Cyprus to strip 26 ‘golden’ passports given to investors

Welcome move but one just highlights yet again the potential for abuse and fraud:

Cyprus said on Wednesday that it had started a process to strip 26 individuals of citizenship they received under a secretive passports-for-investment scheme, admitting it had flaws.

The Mediterranean island has been rattled by disclosures of its investments scheme since Reuters reported last month a list of Cambodian beneficiaries, including its police chief and finance minister.

“The council of ministers today affirmed the will of the government for strict adherence to the terms and conditions of the Cyprus investment programme,” the Cypriot interior minister, Constantinos Petrides, told reporters after a four-hour cabinet meeting.

Petrides did not disclose nationalities or identities of those affected, but said it “also concerned those” whose names were mentioned in media reports.

Cypriot sources said the group included nine Russians, eight Cambodians, five Chinese nationals, two Kenyans, one Malaysian and one Iranian.

They involved nine investment projects, whereby groups of foreign investors in partnership can benefit from the scheme.

Cyprus has had a citizenship for investment plan in place since 2013, under which a minimum 2 million-euro ($2.2 million) investment can buy a passport and visa-free travel throughout the European Union.

Advertising the scheme is now banned, but at least one law office used to distribute pamphlets resembling passports to visitors at the island’s main airport.

Authorities said the programme had gone through several transformations, and was overhauled in February 2019 with five different due-diligence layers, compared with one in 2013.

In the five years from the beginning of the citizenship scheme to 2018, the Cypriot government approved 1,864 citizenship applications. Including family members, the number was more than 3,200, and is close to 4,000 today.

“If there were nine investment cases, concerning 26 people, among 4,000 applications, it is logical that some would be problematic when controls weren’t strict,” Petrides said. “There were mistakes – it was a mistake not to have criteria, for instance, for high-risk persons.”

The Reuters investigation showed that influential police, business and political associates of Cambodia’s long-time ruler, the prime minister Hun Sen, had overseas assets worth tens of millions of dollars.

Hun has previously denied opposition allegations that members of his inner circle had other passports and lived the high life overseas. Some 70 percent of Cambodians live on $3 a day, according to the Asian Development Bank.

Petrides, whose ministry signs off on passport applications, said the individuals concerned had the right to appeal.

Source: Cyprus to strip 26 ‘golden’ passports given to investors

How relatives and allies of Cambodia’s ‘iron fist’ leader gained Cypriot citizenship

Long read with another reminder of the inherent corruption of citizenship-by-investment regimes:

Cambodia’s long-ruling prime minister, Hun Sen, had gathered athletes at his imposing office for a televised pep talk. “I don’t want to mention politics,” he began quietly.

But he couldn’t help himself. It was December 2017. The main opposition party had just been outlawed, the latest move in Hun Sen’s campaign to eradicate his political rivals. The United States and European Union were threatening sanctions, and Hun Sen had a message for them.

“Just do it now if you are brave enough,” he taunted, bristling with outrage. There was no point in the West trying to seize the foreign assets of Cambodian officials, he went on, because they “wouldn’t be so damn stupid as to keep their assets overseas.”

But a Reuters investigation shows that those closest to Hun Sen have done exactly that. Family members and key police, business and political associates have overseas assets worth tens of millions of dollars, and have used their wealth to buy foreign citizenship – a practice Hun Sen has decried as unpatriotic and at times has sought to outlaw.

Among those who have acquired or applied for European Union passports through a citizenship for sale arrangement in Cyprus are: Hun Sen’s niece and her husband, who is Cambodia’s national police chief; the country’s most powerful business couple, who are old family friends; and the finance minister, a long-time Hun Sen adviser.

Photos on social media also show Hun Sen’s relatives enjoying luxurious European lifestyles – boating in Capri, skiing in Verbier, partying in Ibiza – which are at odds with the prime minister’s self-styled image as the humble leader of ordinary Cambodians.

Hun Sen is 67 and has ruled Cambodia with an iron fist for more than three decades. He has jailed or exiled political rivals, shut down media outlets and crushed street protests. Only three men have controlled their countries for longer: the presidents of Equatorial Guinea, Cameroon and the Republic of the Congo. If Hun Sen stepped down tomorrow, Vladimir Putin would have to rule Russia for another 15 years to match his time in power.

