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 hello@lovinmalta.com 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 hello@lovinmalta.com.

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

New Zealand may tighten law that allows mega wealthy to buy citizenship | The Guardian

Need review following the Thiel case:

New Zealand’s new Labour government will reconsider legislation that allows wealthy foreigners to effectively buy citizenship, the housing minister has said.

In an interview with the Guardian about the housing shortage in New Zealand, Phil Twyford said the law that allowed Trump donor and Paypal co-founder Peter Thiel to become a citizen and buy a bolt hole in the South Island would come under scrutiny.

Since coming into power last week, Labour has said it will ban foreigners from buying existing homes, along with a slew of policies aimed at addressing the housing crisis, which has seen homelessness grow to more than 40,000 people.

However, the ban will not apply to foreigners who gain citizenship in New Zealand – a loophole that billionaire Thiel used, after spending a total of 12 days in the country.

Thiel’s fast-tracked citizenship allowed him to buy multiple properties in New Zealand, even though he told the government he had no intention of living in the country, but would be an “ambassador” for New Zealand overseas instead, and provide contacts for New Zealand entrepreneurs to Silicon Valley.

“That was a discretionary decision that was made at the time [Thiel’s citizenship], and we were very critical. Our policy, banning people would apply to everybody, regardless of how much money they have or what country they come from,” Twyford said.

“We haven’t announced policy on that [tightening the investment immigration criteria] but I think it is probably something that we are likely to look at.”

Twyford said New Zealand’s ban on foreign buyers was modelled on similar legislation in Australia, and was designed to ensure New Zealanders can once again achieve the Kiwi dream of owning their own home.

“We’ve seen house prices in our biggest city Auckland double in the last nine years, we’ve got the lowest rate of home-ownership since 1951, and we have what the Salvation Army describes as the worst homelessness in living memory,” said Twyford, who has only officially been in office one day.

“Housing has come to be seen as an investment asset primarily, rather than a place for people to live and bring up a family. Off-shore money coming into the market has been a significant contributor to that.”

The ban – to be introduced within 100 days – will apply to every nationality and every income bracket worldwide, including Australians, and will apply equally to business, trusts, companies and individuals.

For foreigners to be able to purchase property they’ll need to become a permanent resident or citizen of New Zealand – which will become increasingly difficult with Labour pledging to slash high-rates of immigration – a record 70,000 last year.

The ban on buying foreign homes will only apply to existing dwellings, with Twyford saying New Zealand would continue to “welcome” overseas buyers who wanted to build new homes, or invest in apartment blocks.

According to Twyford, Auckland had built up a shortage of 40,000 homes, with the deficit increasing by 7,000 every year at the current build rate. Among Labour’s new policies is a plan to build 100,000 affordable homes in New Zealand within the next decade, stop the sell-off of state housing and build new state housing.

“Uncontrolled foreign investement for the purposes of speculation is actually destructive and it is a feature of a housing market that has utterly failed…We expect it [the ban] will be permanent, ” said Twyford, who added the government would increase the length of tenancies for renters and introduce legislation ensuring rental properties were insulated, warm and dry within 100 days.

“We don’t see any benefit to people who are not citizens or permanent residents of this country being able to speculate in housing and make a profit at the expense of generation rent.”

Source: New Zealand may tighten law that allows mega wealthy to buy citizenship | World news | The Guardian

Antigua & Barbuda To Slash Citizenship Investment Threshold – Investment Immigration

Canadian policies having an impact by reducing the major incentive of visa free travel:

Antigua & Barbuda has seen a dramatic 95 per cent decline in the most popular stream of its citizenship-by-investment program after Canada withdrew visa-free access to passport holders in June 2017.

The Caribbean island will cut the investment threshold for its National Development Fund (NDF) in half – from $200,000 to $100,000 – to try and stimulate interest from high net worth candidates.

A representative of the country’s Citizenship by Investment Unit (CIU) told the country’s Daily Observer newspaper that access to Canada was previously ‘the country’s most compelling advantage’. Without that access, the Antigua citizenship program is left to compete entirely based on investment threshold.

Opposition lawmakers say slashing the threshold will result in the destruction of the program.


