Yes, you can buy your way into U.S. citizenship

Not sure how this program is being affected by the Trump administration (85 percent of applications are from China and, like other investment immigration programs, has been dogged by questions of fraud and questionable value):

Yes, you can buy your way into U.S. citizenship The Globe and Mail It’s known as the ‘million dollar

It’s known as the “million dollar green card,” a visa program that gives wealthy people the ability to move to the United States by creating economic opportunities and employment there.

The EB-5 investor visa offers permanent U.S. residency and eventually citizenship when a person invests between US$500,000 and US$1-million in a new commercial enterprise that produces at least 10 full-time jobs.

The program is becoming popular among Canadians with financial means, experts say, from retirees who want to live for extended periods south of the border to families that eventually want their children to be able to study and work there.

But it’s important to understand the program’s rules, costs and timing, they warn, as well as to seek qualified advice about issues such as health care, estate and tax planning as well as payments associated with the Canadian exit and U.S. entry.

“You need to ask questions,” says Joe Kirkwood, a dual Canadian-U.S. citizen who is an immigration attorney and partner at Leibl & Kirkwood, a private law firm in San Diego that specializes in U.S. immigration law. Three-quarters of the firm’s clients are Canadian, he says, and about 10 per cent are getting EB-5 visas, an overall number that is “increasing for sure,” especially as retiring baby boomers often don’t have other ways to become U.S. residents. “You’re buying green card status.”

The U.S. Congress created the EB-5 Immigrant Investor Program in 1990 to help stimulate the country’s economy by attracting new business investment from abroad. It is administered by U.S. Citizenship and Immigration Services, a division of the Department of Homeland Security.

Up to 10,000 EB-5 visas are issued each year. Chinese nationals typically account for three-quarters of them, but Canada consistently ranks among the top 20 source countries. In 2017, according to U.S. State Department statistics, 55 EB-5 visas were issued to Canadian investors and family members.

Applicants can “fly solo,” Mr. Kirkwood says, making a direct investment of US$1-million in an eligible small business that creates at least 10 jobs and then actively managing it. Or they can passively invest US$500,000 in one of about 900 EB-5 regional centres, approved organizations designed to manage EB-5 investor funds and the immigration approval process. These centres finance or buy equity in job-creating capital projects in certain areas, typically smaller communities with high jobless rates.

For the first two years, EB-5 visa holders are granted conditional permanent-resident status in the United States. After 24 months of compliance with the program, they can apply to have the conditions removed. Dependent children under 21 and spouses get the same visa status as the primary EB-5 investor and receive their own green cards. All are eligible for U.S. citizenship five years after initial approval.

EB-5 funds have been used to build office towers, shopping malls, ski resorts, hospitals and film studios.

One of the bigger downsides for participants in the program is that their cash is locked up for perhaps five years, says Terry Ritchie, director of cross-border wealth services for Cardinal Point Capital Management Inc., a firm with offices in Canada and the United States that specializes in wealth management for people in both countries.

Mr. Ritchie says it’s critical for would-be EB-5 investors to look at their tax and estate planning structures, their other investments and the tax implications of leaving Canada.

He cautions that the program comes with a “a nuisance factor because you’re dealing with government.” For example there’s a lot of poking and prodding through your personal information and tax returns. “You’re laying bare your financials,” he says.

The visa applicant must also show evidence that the investment is being made with capital acquired lawfully, for example earnings from employment, private businesses, real estate, stocks and bonds, an inheritance or a gift.

It typically takes 18 to 20 months for applications to be processed, and the filing fee is US$3,675. Plans to update the program and increase the minimum investments required have been reported but not implemented. There have also been warnings that the program might be cancelled altogether.

Mr. Kirkwood suggests that Canadians exhaust other options for U.S. residency, such as family sponsorship or sponsorship by an employer, as it can take a significant amount of time and money to go the EB-5 route. Administrative fees for the EB-5 program can range from $30,000 to $50,000, with legal costs of around $25,000, he says, plus the cost of other professional and financial planning advice.

Entrepreneurs looking to live full-time in the United States, he notes, have other options, such as the E-2 investor visa, which requires a smaller investment in a business – say an outlay of US$150,000 to start a yogurt shop in Florida, for instance – but does not come with a green card and must be renewed periodically.

The principal residence of EB-5 visa holders must be in the United States, Mr. Kirkwood notes. Direct investors are expected to live in the same area as their project, in order to develop and manage the business, while passive investors can live anywhere in the country.

