The measure of success for citizenship by investment is a combination of transparent legislation and an eye to due diligence
by Micha-Rose Emmett, CEO, CS Global Partners
Interest in second citizenship has never been higher. The demand for more than one citizenship is stirred by a growing sensitivity to globalisation, and piqued by daily headlines on Brexit, President Trump’s promises on immigration control, and scandals such as the plight of the Windrush generation. Simultaneously, supply is growing, with an increasing number of nations opening citizenship to applicants who can generate foreign direct investment.
Second citizenship can be obtained in a variety of ways, with some paths more commonly travelled than others. Common paths include birth within a nation’s recognised territory, descent, marriage, and long-term residence. Increasingly, however, individuals and families from around the world are looking at a more time-efficient path to guarantee their physical security, financial stability and a more global lifestyle. These desires can be achieved through citizenship by investment.
THE PATH LESS TRODDEN
Citizenship by investment (also known as ‘economic citizenship’) is, to some extent, an exclusive means of acquiring second citizenship. It is a legal process, entrenched in legislation, whereby an applicant is awarded citizenship in return for a significant investment into a nation’s economy. There are no more than a dozen countries around the world who have official government-led, legitimate programmes. At the same time, however, and in contrast to more typical ways of achieving second citizenship, it is also more open: allowing applicants to apply even if they do not necessarily have a previous connection to a nation, or a deep-set understanding of its culture and history. Rather, access to economic citizenship is contingent on the individual’s ability to provide the nation with a significant monetary contribution, driving growth and ensuring future prosperity. In practice, this means that most citizenship by investment countries do not impose residence or travel requirements, mandatory interviews, or language requirements. Importantly however, this does not mean that anyone can obtain citizenship – all applicants must show good moral standing and a clean criminal background.
A GROWING TREND
Once the prerogative of small nations, in 2018 citizenship by investment programme were also launched in more populated countries, evidencing a growing appetite for economic citizenship across a variety of nations. Why this appetite is growing among governments is clear: they receive significant contributions that they can channel to communities and projects in need. But the economic citizen has also a lot to look forward to: a new citizenship and the benefit of becoming a part of a nation whose development is being bolstered by an influx of investment. For this reason, the process is often described as a win-win: a win for the applicant (or eventual citizen), and a win for the country.
The investment an individual or family is required to make to the country is specified in the legislation of each CBI nation. One of the most affordable economic citizenship routes – Dominica’s Citizenship by Investment Programme – requires a main applicant to contribute a minimum of US$100,000. Price-points, however, vary widely depending on the nation, with European-based programmes typically seeking ten to twenty times more than those located elsewhere. Investment requirements have shifted a great deal in the past 12 months, as countries seek to find a sustainable balance between being competitive in an expanding market and presenting a programme of worth.
Other indicators, aside from investment thresholds, are also essential to differentiate programmes and their value. The CBI Index – a special report issued annually by the Financial Times subsidiary Professional Wealth Management magazine – ranks citizenship by investment programmes by utilising seven indicators:
- Due Diligence – the process of vetting an applicant and ensuring that they are bona fide and that their application is accurate.
- Ease of Processing – the efficiency of the application process, including but not limited to, how transparent, streamlined, and concise the process is for the applicant.
- Citizenship Timeline – the speed at which the application can be processed. St Kitts and Nevis, for example, offers an Accelerated Application Process (AAP), which guarantees applicants a turnaround time of 60 days or less (including the issuance of a passport), provided all other criteria are fulfilled.
- Mandatory Travel or Residence – whether an applicant is required to reside or travel to the country during or after the application process. This is relevant to the typical high net-worth, time-poor applicant.
- Minimum Investment Outlay – the affordability of the programme.
- Standard of Living – the way of life in the country including its legal systems, life expectancy, crime rates, and more.
- Freedom of Movement – the mobility that the citizenship affords by virtue of its visa-free and visa-on-arrival travel waivers.
The data evaluated for the CBI Index considers the most critical components of today’s citizenship by investment programmes, according to an applicant’s needs. The comprehensiveness of the research, demonstrating extensive use of quantitative and qualitative data, provides an unparalleled study of the citizenship by investment industry.
Those working within the industry should be able to steer applicants in the direction that best suits their needs. CBI programmes and the corresponding government departments do not accept applications directly from investors, and so depend on a trusted list of agents who are authorised to submit applications on their clients’ behalf. CS Global Partners works extensively within this network of agents and is a leader in providing accurate advice and guidance to applicants seeking a second citizenship. It is also officially mandated by a number of governments offering citizenship by investment.
THE DUE DILIGENCE FACTOR
All industries, to some extent, are vulnerable to abuse. Happily, well-established citizenship by investment programmes, such of those of the Caribbean, have taken steps to significantly reduce this vulnerability. Those involved in the illegitimateGuatemalan programme, for example, could never claim to act for one of the Caribbean governments, as these governments publish lists of the agents that they work with on their official websites. To feature on these lists, agents must pass thorough checks, obtain a licence, and ensure that each of their clients are risk-free.
As with agents, due diligence is at the heart of the relationship between a citizenship by investment jurisdiction and its economic citizens. Indeed, the more a country performs checks on prospective economic citizens, the more it safeguards its current citizens – ultimately protecting its reputation and the attractiveness of any citizenship by investment programme it may choose to institute.
The search for programmequality finds a strong proponent in the Commonwealth of Dominica, which has seen the effects of seeking out excellence among its applicants. Here, in addition to making a one-off contribution or purchasing real-estate, economic citizens offer their new nation a strong business network and gifted persons eager to work together to tackle global issues. Dominica refers to this as its Global Community, acknowledging the collective strength of its diaspora. The value of citizenship by investment to Dominica, therefore, is more than the sum of applicants’ investments; it includes the potential for additional contributions flowing from the talent, expertise, and goodwill of economic citizens, and, by doing so, highlights the importance of due diligence in selecting the ideal citizen.
It is important to note that due diligence does not stop at the application. In many CBI nations, applicants who are later found guilty of providing misleading or incorrect information can have their citizenship revoked or their passport blocked. The legislation governing these provisions differs from jurisdiction to jurisdiction, but countries are overwhelmingly in favour of such strict controls on their economic citizens.
CS Global Partners
Micha provides intelligent citizenship solutions to investors seeking to diversify their business and lifestyle opportunities. She specifically advises on the world’s leading CITIZENSHIP BY INVESTMENT (CBI) and INVESTOR IMMIGRATION programmes, including the most eminent CBI programmes in the Caribbean: those of the Federation of St Kitts and Nevis and the Commonwealth of Dominica.
CS Global Partners is an award-winning industry-leading legal consultancy firm specialising in citizenship and residence solutions. Its international team liaises between governments wishing to promote foreign investments in their countries, and individuals wanting to secure their future and become global citizens through intelligent economic citizenship.