Antigua & Barbuda Investor Citizenship: Investment Requirements

National Development Fund One-time investment of US $200,000 (soon to drop to $100,000)
Real Estate US $400,000 in real estate property in Antigua & Barbuda. In case of joint investment, each applicant must contribute a minimum amount of $400,000. The real estate must be held for a period of at least five years.
Business $1,500,000 in an approved business. In case of a joint investment application, the total investment must be for a sum of not less than $5 million with each applicant contributing at least $400,000.

Antigua & Barbuda initially reacted to Canada’s decision by cutting the fee for its program to $25,000 from $50,000 for a family of four.

However, this clearly did not have the required effect.

Ottawa announced on Monday, June 26, 2017 that all citizens of the Caribbean nation would require a visa as of 5.30am on Tuesday, June 27, 2017.

“After carefully monitoring the integrity of Antigua & Barbuda’s travel documents, the government of Canada has determined that Antigua & Barbuda no longer meets Canada’s criteria for a visa exemption,” a Canadian government statement said.

The statement added that Canada needed to protect “the integrity of our immigration system and ensuring the safety of Canadians”.

The move was likely linked to concerns over the integrity of the Antigua and Barbuda Investor Citizenship Program.

The program is one of the cheapest in the region, and effectively meant people could buy their way to visa-free travel into Canada.

Complete Overhaul

Politicians in Antigua & Barbuda called for a complete overhaul of the program following Canada’s move to impose a visa restriction.

The leader of the Caribbean country’s Democratic National Alliance (DNA) says Canada’s decision was a direct result of outside suspicions on how the CIP is operated.

Historically the programs have been viewed as a way for people to hide money, but many of the countries in the region have taken steps to clean up their acts.

DNA leader Joanne Massiah says Antigua & Barbuda is sacrificing the reputation of the country to try and get as much investment as it can from the CIP.

St Kitts Visa Restriction

Canada made a similar move to impose a visa restriction on travellers from St. Kitts & Nevis in 2014.

According to sources, authorities had evidence of people linked to terrorist organizations and criminal gangs buying St. Kitts passports to enter Canada without immigration screening.

Since then, St. Kitts has overhauled its investor residence program, although Canada is yet to lift the visa requirement.

Source: Antigua & Barbuda To Slash Citizenship Investment Threshold – Investment Immigration

Commentary: The View from Europe: Citizenship programmes: a race to the bottom? – Caribbean News Now

David Jessop on how Caribbean countries are in what appears to be a race to the bottom in citizenship-by-investment programs:

In most Organisation of Eastern Caribbean States (OECS) nations, citizenship is available at a cost. It can be purchased by almost anyone who can afford it. There is no qualifying period and no residential requirement. All that is needed is a one-off payment into either an agreed form of investment or to a government development fund, plus background checks on the individual concerned.

Depending on the location and scheme chosen, the basic cost is now between US$100,000 and US$400,000 plus fees. Not only does this confer a passport, but it also offers free movement within the Caribbean Community (CARICOM), and visa free entry to many other countries. At further cost, citizenship can be extended to families and relatives.

The creation of such citizenship by investment (CBI) programmes has been mainly driven by the Caribbean governments’ concerned need to find new ways to raise revenue because of their otherwise limited capacity to compete globally.

St Kitts, Grenada, Dominica, Antigua, and St Lucia have such arrangements, but St Vincent has not. Belize suspended its controversial programme in 2002.

For the most part, such schemes showed early promise.

Slides shown in June this year, by Trevor Alleyne, the IMF Division Chief for the Caribbean, at a conference on global mobility and tax strategies, suggest that taken together, the contribution made to GDP by Caribbean CBI programmes peaked in 2014. Then, for example, St Kitts earned 14% of its GDP from citizenship, enabling it to substantially offset what otherwise would have been negative growth. However, since then its programme earnings has gone into a slow decline.

In a probable reflection of this and the need to stimulate renewed interest, its government recently announced a new route to citizenship at a basic rate of US$150,000, ‘a proportion of which’, it said, would be paid into a hurricane relief fund. The decision appears to make redundant a part of its existing programme, which offers citizenship for a minimum contribution of US$250,000 to the country’s National Development Fund

To be fair, it may also reflect a comment made recently by the governor of the Eastern Caribbean Central Bank (ECCB), Dr Timothy Antoine. Launching the ECCB’s strategic plan earlier this month, he urged OECS governments to consistently set aside a portion of citizenship revenues to use as leverage to attract climate finance under the Paris Climate Accord.