Another motivation for EB-5 investors is attendance at elite universities. For example, it may be easier for the children of EB-5 visa holders to ultimately get into an Ivy League school as a green card holder or dual citizen rather than an international student, and they might qualify for in-state tuition at universities. But Mr. Kirkwood warns that dependent children must be younger than 21 upon the initial program approval to qualify for green cards.

Source: Yes, you can buy your way into U.S. citizenship

Douglas Todd: Wooing the ultrarich with ‘Golden Passports’ and flattery

Good column on citizenship-by-investment schemes:

I regret to inform readers that few of you are likely to receive an alluring invitation to buy a “Golden Passport.” That is because you are not a “High-Net-Worth-Individual,” also known as an “HNWI.”

Chances are you are just not moneyed enough to be targeted by the glossy magazines, online ads and emails designed to entice a certain class of people to join the elite club of “global talent” eager to purchase their way into a new “opportunity oases,” or, as some of us still like to call them, nations.

No, since you are not worth many millions, if not billions, of dollars, you are not the market for the jargon, euphemisms and flattery that would otherwise urge you to advance the interests of yourself and family by becoming an international “investment expatriate” or “investor immigrant,” while being lauded as “the best and brightest.”

Instead, this exclusive circle of passport and visa purchasers is for the super-rich, especially those who don’t trust their own governments, who seek the “competitive advantage” of multiple passports, who are keen on avoiding taxes and who are looking for a haven for their families. Stable, clean welcoming Canada, and Metro Vancouver, are among the most sought-after destinations of this jet-setting club.

Alas, watchdog agencies are beginning to warn that some of these trans-national migrants also want to hide their ill-gotten gains. They are collecting second, third and more passports, or at least permanent resident cards, from multiple nations as they strive for an immigration status that can provide the real-world equivalent of what the game of Monopoly calls a “Get Out of Jail Free” card.

The number of investor migrants is expanding rapidly. Economist magazine says “thousands of passports are bought and sold every year, almost always by the wealthy. The number of commercially acquired residence permits runs into the hundreds of thousands.” It’s an industry that the public widely suspects of diminishing the rights and privileges of citizenship.

There is also gnawing worry the governments busy selling passports and visas — typically in exchange for an “investment” in government bonds, businesses or real estate in the value of anywhere from $200,000 to $2.5 million — are playing into the hands of international crooks, terrorists, money launderers and oligarchs.

The European Union has gained nearly 100,000 rich new residents and 6,000 new citizens in the last decade through poorly managed, semi-secret passport-sale schemes, says Transparency International and Global Witness. The watchdog organizations have concerns about Spain and Britain, but they’re especially alarmed by the European Union’s smallest countries, Cyprus and Malta — because anyone who buys a passport from one of these yacht-filled nations gains access to all 26 countries of the EU.

Canada designed one of the first investor-immigrant schemes in the late 1980s, which soon became known for luring hundreds of thousands of affluent Hong Kong residents to the country. And, along with the United States, Canada remains among the most popular destinations for ultrarich trans-nationals hunting for extra visas and passports.

Thousands of lawyers and immigration specialists now strive to ingratiate themselves with these upper-crust clients. The most influential firm promoting the value of trans-nationalism is Henley and Partners, founded by Swiss lawyer Christian Kalin, which has offices in 20 nations and claims to have created “the concept of residence and citizenship planning.”

Kalin is editor in chief of The Global Residence and Citizenship Review, a glossy magazine that sings the praises of the “aspiring migrants” who take advantage of extra passports and the mobility they provide. One glowing ad in his magazine pumps the value of paying to “secure your family’s future with European citizenship.” It features a posh father knotting the private-school-like tie of his son. Arguably the world’s second biggest firm centred on securing a safe haven for investor migrants is Arton Capital, which has its headquarters in Canada.

Vancouver-based Johann van Rooyen, who runs the Citizenship by Investment Research Consultancy, says the global rich are buying “powerful passports” because they want to have the potential to escape political problems, preserve their wealth, reduce their taxes and travel more freely to more countries.

“While political instability and violence forces most investor-class emigrants to physically move to their host countries, for many others a second passport is seen as an insurance policy against future risks. They prefer to stay in their home countries, but like to have an alternative in case things go wrong,” says van Rooyen, citing how high-net-worth migrants are worried about rising political danger, crime, pollution and authoritarianism in places such as the Middle East, Russia, China and South Africa.

“Many Hong Kong residents who left before the China takeover in 1997 returned within a few years, after they obtained a second passport (mainly from Canada),” says van Rooyen, explaining how a lot of migrants don’t actually move to the country they bought their way into. “And thousands of Lebanese Canadians returned to Lebanon after obtaining Canadian citizenship.” More than 250,000 people now living in Hong Kong, and at least 50,000 in Lebanon, have a Canadian-passport lifeline.

