Most still view the passports as desirable because the country is seen as a safe harbour for families and wealth.
The number of British citizens applying for second passports in European Union member states has skyrocketed in a bid to retain the freedom to study, work, and live in those countries after Brexit, but high net-worth South Africans, in contrast, are seeking UK passports.
Most South Africans still view British passports as desirable because that country is seen as a safe harbour for families and wealth, according to multi-faceted global financial solutions provider Geneva Management Group (GMG).
High net-worth South Africans, in particular, are primarily driven by political and economic uncertainty, said GMG managing director Sean Gaskell.
“Political uncertainty is a crucial factor, especially in emerging markets, where HNWIs ( high net-worth individuals) are often based in jurisdictions where there is a large disparity in wealth,” he said.
“This may give rise to populism and anti-wealth sentiment, resulting in additional political risk that could create exposure for both their families and their wealth.”
He said other important factors included crime, access to support services including medical treatment, hedging against a weak or volatile currency, culture, language, and education.
While tax was not a particularly big driver for seeking out second passports globally, it was a motivator for South Africans, particularly those “who take the view that they receive nothing in return for the taxes they pay”, said Gaskell.
Many South African high net-worth individuals were also making use of golden visa programmes in countries such as Portugal and Malta, which rewarded them with permanent residency in return for the purchase of a property or investment, GMG said.
“Portugal, for example, has one option where a minimum real estate investment of 500,000 euros is required,” said Gaskell.
Geneva Management Group provides expert guidance on structuring and managing business and wealth in 11 countries and more than 50 markets.
This article was first published by TheCitizen on the 17th April 2019.