BY BESTENIGAR KARA
Turkish citizens’ enquiries for investment migration will break a record this year, according to Dr. Christian H. Kaelin, Chairman of Henley & Partners. “Turkish investors’ enquiries jumped 200% in the first quarter of 2023, compared to the same period of the previous year. In January-April, we have practically matched the number of enquiries we received in the entire 2022,” Kaelin told in an exclusive interview with TR MONITOR during his business visit to Istanbul within the scope of the Wealth Preservation Seminar hosted by the Henley & Partners in partnership with the Switzerland-based international law and tax consultancy company KENDRIS (formerly KPMG Private) at Swissotel The Bosphorus Istanbul on June 19.
The globally leading investment migration firm Henley & Partners created the concept of residence and citizenship planning in the 1990s. The company, which today operates over 40 offices worldwide, including Türkiye, advises governments on residence by investment (RBI) and citizenship-by-investment (CBI) policy and works with them to develop and implement residence and citizenship programs. “Program advisory, program due diligence, a program set up, program processing, and program promotion are the five areas in which we provide consultancy to governments,” Kaelin noted. Within this frame, the company’s government advisory practice handles, coordinates, and exercises the launch, international positioning, and promotion of residence or citizenship programs in line with a global marketing plan to source and secure the appropriate caliber of applications. Governments often outsource the marketing of their programs to the firm. “The programs as we know them today are mainstream wealth management tools for individuals and alternative important revenue streams for sovereign states,” Kaelin said. “Contrary to what many believe, residence and citizenship programs are not the exclusive domain of countries which may struggle to otherwise attract foreign direct investment (FDI).”
Indeed, 19 of the G-20 nations have mechanisms to attract inward investment in exchange for residence rights, and 60% of the European Union (EU) member states host investment migration programs. “Highly developed nations design and implement investment migration programs for the same reasons small and developing nations do — to attract foreign capital, skills, and knowledge to their shores,” he noted.
Henley & Partners has raised over USD 10bn in FDI so far, and it has designed and implemented several of the most successful programs worldwide. CBI programs provide families with the privilege of acquiring alternative citizenship, which gives them the right to travel freely to various destinations and settle in another country in return. Residence by investment programs, which are also known as golden visa programs, on the other hand, provide high-net-worth individuals with the option to relocate and the right to live, work, study, and receive healthcare in their new countries of residence.
Within this frame, Kaelin stated that there are currently more than 10 CBI programs that are running successfully, many of which were designed and set up by Henley & Partners. “Some are in the Caribbean, others are in Europe, and in the Middle East, also Jordan, the UAE and Egypt have citizenship programs,” he noted. There are also many more residence-by-investment programs – around 30 successfully operating programs are available across the globe currently, and overall, and many more countries have some form of investment migration provisions in their laws.
PORTUGAL AND ITALY ARE ON THE TURKS’ RADAR
The most popular citizenship programs of Henley& Partners are the Austria CBI Program, the Grenada CBI Program, and the Malta Program for 2023, according to Kaelin. “In terms of applications, the Grenada CBI Program tops this year, followed by St. Kitts, and Malta’s Granting of Citizenship for Exceptional Services by Direct Investment Regulations, which allow for the granting of citizenship to foreign individuals and their families who contribute to the country’s economic development.” “All have visa-free access to the EU Schengen Area, and the European programs offer the ability to live, work, and study in the country and to apply for citizenship of an EU member state after between 2 and 10 years of legal resi
dence, depending on the program, origin of applicants and other factors,” Kaelin said. “Greece and some other countries have no requirement to reside in the country, and Portugal only requires seven days per year stay in Portugal over this period. The Caribbean programs have no residence requirement at all, except a minimal one in Antigua and Barbuda,” he added. “Most of these programs have real estate-linked investment migration options that provide all the traditional benefits of the asset itself while at the same time enhancing people’s global mobility and expanding their personal access rights as a citizen or a resident of additional jurisdictions.” This is very attractive for Turkish businesspeople as it enables them to improve their mobility abroad and access many more countries without needing a visa, and thereby supporting their success in international trade and supporting the economy of Türkiye.