The federal Conservatives finally stopped Canada’s immigrant-investor program in 2014, after determining most of the affluent who took advantage of it didn’t intend to live in Canada and those who did paid few taxes while receiving free health care and subsidized higher education.

But Quebec’s buy-a-passport scheme continues to this day.

The Quebec Immigrant Investor Program — which attracts nine out of 10 of its millionaire applicants from Asia — does not actually lure many foreign rich to the French-speaking province. Instead, the vast majority of the roughly 5,000 migrants a year who exploit Quebec’s plan move to Metro Vancouver and Toronto, where their foreign-sourced dollars pump up the cities’ already high-priced real estate.

Radio Canada journalists this fall reported that fraud, forgery and money laundering are rife in the Quebec Immigrant Investor Program. And this appears to be the norm with many Golden passport schemes. More media outlets are beginning to detail the corruption in such programs, which often make it possible for high-net-worth individuals to evade taxes and in many cases the law-enforcement officials trying to track dirty fortunes.

Trans-national scoundrels, for instance, can dodge tax reporting rules in their home country by taking citizenship or residency in a second country and opening a bank account in a third, claiming tax residency in the second. The list of scams goes on. One Chinese investor caught up in a rare crackdown on immigration fraud in Vancouver was found with seven different passports.

The passport-for-sale industry needs to be more diligent in corralling abuse and pitfalls, say watchdogs. And so do receiving and sending countries. The Economist recently speculated about a possibly bad fate, for instance, befalling some of the tens of thousands of newly wealthy Chinese nationals, who have become the world’s leaders at snapping up Golden passports and visas

“Only about half the countries in the world allow their citizens to hold dual nationality. China is not one; and it has strict exchange-control rules,” warns the Economist. “It seems unlikely that all Chinese investment migrants have alerted the authorities to their plans, or gained permission to take their money out.”

Many politicians in the West have gone wild for passport-buying schemes, most of which are new. But law enforcement officials, the public and even the investor immigrants themselves are only learning now about the real price that may have to be paid for such dubious schemes.

Source: Douglas Todd: Wooing the ultrarich with ‘Golden Passports’ and flattery

Evidence of massive fraud surfaces in St Kitts-Nevis citizenship programme

No surprise, these programs are almost designed for fraud:

Allegations of fraud in the citizenship by investment programme of St Kitts and Nevis have followed revelations supported by documentary evidence that agents in Dubai are selling passports at substantially below government-sanctioned rates.

Caribbean News Now is in possession of a copy of a letter purportedly sent by the Citizenship by Investment Unit (CIU) of St Kitts and Nevis to a local authorised agent. The letter states that “the application via real estate option” in a named development for a specified individual “has been approved in principle for Citizenship by Investment”.

The letter goes on to say that “payment of US$150,000 must be made within six months”. However, the minimum amount required by law under the real estate option is an investment of $200,000, not $150,000 as stated in the letter.

The citizenship agents concerned told Caribbean News Now that the firm “has never received such a letter from the unit and has never forwarded such a letter to anyone.”

“On learning of this development, we have met with the CIU and have written officially to request that the unit fully investigate this matter,” the firm said in a written statement.

In response to a request for clarification and comment, Les Khan, CEO of the CIU, told Caribbean News Now that there are no government sanctioned discounts on any of the investment options. He insisted that the unit does not accept applications for any of its offerings below the price that is published in the regulations.

“Any letters from the unit will reflect the amounts as published,” he said. “In the case of the contribution, our letter will stipulate the contribution amount and whether it was the Hurricane Relief Fund, the Sustainable Growth Fund or the SIDF [Sugar Industry Diversification Foundation].”

Khan went on to state that the “contribution letters will not stipulate any development. In terms of the real estate offering, an approval letter will have the real estate fees required for the investment,” adding that “This letter will have the name of the development.”

Given that the letter in question purports to be an approval letter under the real estate option, “the real estate fees required for the investment” are conspicuous by their absence. It appears instead to be based on a “contribution letter” that has been tampered with in some way, including the somewhat curious turn of phrase “the application via real estate option”.

According to Khan, the matter is currently under investigation by the CIU but, in the meantime, the flurry of agents in the Middle East offering St Kitts and Nevis citizenship at the greatly reduced rates outlined above has yet to be explained.

