IMI Podcasts

This opinion piece from IMI's editor first appeared on imidaily.com on March 6th, 2019.

Citizenship by investment has granted small, developing countries in the Caribbean and Pacific the means to fund public spending independently rather than rely on outside aid or loans. That financial autonomy reduces the influence developed countries have in these jurisdictions, which is one of the reasons they seek to restrain such programs.

Our guest this week on the Mobility Standard podcast was Slava Apel, CEO of Startup Visa Services, who came to talk about Canada's Startup Visa. The episode covers practically all facets of the program, including (but far from limited to):

• Is it true that the Canada SUV can be a passive-investment program if you plan the right way?
• "Residence by investment, minus the investment": With no minimum investment, no performance requirement, a direct path to PR and eventual citizenship, isn't the Canada Startup Visa program too good to be true?
• How is the Canada SUV different from the provincial entrepreneur visas? How does the SUV compare to Portugal's HQA, the US E2, or the UK's Startup and Innovator visas
• What are the precise steps of the application process, and what are the critical junctures?
• What is the real rejection rate of the Canada Startup Visa?
• What is the role of incubators, angel investor groups, and the "business institutions"?
• What kinds of people should apply for the Canada Startup Visa? Experienced entrepreneurs? Tech graduates? What about teachers or construction workers?
• Why doesn't Canada's Startup Visa require exhaustive source-of-funds documentation?
• What share of businesses originating in the Canada Startup Visa go on to become financially successful in the long run?
• What do agents, brokers, and introducers get paid when they help a client get the Canada Startup Visa?

Slava also tells the story of what happened when he flew to Dubai and confronted the company engaged in false advertising of the program.

"Canada Startup Visa is the most profitable program for immigration firms," said Apel. "They typically make double what they make selling Portugal Golden Visa, EB-5, or Malta, or any other program."

he also pointed out that "anyone can become [a Startup Visa permanent resident], as long as they have the drive to bring - or to do - something that's new in Canada. "I've seen housewives come up with great concepts and products; I've seen farmers come up with better processes and technologies; I've seen teachers come up with new software for e-learning; I have seen people come through this path from every walk of life and from every country." 

Listen to the full episode using the player below, or find the Mobility Standard on Spotify, Apple Podcasts, and most other podcast platforms.

Our guest on the Mobility Standard podcast this week is Andrew Henderson, founder of Nomad Capitalist. 

In under a decade, Andrew has built the world's most recognizable brand in the "global citizenship" space. The firm, which now has more than 50 employees, helps hundreds of clients each year to design and implement a global diversification strategy that includes not only residence and citizenship by investment but also tax optimization and wealth protection. 

We spoke to Andrew about:

• Growing up in Ohio, starting a business at a young age, and becoming disillusioned over the erosion of freedoms and confiscatory levels of taxation. 
• The communication errors the investment migration practitioners are committing, and how it affects their relations with the powers that be.
• What he thinks are the reasons he has a social media following that's an order of magnitude greater than any other brand in RCBI. 
• Why he rejects the vast majority of prospective clients and why he thinks free consultations are not helpful for industry practitioners or clients.
• What personal characteristics he shares - and does not share - with Donald Trump.
• Why he maintains permanent homes in six different countries on three different continents, why he picked those destinations to begin with, and where he's looking at for his next home. 
• Which solutions for low-tax living in high-tax EU countries he thinks are the best.

If you'd like to meet Andrew Henderson in person, you'll have the chance during IMI Connect Istanbul on Nov 2-4, where Andrew will be participating and speaking. 

Our guest on the Mobility Standard podcast this week was Benjamin Lodmell of asset protection specialist firm Lodmell & Lodmell. 

Lodmell has spent the last several decades working on more than half a dozen countries and, together with his father and brother, has built the world's leading asset protection firm serving several thousand clients. 

We spoke about 

• His global journey and what it was about Lisbon and Portugal that made him remain here;
• What asset protection is and who needs it;
• What lessons the investment migration industry can draw from the development of the asset protection industry, namely, how to go from having an image problem to being widely acknowledged and how to grow from being a service for just a small segment of society to reaching the mainstream;
• Why asset protection and investment migration go hand in hand. 

Lodmell: "30 years ago, it was only really high-risk professionals like medical doctors and dentists and others who were sensitive about being sued who were our client base. Now, it's just anyone with a net worth because we're in a system where anyone can sue anyone for any amount of money, they don't have to prove why, they can get an attorney for free on a contingency, they don't have to pay your legal bill if they lose the case against you, so […] anybody who has a net worth of more than half a million qualifies."

Our guest this week on the Mobility Standard is Jeremy Savory, founder of Dubai-based Savory & Partners.

Topics of discussion in today's episode include:

• The road from growing up in Southwest London to running a Savory & Partners in Dubai;
• What it's like to run a CBI business in the hyper-competitive Dubai market and whether it has hardened him as a businessman;
• Why he chose to become a resident of Portugal and how it's been helpful for business;
• How the continually evolving "golden visa" of the UAE has made life simpler for expats;
• The degree to which there are economies of scale in investment migration;
• Whether Turkey, and Istanbul specifically, has the potential to compete with Dubai as an investment migration hub, and why the country’s two-way CBI market is so unique;
• And what potential Latin America has as an inbound or outbound RCBI market.

