Urban exodus in the post-pandemic world

By Stéphane Tajick, Managing Director, Products at Global RCG

As we exit summer 2021, we hope to see the back of the pandemic. Although it’s continued longer than expected and may last even further, the investment migration world is clearly seeing the impact the pandemic has had and may continue to have in the next few years.

Earlier this year, the World Economic Forum established a “Great Reset” effort which was a (much maligned and criticised) platform for world leaders to plan the recovery. Although the term “Great Reset” may be overused or misleading, one thing is certain: the pandemic has driven reforms across the board and in every industry. Businesses have had to make unanticipated technological leaps in order to automate their processes, reduce human interaction and increase productivity; the investment migration industry being no exception to this rule. Businesses that haven’t kept up with the times and technological advances may have found themselves falling behind their competitors. Bearing this in mind, it is no wonder that the pandemic has been the catalyst for innovation in green energy and other cutting-edge technologies. Likewise, governments have attempted to follow suit by investing money to jumpstart their economies and speed up these technological developments.

Remote employment has carved out a niche for itself in that future, and it may have the greatest impact on the global economy and immigration sector. As a consequence, companies all over the world have begun to reduce their workplace space. Many fear a commercial real estate crisis as a result of the increased strain on retail establishments and eateries and whether or not that is the case, there is no doubt that the commercial real estate market is in a state of flux. What we do know is that converting commercial property to residential space will hold significant opportunities.

Although the world has already been going “global” for quite some time now, and the international workforce has become increasingly mobile, the current urban emigration trend is a pivotal moment for the world’s economy. Employees moving outside of major cities provide a significant opportunity for the investment migration business. As a result of home working, employees are able to drastically improve their quality of life. No longer needing to live in the cities where their jobs are located, they are able to trade up their cramped city flats for larger homes in less densely populated areas or even move to a more attractive country altogether. These benefits will be shared with the companies; as workers relocate to areas with lower living costs, companies will be able to control wage increases and reduce operating costs. For European countries where the cost-of-living disparity between cities and smaller towns is huge, this trend can kickstart economic growth and heal regions that have been ravaged by rural exodus.

Employees moving outside of major cities provide a significant opportunity for the investment migration business.

Even before the epidemic, countries like Portugal and Italy encouraged individuals to buy homes in little communities all throughout the country. In this vein, Portugal will exclude its major cities from the real-estate option of its investor visa, and Italy has started the “one euro for a property” programme.

As a result, investment migration has the potential to play a significant role in the European economy. The main bonus of investment migration is that the primary goal of investors is residency or citizenship status rather than a return on investment. Of course, it’s not that they are unconcerned about their finances; instead, they’re willing to take on more risk, even if it means losing a certain amount of money to gain that status.

And naturally it’s not just in Europe where investment migration is playing a significant role. For a country like Antigua & Barbuda, the benefits of the post-pandemic era have the potential to be huge. Being more or less in the same time zone as most of North America and with great communication links to both North America and Europe, opens the door to millions of remote workers. The country was quick to launch a digital nomad visa, and contrary to other tax-friendly jurisdictions in the Caribbean, like The Bahamas or the Cayman Islands, they don’t merely cater to the ultra-rich. Remote workers from places like the US North-East can relocate to Antigua & Barbuda to enjoy a warm winter, beautiful scenery and see some financial benefits to boot.

In comparison to the citizenship by investment market, where competition is fierce and demand is relatively small, the digital nomad market is both lacking in supply and has a potential market of millions. The twin islands have already taken the first step. By offering a great environment for remote workers, Antigua’s Nomad Digital Visa can have an economic impact matching that of the Citizenship by Investment programme.

There is no doubt that the digital nomad market has exploded since the pandemic and will establish itself as a way of life going forward.