This revelation follows allegations at a recent press conference by leader of the opposition, Dr Denzil Douglas, that the government is allowing St Kitts and Nevis economic citizenship to be sold for as little as US$37,500,

In a press statement last week, Khan said he had just returned from a marketing trip to Abu Dhabi and Dubai, where he took the opportunity to have a series of one-to-one meetings with agents across those territories in order to reinforce that the investment options remain unchanged at US$400,000 and US$200,000 for real estate and US$150,000 for the Sustainable Growth Fund (for a single applicant).

However, the allegations by Douglas have been reinforced, and Khan’s denials contradicted, by a number of advertisements appearing on social media in the Middle East, confirmed by direct messages from the citizenship consultants involved seen by Caribbean News Now.

For example, Savory & Partners explicitly offer St Kitts and Nevis citizenship for a single applicant for $113,347 “all inclusive”, which presumably refers to the government’s additional due diligence fee of $7,500.

This compares to the government’s published total of $167,500 ($150,000 + $7,500) and, according to Savory & Partners, represents a “limited time offer for our valued clients”.

Another firm, Citizenship Invest, offers an even lower “limited offer” rate of $100,000.

Multi Passports offers yet another lower rate of $99,000 “all inclusive” for a single applicant, as well as $145,000, again “all inclusive”, for a family of four, compared to the rate stated on the CIU website of $195,000 plus due diligence fees.

AAA Associates advertises a family rate of $155,000, also confirmed by direct messages seen by Caribbean News Now, compared to the official rate of $195,000 plus due diligence fees.

It is not yet clear what prompted at least four agents, and reportedly many more, to start offering St Kitts and Nevis citizenship at these substantially reduced investment requirements when the CIU is saying that such options are not in fact available.

Major stakeholders in the economic citizenship industry are now demanding answers, as pressure grows on the St Kitts and Nevis government to explain the contradictions between its exculpatory statements and the available evidence.

Source: Evidence of massive fraud surfaces in St Kitts-Nevis citizenship programme

Citizenship schemes should be ‘phased out as soon as possible’

Hard not to agree with this recommendation of  the European Parliament:

Schemes which offer citizenship or residency by investment should be phased out as soon as possible, a European Parliament special committee has said.

In a draft report released on Tuesday, the Special Committee on Financial Crimes and Tax Evasion expressed concerns about Malta’s Individual Investor Programme, saying it could “potentially pose” high risks.

Their concerns came following an analysis by the Organisation for Economic Co-operation and Development, which found Malta could potentially offer a back-door to money-launderers and tax evaders.

Read: Malta at ‘high’ risk of being used for money laundering

Following continued revelations over the past year, including the Panama Papers and Paradise Papers, the European Parliament decided to set up a special committee on financial crimes, tax evasion and tax avoidance.

After many months of expert hearings, studies and fact-finding missions, the committee presented its findings on Wednesday.

The report, put forward by Czech MEP Luděk Niedermayer and Danish MEP Jeppe Kofod, calls for an urgent reform of outdated and international tax rules.

“Anti-money laundering provisions in Europe are a loose patchwork blanket of EU and national rules. The blanket clearly doesn’t cover all it needs to, and the patches don’t quite line up, leaving loopholes,” Mr Kofod said.

In a statement, the EPP also came out strongly against schemes offering citizenship or residences for investment.

These schemes were being abused and posed a security threat to the rest of the EU, MEP Dariusz Rosati, EPP group spokesman in the committee said.

In his reaction, PN MEP Francis Zammit Dimech said concerns related to proper lack of due diligence meant countries were facing “totally unnecessary security risks”.

Nationalist MEP Francis Zammit Dimech

“This is why we shall keep on insisting on the full and clear disclosure of the names of all persons acquiring citizenship and not try to hide those names from public attention and scrutiny,” he said.

The draft report will be discussed on November 27.

And in other citizenship-by-investment news, this editorial in the Jordan Times regarding recent Jordanian proposals:
The government decided on Sunday to have another look at the regulations governing granting of the Jordanian nationality to foreigners by raising the financial stakes for their eligibility.

Depositing $1.5 million with the Central Bank of Jordan, purchasing no less than $1.5 million worth of Jordanian treasury bonds or even buying stakes in Jordanian companies worth $1.5 million are all well and good revisions, but making the price of citizenship higher does not go far enough. The Jordanian nationality has no price and cannot be measured in US dollars or Jordanian dinars. There must be something much more important and valuable for obtaining the Jordanian nationality.

One would have thought, therefore, that the government would revisit other factors for citizenship qualification that go beyond money. What about having potential citizen take a test, like all countries do when they grant citizenship to foreigners, with a view to determining the extent of their knowledge of the history of the country and its goals and aspirations.

