"Fleeing" the United States: Immigration applications from the United States' billionaires soared by 327%, most favoring Portugal

Reporter | Liu Zixiang

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More and more american billionaires are applying for investment immigration.

Last week, a number of immigrant investor companies revealed to Business Insider that the number of wealthy Americans applying for foreign citizenship or residency has skyrocketed over the past three years. Billionaires, tech entrepreneurs and celebrities are working on an immigration "Plan B" for their families.

Destinations include Portugal, Malta, New Zealand and Austria. According to Forbes, from Malta at $1.1 million to Austria at $9.5 million, billionaires have a variety of different options for project prices.

The volume of consultations has more than tripled

According to immigration firm Latitude Residency & Citizenship, consultations from the U.S. increased by 300% between 2019 and 2021. Henley & Partners, one of the world's largest citizenship brokers, said sales to U.S. nationals increased by 327 percent between 2019 and 2020 and 10 percent in 2021.

The firm's managing partner, Ezzedeen Soleiman, sees the move by the regal as an insurance policy. Some billionaire clients ask them where the best place to live is if there is a climate disaster, or another global epidemic.

Dominic Volek, head of private clients at Henley & Partners, a company that helps wealthy people buy citizenship around the world, noted that the rise in U.S. applications began during the Trump administration but escalated during the COVID-19 pandemic lockdown. Because during the very strict lockdown period, only American passports could not enter Europe, which made the wealthy realize that they may be more vulnerable than they thought.

Reaz Jafri, CEO of immigration consultancy Dasein Advisors, said he has received more inquiries from the United States in the past 3 years than in the past 20 years combined. Most of his U.S. clients are from the tech, real estate or cryptocurrency sectors, and are worth between $50 million and $20 billion. One thing they all have in common is a "deep-seated fear of the future of American society."

From tech founders who fear an increase in Asian hate crimes to young internet entrepreneurs who want to avoid tax hikes, rich people in all fields are preparing for the worst, Reaz Jafri said.

In addition to fears of another epidemic, heightened climate change and fears of economic collapse, billionaires worry about "divisions and civil strife that seem to worsen every day in the United States."

The Daily Mail said that in the past three years, the parliamentary riots, the "black lives are also important" movement, the Supreme Court's preparation to overturn the "Rowe v. Wade case", the anti-abortion bill, The Florida pass of the "No Speaking Homosexuality" bill, and the disagreement over the reform of the police system have made liberal cities that accept the new law experience a surge in violent crime.

One of the most popular countries is Portugal. Both companies told Business Insider that Portugal's "Golden Visa" is what U.S. investors need most. As long as the minimum investment amount is just over $200,000, and the average stay in Portugal is 7 days per year, you can obtain a five-year residence permit in Portugal, thus entering the 26 countries of the European Union without a visa. After the expiration of five years, it is possible to apply for full-time citizenship.

Ezzedeen Soleiman, a partner at latitude, an immigration firm aforementioned, said the U.S. super-rich want to take root in Europe as a "legacy program" for their children and grandchildren, "and many of them are either disappointed by what's happening in the U.S. or aren't seeing the opportunities they once saw in the U.S." ”

Former Google CEO Eric Schmidt is one of golden passport customers. He applied for European citizenship in 2020 through Cyprus' now-defunct scheme. peter Thiel, co-founder of PayPal, also received New Zealand's "Golden Passport". He is worth about $5 billion.

However, many of these "Golden Passport" customers have not moved to the local area. The Guardian's survey of the Malta Citizenship Scheme last year showed that many participants did not end up moving, with some rarely visiting. Henley & Partners' Dominic Volek also said that few of his clients actually moved, and most only wanted one more option.

However, as more and more Americans apply for the Golden Passport, concerns have been raised about "shady" and "dirty money" entering the EU. Dominic Volek noted that some smaller investor immigration firms do not properly vet applicants due to a lack of regulation in the industry.

The constantly mentioned rich tax

In recent years, U.S. tax proposals for the rich have been raised. The latest development is that in March, Biden unveiled a fiscal 2023 budget proposal that includes a "minimum income tax for billionaires," a 20 percent tax on household income over $100 million, counting unrealized capital gains or asset growth. If implemented, the new tax would generate about $360 billion in new revenue over the next decade, half of which would come from about 700 billionaires.

The wealth tax proposal is to combat rising inequality. Steve Rosenthal, a senior fellow at the Center for Tax Policy at Cities & Brookings, noted that while the government previously relied on estate taxes to tax wealth, it has been less effective because many of the rich have successfully avoided taxes through complex estate planning strategies. In addition, because tax laws favor investment gains such as interest, dividends, capital gains, or rents, many of the top wealthy families pay relatively low taxes.

The U.S. currently has the highest marginal income tax rate of 37 percent, and those with high earners pay 20 percent for long-term capital gains, plus the 3.8 percent Obamacare surcharge. From 2010 to 2018, the 400 richest households paid an average of 8.2 percent federal income tax, according to the White House analysis. By comparison, the average American paid 13.03 percent.

The issue of the regal tax attracted national attention during the 2020 presidential primaries. At the time, Massachusetts Democratic Senator Elizabeth Warren and Virginia Bernie Sanders engaged in a "duel" over the issue.

Warren has called for a 2 percent annual "super millionaire tax" on Americans with net worth more than $50 million and a 6 percent tax on wealth over $1 billion. Sanders fought back with a more radical plan, proposing a 1 percent tax on people with more than $32 million in property, and then gradually increasing the tax rate, raising an 8 percent tax on people with property over $10 billion.

Finally, in March 2021, Warren and Sanders, along with other Democrats, introduced the Super Millionaires Tax Act, which imposes an annual 3 percent tax on wealth over $1 billion. However, the program failed to succeed in Congress.

In fact, the wealth tax proposal has a large public opinion base in the United States and transcends partisanship. A Reuters/Ipsos 2020 poll found that 64 percent of Americans favor some form of wealth tax on the super-rich, while 77 percent of Democrats and 53 percent of Republicans support the idea.

According to a YouGov PLC survey in March, nearly two-thirds of Americans supported a tax of at least 20 percent on more than $100 million in revenue. According to a CNBC 2021 survey, about 60 percent of the richest individuals with assets of more than $1 million support a wealth tax on people over $10 million.

Policy experts say that like previous wealth tax proposals, Biden's latest "minimum income tax for billionaires" may struggle to gain broad support and face legal issues if implemented. Despite the gloomy outlook, experts believe that wealth tax proposals will continue to be revived.

John Gimigliano, head of federal legislative regulatory services at KPMG, said it may take some time for policymakers to master the know-how to smoothly address issues that may arise during the stages of promulgation and enforcement of wealth taxes.

He believes the wealth tax-related proposal could resurface in the midterm elections and beyond, and if Biden runs for re-election in 2024, he is "very convinced" that the proposal will be one of the topics in Biden's campaign.

By contrast, efforts to impose wealth taxes in European countries on the "Plan B" list of america's billionaires have not been very successful. Garrett Watson, a senior policy analyst at the Tax Foundation, said one of Europe's problems is the ability to avoid taxes by moving from one country to another, as well as various exceptions, such as the fact that some countries have abolished wealth taxes for various reasons over time.

According to the Tax Foundation's analysis, only five OECD member countries (Colombia, France, Norway, Spain and Switzerland) generated income from wealth taxes in 2020, down from the peak of 12 countries in 1996.