Yet challenges remain for Hun Sen. Popular dissatisfaction still simmers, say political analysts. In February, responding to his crackdown, the European Union began a process that could suspend Cambodia’s special trade preferences, potentially damaging industries that employ hundreds of thousands of workers. The country’s political and business elite is on edge, a government insider told Reuters, speaking on condition of anonymity.

“Everyone is making an escape plan,” he said.

Hun Sen’s government didn’t respond to questions from Reuters for this article. Hun Sen’s relatives and associates also chose not to respond, with the exception of one member of the extended family. Hun Panhaboth, the son of another niece, defended his lifestyle in messages sent to Reuters through his Facebook page. An Instagram photo shows him driving a Mercedes while holding a fistful of banknotes. “I really don’t see the harm in that anyways,” he said.

AN ESCAPE ROUTE

One Cambodian with overseas assets is the prime minister’s niece, Hun Kimleng. Photos posted on Instagram by a family nanny helped lead Reuters to a posh apartment in central London, situated only a few hundred metres from the palace of the Duke and Duchess of Cambridge.

Hun Kimleng bought the apartment in 2010 for £1.95 million ($2.5 million), according to official property records. It could now be worth at least £3.5 million, estimates the real estate website Zoopla. She also owns a multi-million-dollar apartment in a luxury condo in Singapore, according to the Singapore Land Authority.

In 2016, she became a citizen of a foreign country: Cyprus.

Hun Sen has frequently denounced his political rivals for obtaining second passports, once declaring them “an escape route from difficulties in Cambodia.” His niece’s Cypriot citizenship is confirmed by a confidential document sent by Cyprus’s Ministry of Interior to its cabinet, which Reuters has seen.

Getting a Cypriot passport also makes the niece a citizen of the European Union, which Cyprus joined in 2004. This gives her the right to live, work and travel without visas in 28 EU countries.

Becoming a Cypriot isn’t cheap: It involves an investment of at least €2 million ($2.2 million). Between 2013 and 2018, the country granted citizenship to 3,200 foreigners under its Cyprus Investment Programme, raking in €6.6 billion.

The Cyprus interior ministry document confirming Hun Kimleng’s citizenship is dated 21 November 2017. It also recommends that the cabinet grant citizenship to her husband, Neth Savoeun, and two of their grown-up daughters. The cabinet always accepts the ministry’s recommendation, Cyprus’s interior minister told Reuters.

Neth Savoeun is Cambodia’s powerful national police chief, presiding over a force responsible for arresting Hun Sen’s political opponents and violently suppressing anti-government protests. Last year, Human Rights Watch named him as one of 12 generals who form “the backbone of an abusive and authoritarian political regime.” The Cambodian defense ministry called the report “fabricated.” Neth Savoeun is also a senior member of the ruling Cambodian People’s Party.

That the country’s top cop has sought foreign citizenship could show that the party’s leaders are losing faith in each other, said Em Sovannara, an academic and political analyst in Phnom Penh. “It signals fragility in the ruling party,” he told Reuters.

Cambodia’s opposition has repeatedly alleged that Neth Savoeun and his family have foreign citizenship. In August, one opposition leader posted photos on Facebook of what he said were the family’s Cypriot passports. The post seemed to strike a nerve. The next day, the Cambodian National Police issued a statement, saying that Neth Savoeun would never “escape to another country, never betray the nation.”

In 2017, the U.S. State Department put Neth Savoeun, Hun Kimleng and their three children on a “visa blacklist” for undermining democracy, according to a U.S. official and another source. This means they can’t travel to the United States unless on official business. The State Department declined to comment.

Cyprus seems less strict. In the confidential document, the Cypriot interior minister urges the cabinet to grant citizenship to Neth Savoeun and two grown-up daughters, and notes that they have never visited Cyprus.

Under Cypriot law, the daughters are eligible for citizenship if they are “financially dependent” on the primary applicant, who in this case is their mother, Hun Kimleng. Yet one of the daughters named in the interior ministry document, Vichhuna Neth, 26, appears to be independently wealthy. In September 2017, three months before the interior ministry’s document was issued, she bought a London apartment near her mother’s, according to British property records. It has two floors and four bedrooms, and cost £5.5 million.