Potential citizens must be also sensitive to the culture of the country, and its regional and international challenges. Above all, there is a need to gauge the extent of their solemn loyalty to the country.

None of these non-material testing grounds appear to figure highly in the process leading to granting citizenship to foreign applicants. And come to think of it, why not invite Parliament to have a look also at the citizenship process for foreign applicants. The people’s representatives need to have voice in this important policy.

Being a Jordanian is a very serious matter and taking it should not be for serving applicants’ immediate needs. Otherwise, the Jordanian nationality would become a citizenship of convenience.

Jordanians at large would want to make sure that no one is contemplating taking Jordan for a ride, to serve their own immediate and perhaps temporary goals. This whole process of granting citizenship to investors requires another look, a look that is deeper and multidimensional.

Source: Citizenship is not a commodity

Brisk business in EU golden visas and citizenship scams

More on these scams:

As demand for residency or citizenship in EU member states has grown, a market has emerged in which corrupt national officials falsify documents for a fee. And that is not all: Many governments of EU member states openly and officially benefit from selling “golden visas,” raking in billions of euros.

Last week in Bulgaria, about two dozen officials were temporarily detained because they had for many years illegally sold fake certificates of ancestry to people from Macedonia, Moldova and Ukraine — and reportedly made thousands of euros in doing so. People holding such certificates, authenticated by the State Agency for Bulgarians Abroad, can apply for citizenship. Petar Haralampiev, the head of SABA and a notorious nationalist politician suspected of being the ringleader, was among the officials arrested; he has been removed from his post.

In 2012, DW’s Bulgaria desk was one of the first media outlets to report on SABA’s sale of fake ancestry documents to foreigners. Beginning in 2013 Katja Mateva, a lawyer and the former head of the citizenship department in Bulgaria’s Justice Ministry, repeatedly offered senior government officials information on the sales. In 2014, Petko Petkov, the deputy justice minister at the time, sent a memorandum on the matter to interim Prime Minister Georgi Bliznashki. Nothing happened.

Mateva told DW that she was sidelined for years at the Justice Ministry, and ultimately dismissed in 2017. Petkov was branded a traitor by his colleagues. Both Mateva and Petkov told DW that senior politicians have not been keen to stop the deals.

Ancestry certificates offer citizenship in Romania and Hungary, too. In Romania, the deal mainly affects people from Moldova, where two-thirds of the population are of Romanian descent. Ukraine is also home to people of Romanian and Hungarian descent. Regional media report that fake certificates have been sold in Romania and Hungary for years. Thousands of Russians and Ukrainians are believed to have secured Romanian or Hungarian citizenship in this manner.

‘Security risks’

There’s also a brisk trade in golden visas in the European Union. Non-EU citizens can buy citizenship or a permanent residence in many countries by coming in as investors. EU member states such as Bulgaria, Greece, Great Britain, Latvia, Lithuania, Malta, Austria, Portugal, Spain, Hungary and Cyprus have offered or still offer such programs.

Transparency International and Global Witness report that at least 6,000 people have bought citizenship and more than 100,000 have received residency in this manner over the past decade. The total income, the NGOs report, amounted to at least €25 billion ($28.5billion). Golden visa programs encourage money laundering and offer businesspeople a safe haven, the NGOs report. They urge the European Union to put a stop to this practice.

Hungary’s golden visa program ran until 2017. Though there is almost no official information, Hungarian investigative journalists have repeatedly — most recently three weeks ago — published findings on the program’s beneficiaries. According to the reporters, Russian politicians, relatives of high-ranking Russian secret service officials and confidants of Syrian dictator Bashar Assad have received Hungarian citizenship or residency. Ghaith Pharaon, a Saudi businessman who died in 2017 and was wanted by the US for bank fraud and money laundering, also allegedly received a Hungarian residence permit and applied for citizenship.

“This business practice poses security risks, not only for Hungary but the entire European Union,” Andras Petho, an editor with Hungary’s Direkt36 center for investigative journalism, told DW.

He pointed out an “interesting contradiction.”

The Hungarian government minces no words when speaking out against immigration. “At the same time, lots of people from outside the EU are being brought into the country by way of the golden visa program,” Petho said, “people hardly anyone has checked.”

Source: Brisk business in EU golden visas and citizenship scams

EU citizenship for sale as Russian oligarch buys Cypriot passport | World news | The Guardian

Speaks for the inherent corruption of citizenship-by-investment programs:

The Russian oligarch Oleg Deripaska has bought a Cypriot passport under a controversial scheme that allows rich investors to acquire citizenship and visa-free access to the European Union, the Guardian can reveal.

