Mimoun Assraoui, RIF Trust CEO, is seeing the concept of geopolitical risk play a more and more prominent role in investment. "Our clients consider geopolitics to be a key motivation in exploring the worlds of Residency by Investment and Citizenship by Investment," he explains.

"Investing in a new residency or second citizenship offers many benefits and mitigating against geopolitical risk is one that is becoming increasingly appealing."

Our CEO expands: "RIF Trust has 13 offices around the world. We are an international company populated by staff who speak a wide range of languages. RIF Trust also helps HNWIs to become more global through the acquisition of dual citizenship."

What Is Geopolitical Risk?

Noted economists Dario Caldera and Matteo Iacoviello are the brains behind the Geopolitical Risk Index aka GPR. In their own words: "The Caldara and Iacoviello GPR index reflects automated text-search results of the electronic archives of 10 newspapers: Chicago Tribune, the Daily Telegraph, Financial Times, The Globe and Mail, The Guardian, the Los Angeles Times, The New York Times, USA Today, The Wall Street Journal, and The Washington Post. Caldara and Iacoviello calculate the index by counting the number of articles related to adverse geopolitical events in each newspaper for each month (as a share of the total number of news articles)."

The search is organized in eight categories. They are as follows: "War Threats (Category 1), Peace Threats (Category 2), Military Buildups (Category 3), Nuclear Threats (Category 4), Terror Threats (Category 5), Beginning of War (Category 6), Escalation of War (Category 7), Terror Acts (Category 8)."

Interestingly, there are 44 country-specific indexes. It's reasonable to assume that the economist duo focuses on countries that are more susceptible to geopolitical risk, although their rationale for inclusion is that these are advanced and emerging states. These are the countries they cover:

1.         Argentina

2.         Australia

3.         Belgium

4.         Brazil

5.         Canada

6.         Chile

7.         China

8.         Colombia

9.         Denmar

10.       Egypt

11.       Finland

12.       France

13.       Germany

14.       Hong Kong

15.       Hungary

16.       India

17.       Indonesia

18.       Israel

19.       Italy

20.       Japan

21.       Malaysia

22.       Mexico

23.       The Netherlands

24.       Norway

25.       Peru

26.       The Philippines

27.       Poland

28.       Portugal

29.       Russia

30.       Saudi Arabia

31.       South Africa

32.       South Korea

33.       Spain

34.       Sweden

35.       Switzerland

36.       Taiwan

37.       Thailand

38.       Tunisia

39.       Turkey

40.       Ukraine

41.       United Kingdom

42.       USA

43.       Venezuela

44.       Vietnam

 

Emerging Geopolitical Risks

Geopolitical risk will continue to dominate the headlines. In 2025, the return of Donald Trump to the White House will have a ripple effect worldwide. His support for fellow populist leaders, many political commentators argue, could weaken democracy in those countries.

As well as Trump, his chief financial backer, Elon Musk, the world's richest person will wield greater power. Critics worry about him poisoning the well of democracy. This relates to his championing of extremists on the social media platform he owes, X.

The development of AI is another concern. Wednesday, January 1, 2025 saw a Tesla Cybertruck explode into flames outside the Trump Hotel in Las Vegas. This was a terrorist attack powered by AI, so you might want to put some distance between yourself and a country that is invested in accelerating growth in the AI industry.

The conflict in Ukraine continues to alarm. Many are worried about incursions Russia may make to reclaim land that made up the old Soviet Union. Putin is seen as operating independently within the international community rather than fostering improved relations with neighboring countries.

Expect lots more news stories to break about the Middle East too. It's not yet certain whether the fall of Bashar al-Assad in Syria will lead to greater stability. Israel, Gaza, and Lebanon will maintain their status as political (and military) hotspots in 2025.

Residency by Investment Programs in Lower Risk Countries

The aforementioned Matteo Iacoviello has linked geopolitics with inflation. On Tuesday, July 2, 2024, he presented Geopolitical Shocks and Inflation to the ECB Forum on Central Banking. As geopolitical risk increases inflation, this means that lower inflation countries are a great refuge.

But what is more important is having a Plan B location lined up. A bolthole for when geopolitics become too much. This could also be an ideal location to isolate if there's ever another pandemic.

Greece is not one of the 44 countries featuring in the GPR. Its islands are where people like to get away from it on vacation. This makes the Greek Golden Visa one of the most tempting European Residency by Investment programs.

Malta is another sunny getaway in Europe that is also attractive as a longer-term investment than a holiday. This archipelago is a miniature version of the Greek islands. This means the Malta Permanent Residence Programme is worth exploring.

The United Arab Emirates is amongst the most secure countries in the Middle East. Is it any surprise that like Greece and Malta it's a popular tourist destination too? We recommend that you look into investing in a UAE Golden Visa.

Citizenship by Investment Programs in Lower Risk Countries

The Eastern Caribbean dominates the Citizenship by Investment landscape. No stranger to travelers, especially cruise ships and snowbirds from the US, it makes sense for HNWIs to invest in citizenship. Especially if the Trump Bump reverses to a Trump Slump.

There are 5 programs to choose from. There is Antigua and Barbuda Citizenship by Investment, Dominica Citizenship by Investment, and Grenada Citizenship by Investment. Completing the quintet are St Kitts and Nevis Citizenship by Investment and St Lucia Citizenship by Investment.

You can also invest in a second citizenship in Malta. This is through Maltese Exceptional Investor Naturalization. Last, becoming a national of a tropical paradise in Oceania via Vanuatu Citizenship by Investment is a quick and efficient method of removing yourself from the aftershock of geopolitical risk.

How to Lessen the Effect of Geopolitical Risk in 2025

The greatest protection against geopolitical risk is to put some mileage between your base and countries that are more susceptible to developments relating to geopolitics. Consult a Residency and Citizenship by Investment expert such as RIF Trust to discuss the finer details of the programs we've outlined above, to ensure they match any other needs you may have.

By Mimoun Assraoui,

RIF Trust CEO.