With a global economy plagued by malaise or political instability, an increasing number of wealthy individuals are considering safer havens and investment based immigration program are the option for many. Figures show the global elite spent approximately $2 billion in 2014 on citizenship or residence based schemes. The list of nations offering citizenship or residence schemes is expected to grow.
Economic Citizenship and Residence is a Winning Proposition for Nations and Investors
Many nations in the Caribbean region are now relying on citizenship by investment schemes to attract investment and enjoy unparalleled economic growth and stability to complement a dampened tourism industry.
Dominica offers its passport to a single investor for just $100,000. One can become a citizen of St. Kitts and Nevis by investing in multiple asset classes. Investors can choose to purchase real estate for at least $400,000 or make a $250,000 donation to the Sugar Industry Diversification Foundation. Citizenship comes with nominal residency requirements. To remain a citizen of Antigua and Barbuda, one must comply with the minimum investment norms and visit the country for at least five days over a period of five years.
Not surprisingly, demand for such programs has been consistently rising. Nations in the region issued around 2000 passports in 2015, which is a 100% increase from 2010.
Sale of citizenship is not restricted to the Caribbean region alone. An investor can become a citizen of Cyprus by investing 5 million Euros in the country. Malta is another popular European destination that offers passports for sale.
Developed countries like the USA, the UK, Australia, and Canada do not offer citizenship by investment schemes. However, one can become a permanent resident through investment in these countries. In the USA, the EB-5 visa is available against a $500,000 or $1 million investment and that creates ten jobs in the country.
The UK offers indefinite leave to reside to those investing at least two million pounds. Australia has its Significant and Premium Investor Visa program while Portugal’s Golden Visa is also a popular option among investors. Investors can apply for citizenship through continued compliance of investment and residency requirements for a specified period of time.
Demand for citizenship and residence schemes, comes primarily from Chinese and Russian investors. St. Kitts and Nevis established its program in the 1980s. However, demand surged only after it revamped its program in 2006. Sale of passports helped the country reduce its debt from 164% to 104% of GDP in just three years. Currently, it generates around 25% of its GDP through sale of passports.
There are numerous factors fueling the rising demand for economic citizenship and residence programs. Citizens of Middle Eastern nations rely on such programs for political stability. Since the beginning of the Arab Spring, demand for such programs has risen by 100% among citizens of countries in the region. The recent boom in the Chinese economy has also contributed to the rise in demand.
Apart from serving as a protection against uncertainty, holding a passport of another nation can help citizens of countries like Iran and Pakistan enjoy greater travel privileges. A Pakistani passport holder enjoys visa-free access to less than 40 nations. A citizen of the St. Kitts and Nevis can travel to 131 nations without a visa. Citizens of developed nations like the USA and Canada enjoy visa-free travel to more than 170 nations globally.
Additionally, wealthy individuals often opt for a second passport to gain access to a less-stringent tax regime. Nations offering such programs frequently offer zero or nominal tax on investors’ foreign incomes, a further enticement for businesspersons
However, despite the numerous benefits to investors and nations, many citizenship and residence through investment programs are not devoid of their share of risk and challenges. The biggest risk is that they attract criminal elements or even members of terrorist organizations who secure a secondary passport to bypass strict security rules implemented by developed countries where they are destined.
Worries over due diligence and security risks led to Canada to withdraw its visa-free policy to St. Kitts and Nevis passport holders. Despite recalling thousands of passports, the Caribbean nation is working diligently to strengthen its program and it appears to be doing so.
Today, the global elite view themselves as global citizens. As new programs are set to launch, stakeholders are aiming their sights on security and integrity measures at higher standards.
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