Deripaska, an aluminium magnate with connections to Donald Trump’s former campaign manager Paul Manafort, is one of hundreds of wealthy individuals who have applied for Cypriot nationality. His application was approved last year.

The revelations will revive concern about oligarchs with Kremlin connections buying EU passports. Large numbers of the Russian and Ukrainian elite featured last year in a list of hundreds of people granted Cypriot citizenship over the past four years.

The island also offered citizenship to Viktor Vekselberg, a major shareholder in the Bank of Cyprus, the country’s biggest bank, documents show. Vekselberg appears to have turned the offer down. His spokesman said he only had Russian citizenship.

Deripaska and Vekselberg appeared on another list issued by the US Treasury in January of oligarchs close to Vladimir Putin. Deripaska has denied claims that he served as a back channel between the Kremlin and the Trump campaign, as an investigation by the special counsel Robert Mueller into possible collusion continues.

The Cypriot documents seen by the Guardian and the Organised Crime and Corruption Reporting Project (OCCRP) show that Deripaska’s first attempt to become a Cypriot citizen was unsuccessful.

Cyprus has been accused of failing to vet passport candidates vigorously enough, heightening concerns in EU circles about people being able to buy EU citizenship. On this occasion, however, Deripaska was asked to resubmit his case because of a preliminary inquiry into his affairs in Belgium. The inquiry was subsequently dropped in 2016.

Cyprus’s council of ministers sent Deripaska’s case back to the island’s interior ministry, the Cypriot documents say, asking it to investigate further. The oligarch’s naturalisation bid had to be re-examined before a final decision could be made.

Deripaska’s name was made public this week when an interior ministry document listing beneficiaries of the collective investment scheme was distributed inside Cyprus’s parliament. Clerks left it in a room used by journalists, and several picked up a copy.

Leaked documents show that the Cypriot “golden visa” scheme remains a lucrative source of revenue for the island, generating at least €4.8bn (£4.3bn). Cyprus has given citizenship to 1,685 “foreign investors” since 2008 – many from the former Soviet Union, and from China, Iran and Saudi Arabia – and 1,651 members of their families.

The finance ministry has previously said it carries out stringent checks on all citizenship by investment applications, with funds required to undergo money laundering controls by a Cypriot bank. Cyprus is not the only EU country to have granted citizenship to high net-wealth Russians, it says. There is no suggestion of wrongdoing on the part of beneficiaries.

Vekselberg’s Renova group is one of Russia’s biggest conglomerates. He made a major investment in the crisis-hit Bank of Cyprus in 2014, buying almost 10% of its stock. The move at a time when the island’s economy was depressed meant he was an “exceptional case deserving of honorary naturalisation”, the documents say.

Vekselberg’s spokesman, Andrey Shtorkh, said: “Mr Vekselberg has only one citizenship, of Russian Federation and was never granted any other citizenship including Cypriot.”

Cyprus made it easier for rich foreigners to gain citizenship in September 2016. It had previously required investors to have at least €5m in domestic assets, including real estate, firms and government bonds. Applicants could also take part in a collective investment scheme by spending a minimum of €12.5m, or €2.5m per person. The ruling council reduced the eligibility threshold to €2m and ditched collective schemes.

The fresh trove of scheme beneficiaries obtained by the Guardian and the OCCRP confirms the extent to which Cyprus’s citizen-by-investment programme has become a main avenue for Russian oligarchs who wish to get a European passport.

The Portuguese MEP Ana Gomes described the visa scheme as “absolutely perverse, immoral and increasingly alarming”. The European commission launched its own inquiry last year into citizenship-by-investment programmes in the EU. The outcome is expected to be revealed later this year.

Cyprus, along with Malta, is one of the countries under scrutiny. “Cyprus is the biggest European investor in Russia and a great number of Russian nationals acquired Cypriot passports. We are all aware that there is also a big problem of recycling money. The point is that Cyprus, like other countries, is not just selling its passport. It is marketing European citizenship,” Gomes said.

Naomi Hirst, a senior campaigner at Global Witness, said EU states that sell citizenship should carry out “the sharpest of checks” on applicants.

“The source of wealth and background of these individuals should be scrutinised,” she said. “If not, then the whole of the EU could be made vulnerable to those who will use these schemes as a ‘get out of jail free card’ to move freely around Europe.”

via EU citizenship for sale as Russian oligarch buys Cypriot passport | World news | The Guardian

Two sides of the same coin? Diaspora Investment and Citizenship-by-Investment

Good commentary on the differences:

It’s no secret that many small states struggle to acquire the finance needed to support their development goals. The Commonwealth Secretariat has recently been exploring the potential of diaspora investment to support development. A recent Commonwealth publication estimates that on average, small states could raise approximately 4.52% of GNI per annum from their migrants alone (excluding first and second generation migrants) as compared to 1.18% of GNI for Commonwealth non-small states (Tavakoli and Raja, 2017).

