The citizenship by investment industry is booming right now. Every year, the demand for having a second passport continuously increases by 25 percent, and the investment migration industry is expected to hit 20 billion dollars by 2020.
The concept of citizenship by investment (CBI) began in 1984 when St. Kitts and Nevis — a two-island nation in the Caribbean — introduced it to the world. It is now the longest-running CBI program, and is considered to be “the platinum standard” of CBI programs. Fast-forward to 2019, and there are 14 citizenship by investment schemes currently running worldwide, with more countries expected to join the list in the near future.
Today, the citizenship by investment industry is estimated to be worth 5 billion dollars annually, with approximately 5 thousand people obtaining citizenship this way each year. The majority of CBI investors come from China, Russia, India, Vietnam, Mexico, Brazil, Turkey and the Middle East, but there is a growing demand for CBI programs worldwide.
We have one more impressive number for you right here: the CBI industry is expected to hit 10 billion dollars annually by 2025. The basic idea behind the CBI program is pretty easy: investing or donating a certain amount of money in a country, in exchange for a passport in a relatively short amount of time. The investment cost can range from 100 thousand dollars to 2,5 million dollars, and can include everything from non-refundable cash donations to investments in real estate, business or government bonds.
From a business perspective, a second citizenship removes the need for tourist visas for a number of countries, opens up new markets and helps to increase business opportunities, whilst at the same time providing much better tax terms while fully complying with international laws.
Today, the second passport has become a must-have accessory for many successful businessmen, investors and multimillionaires. Usually, such high-net-worth (HNW) individuals have a great deal of income at their disposal, but are not able to put it to effective use within their home country.
Nuri Katz, founder of the international financial advisory firm Apex Capital Partners Corporation, noted that “Generally, CBI programs draw individuals from countries whose passports offer very limited abilities to travel, such as China, Russia, and Middle Eastern countries. Most of the individuals making these types of investments are high-net-worth entrepreneurs with net worths of about 2 to 15 million dollars.”
In 2018, Moldova and Montenegro joined the CBI program’s list, which also includes Cyprus, Portugal, Malta and other countries that offer individuals the opportunity to live, work and register their businesses in various jurisdictions. Each government has different requirements for applicants, and everyone interested in CBI options should spend some time on analysis, as every country in the program has some unique stipulations.
For example, St. Lucia and Cyprus are the only countries offering CBI passports through government bonds and treasury bills, while St. Kitts is the only country that offers an accelerated application process within 60 days for an additional fee.
Cyprus’s CBI scheme is limited to 700 applications per year, while Western Samoan and Bulgarian passports have a visa-free travel to Canada option.
Antigua is the only country that accepts Bitcoin and other cryptocurrencies for payment, and Malta is the only country that has the Visa Waiver Program with the United States.
Hoping to make it all much simpler for the HNW individuals and investors, James McKay — a research analyst and consultant with more than a decade’s experience in the implementation and execution of complex research and data analysis projects — developed the CBI Index.
This first ever up-to-date guide provides accurate data on all citizenship by investment programs around the world, and measures important areas such as due diligence, freedom of movement, ease of processing, mandatory travel and residence.
The newest CBI Index rankings showed that the Caribbean Islands’ CBI programs have reached an all-time highest ranking with their popularity, crowning Dominica as the most attractive program on the market for the second year in a row. St. Kitts and Nevis took the second place, leaving Grenada in the third. Close behind were Antigua and Barbuda, and St. Lucia — the newest member of the Caribbean CBI program.
Investors from all around the world, but especially from China, Russia, the Middle East and Africa, really like the concept of acquiring a second passport in these countries, one of the top reasons being their accessibility and a much cheaper price.
Speaking about the cost, we have an interesting example for you right here.
Malta’s CBI program, with its minimum investment amount of 816 thousand euros (about 921 thousand dollars), is considered to be the most accessible one in Europe.
Now, the minimum entry threshold for a Caribbean program is 100 thousand dollars. This, along with the warm climate, low investment requirements and undemanding residency obligations, has definitely helped the Caribbean CBI programs take the first 5 places in the CBI Index list.
But there’s more. Caribbean countries don’t impose most of the taxes we are used to, investors can forget about all visa-induced problems, as the second passport here also unlocks borders of more than 100 countries — including Schengen and the UK, application processes are handled quickly and easily, taking maximum 3 to 5 months, there are no residency requirements for retaining the status, and Caribbean countries take confidentiality really seriously, as no information about the applicants to any third parties is revealed.
But perhaps the biggest and most important reason why people like Caribbean CBI programs is the fact that they are not as strict, especially when compared to EU CBI programs. Cyprus was a winning citizenship by investment program in the European category, reaching 7th place in the overall CBI Index ranking. Launched in 2013, it is the biggest citizenship scheme in the EU with almost 4,000 foreigners from Asian, European and Arab countries obtaining a second passport here between 2014.
With political stability, high standards of living, low crime rates, no restrictions on applicants from any country, visa-free travel to 173 countries — including the UK, EU member states, Canada and Singapore, and an excellent education and health care system, Cyprus is a very attractive choice.
However, Cyprus’s CBI program is quite expensive, especially when compared to the Caribbean, as a single applicant minimum outlay equals 2 million euros (about 2,258 million dollars) here.With uncertainties caused by Brexit, Cyprus’s CBI has also become one of the top choices for British citizens who are looking for new ways to keep their European citizenship.
According to the BBC, the number of Britons granted citizenship of another EU country has increased by 159 percent since 2016.
A few years ago, CS Global Partners conducted a survey in the UK among people between the ages of 18 and 50 about the importance of a second citizenship. Results were interesting: 89 percent said that they would like to own a second passport, and they are willing to pay more for it than they spend on monthly rent. Over 34 percent said they had looked into investing in a second citizenship, with over 58 percent naming Brexit as the main reason for doing so.