The Cyprus government didn’t respond to a Reuters request for comment about its decision to grant citizenship to Prime Minister Hun Sen’s relatives and allies, including a family blacklisted by the United States. Nor did it respond to questions about its vetting procedure for these prominent Cambodians.

INNER CIRCLE

The document detailing the citizenship of Hun Kimleng and her family is part of a tranche of interior ministry documents that Reuters has seen. These detail thousands of applications for Cypriot passports by wealthy foreigners.

The documents take the form of a letter, in which the interior minister summarizes an application for Cypriot citizenship and recommends the cabinet approve it. While the letter mentioning Hun Kimleng confirms she is a Cypriot citizen, the other letters are only recommendations. However, asked if any of his recommendations were rejected by the cabinet, Interior Minister Constantinos Petrides told Reuters: “No . . . Not to my knowledge.”

These documents show that other members of Hun Sen’s inner circle have also received or applied for Cypriot passports. They include Cambodia’s finance minister, Aun Pornmoniroth, a long-time financial adviser to Hun Sen. Aun’s wife also applied.

So did two of Hun Sen’s closest and wealthiest allies. Choeung Sopheap and her husband, Lau Ming Kan, created Pheapimex, a giant conglomerate. In a series of reports in the early 2000s, Global Witness, a London-based anti-corruption group, used aerial surveys and field inspections to document years of illegal logging by Pheapimex. Hun Sen has accused Global Witness of telling lies.

Another of Choeung and Lau’s companies was embroiled in the eviction of thousands of families from a development site in Phnom Penh; many of those who protested the evictions were beaten and jailed. Citing the evictions, the World Bank temporarily suspended new lending to Cambodia. Choeung and Lau didn’t respond to Reuters’ questions about their business activities.

Choeung and Lau are both in their seventies, and their family has business or marriage links to four of Hun Sen’s five children. Lau is a senator for Prime Minister Hun Sen’s party. Choeung sits on the board of the Cambodian Red Cross. She is a close friend of the charity’s president – Hun Sen’s wife.

Choeung and Lau are also close to Cambodia’s security forces. Red envelopes of cash are traditionally handed out as gifts at Chinese New Year, an occasion the couple used to give money to thousands of soldiers, police and Hun Sen bodyguards who gathered outside their mansion in Phnom Penh, according to local media reports. One report quoted the couple’s son saying they had been making the mass donations for nearly a decade.

Choeung and Lau were issued with Cypriot passports in February 2017, Reuters reporting showed. Four of their five children also applied for Cypriot passports in the same year.

These prominent Cambodians all sought Cypriot citizenship during a turbulent period when Hun Sen’s grip on power seemed to be faltering. His recent troubles trace back to a general election in 2013. His ruling Cambodian People’s Party had long dominated the polls, but in 2013 it won only 68 of the national assembly’s 123 seats and 48% of the votes. It was Hun Sen’s worst showing in 15 years.

Turmoil ensued. Supporters of a resurgent opposition party spilled onto Phnom Penh’s streets to protest suspected election fraud, and only dispersed after military police opened fire and killed or injured dozens of people. The opposition leader was forced into exile and his successor put under house arrest. The party itself was dissolved.

Other critics were picked off in a wave of arrests and prosecutions, and one was silenced permanently: Kem Ley, a well-known activist, shot dead in broad daylight in July 2016. Police said he was killed by a man he owed money. The man confessed and is serving a life sentence.

The murder had a chilling effect on Cambodia’s embattled opposition. In 2018, with his rivals cowed or silenced, Hun Sen held another general election. This time, his party won 77% of the vote – and every single seat.

The United States called the election “the most significant setback yet” to Cambodian democracy. Hun Sen remained defiant. In a speech at the United Nations in Geneva in July 2019, he said the election had been “free, fair and just,” and called Cambodia a “land of freedom.”

LAND OF FREEDOM

For a wealthy global elite, it’s Cyprus’s freedoms that are appealing. The citizenship for sale programme took off in 2013 after a banking crisis almost wiped out Cyprus’s economy. The country’s economic woes forced it to seek a €10-billion international bailout and scramble to secure other forms of investment. The idea of the Cyprus Investment Programme was “to further encourage Foreign Direct Investment and to attract high net worth individuals to settle and do business in Cyprus,” according to the Ministry of Interior’s website.

