not guaranteed. During the height of the virus, US passport holders were blocked from entering most countries for a significant length of time. The pandemic was the first time that Henley & Partners saw a surge in interest in our services from US citizens. We had clients with private planes who couldn’t land them and others with vacation homes they couldn’t retreat to. Many Americans came to the realization that being reliant on a single mobility option (the US passport) posed a risk or limitation they were not comfortable with.   

Thankfully the public health emergency has ended, and the pandemic is now in an endemic phase, but interest in additional residence and citizenship options has continued to increase. Today, Henley & Partners has more American clients that are seeking a second passport and/or alternative residence abroad than any other single nationality. In 2023 alone — the record year to date in terms of the number of enquiries from Americans — we saw a 504% increase compared to what we received just four years prior in 2019. Most of this interest is driven by high-net-worth families who see investment migration as an insurance policy against economic and political uncertainties with the USA’s precarious landscape. Many reference the upcoming election (with concerns being expressed by investors from both sides of the political party spectrum), gun violence, and Supreme Court decisions as key issues. Others seek options in countries where there are no vaccine requirements or where there were no mask mandates during the pandemic.

Recently, many have raised the issue of antisemitism, with one client telling me 27 of his family members died in the Holocaust. “They told themselves, it can never happen here…and then it did,” he said as he asked me about his options. As part of Henley & Partners’ citizenship by descent service we then discussed whether he might qualify under recent laws passed by Austria and Germany, which grant direct descendants of relatives who fled these countries due to Nazi persecution the right to citizenship for themselves and all future generations. Since Austria and Germany are part of the European Union, these citizenships are extremely powerful as they allow one to live, work, and study anywhere in the bloc as well as in Switzerland.

A same-sex couple living in Florida shared with me, “we’ve lived here for over 20 years, but lately we’ve been asking ourselves, should we have a back-up plan to move to another country that may be more welcoming of us?”  

I always reassure my clients and explain that while the scenarios that may be keeping them awake at night are hopefully just hypothetical, by securing an alternative mobility option, they may very well rest easier. I then advise them of residence and citizenship programs that require no physical presence so they have options they can turn to if or when they want to. Then we might chat about either Caribbean citizenship programs or residence or citizenship solutions in Europe. There are many attractive options in both regions that are great strategies for those who don’t necessarily want to leave the USA but want to be sure they can if they decide to or need to. 

Retirement or long-stay options

The vast majority of our US citizen clients don’t intend to leave the USA permanently nor do they intend to spend more than six months in another country (to avoid becoming a tax resident). However, some are thinking about spending significant time in Europe once they retire or while managing their investments, which can be done from anywhere in the world. While the US passport currently allows you to enter Europe without a visa, you are restricted in terms of how long you can spend there. Many don’t realize that the US passport only allows you to stay in Europe 90 out of every 180 days. As a result, clients often explore routes that will allow them to stay in Europe longer. For these clients, the program options will vary depending upon their goals. If they know that they want to spend more time in a specific country, we might look at a residence that would allow them to live 12 months a year in that country while still limiting them to 90 out of 180 days in the rest of Europe’s Schengen Area. This is easily accomplished in the case of the residence programs offered by Greece, Italy, or Spain. However, if they want to have the freedom to spend extensive time in multiple countries in Europe, we would discuss programs that result in citizenship such as those offered by Austria or Portugal, which would allow them to live anywhere in the European Union as well as in Switzerland for as little or as long as they want.

It's important to keep in mind that each program has a different processing time, and many take considerable time to process and approve applications. Accordingly, it’s never too early to understand your options if you are thinking about how you want to spend your retirement years.

Asset diversification with residence or citizenship on the side

The path to obtaining an alternative residence or citizenship involves making some form of financial investment in the country where you seek this benefit. Your investment will vary depending upon the design of the program. It could be the purchase of real estate or an investment in private equity, venture capital, stocks, or even a bank deposit.

As many high-net-worth clients are already seeking to diversify their assets, gaining the benefit of an alternative residence or citizenship can sometimes be considered a bonus for pursuing the financial diversification strategy they are implementing. It is not uncommon for a wealth manager or family office to call me and say, for example, “I have a client with a few homes in the USA who wants to buy something outside of the states. Are there any countries where, if she buys real estate, she will be able to get a residence?” (meaning the ability to live in that country up to 12 months a year). The answer is yes — in countries such as Costa Rica, Greece, Panama, Spain, and others. Or perhaps their client wants to hold investments in other currencies. Austria, Italy, New Zealand, Portugal, and Spain all have programs that grant residence or citizenship to those making specific financial investments in the country’s financial system.

Protecting generational wealth and opportunity

While most of our American clients do not relocate, I have assisted parents with school-age children who want to give them the opportunity to be global citizens. They are considering moving to Europe for a few years and allowing their children to attend school in another country while immersing themselves in a different culture. Depending on the age of the children and the number of years they live in Europe, many of these children are then able to attend college in Europe at a significantly lower tuition cost than in the USA.

Other clients I work with are global investors or own businesses in the USA and want to expand into other countries in Europe. Having a residence or citizenship on the continent gives them greater financial freedoms for ease of conducting business and international banking and investment as well as entrepreneurial opportunities.

I’ve also advised investors who were very focused on securing mobility options not just for their children, but also future generations. “I am not sure what the world will look like in 50 years,” said a recent client.  “I want to be sure that my children and grandchildren have options about where they want to reside and have the freedom and flexibility to have global educational and cultural opportunities.” Many such clients are drawn to Malta’s Citizenship by Naturalization for Exceptional Services by Direct Investment, which allows for the granting of citizenship by a certificate of naturalization to foreign individuals and their families who contribute to the country’s economic development, and this can be passed down to future generations.  

Many of us still feel that the USA is a land of opportunity and the best country in the world in which to live. In fact, we have clients living in other parts of the world who we support in their objective of coming to America through the US EB-5 Immigrant Investor Program. That being said, in today’s tenuous age of uncertainty, many high-net-worth Americans are exploring alternative residence and citizenship as a tool to help them mitigate risk, create opportunities, and preserve their wealth and legacy.