Our guest on the Mobility Standard podcast this week is Mr. Titus Gebel, a German-born lawyer and entrepreneur who is now dedicating his life to the development of Free Private Cities, jurisdictions embedded within conventional states but operated by private companies for profit; a peaceful and voluntary alternative to the coercion-based systems of government we have today. 

"The defining feature of a Free Private City is that it's run by a for-profit company that acts as a government service provider, so to speak," says Gebel. In this capacity, he explains, the private company - the "operator" - offers citizens "the protection of life, liberty, and property, services that include both internal and external security, a pre-defined legal and regulatory framework, and independent dispute resolution."

Interested individuals and companies enter into a citizen's contract with the operator and pay a fixed annual fee for the operator's services, instead of paying taxes.

"Within that framework, which is relatively limited," continues Gebel, "a spontaneous order can develop, which emerges from the voluntary activities of the citizens."

Crucially, the operator cannot later unilaterally make any changes to the citizen's contract but would need the permission of the individual citizen concerned.

A citizen's contract, he explains, gives the individual far better legal protections than, say, a constitution, because "there is no third-party like a majority or a parliament or a government that could infringe upon your contract."

In the podcast, we also went into detail about:

• The latest developments in the field, with an emphasis on the ZEDE projects in Honduras;
• The historical precedents for Free Private Cities;
• The long-term ramifications of successful Free Private Cities;
• Technology’s role in the decentralization of political power and the rise of sovereign individuals; and
• Why the European Union, which is totally opposed to special economic zones, is unlikely to survive the next three decades.

Listen to this illuminating and heartening episode in its entirety by clicking the player below, or find the Mobility Standard on Spotify or Apple Podcasts.

This week, our three guests on the Mobility Standard podcast were Matthew Galati, Principal of The Galati Law Firm, Ishaan Khanna, President of the American Immigrant Investor Alliance, and EB-5 expert, business plan writer, and author of the world's leading EB-5 blog, Suzanne Lazicki.

In this episode, the three EB-5 experts engaged in an in-depth discussion of the recently passed EB-5 Reform and Integrity Act, which Galati referred to as "the most fundamental visa reform we have seen in the American immigration system since at least 1990."

Topics under discussion included:

• Who is happy about how the bill turned out, who isn't, and why;
• Why the new bill could create a great deal of chaos in the absence of further guidance and regulations;
• What is necessary to get the program up and running again, and how long it will take;
• How the reserved visa categories - or set-asides - will work and whether they are fair to existing applicants.

"So much needs to be done here in order to get the program off the ground again for new filings," says Galati about the consequences of the comprehensive and complex new legislation. "[...] It'll take a long time for this new program to be stable. I don't know if that gets done before 2027, frankly."

Lazicki agrees with Galati's five-year horizon for program stabilization:

"Just based on how much is going to have to be figured out, and who has to figure it out […] the policy manual will need to be revised, we'll need some new regulations, we'll need all new forms for all of the form types, the Investor Program Office […] are going to have to get their people trained in the new law. All of those things take a long time to do."

Independent means visas (IMVs), such as Portugal's D7, Greece's FIP, and Italy's Elective Residency have rapidly gained attraction in a post-pandemic mobility market, where those who might previously have opted for a golden visa (which doesn't demand physical presence) are increasingly willing to relocate. 

In this episode, we spoke to Andre Bothma, founder of D7visa.com and an expert on independent means visas more broadly, to learn what's driving growth in the IMV market, why IMVs are - as Bothma has claimed - an existential threat to golden visas, and why it behooves investment migration firms to include IMVs in their program portfolios. 

Bothma, a South African national, explains that when he was exploring ways to move to Europe eight or nine years ago, "there was a dearth of options available to South Africans. [...] The only thing I could find at the time was the golden visa program in Portugal. That was the one that was known and being actively marketed, as well as some hybrid, informal programs in Slovenia and Hungary. So, effectively, there was a very limited range of options and they were all very pricey."

For years on end, he says, the only thing those who wanted to relocate to Europe were the golden visas because the independent means visas, while they already existed, were not marketed and remained largely unknown. 

The reason IMVs have gained tremendous popularity since the pandemic are three-fold, he says:

• Investors became more open to physical relocation, especially because of the rise in remote work;
• Investors couldn't travel and were, therefore, more hesitant to buy golden visa real estate;
• Investment migration companies began to actively market IMVs as a way of pivoting during changing market conditions.

"I now frequently talk to people who have the means to get a golden visa but who are now more interested in D7 visas. Because they don't necessarily need all of the flexibility anymore."

The top two applicant nationalities, he says, are Americans and British, i.e., not your typical investor migrants. For the British, he postulates, it's about regaining access to the Schengen area, while for Americans, the appeal of D7 is the Portuguese lifestyle proposition. 

"Many are looking to settle in a place with less political polarization than the US."

