Russian millionaires are seeking second citizenship to beat Western sanctions imposed as a result of the Ukraine crisis.
On Monday the US and European Union increased sanctions on Russian President Vladimir Putin’s inner circle, adding seven prominent figures to a blacklist subject to visa bans and asset freezes.
Arton Capital, a Dubai-based company that specialises in helping individuals to become second citizens, has noted a significant increase in interest from Ultra High Net Worth (UHNW) Russians (with at least US$30 million in net assets) in recent weeks.
“We have, over the last month, felt an increased interest from the Russian UHNW segment, who feel very uncomfortable anywhere in the world. It’s not only Russians in Russia but also the Russian expat community in the Gulf and in London,” Armand Arton, president and CEO of Arton Capital, told Gulf Business.
“The demand has increased by 200 per cent from Russians, in inquiries at least.”
Europe is the first choice of many Russians for second citizenship, with Cyprus, Malta and Bulgaria all popular options.
“Bulgaria is a natural fit for them because of the language, religion and culture. So it does tend to attract the largest proportion of applicants,” added Arton.
Bulgarian citizenship applicants are required to deposit over 500,000 Euros in a government bond portfolio for five years.
Those applying for Cypriot citizenship must hold a private residence on the island worth at least 500,000 Euros.
Options then include:
• Depositing two million Euros for the purchase of shares/bonds of the State Investment Company for three years, plus a 500,000 Euro donation to the state Research and Technology fund.
• Making a direct investment of at least five million euros in property, business or financial assets in Cyprus for three years.
• Having a fixed term deposit of at least five million Euros in a Cypriot bank.
“Sanctions will affect every Russian businessman around the world. The Ukraine situation could get worse and affect other CIS countries, and the response of the US and Europe is crucial to the next development,” said Arton.
“So there is definitely a lot of discomfort in the UHNW segment with Russian origins.”
Second citizenship is also being used to flee Putin’s government, as shown by Pavel Durov, the founder of Russia’s largest social network.
Durov claimed he was forced to leave Russia earlier this month due to pressure from authorities to release the personal information of opposition activists.
The Vkontakte founder is reportedly having his St. Kitts and Nevis citizenship processed and will be contributing $250,000 to the island nation as part an investment programme.
St. Kitts is one of several several Caribbean islands that have introduced citizenship for investment schemes. Others include Dominica, Grenada and Antigua and Barbuda.