Not many people know you can actually buy another country’s citizenship, in fact, more than a dozen of countries offer this opportunity. Although buying a citizenship may associate with illegal activities or clandestine dealings, in reality, this issue is solved at the governmental level, and the potential candidates go through a thorough check.
The official name of this “official mission” is a Citizenship by Investment Program. Investments can be non-refundable and, under certain conditions, refundable.
There are a lot of articles describing all the perks of different programs, but there is little information on the investors themselves and the goals they pursue. In early October 2017, the Economist’s sister project, 1843magazine, released a curious feature article on the second citizenship. One of the main characters of the article is Jalal (not his real name) who received his second citizenship in exchange for investment. He made this decision because of the shortcomings of his major passport and the bias towards his nationality.
Jalal graduated from Harvard, holds an executive position in a TV company in Iraq, speaks fluent English. His wife is a surgeon. Both are successful, have stable income, and love traveling around the world. One of the favorite places is Lake Como in Italy. But, being Iraqi, the couple often face visa-related difficulties. Because of this, Jalal and his wife applied for a second citizenship of Antigua and Barbuda. The process of paperwork and due diligence (thorough background check) took about 10 months, then the couple invested several hundred thousand in real estate and the development fund of the country, and, as a result, received the passports, which provide visa-free entry to 130 countries, including Europe. After the couple received the second citizenship, they started a new tradition: when they go to Como, they send a postcard to the citizenship consultant who helped them become citizens of Antigua.
Where do foreign investors hail from?
According to 1843magazine, thousands of people spend more than two billion dollars a year to buy passports and residence permits of other countries. The largest number of applications come from residents of China, Russia, and the Middle East. However, the number of applicants from developing countries whose net worth is from 1 to 10 million dollars is growing by 15-20% annually. For them, to spend a few hundred thousand dollars on a passport that makes the life easier is a profitable and respectable deal.
Instability in the countries of residence is another factor boosting the demand for second citizenship: more South Africans are eager to obtain second passports because the actions of President Jacob Zuma’s prickly government decreased the number of countries they were previously able to enjoy enter visa-free. Terrorism also makes one think about a second citizenship: the citizens of rich countries, especially America, want to get another passport for travelling and working abroad.
The growth of demand causes the growth of supply. For example, 30 to 40 countries already offer the investors the citizenship or residence by investment programs, about 60 countries consider launching similar programs in the future. Some programs require a direct money transfer to a state fund, some require investments in government bonds or real estate. There are also programs that are designed for financially independent individuals and businesspersons. Under the terms of those programs, the applicant is required to start their own business and create a required minimum number of jobs. The amount of investment starts from $10,000 (for example, in Thailand) and can reach $10 million (British citizenship in 2 years’ time). In some countries the investment can be recovered in a few years.
Why do Caribbean countries sell citizenship?
The Caribbean countries are particularly interested in attracting foreign investors with citizenship by investment offers. The citizens of former colonies can still enjoy wide visa-free access. Because of their small size, these countries do not pose a threat to rich countries, and world borders remain open for them. The simpler answer is often the correct one: the primary reason behind running such programs is financial instability; in other words, these island states need money and want to secure inflow of foreign cash into their economies.
Saint Kitts and Nevis was the first to launch its citizenship by investment program as a means to look for other sources of pumping up the treasury due to the decline of the sugar refining industry. Since then, Saint Kitts and Nevis has sold more than 10,000 passports at a price of $250,000 each – a good income for a country consisting of two islands with a population of 55 thousand and GDP of billion dollars.
Important! Till the end of March 2018, the cost of citizenship of Saint Kitts and Nevis will be $150,000 instead of $250,000.
Neighboring Dominica sells about two thousand passports per year for $100,000 per application. The program became a lifesaver for Dominica after thee 2015 Hurricane Erica. In 2017, $148 million from the state budget of $340 million is expected to come through the citizenship by investment program.
Which European countries sell citizenship by investment?
The whole industry took a big step forward when the EU countries — Malta and Cyprus — came into the arena. Cyprus offers to receive the EU citizenship in just a few months, offering quite easy conditions in addition to a favorable tax environment and the opportunity to get medical care in Europe. There are no requirements to live on the island, or to know the history of the country, no language proficiency tests. The cost of Cypriot citizenship is relatively high: a €2 million investment in a business or real estate. That explains why there are so many villas on the island owned by Russian and Chinese nationals.
The Maltese citizenship is cheaper: the price starts from €650,000, plus additional €25,000 per spouse or child. But it’s harder to obtain it. The whole process takes at least one year, and, according to the statistics, one third of all the applications have been denied. During the program’s lifetime, the Government of Malta approved 1,400 applications (out of the 1,800 possible approvals – up until recently, there was a quota on how many foreign investors may become citizens of Malta.
As we have already mentioned, many countries are still considering the possibility of launching own citizenship/residency programs. Montenegro, which is set to join the EU in 2022, tried to launch the program a few years ago, and only in 2017 the project finally has pushed forward – not officially re-launched yet, but getting ready to.
It is safe to say that we’ll soon see more and more countries rearrange their economic citizenship programs in order to lure potential investors with favorable conditions and stand out among competitors.
The demand for a second citizenship is growing for various reasons — one’s native country’s dented economy, political clashes, modest power of one’s primary passport, the desire to live in a better-developed country. The factor of exclusivity plays in, too. Not everyone can afford to buy an additional passport at any time – only people with platinum credit cards and multi-million dollar businesses may join this elite club of high net worth dual citizens.
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.
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