Montenegro joined NATO in Summer 2017, has set plans in motion to join the European Union, its economy is demonstrating sustainable growth year in year out. Since December 2009, Montenegrin passport allows its holder free movement across the Schengen Area.
Montenegro citizenship program has a lot of potential and is shaping up to become one of the most reliable CBI programs in Europe. The Balkan nation has been actively attracting foreign funds into its economy, and the Citizenship by Investment Program will further stimulate the process.
After reading this blog entry, you’ll know all about:
- Terms and conditions of the Montenegrin citizenship by investment program;
- Why foreign investors are so interested in Montenegro’s passport;
- The EU and Caribbean alternatives to the Montenegrin CBI program.
We’ll also throw in some tables and visual comparisons of competing programs.
Montenegro preparing to launch own citizenship by investment program
It is expected that Montenegro’s investment citizenship program would be up and running until 2017 expires. Currently, foreign nationals have only one official way of obtaining this country’s full rights as citizens, and that’s a lengthy process of renewing one’s temporary residence permit every year for 5 years, then switching for a 5-year permanent residence permit, and eventually applying for citizenship. Fairly, this isn’t really attuned to today’s frenetic tempo of life.
The previous attempt by the Montenegrin government to issue the country’s passports to foreign investors dates back to 2010. The minimum €500,000 investment requirement was set up, no language tests, no obligations for lengthy residence, dual citizenship was formally recognized. The program drew harsh criticism when the former Thailand prime minister, Thaksin Shinawatra, applied via the program and was granted Montenegrin citizenship. Despite his corruption and conflict of interest charges, local authorities approved his investment in hotel business and real estate, and justified their decision by stating Shinawatra didn’t have an international arrest warrant issued for him.
Evidently, to nip the public fear of possible abuse of the program by individuals who could endanger the country or harm its reputation, the authorities soon started stressing the importance of the candidate’s excellent personal and business characterization, legality of source of income, and announced thorough diligence checks.
The lengthy development process of the newest version may be directly linked to the government’s desire to take into account all previous shortcomings and ensure maximum compliance with EU requirements. No less important is to integrate the experience of other European countries that offer their citizenships in exchange for investment, as previously, the principal applicant couldn’t list family members in his application; however, to survive in the second citizenship market, it would be rational to make the investor’s family members eligible for obtaining Montenegrin passport.
Little is presently known of the program under the working title Montenegro Special Investor Program (MSIP). It is being developed by a team of representatives of various ministries and committees, with the assistance of foreign consultants and investment migration experts. Highly probable that applicants would be expected to either purchase real estate of a certain minimum value, or invest in the country’s economic development. Since various regions of Montenegro are developing at a different pace, MSIP is likely to be used for injecting foreign funds to northern and eastern regions that are somewhat lagging behind seaside regions.
Luštica Bay is the beating heart of coastal Montenegro with authentically designed apartments, townhouses or spacious villas
Why are investors so eager to get their hands on a Montenegro passport?
Montenegro is a state with a bright future and especially fortunate location in Southeastern Europe. We know of at least 7 reasons to keep MSIP in mind:
- Economic growth. Looking at the active development of tourism sector in 2017, Central Bank of Montenegro Vice Governor Nikola Fabris has predicted a 4% growth for 2017, and 3.5% for 2018.
- Favorable investment climate. High-powered businessmen from abroad (for the most part as of now, investors from the Middle East) are attracted by the fact that the elite sector of real estate market is at its early stages in Montenegro. In 2016, the Investment Corporation of Dubai acquired the super-yacht marina Porto Montenegro, along with the adjacent elite settlement with housing, shops and restaurants. Further plans on construction of modern yacht and resort complexes in the Bay of Kotor show the country is gradually turning into a trendy center of European yachting.
- Mobility rights. Montenegrin passport means visa-free travel, or visa on arrival, to over 100 countries, the Schengen Area included.
- Favorable tax rates. The corporate income tax is only 9%, and personal income tax varies from 9% to 15%.
- Comfortable life. A nice climate, healthy environment, EU membership not far off all paint a favourable image of the country as a great Plan B for the whole family.
- Safety. Thanks to its NATO membership, Montenegro can grant social and political security to investors and their families.
- Convenient location, rich historical background. It is easy to get to Montenegro from anywhere in Europe, an additional bonus of the program for those planning to purchase elite real estate for personal use. Despite its young age as an independent European country, Montenegro has a significant cultural heritage. Its authority will only strengthen in the upcoming years. In October 2017, the highly prestigious international Global Citizen Forum was held on the Sveti Stefan islet. Many famous people are honorary citizens of Montenegro, like businessman and member of the famous dynasty, Nathaniel James Rothschild, artist Marina Abramović, basketball player Omar-Sharif Cook. In 2011, Egyptian billionaire Samih Sawiris was granted Montenegrin citizenship and has since been developing prominent projects on the coast of the country.
EU alternatives to Montenegro’s citizenship
As Montenegro is honing its citizenship program before the launch, other European nations, namely, Austria, Bulgaria, Cyprus, Malta, have something to offer, too.
