Selling passports in the age of Trump

Not 12 hours after Donald J. Trump was elected the 45th president of the United States, the Swiss citizenship planning firm Henley & Partners reported a spike in Americans inquiring about one of its many alternative residence programs. The boom in business was to some extent predictable. Canada’s immigration website had crashed as the results rolled in, and Irish embassies had already seen months of increased citizenship applications from Americans.

For the passport business — the unexpected result of the American election, and the global uncertainty it wrought — would seem to be a boon.

Indeed, for private “citizenship planning” companies like Henley, which helps clients secure residency and visas to places like Austria, Malta, Cyprus, St. Kitts and Nevis, Grenada, and more, instability can often be good for business. And from that perspective, 2016 — with the ongoing war in Syria, terror attacks in France, Britain’s decision to leave the EU, an attempted coup in Turkey, and Trump’s election in the U.S. — has been a very good year.

But the past 12 months have also seen rising waves of populism, nationalism, nativism and skepticism of international institutions and globalization. While the uncertain global climate means more wealthy people are on the move, it also means the values upon which Henley’s industry depends — mobility, internationalism, hospitality — have never been as threatened as they are today.

Given these new conditions, a certain malaise hung over Henley’s 10th Global Residence and Citizenship Conference, a London gathering in mid-November meant to celebrate the industry’s prospects.

At the opening of the event, at the National Portrait Gallery in Trafalgar Square, staffers from private citizenship planning firms mingled with representatives from passport-selling countries like Malta, Cyprus, Grenada, Monaco, Portugal and most of the Caribbean. But neither the champagne and elderflower cocktails, the Renaissance paintings from Sandro Boticelli’s workshop, nor the upbeat toast delivered by Henley group chairman Christian Kalin could dispel the sense that the conference was being held on decidedly unwelcome territory.

“The history of humankind is largely a history of migration, often forced migration,” Kalin reminded the delegates toward the end of the soiree, as attendees prepared to don tuxedoes and gowns for a black-tie cruise down the Thames. “If you look in your own ancestry, at some point, I’m sure you’ll find that some of your forefathers were refugees. You should always keep this in mind.”

Henley’s customers — mostly so-called “High Net Worth Individuals,” or HNWIs — are not used to finding many points of comparison between themselves and the world’s most desperate people. And while the wealth gap between the two groups remains higher than ever, there was the unmistakable sensation that both are facing the same unfriendly tide.

The British Brexit vote has been followed rising anti-foreigner sentiments in the U.K. – something that Prime Minister Theresa May did nothing to dispel when she declared at the Conservative party conference in October that “If you believe you’re a citizen of the world, you’re a citizen of nowhere — you don’t understand what the very word ‘citizenship’ means.”

HNWIs treat passports like investments, as indeed they are, and while the sharp turn toward protectionism has driven up demand, over the long term it risks creating a bear market. Today, Austrian citizenship can be purchased for around €2 million, Maltese citizenship for around €1 million. In the U.K., £2 million can buy HNWIs a three-year visa, with the potential for extension. With the U.K. severed from the rest of Europe, and freedom of movement under pressure even within the rest of the European Union, the value of these investments is declining.

“I’ve had clients who feel significantly disincentivized by Brexit,” said Jonathan Burt, one of London’s most highly-rated private wealth managers, “mainly because, as foreigners in a foreign land, they’ve felt unwelcome. They also started to moan about the weather.”

The trip down the Thames was in part a fundraiser for United Nations efforts to register and resettle refugees, and as the yacht circled under the glimmering London bridge, the famed soprano and UNHCR Goodwill Ambassador Barbara Hendricks made an appeal to those on board to consider the fate of the less fortunate. “No one puts their children in a boat unless the water is safer than the land,” she said.

The irony of her remark may have been lost on the audience, most of whom were somewhere between their third and fourth glasses of wine.

Linda Kinstler is a contributing writer at POLITICO.