Citizenship by investment (CBI) programs, also known as golden passport programs, allow individuals to obtain immediate citizenship in a country by making a significant financial investment. These programs have gained enormous popularity in recent years, and we examine some trends associated with citizenship by investment:
Increasing Number of Programs: The number of countries offering citizenship or residency through investment has been growing steadily. Several nations have recognized the economic benefits of attracting foreign investment and have implemented CBI programs to encourage it.
Diversification of Programs: CBI programs now offer more diverse options to cater to different investor preferences. Some countries provide full citizenship and passport rights, while others offer residency or a pathway to citizenship after a specific period. Investors can choose programs based on factors such as investment amount, residence requirements, visa-free travel benefits, and lifestyle considerations.
Flexible Investment options: Investors are given a number of investment routes such as donation, real estate, bonds, bank deposit, investment funds or job creation to acquire citizenship.
Waivers – Investors and their family are waived the condition of residence, language, or military service to become a citizen based on purely investment. (Malta is an exception). The time frame for examination of investment applications on average have been cut to 70 days due to streamlined efficient process.
Small countries: Small nations have benefited economically through the flow of revenues through CBI. The revenues were efficiently used for public projects (schools, hospitals), mitigate hurricane risks, social housing, climate resilence, pensions, social security and paying debt. CBI is not limited to small countries, global economies such as Turkey, Egypt, Jordan have also implemented investor citizenship schemes to boost foreign investment and property market.
Global Competition: As more countries enter the CBI market, competition among them has intensified. Nations with established programs are continuously refining their offerings to attract high-net-worth individuals (HNWIs) and investors. This competition has led to enhancements in program features, reduced investment thresholds, and improved processing times.
Emphasis on Due Diligence: Due diligence measures have become the heart of in CBI programs. Countries are placing greater emphasis on conducting thorough background checks and vetting applicants to maintain program integrity and ensure that no criminals, only individuals of good character and reputation are granted citizenship or residency.
Expansion of Investor Benefits: Some CBI programs are expanding the benefits offered to investors beyond citizenship or residency. These benefits may include access to education, healthcare, business opportunities, tax advantages, and increased visa-free travel options to multiple countries.
Focus on Sustainable Investments: There is a growing trend toward promoting sustainable investments through CBI programs. Some countries encourage investors to channel their funds into areas such as renewable energy, real estate development, infrastructure projects, or job creation initiatives that contribute to the country’s long-term economic growth and sustainability.
Regional CBI Cooperation: Regional cooperation among countries offering CBI programs is on the rise. For example, several Caribbean nations have established the Caribbean Community (CARICOM) Citizenship by Investment Program, allowing investors to gain citizenship in multiple countries within the bloc. Such collaborations aim to enhance the attractiveness of the programs and create synergies between participating countries.
Enhanced Transparency and Regulation: Increased scrutiny and calls for transparency have led to efforts to enhance regulation and oversight of CBI programs. International organizations like the Organization for Economic Cooperation and Development (OECD) and the European Union (EU) have been advocating for stricter standards and increased transparency to combat money laundering, tax evasion, and other illicit activities.
Pressure on Visa waiver agreements – Countries run citizenship for investment schemes risk visa waiver agreements with EU, UK and Canada for granting criminals, sanctions evaders, laundromats without proper security and due diligence checks. eg. Canada revoked visa waiver agreement nationals of St Kitts, Antigua and Grenada for sale of citizenship. Recently Vanuatu was hit with visa waiver fully suspended by EU for poor security checks.
Limited Shelf Life – The Global citizenship industry is estimated to be worth about $10 billion steadily growing every year. All citizenship for investment schemes have limited shelf life, as we have seen in the past due. Critics have pointed out poor security checks, tax evasion and money laundering concerns and growing pressure from European Commission calling for phasing out all citizenship for sale programs by 2025. Montenegro, Moldova, Bulgaria and Cyprus have already downed their shutters offering citizenship for economic investments. Nobody knows how long the CBI industry will thrive.
It is important to note that the specific trends in citizenship by investment can vary from as new and existing programs are shaped by local regulations, political considerations, and global economic factors. Prospective investors should thoroughly research and consider the requirements and benefits of each program before making any investment decisions.