Our guest on the Mobility Standard this week was Nuri Katz, founder of Apex Capital Partners. We spoke to him about a range of current events, including Vanuatu's possible suspension from the EU visa-waiver scheme, Montenegro's last-minute CBI extension, and the industry's apparent failure to effectively lobby the European Commission.

Timestamps:

• 02:15 - Introduction to Nuri Katz and his backstory.
• 06:00 - Why the regulatory situation in investment migration today is reminiscent of that of Canada's immigration market in the late '90s.
• 17:04 - What are Nuri's main business concerns at the moment, and what's keeping him up at night?
• 22:53 - The three main criticism against CBI, with a focus on the one that has merits.
• 26:31 - As Europe threatens to revoke Schengen access for Vanuatu, what are the implications for the Carib 5?
• 37:14 - Why industry efforts to lobby Brussels appear to have been ineffective.
• 51:19 - Montenegro's CIP extended in the nick of time - What happened in those final days?

Discussing the merits of the European Commission's claim that a lack of due diligence in CBI gives rise to security threats, Katz dismisses the notion.

"The due diligence on candidates for citizenship in CBI countries is the best due diligence known to man," says Katz. "It's certainly much better due diligence than the US does on its EB-5 applicants or the one the Canadian government does on its own its investor immigration clients, not to mention the UK."

The chief problem, he indicates, is related not to the vetting procedures but to fly-by-night companies.

"It's a jungle out there. I've seen so many companies that, because there was no regulation, were able to open up for a few years make a bunch of money, get in trouble, and then disappear. I've seen that over and over and over and, so, that for me is the weak link of this industry."

He also believes European regulators either don't understand or don't want to understand, the degree to which CBI jurisdictions engage in screening of applicants.

"I think the people in the European Commission who are looking at this industry are taking a very superficial look. They're thinking 'oh, money is being exchanged for citizenship and that means that it's dangerous'. In all honesty, yeah, money is being exchanged for citizenship. But before the exchange happens the money goes through the most serious type of due diligence checks."

Reacting to Montengro's last-minute extension of its CBI program, Katz hinted the perceived urgency had been good for business.

"It actually all worked out well for us because, as we know through our experience in Quebec and in Saint Kitts and in lots of different countries, the threat of a program ending leads to everybody who's sitting on the sidelines to come to decisions faster. So, it was very good for our firm and, I'm assuming, good for the other firms as well."

The Mobility Standard podcast this week hosted John Hanafin, chief executive at Huriya Private, who spoke with us about the complementarity of investment migration and financial planning, both of which are fields in which he has extensive experience.

Timestamps

• 00:30 - Who is John Hanafin and what is Huriya Private?
• 05:45 - The complementarity of investment migration and financial planning: Can you plan for one without also planning for the other? Are the two realms best kept separate or will more firms begin offering these services in conjunction with each other?
• 17:04 - Balkan countries planning for CBI and which of them are really closest to EU membership.
• 19:57 - Why Ireland should have a CIP, why and how it should reform its IIP, and which other programs it should be modeled on.

Investment migration and financial planning: Joined at the hip

Many firms in the investment migration market choose to steer clear of providing advice on tax and estate planning, partly because they don't have the necessary training but also to avoid becoming subject to the stricter regulations pertaining to such practices. Questioned as to whether he thinks RCBI practitioners should also help clients plan for the tax and estate implications of partaking in investment migration programs, Hanafin indicated they were essentially two sides of the same coin:

"I think it’s mandatory [to plan for both together]. It shouldn’t even be a consideration […] I don’t understand how it can be just a transaction. […] There are people in the industry who are very good at what they do and who purely want to do [RCBI] and that’s it. And I’ve worked for people who have had that attitude, shall we say. "

"In Dubai, you can be selling bananas on Friday and passports on Monday."

"Maybe the guy comes to my office and says 'I own the office tower next door,' to which I might say 'oh great, how do you own it? In your individual name? Okay, well you understand this is a civil law country, not a common law country, and you have sharia implications of having assets over here. Perhaps that's something we can discuss alongside your passport,' and so on."

Hanafin comments that Dubai, in particular, is a place where clients can easily end up with advisors who are too narrowly focused on RCBI and who don't give due consideration to possible tax and estate implications.

"The issue with Dubai as a jurisdiction is that you can set up a specialist immigration firm in about 48 hours. You can't do that in the UK, for example, where you need to be a qualified immigration lawyer. You can't do that in most European countries. In Dubai, you can be selling bananas on Friday and passports on Monday."

North Macedonia and Albania "about five years ahead of Montenegro" on EU accession

"There are rumors about Serbia, there are rumors about Croatia, there are rumors about Albania," he says, but adds that there are some misconceptions as to which Balkan countries are closest to EU accession. 

"Montenegro promoted themselves as the next EU country. But if you read the statutes and the laws, North Macedonia and Albania are about five years ahead of Montenegro."

Where would John Hanafin most like to see a new CIP open? In his native Ireland, he responds without hesitation. For now, however, he says there are still too many uncomfortable memories from the Bertie Ahern years, when Ireland operated a citizenship by investment program (of sorts). He does, however, lobby the Irish government from time to time, urging them to at least reform their Ireland Immigrant Investor Program and make it more attractive.