In recent years, an increasing number of wealthy individuals are acquiring a second or third passport to gain greater freedom and improve control of their future. To acquire true peace of mind, they realise that not only their investment portfolio, but also their citizenship portfolio, need to be diversified in today’s globalised world.
Countries themselves are also looking for new ways to generate growth, and governments have increasingly become focused on the benefits of offering individuals residence or citizenship in return for some form of economic investment. While residence is granted to investors and wealthy individuals in most countries, there are currently only eight countries which have clear provisions in their law for citizenship-by-investment: Austria, Antigua and Barbuda, Cyprus, Dominica, Grenada, Malta, St Lucia and St Kitts and Nevis. Citizenship by investment programs offer individuals the opportunity to legally acquire an additional citizenship quickly and simply, often with no real physical presence requirement.
It is important to note that the purpose of citizenship by investment programs is to enable individuals to acquire citizenship by making an exceptional economic contribution to another country. The programs are structured to ensure that the investment contributes to the welfare, advancement and economic development of the country in which they wish to reside or belong too. It is often more about making an economic contribution than just an investment. In contrast to normal foreign direct investment, where investment decisions are based on competitive rates of return and provide for a certain level of economic efficiency, investors in citizenship by investment programs are generally willing to invest at less favourable rates or may acquire assets for more than their intrinsic value as the result of the inclusion of the passport asset in their investment decision.
For business owners and professionals who hold a passport from a country with limited visa waiver agreements, a second passport will open up visa-free travel to countries that were previously not accessible or were restricted by time-consuming visa application processes. This additional passport gives a business person easier access to the global market, which in turn creates diverse opportunities for economic growth. Families are typically interested in regions of the world that provide them with additional settlement rights and enhanced control over their family’s future, with improved security and education opportunities.
Most citizenship program applicants have no intention to actually leave their home country in the near future, and no citizenship by investment program requires this to happen. The application process is different for every program worldwide. Applicants undergo extremely strict due diligence procedures and are screened by the firm before they are accepted as clients, and before their applications are submitted to the relevant governments. In this sector, each country program is only as reputable as the last investor to gain entry, so the most important element in any residence or citizenship program is due diligence.
Currently, the world’s most successful and advanced citizenship by investment program is the Malta Individual Investor Programme (MIIP); the only such program fully endorsed by the European Union (EU). Malta is part of the EU, and citizens therefore enjoy the right of free movement and settlement rights throughout the 28 EU member states. Maltese passport holders may also travel visa-free to 168 countries. Due to these benefits, Malta ranked very high in the Henley & Partners Kochenov Quality of Nationality Index (QNI) (22nd globally) and in the Henley & Partners Visa Restrictions Index (HVRI) (9th most powerful passport worldwide). The minimum capital requirements for this program are €900,000.
Elsewhere in Europe, Cyprus has also refined a citizenship by investment program, with an application process which can be completed in as little as 90 days. This program can provide full Cypriot citizenship to those who acquire at least €2.5 million in real estate (which can be re-sold after three years) and who meet certain other requirements. Like the MIIP, because Cyprus is also part of the EU, successful applicants gain the right to live, work and study in all 28 EU member countries. Cypriot passport holders may travel visa-free to 159 countries. Due to these benefits, Cyprus also ranked very high in the QNI (25th globally) and in the HVRI (17th worldwide). Austria is yet another European country that offers a citizenship by investment program, however it requires more capital and will take at least 18 months to facilitate.
With hundreds of beautiful beaches and clear turquoise waters, Antigua and Barbuda is another appealing location for citizenship investors. The Caribbean island signed a visa waiver agreement with the EU in 2009, which allows its citizens to visit Schengen countries without a visa, and its passport provides visa-free travel to a total of 134 countries around the world. The minimum capital required for this program is circa US$300,000 and the time frame is four months. Grenadian citizenship is another excellent option available in the Caribbean, providing similar benefits with visa-free travel to 121 countries, including China and the possibility of treaty investor visa access to the USA. This citizenship will cost about US$240,000 to complete the full process.
In short, the effects of globalisation continue to expand and touch all aspects of our lives. People have become more interdependent and mobile than at any other time in human history. The concept of borders are changing and governments have found themselves having to face new challenges as the concepts of residence and citizenship continue to develop. They have to not only compete for international talent, but also for investors, entrepreneurs and high net worth individuals and families, and they are now finding new ways of generating growth based on this new trend of economic migration.
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