In contrast, in Dominica, and to a much lesser extent in Grenada, the contribution made by citizenship programmes to GDP has been increasing. In Dominica’s case, its National Development Programme earnings before Hurricane Maria struck, had reportedly reached US$50 million per month: sums that were being used to pay down debt, support public works, as well as to provide budgetary support and employment.

In an indirect confirmation of the value of Dominica’s low basic fee of US$100,000, and the fierce competition now existing between OECS nations for citizenship applications, Antigua this month reduced its basic fee for citizenship to the same US$100,000 level.

The least successful CBI programme has been St Lucia’s.

Earlier this year, its government halved the previous cost of citizenship for individuals, also to US$100,000, and adjusted downwards the fee for all other categories, making the country’s programme for a short time the cheapest in the region. It also lifted a self-imposed limit on the number of applications that could be processed annually, and revoked previous requirements relating to an applicant’s net worth on the basis that other countries were offering discounts or incentives.

What is emerging from this apparent race to the bottom are several issues.

Firstly, well thought through, well administered programmes linked to national development programmes, where judiciously applied and with clear outcomes, appear to offer the best avenues for government and countries to reap the greatest rewards.

Second, global and inter-regional competition suggests the emergence of a zero-sum game in which nations may seek to offset a decline in income by further reducing pricing. If this happens, it follows that a higher number of successful applicants will be required if income from citizenship is to sustain or enhance GDP growth.

Thirdly, if governments are unable to significantly grow applicant numbers through price reductions, or through encouraging greater citizenship related investment in real estate or bonds, they may have to turn again to tourism to increase revenue, and to new tax breaks to spur investment.

In short, Caribbean CBI programmes may not have as a bright a revenue earning future as they have had in the past.

While many high net worth people continue to seek second or third citizenships, it appears likely that the numbers of applicants per Caribbean country may decrease as global competition grows, at worst accelerating the sector’s decline.

In theory, OECS nations with CBI programmes could consider some sort of approach involving harmonisation. However, in the real world of multiple unresolved sub-regional ideological, economic and personality differences, it is hard to imagine achieving a consensus that lasts.

Unfortunately, OECS governments have shown little willingness to address questions about the sustainability of their citizenship programmes, or to indicate whether they have fresh ideas about the ways in which they might redesign existing schemes to ensure continuing income without lowering fees any further.

All of which is to say nothing about the sometimes-questionable comments and defensive public relations exercises undertaken by some agents selling CBI programmes, about the questions that remain about the due diligence processes some governments pursue, or the serious international concern that has arisen about the issuance of diplomatic passports.

Almost every nation in the world provides a path to citizenship. Despite this, many citizens and some governments in principle object to the idea that nationality is something that can be sold. In this the Caribbean is no exception.

As long as citizenship programmes exist, questions will also remain about the granting of rights and free movement within CARICOM to those who are not required to reside, make no long-term economic or personal contribution, and who have no historic or cultural affinity to the region.

Source: Commentary: The View from Europe: Citizenship programmes: a race to the bottom? – Caribbean News Now

Which passport offers the best perks? [#citizenship] | The Economist

Which passport offers the best perks?

The Economist’s buyers guide – note Quebec on list:

Matthew Valencia exploreshow globalisation has turned citizenship into a commodity. Here, he weighs up the pros and cons of different passports.

SAINT KITTS AND NEVIS
OPTION 1: Invest $400,000 in real estate, which must be held for five years.
OPTION 2: Pay $250,000 into the Sugar Industry Diversification Foundation.
FEES: $57,500 for main applicant, $25,000 for each dependant.
BENEFIT: Citizenship; visa-free access to 132 countries; no residency requirement.
DISADVANTAGE: Seen as shady by some countries; bad publicity led Canada to withdraw visa-free access.

DOMINICA
OPTION 1: Invest $100,000 in Economic Diversification Fund, plus additional $75,000 for spouse, $25,000 for up to two children.
OPTION 2: Invest $200,000 in real estate. Property can be sold after three years if the intended buyer is a citizenship-by-investment applicant. Applicant must turn up for interview. Fees: $50,000 for main applicant, $25,000 for spouse.
BENEFITS: Citizenship; visa-free access to 91 countries; quick processing (3-6 months); no residency requirement; no mandatory interview; no physical residence requirement.
DISADVANTAGES: Poor reputation, though it claims to have tightened up vetting process; applicant must swear oath of allegiance.

