With more than 50 programs globally, the investment immigration industry has been growing steadily despite concerns over lack of transparency, inadequate due diligence, misuse by tax evaders and even exploitation by terrorists.
While there is tough competition among countries to attract investment immigrants, there is no race-to-the-bottom scenario where programs with the lowest thresholds are the most popular.
The US has hiked minimum investment requirements for its EB-5 visa from $1 million to $1.8 million while retaining the requirement for investors to create at least 10 jobs.
Australia barred direct investment into residential real estate for its Significant Investor Visa and published detailed guidelines directing investments into its startup and venture capital sectors.
Security Concerns and Other Risks
Criticism of investment immigration focuses on two aspects
- The moral issue of sale of citizenship, and
- Practical issues connected to increased security risks.
Related to the second issue are concerns such as inadequate oversight, poor due diligence, instances of investors facing criminal prosecution qualifying for second passports, and instances of corruption within programs.
Undeniable Benefits
Yet, qualifying for a fast-track second passport of a country like Cyprus or Malta offers significant privileges and benefits to investors and dependent family members. These include:
- Second citizenship.
- Visa-free travel access to more countries.
- Access to simpler tax regimes.
- Better opportunities to manage foreign incomes.
- Better lifestyle for family members and better education and career prospects for children.
One reasons why Golden Visa or Golden Passport programs are popular is that they offer protection against political instability.
The aftermath of recent protests in Hong Kong saw a surge in number of wealthy residents seeking a second passport or permanent residence in a foreign country as a backup option.
Investors from the troubled Middle East region countries with authoritarian governments view a second passport as a route to a safer future.
For the countries, such programs bring in valuable foreign investment combined with the additional money wealthy investors spend setting up residence after the grant of citizenship or permanent residence.
Countering the Criticism
There have been persistent concerns that immigration specialists, as well as governments, may focus on the applicant’s wealth, with other aspects like due diligence, past and existing criminal record, and other security concerns relegated to the background.
Countries have countered such criticism by ensuring applications are checked by personnel trained in detecting money laundering, fraud, and other financial crimes. Further, due diligence is often outsourced to independent third-party firms specializing in intelligence services.
Barring exceptions, almost all investment immigrants are required to submit detailed information about the following points as a part of the due diligence process:
- Full personal details.
- Employment histories.
- Details of all financial assets owned by the applicant and dependent family members.
- Past and current passport details and details of residence in foreign countries.
- Relevant medical, birth, and educational records.
- Police certificates as proof of good character.
- Employment references, bank statements, and other financial details.
Countries recognize that a program’s credibility depends wholly on how it is administered.
The steady rise in the number of countries offering such programs is a clear and reliable indication that the benefits of investment immigration continue to outweigh potential risks and challenges.