Each applicant must invest at least €2 million in Cyprus. At least €500,000 must be invested permanently in property. The remainder can be invested in Cypriot companies, and need only be parked there temporarily. At no point in the application process is the applicant compelled to live in – or even visit – Cyprus.

A backlash against the scheme has grown. Some conservationists and other critics say it has fueled a property boom that has priced out ordinary Cypriots and harmed the environment. In a January report, the European Commission warned that what it called “golden passports” could help organised crime groups infiltrate Europe and raised the risk of money laundering, corruption and tax evasion.

The Cypriot government denied this, but has also tweaked the programme. Since May, applicants must keep the bulk of their investment in Cyprus for five years instead of three. They must also pay up to €150,000 to state agencies tasked with fostering innovation and building affordable homes. Some critics dismiss these measures as cosmetic, and are calling for more public scrutiny of who is applying, where their money comes from and who benefits from it in Cyprus. The government has resisted.

“INVEST IN CYPRUS”

The Mediterranean resort town of Paphos is a two-hour drive from the capital. The highways and roads leading there are flanked by billboards erected by property developers and aimed at foreigners looking for residency or citizenship. “Invest in Cyprus, enjoy its benefits,” says one, in English and Chinese. On Paphos’s beaches, tourists sprawl across the burning sand or cool down in the Med’s azure shallows.

Not far inland, on the top floor of a Paphos low-rise, is a family law firm called Andreas Demetriades & Co. Between January 2013 and August 2018, its modest office processed 137 “citizenship by investment” applications worth hundreds of millions of euros to Cyprus.

This is according to a document from Cyprus’s interior ministry, which was shared with the country’s parliament and seen by Reuters. The company that has processed the most applications is the giant accounting firm, PricewaterhouseCoopers; it handled 184 applications during that period with what PwC Cyprus calls “robust client screening and acceptance processes.”

Andreas Demetriades & Co. was second. Demetris Demetriades, a senior partner, said the firm had processed “hundreds” of applications, but declined to confirm the interior ministry’s tally of 137 or talk about specific clients. Reuters reporting shows that his firm handled the applications of the Cambodian finance minister, Aun; the leading business couple, Choeung and Lau; and their family members.

Demetriades said most of his clients were “savvy investors” who wanted a Cypriot passport that gave them the freedoms of a European national. For some, the passport was also “an insurance policy.”

“Let’s admit it,” he said. “There are countries which have political instability – where people feel that their families and their business interests are in jeopardy. So it’s good for them to have something to fall back on should the worst happen.”

Demetriades said some of his clients were so-called “politically exposed persons” – people whose prominent positions in government or public life might make them vulnerable to corruption. “That doesn’t mean that they’re bad people,” he said. “It just means that you have to investigate further their source of funds.”

Where those funds end up in Cyprus is also hard to track. Business and property databases in Cyprus are often out of date, incomplete or closed to public access. But Reuters reporting turned up a company that served as an investment vehicle for foreigners seeking citizenship, including five of the Cambodians.

The company, called JWPegasus, was incorporated in Cyprus in May 2015 to help fund the construction of a Radisson Blu hotel in Larnaca, the country’s third-largest city.

A Reuters analysis showed that at least 22 of JWPegasus’ 26 shareholders have applied for Cypriot passports. Twenty of them applied through Andreas Demetriades & Co., the law firm. The five Cambodians among them include: Choeung; two of her children and the wife of Aun, the finance minister. Each invested at least €2 million.

JWPegasus described itself to Reuters as a “solid company” that has created hundreds of jobs. JWPegasus declined to comment on individual investors but said that, to its knowledge, none of them had “any illegal activities.” Radisson Blu said that its due diligence, carried out before doing business with JWPegasus, “did not reveal any suspicious activity at that time.”

Demetris Demetriades said he knew of JWPegasus but stressed that his law firm had no connection to it. He said he didn’t tell his clients which companies to invest in because his firm also did due diligence on those companies, which could create a conflict of interest. “Caesar’s wife must not only be honest, but must also look honest,” he said.