ANTIGUA AND BARBUDA
OPTION 1: $400,000 invested in an approved real-estate project.
OPTION 2: $250,000 in National Development Fund.
OPTION 3: $1.5m invested in a business.
FEES: $50,000 each for main applicant, spouse and any dependant over 18; $25,000 for dependants under 18.
BENEFIT: Citizenship; visa-free access to 132 countries.
DISADVANTAGE: Weather risks for property buyers.

SAINT LUCIA
OPTION 1: Invest $200,000 in the Saint Lucia National Economic Fund.
OPTION 2: $500,000 in government bonds. Investment must be held for at least five years.
OPTION 3: $300,000 in an approved real estate. Must be held for at least five years.
OPTION 4: $3.5m in a new business that creates at least three jobs. Applicants must have a net worth of $300,000.
BENEFIT: Citizenship; visa-free access to more than 100 countries
DISADVANTAGE: As above.

UNITED STATES
EB-5 VISA: $1m investment in a business, or $500,000 in a high-unemployment or rural area. Company must create or preserve at least ten full-time jobs.
BENEFITS: Residency; access to US citizenship after five years.
DISADVANTAGES: Residency in the US required, especially during first two years; citizenship brings tax headaches, risk of being targeted by terrorists.

QUEBEC
OPTION 1: C$2m in a risky investment for 15 years. Applicants must be worth C$10m.
OPTION 2: C$800,000 in a passive investment for five years. Applicants must be worth C$1.6m.
BENEFIT: Access to citizenship after four years.
DISADVANTAGE: Must speak English or French.

AUSTRALIA
OPTION 1: Invest A$1.5m in a designated investment.
OPTION 2: For retirees aged 55-plus with A$750,000 of assets, an income of A$65,000 a year and no dependants (other than a partner). Must make a designated investment of A$750,000.
BENEFIT: Access to citizenship after four years
DISADVANTAGE: Other Australians will expect you to understand the rules of cricket.

MALTA 
CITIZENSHIP: Invest €350,000 in property, €150,000 in government-approved financial instruments and donate €650,000 to the National Development and Social Fund.
RESIDENCE OPTION 1: Invest €320,000 in property and €250,000 in government bonds. Fee of €30,000.
RESIDENCE OPTION 2: Invest €275,000 in property and pay €15,000 annually. Annual income of €100,000 or possession of capital of €500,000 required.
BENEFIT: Citizenship; visa-free access to 168 countries.
DISADVANTAGE: Successful applicants must show maintain a “genuine connection” to the country (though policing of this is not stringent).

CYPRUS
CITIZENSHIP: Investment of €2m during the three years preceding the date of the application; must retain the said investments for at least three years from date of the naturalisation.
RESIDENCE: Purchase property of at least €300,000 with evidence of a secured annual income of at least €30,000 deriving from abroad.
BENEFITS: Citizenship; visa-free access to 159 countries; dual citizenship allowed.
DISADVANTAGES: Must visit Cyprus at least once every two years.

BRITAIN
OPTION 1: Invest £2m to live in Britain for a maximum of three years. £5m gets you citizenship after three years, £10m after two years.
BENEFITS: Access to citizenship
DISADVANTAGES: Must spend at least 50% of their time in the country.

PORTUGAL
OPTION 1: Invest €500,000 in property, or €350,000 in research, or €250,000 in the arts, or €500,000 in venture capital, or create a minimum of ten jobs.
BENEFITS: Residency with a stay of only seven days in the first year; access to citizenship after five years; the right to free entry to the 26 Schengen countries; includes immediate family members
DISADVANTAGES: The cuisine

RUSSIA
OPTION 1: Start a business in Russia and once profits exceed 10m roubles.
OPTION 2: Invest 10m roubles in a business worth 100m roubles, and pay taxes of at least 6m roubles a year for three years.
BENEFITS: Citizenship
DISADVANTAGES: Two-to-four-week stay in Russia during processing required.

Sources: Investment Migration Council, The Economist

Source: Which passport offers the best perks? | 1843