Similar, but less frequently examined, sources of funding are citizenship-by-investment programmes.These programmes grant citizenship to people who make substantial financial investments in a country. While many countries offer a route to citizenship after a period of residency, with citizenship-by-investment programmes, residency is not often required. This revenue raising scheme is particularly popular with many Commonwealth small states — Antigua and Barbuda, Cyprus, Dominica, Grenada, Malta, St Kitts & Nevis, St Lucia, and Vanuatu all have such programmes. The investments required are often real estate purchases, set term investment in government bonds, or donations to particular charities or funds and the minimum amounts range from $100,000 USD in Dominica to $2.4million USD in Cyprus.

On the face of it, diaspora investment and citizenship-by-investment programmes are two sides of the same coin. They both seek to increase investment by appealing to people’s affinity for a country through its citizenship or would-be citizenship. However, I would argue that their risks and rewards of each are quite different.

With diaspora investment, there is an identifiable pool of people ready and willing to invest in the country of their roots. Their interest in the country is stable and often not subject to the fluctuation of economic cycles. As diaspora investment can take many forms – investment in real estate, bonds, or businesses – the financial benefits can range from increasing government revenue to job creation and adding to GDP. However, the size of the investment can vary greatly from person to person. Furthermore, many diaspora investors may demand higher accountability from the government before investing, or may seek more political rights in the country.

On the other hand, citizenship-by-investment programmes offer an immediate substantial investment which increases government revenue. However, the investment vehicles do not tend to lead to job creation and may have an adverse impact on the property market in small countries with scarce land. Additionally, given that countries offering these programmes are competing with each other for investors, there is the possibility of a race to the bottom. Finally, there is the reputation risk for the country if background checks are not properly conducted.

Given the pros and cons, for my taste, governments would do well to spend more time and effort facilitating diaspora investment as opposed to citizenship-by-investment. I realise however that the issue is completely debatable. Some people argue that criticising citizenship-by-investment undermines sovereignty and attacks a genuine income stream for countries with limited revenue-raising options. Furthermore, some countries don’t have sizeable diaspora communities to make diaspora investment viable. Nonetheless, personally, I think the reputation risks alone outweigh the benefits.

One thing is certain, more research is needed into citizenship-by-investment programmes, including how much money countries actually gain from it.

Where do you stand on the issue? Should more small states consider citizenship-by-investment? Or should more be done to attract investment from diaspora communities around the world?

Source: Two sides of the same coin? Diaspora Investment and Citizenship-by-Investment

ICYMI: Here Is A List Of Everyone Who Got A Maltese Passport Last Year – Lovin Malta

Great example of false transparency – providing all information in a manner not susceptible to analysis:

The government has finally released a list of every single person who bought a Maltese passport in 2016.

It includes their names and surnames – more than enough to do some background checking to see whether there is anything we should know about them (see below for more details).

There’s only one problem – the names are buried in a list of the 2,182 people who became naturalised Maltese citizens in 2016.

Instead of printing them in separate lists, both citizenship buyers as well as citizenship earners have been combined in one large list.

There are no markers by their names, or any other way to figure out that those specific people had bought their Maltese citizenship through the Individual Investment Programme.

The Malta Government Gazette published the list, and when the Times of Malta asked for a breakdown of the passport buyers names, they were rejected.

As you’d expect, the list contains a lot of foreign surnames, including Russian, Asian, and Middle Eastern surnames.

The government, for its part, has maintained that these new citizens are now Maltese citizens equal to any other, and publishing their names in a separate list or marking them out could be discriminatory.

It has also said that publishing their names could jeopardise the success of the scheme since most of the buyers preferred to keep their personal information discrete.

While exact numbers on how many people have actually bought their Maltese passport have never been released, there seems to be 1,101 main applicants according to the government-appointed regulator’s most recent report, released in June.

This comes after a delegation of MEPs that visited Malta last month on a rule of law fact-finding mission asked the Prime Minister for full list of Maltese passport-buyers, only to be rejected on the grounds that giving them that list would be illegal

It’s also worth noting that by December 2017, there was €360 million in the National Development and Social Fund, where a majority of the IIP’s profits go.

A Maltese passport can be bought for about €650,000 alongside a five-year investment into Maltese property or bond.

