The wealthy have always given credence to the old adage that money creation is a function of working smart rather than working hard. After making it, the trick is in preservation. Wealth preservation needs a fair bit of hard work.
According to the 2023 Wealth Report published by Knight Frank, Kenya’s wealthy have a strong hold on prime properties aimed at residential and retail clients. Additionally, many prefer investing their money in government bonds.
Kenyan government bonds have provided insurance against the capital erosion seen in other investments. Old-moneyed folks continue to hold onto land for development, riding on the wave of steady appreciation of land rates in Kenya.
Since the promulgation of the new constitution in Kenya in 2010, Kenyans have been allowed to hold dual citizenship.
A majority of Kenyans seeking a second passport are often on the hunt for better investment opportunities, healthcare and quality education abroad.
However, it has always been a silent secret that the HNWI individuals in Kenya have stashed their wealth abroad for various reasons including diversifying their risk base. Undoubtedly, one of the key reasons is to escape the taxman’s long-reaching hand.
According to a past Knight Frank wealth report, 28% of Kenyan dollar millionaires seek to hedge their wealth against unforeseen problems in the country.
“Amongst Kenyans seeking new passports, the proportion interested in reducing their tax bills, enhancing their safety or getting a better quality of life is much the same as for the wealthy globally,” wrote the report’s editor, Andrew Shirley.
The high number of HNWI and UHNWI seeking to leave the country is a clear indicator of the low confidence the rich have in local investments as well as the economy’s performance.
As previously reported on Bizna Kenya, these wealthy Kenyans are willing to fork out as much as Sh. 35 million to purchase dual citizenship abroad. The amount paid is subject to the country’s requirements.
Country where wealthy Kenyans are buying citizenship at Sh. 35 million
What are some of the most prominent destinations for these wealthy Kenyans?
Overall, Kenya’s former coloniser, Britain, has remained an attractive destination for investments by the super-rich in Kenya. Kenya has maintained good relations with its coloniser since independence, which may have driven these foreign investments.
Another prominent nation is the island of St. Kitts and Nevis, a Commonwealth realm. It is located between the Atlantic Ocean and the Caribbean Sea and is the only sovereign federation in the Caribbean.
Saint Lucia in the West Indies and Switzerland are top investment destinations for wealthy Kenyans. Their main agenda is to diversify their investments and, if possible, secure a second home.
Henley & Partners, an international citizenship and residence advisory firm previously said that savvy Kenyan investors have shown continued interest in investment migration programs (Citizenship-By-Investments) contrary to migration destinations.
The two mentioned islands, St Kitts & Nevis and St. Lucia, have the most popular programmes sold to Kenyans. Citizenship in these countries opens doors to an unlimited wealth of opportunities.
The elite are also keen on acquiring Dominican Republic passports, knowing that these passports grant visa-free access to over 140 countries, including the US, Europe, and Asia.
In contrast, the Kenyan passport allows access to only around 65 countries, most of which are in Africa.
“By spreading their assets across a range of markets and jurisdictions, over time they are more likely to harvest returns that if they hedge their bets on one country alone,” said Juerg Steffen, CEO at Henley & Partners.
Other top countries favoured by Kenyan investors include the island of Cyprus, which requires no language test, and the United Arab Emirates (UAE).
In Africa, Mauritius is a hotspot for Kenyan-dollar millionaires, and most have taken up offshore bank accounts. Namibia has recently been referred to as ‘The Australia of Africa’, and is slowly rising to become a key destination.
“Countries that draw affluent individuals and families to migrate to their shores tend to be robust, with low crime rates, competitive tax rates and attractive business opportunities,” said the head of research at New World Health, Andrew Amoils.