HUMBLE LEADER

For some members of Cambodia’s elite, Cypriot passports are trappings of luxurious lifestyles that could undermine Prime Minister Hun Sen’s self-styled image as the humble leader of a party representing ordinary Cambodians.

Wealth is a touchy subject in Cambodia. The Asian Development Bank estimates that 70% of people live on about $3 a day, and Hun Sen has long projected himself as a leader who suffers alongside his poorest compatriots. Speaking at a factory near Phnom Penh in February, he said he didn’t have a second nationality or a house abroad, and chose instead “to eat grass with the Cambodian people.”

Yet many relatives with the Hun family name flaunt their wealth on social media accounts. One photo on Instagram shows two of the prime minister’s nieces, Hun Kimleng and Hun Chantha, posing in ballgowns and matching golden necklaces. Other photos document their near-constant travel, often by private jet, to fashion shows in Paris, a hillside villa in Mykonos, and London nightclubs like Loulou’s. Hun Chantha also co-owns London apartments worth £5 million, property records show.

Hun Panhaboth, the son of another niece, gave his girlfriend a Mercedes-Benz for her birthday, according to photos on Facebook. Most Cambodians were “happy and congratulated us,” Hun Panhaboth told Reuters. “I don’t think this gift makes Prime Minister Hun Sen look bad in any shape or form.”

And while the prime minister spoke about eating grass, Instagram showed some relatives feasting on caviar in London. Among them was Hun Kimleng’s wealthy young daughter, Vichhuna Neth. She applied for Cypriot citizenship in November 2017. Four months later, she posted photos and videos on Instagram from western Cyprus. They show her driving a dune buggy along a coastal road and reclining in an open-air jacuzzi at a luxury villa.

“Cyprus,” she gushed, “you’ve been AMAZING!!”

Source: How relatives and allies of Cambodia’s ‘iron fist’ leader gained Cypriot citizenship

Greece preparing citizenship by investment scheme similar to Cyprus’

More on competition among countries:

Local land developers but also service sector professionals are becoming concerned by reports that Greece’s new government is planning to launch a  citizenship by investment scheme similar to that of Cyprus.

The scheme provided by Nicosia in recent years has substantially contributed to the recovery of the Mediterranean island’s economy.

The new right-wing government under Kyriacos Mitsotakis is drafting its own citizenship by investment programme which resembles the Cypriot one and, thus, will be quite competitive, according to informed sources.

One source told Phileleftheros that the new programme is expected to be implemented after the first quarter of 2020 and may involve investments of €2.5 million. Cyprus’ investment limit is €2 million, plus VAT. In the case of Greece, the plan is for VAT payment to be deferred for a period of three years. This basically means that at the time of the investment the cost will essentially be the same as that in Cyprus.

Undoubtedly, the implementation of such a programme by Greece will create strong competition for Cyprus. Greece, as a brand name, is stronger and more versatile. So are some of its areas or islands as well. This means that far more investment opportunities will be on offer, especially in the sector of ​​land development. The areas that will fall under the scheme’s criteria have not been disclosed yet.

At the same time, as a larger country that has been in recession for many years it offers more investment opportunities, plus connectivity is also an important factor for foreign investors. Another advantage of Greece taken seriously in consideration by foreign investors is that one does not need a visa to travel to the US.

Source: Greece preparing citizenship by investment scheme similar to Cyprus’

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

These are the countries you can ‘buy’ citizenship to – Business Insider

Another good overview of the various schemes, and the relative advantages for those shopping for citizenship:

Most countries offer citizenship (passports) the hard way. But 7 sell them outright, and 3 have “powerful” passports. “Citizenship Planning” is a thing.

For people who need a second citizenship and passport to dodge the long arm of their government, there is something called “citizenship planning,” similar to “financial planning.” But when it comes to just outright buying a citizenship and passport without having to languish for years as mere non-citizen resident, the Huddled Masses need not apply. And not any passport will do. In fact, there are only three for sale that are really good.

Which are the best passports to get?

There are quality standards for everything, especially if it’s costly. The most powerful passports are those that allow visa-free travel to the most countries.

There are other considerations, for example those that drive US citizens nuts when they live overseas, due to the US government’s onerous reporting requirements on them and on banks that do business with them, and due to US taxation of their worldwide income no matter where they live. Few other governments treat their citizens that way.