As Kaelin says, the interest of Turkish citizens in investment migration rises every year. Apart from the hikes in 2023, the peak of enquiries from Turkish citizens received by Henley & Partners was observed in the mid-pandemic year of 2021, when there was a jump of 147%, year-over-year. “Turkish businesspeople would like to be able to travel frequently without a visa, as export is very important for the country, and the visa crisis adversely affects many businesspeople’ s initiatives. Many people were not able to attend some of their planned business trips or fairs abroad. That’s why applying under an investment migration program is a good solution.”
TURKIYE ALSO RECEIVES FOREIGN INTEREST
The Türkiye CBI Program also gained popularity during the pandemic. The number of enquires received by Henley & Partners for the program soared over 900% in 2021, compared to the previous year, according to the Henley & Partners Chairman. “Enquiries continued to increase every year. However, 2022 was again a record year in terms of interest and enquiries,” Dr. Christian H. Kaelin said. The number of enquiries for the Turkey CBI Program has been more than 200% higher as of April 2023 than in 2019. “Many wealthy individuals from across the world, including business owners and affluent families, have turned their attention to Türkiye and are interested in investing in the country, with most of the recent enquiries coming from the U.S, Pakistan, and India,” Kaelin added. “Türkiye has a geographical importance for businesspeople, and is a large, attractive country with an 85 million population. This does not only constitute an important local market but also a regional business center considering over 270 direct flights by Turkish Airlines from Istanbul. The Istanbul Financial Center project now being completed, and new incentives being introduced are making Türkiye increasingly attractive to foreign investors. This will bring more investments and new talent to the country.”
Türkiye offers several investment choices, with the USD 400,000 real estate option being the most popular, as real estate-linked investment migration programs have reliably demonstrated their resilience. High-net-worth individuals have been investing in brick-and-mortar as a long-term strategy to grow their wealth for centuries. “Today, the added benefit is that a range of attractive real estate investments qualifies them for an alternative residence or an additional citizenship — valuable asset classes in times of volatility,” he noted. “Still, improvements are possible and probably advisable in the context of Türkiye’s CIP, and I am sure the government will continue to improve this important program” Kaelin added.
Based on the British Knight Frank’s Global Residential Cities Index, the Turkish real estate market has significantly grown, with Istanbul showing the sharpest annual urban real estate price hike in the third quarter (Q3) of 2022, despite facing its challenges. Within this frame, Istanbul’s real estate prices jumped 212.1% in Q3, yearover-year, providing foreign investors with notable returns. Ankara and Izmir followed the city in the index with year-on-year price hikes of 196.0% and 185.8%, respectively.
“There are also those, who would like to choose Türkiye as a retirement plan thanks to its excellent climate conditions and strong health care system. Health tourism is already a big sector in this country,” Kaelin said, stressing that foreign visitors often would like to have a holiday and get treatment in the country at the same time. “Once they discover the country’s beauty by tourism, they often decide to make Türkiye their second home, and secure this by acquiring citizenship also in the country.”
GLOBAL INVESTORS CONVENED IN ISTANBUL
The Wealth Preservation Seminar, hosted by the Henley & Partners in partnership with the Switzerland-based international law and tax consultancy company KENDRIS (formerly KPMG Private), was held at Swissotel The Bosphorus Istanbul on June 19. Businesspeople, government officials and representatives from Switzerland, Italy, Grenada, Montenegro, and Dubai attended the event, alongside many Turkish businesspeople Henley & Partners Chairman Dr. Christian H. Kaelin and Grenada’s Prime Minister Dickon Mitchell delivered the opening speech at the event, which was organized under the auspices of Henley & Partners Türkiye Director Burak Demirel. The global outlook, FDI, global wealth preservation and structuring, global investment management, and global real estate were the main topics that were discussed at the seminar as well as during a private dinner in the evening.