Want to be an investigative journalist for a day?
The government has printed the 2,182 names of naturalised citizens for 2016. If you’ve got some spare time and want to be a part of our investigation, here’s how you can help

  • Go to the latest issue of the Government Gazzette

  • Go to page 14,018

  • Select some names and Google them

  • Email us at if you think you might have found someone worth looking into

  • Google some of these names, and if you find something you think is interesting, contact us at

via Here Is A List Of Everyone Who Got A Maltese Passport Last Year – Lovin Malta

Malta’s “due diligence” of rich passport buyers gets glowing review

Different meaning of “due diligence”:

Malta’s due diligence of people applying to buy citizenship has been held up as “a textbook example” of effectiveness and reliability by Thomson Reuters.
Peter Vincent, general counsel at the Canadian company that provides intelligence services, said Malta’s Individual Investor Programme provided a high standard of due diligence.

“Malta has a reputation for having a very solid programme for citizenship and residency that has very secure due diligence processes in place and transparency. It’s by no means perfect but there is no completely secure system in the world but if you are looking for a model, not just for the EU but for the entire world, I would look to a country like Malta,” Vincent said in an interview with Investment Migration Insider, an industry journal.

Thomson Reuters is one of the companies used by Identity Malta to help it in the screening of prospective clients.

Vincent was speaking on the price war in the Caribbean over citizenship programmes, which was affecting due diligence standards in the region.

“Malta is a textbook example of how to conduct effective and reliable due diligence,” he said, adding that Identity Malta should look beyond its remit and mentor other countries still trying to develop their programmes.

The IIP was introduced amid much controversy in 2014 with the aim of attracting rich foreign nationals interested in buying Maltese citizenship. The scheme has enabled the country to create a multi-million euro fund administered separately from government accounts.

The programme last year raised some €165 million and is capped at 1,800 applications, a number likely to be reached some time next year.

The government has been criticised by the European Parliament because the names of those who obtain citizenship through the IIP are not published separately. Instead, the names are included without any specific identifier with those of others who obtain citizenship through naturalisation.

At a recent citizenship forum organised by Henley and Partners, the company entrusted to manage and market Malta’s scheme, Prime Minister Joseph Muscat said Malta will be extending its citizenship by investment programme.

He told his audience in Hong Kong the second IIP programme would be “even more exclusive” than the current version, without elaborating further.

via Malta’s due diligence of rich passport buyers gets glowing review

St Kitts-Nevis citizenship by investment scheme named ‘world’s most innovative’ ~ WIC News

More a negative than a positive, given the program’s clientele and the organization that named it “most innovative:”

The citizenship by investment programme in St Kitts and Nevis has been named the most innovative investment immigration programme in the world at an awards ceremony in Russia.

The Russian Global Citizen Awards, which took place today in Moscow, are designed to celebrate individuals, companies and governments “who have made significant contributions to the freedom of movement, investment and residence.”

The annual ceremony was attended by international experts in the fields of private banking, family office, residency and economic citizenship.

“This award is the culmination of many years refining and improving our processes, and adapting to the growing needs of the global citizen,” said Prime Minister Timothy Harris.

“Receiving an award which acknowledges the forward-thinking approach and the agility of our programme is reinforcement that we are leaders, not just in the world of economic citizenship, but in what we have to offer to the global citizen.”

The award comes in the same year that the federation was ranked high in the special report by Professional Wealth Management, a publication from the Financial Times newspaper.

The long-running programme, the world’s first when it launched in 1984, was marked as the strongest in terms of due diligence vetting for each applicant. The dual-island state’s citizenship by investment unit was the first to introduce an electronic system to manage applications.

Yesterday in parliament, Harris said that the St Kitts and Nevis CBI programme was about “more than passports”.

Instead the government hopes to “build the country and find avenues in a challenging world, to have appropriate, legitimate foreign investment coming into the country to assist us with our nation-building tasks.”

The prime minister wasn’t in Russia to collect the award, so accepting in his place was a representative from international citizenship consultancy firm CS Global Partners.

A spokesman said they work closely with the Basseterre government on the CBI programme.

According to the award criteria, award winners must have “assisted international clients in becoming true citizens of the world”, either those one specific achievement or because of a long series of contributions.

Nominees are selected by an international jury made up of both industry professionals and the HNWI – high-net-worth individual – community.

The awards ceremony took place alongside the the seventh Moscow Family Office Forum.

This annual gathering covered topics ranging from real estate investment to risk management, taxation to relocation, and family office trends.

via St Kitts-Nevis citizenship by investment scheme named ‘world’s most innovative’ ~ WIC News