Why Are Billionaires Investing in Second Passports?

Some people, as a sort of birthright, are eligible for more than one passport, which in turn grants them various (and sometimes, a more abundant array of) freedoms while traveling. For example, the least powerful passport per the Henley Passport Index allows holders to travel to just 26 other countries without a visa. The most powerful passport, by contrast, allows holders to travel to 192. To that end, it’s easy to see what the appeal in having multiple passports would be.

But now there’s another reason people are after second passports, and it’s not a matter of birthright at all. According to a new report from Insider, the number of one-percenters applying for citizenship or residency in foreign countries has skyrocketed over the course of the last three. The passports in questions are commonly referred to as “golden passports,” and they permit the ultra-wealthy to apply for citizenship, or residency, in exchange for investing in the country, as a contingency of sorts.

“We see these programs as an insurance policy,” Ezzedeen Soleiman, a managing partner at Latitude Residency & Citizenship, told Insider. “We’ve had some billionaires approach us and ask what’s the best place to live if there’s a climate catastrophe, or if there’s another storm, or another global pandemic.”

To date, only about 15 countries across Europe and the Caribbean offer such a program — with cost ranging anywhere from $100,000 to a cool $9.5 million. Even still, inquiries from (rich) U.S. citizens reportedly rose by 300% between 2019 and 2021, and sales by 327% between 2019 and 2020. Among those typically in pursuit of golden passports are celebrities, tech entrepreneurs, crypto bros and real estate moguls, none of whom are worth less than $50 million.

According to Dominic Volek, head of private clients at Henley & Partners (one of the world’s largest citizenship brokers), the “four C’s” currently responsible for fueling the investor citizenship industry are “COVID-19, climate change, cryptocurrency and conflict.”

“In the very strict lockdowns there was a point where if you only had an American passport, you could not enter Europe,” Volek said. “I think that made a lot of particularly ultra high net worth individuals realize that they’re potentially a little bit more fragile than they thought.”

All of that said, there is still some good news for the less affluent folk also reckoning with their fragility thanks to the four C’s, which is that almost every country around the world offers a pathway to citizenship. And while it may not necessarily be easy, it certainly won’t cost you $9.5 million either.

The other good news is in another two years or so, we may see a mass exodus of crypto bros to Malta, some other far-flung destination selling citizenship at a premium.