Austria stands apart in this list, though, because it doesn’t have a defined set of criteria that determine whether citizenship is granted or not. Instead, the government looks into each application and studies each applicant individually. The principal applicant is expected to invest €6-10 million in the country’s economy, and it is important that the investment is not passive. One may establish a business in Austria and make an equity investment.
Cyprus, Bulgaria, and Malta require less funds, within the range of €880,000-€2 million. The investor’s spouse, children and parents can be included in the application.
These passports provide visa-free (or visa-on-arrival) access up to 167 countries, including the UK, Japan, South Korea, Canada (available for Bulgaria’s nationals since December 2017). Cypriot application processing takes up to 6 months, and the lengthiest process is Bulgaria’s – up to 2 years.
Naturally, only applicants of outstanding business and personal reputation, with legal proof of funds acquisition and no criminal history may be considered eligible for any of the European CBI programs.
To become a Maltese citizen, an investor is to make a non-refundable donation of at least €650,000 to the National Development and Social Fund, purchase government bonds worth at least €150,000, and buy residential property worth at least €350,000 (or lease for at least €16,000/year).
By this time, the cumulative cost of Malta’s passport for a single applicant will reach €880,000, but the final amount is slightly higher with additional administration and due diligence fees.
Adding family members to the application also comes at an extra price, with €25,000-50,000 fee per person.
Document processing usually takes 12-14 months. The investor is not allowed to lease or sub-lease their real estate objects, but it is possible to put them on the market once the obligatory 5-year retention period ends.
Cyprus is ready to convert foreign nationals into Cypriots for a minimum of €2 million investment in purchasing or leasing real estate (residential or commercial), purchasing or establishing a Cypriot company, or purchasing government bonds. In addition, the investor is obliged to own residential property on the island worth at least €500,000.
Spouse and underage children, as well as parents (provided that another €500,000 residential property object is acquired) may be listed in the application.
The Cypriot program does look costly, but fear not: it is possible to recover the most part of your investments by selling the real estate (not the €500,000, though) after 3 years. This said, Cyprus CBI is highly popular with foreign nationals.
Caribbean passport vs European passport
A Caribbean passport is another entry into the world of second citizenship favoured by wealthy foreigners.
The main distinctive feature of this region is low passport cost and virtually non-existent residence requirements for retaining the status of a citizen indefinitely. Caribbean citizenship also provides a plethora of opportunities for visa-free travel, tax optimization, and expanding business. Information submitted to the authorities of the host country is not disseminated neither to third parties, nor to the country of primary citizenship.
5 reasons to look into Caribbean passports
High-net-worth individuals may opt for Saint Kitts and Nevis, Antigua and Barbuda, Grenada, Dominica, or Saint Lucia as their ultimate safe abode. Since all of these island countries are members of the British Commonwealth of Nations, their citizens have the privilege of visa-free travel to the UK, and the Schengen Area.
- The CBI program of Kitts and Nevis has been successfully operating for over 30 years. One of the most affordable means to get this passport was to donate at least $250,000 to the Sugar Industry Diversification Fund. The local authorities, however, have recently activated another option that is even more appealing (but will be shut down after March 31, 2018): a single applicant and a family of up to 4 members may donate $150,000 to the Hurricane Relief Fund.
- In Antigua and Barbuda, it is possible to invest $400,000 in local real estate projects and obtain the citizenship. But the fresh addition to the array of investment options looks especially interesting: a $100,000 donation to the National Development Fund, as the authorities are looking for ways to re-build the island of Barbuda that was utterly destroyed by hurricanes. Note that it is possible to apply for tax residence in Antigua and Barbuda.
- A sole applicant may become a citizen of Saint Lucia by investing $100,000 in the National Economic Fund; passports for a family of 4 would cost $190,000.
- To become a Grenadian, a foreign investor is expected to donate $200,000 to the National Transformation Fund (valid for a family, too), or purchase real estate worth at least $350,000. The Grenadian CBI program is of particular interest to entrepreneurs who have business ties with China, seeing that very few other countries have visa-free entry permission to offer to their citizens. Rounding up the list of unique benefits, citizens of Grenada may easily apply for and obtain the E2 business visa to the US.
- Dominica has quite a few tricks up in the sleeve as well. With the minimum Government Fund donation standing at $100,000, and real estate investment at $200,000, the Dominican passport is one of the least costly in the world. What is more, the age restriction for financially dependent children who can be included in the application by the investor (children up to 28 years of age) is one of the mildest, too.
Second citizenship of a European or Caribbean country effectively solves two issues: where to invest safely, and how to obtain a Plan B for unforeseen circumstances.
Take care of your second passport… to let your second passport take care of you from now on.
Interested in more detailed information about citizenship by investment programs? Contact us!
- We offer free consultations, understanding how important it is for the client to make the only correct decision.
- We work only in the field of investment immigration, integrating gained experience into the investor’s goal.
- We work only with official programs of the European Union and Caribbean countries.
- Before signing the contract, we inform our clients about all additional fees and expenses.
- We conduct a screening to assess the investor’s chances of obtaining the desired citizenship.
- We oversee the process at each stage and work exclusively towards the result.
- We are in touch 24/7.