In terms of visa-free travel, here are the 25 countries with the most powerful passports, according to a new ranking by Henley & Partners, which is into “citizenship planning.” But among them is only – Austria – one whose citizenship can be bought (more on that in a moment):

  1. Germany: visa-free travel to 176 countries.
  2. Sweden: 175 countries
  3. Denmark, Finland, Italy, Spain, and the US: 174 countries.
  4. Austria, Belgium, France, Luxembourg, Netherlands, Norway, Singapore, UK: 173 countries
  5. Republic of Ireland, Japan, New Zealand: 172 countries
  6. Croatia, Greece, Portugal, Switzerland: 171 countries
  7. Australia, South Korea: 170 countries
  8. Iceland: 169 countries.

And how do you get one of those passports?

In most countries, the hard way: Legally immigrate and obtain residency, and then fulfill the residency requirements to get citizenship and that second passport, which takes years. Most countries, including the US, have special programs for “investors” to obtain residency, such as a green card, essentially on the spot, but even then it takes years to obtain citizenship and a passport. If it’s possible at all, such as in Germany.

Then there’s the direct way: Buy a citizenship and the passport that comes along with it. These citizenship-by-investment programs are not for folks on a tight budget. According to Henley & Partners, only seven countries offer this convenient route, only three have powerful passports, and only one is in the top of the heap above.

Passports from EU countries are the best. If you’re from Russia or China or Iraq and become a citizen of one of the 28 EU countries, you’ll get a country-specific EU passport that allows you to live and do business anywhere in the EU. There are all sorts of offshore benefits. And travel around the world is a breeze.

But citizenship in most EU countries is not for sale. You can buy only residency, similar to programs in the US. But there are three exceptions:

Austria

Citizenship is almost impossible to get for normal foreigners already legally in Austria. But the super-rich and famous have a way. The government, through paragraph 10, section 6 of the Citizenship Act, can confer citizenship “because of the services already provided by the foreigner and the extraordinary achievements still to be expected of him in the special interest of the Republic.” This usually involves a big direct investments of unspecified magnitude plus some other “extraordinary” contribution, such as being famous or creating jobs. Few succeed. In some years, none succeed.

They’re playing hard to get. But the rewards are huge for the few that succeed, including an impeccable EU passport with visa-free travel to 173 countries.

Cyprus

In 2012, as the EU-part of the divided island was veering toward bankruptcy, it offered citizenship through a “fast-track” scheme to dodge the normal residency requirements. But the price tag was €10 million in direct investment. Too expensive for the average oligarch.

In 2013, Cyprus became desperate. Its offshore financial industry, the main breadwinner of the economy, had collapsed in a cesspool of corruption. The banks had taken much of the foreign money – particularly Russian money – down with them. Cyprus needed some moolah. It slashed the price of citizenship to €3 million of direct investment. Russians who’d lost at least €3 million in the collapse would also be eligible for citizenship.

Since then, the price was further slashed, to as low as €2 million. And it’s fast: about three months for citizenship and an EU passport, with visa-free travel to 159 countries. And that €3-million investment can be sold after three years. An adequate house would likely do.

Malta

The tiny EU member state with 417,000 residents spread over three islands is convenient for foreigners, with English being one of the two official languages. In 2013, during the still rough waters of the euro debt crisis, Parliament passed legislation that put Maltese citizenship up for sale at €650,000. A spouse costs another €25,000; unmarried children between 18 and 25 and dependent parents cost €50,000 each. There are no residency or investment requirements. The money goes into government funds.

This citizenship is a product to be marketed. If it sells 100 per year at €650,000 a pop, it would generate annual revenues of €65 million – or 1.75% of total 2016 revenues (€3.7 billion). Given the limits on budget deficits under EU Treaties, everything counts.

This Maltese product includes an EU passport with visa-free travel to 166 countries. Folks can stop by, jump through some bureaucratic hoops, pay, get their citizenship and passport, and settle in Germany or wherever. At the time, Simon Busuttil, leader of the opposition Nationalist Party, warned that Malta could end up being compared to shady tax havens in the Caribbean. And that’s our last stop.

Source: These are the countries you can ‘buy’ citizenship to – Business Insider