Citizenship by investment (CBI) was first formalised into law over three decades ago, and despite making its mark on the agenda of many high net worth individuals (HNWIs) early on, it has only recently come of age as an international industry.
Offered by countries from all corners of the globe, it attracts businesspersons, entrepreneurs, and families, enticing them with the promise of second citizenship in return for a contribution to a nation’s economy. Field experts attribute this surge to growing international communication, socio-political uncertainty, and the globalisation of business and leisure activities. The HNWI sees a world in flux, and, whether to exploit this change or to guard against it, citizenship by investment has emerged as an expeditious, permanent solution.
The CBI Index captures the 12 citizenship by investment programmes currently available across the world, and examines them under seven different lenses: freedom of movement, standard of living, minimum investment outlay, mandatory travel or residence, ease of processing, citizenship timeline, and due diligence. The purpose of this examination is to allow HNWIs to compare the programmes according to the characteristics that matter most to them.
Where a HNWI is looking for a solution that is cost-effective, for example, he or she may wish to focus on the minimum investment outlay required by each of the programmes. For the busy entrepreneur, particular attention may be paid to countries that require travel or residence abroad, and which best streamline the citizenship processes.
The Caribbean island-nation of Dominica was the leading scorer of the CBI Index, having received full marks in minimum investment outlay, mandatory travel or residence, ease of processing, and due diligence. This is probably unsurprising to those familiar with the industry, who have seen this small island become a well-established and reputable provider of citizenship.
Some of the metrics that tipped the balance in its favour included no interview or language requirements, a US$100,000 minimum investment threshold for single applicants, and strong vetting procedures ranging from source of funds analysis to the collection of criminal records from multiple jurisdictions. Dominica was also bolstered by creditable scores for its citizenship timeline (currently at less than three months), freedom of movement (offering access to almost 120 countries), and standard of living.
While citizenship by investment is certainly a useful tool for the HNWI, it is also important to note the impact that these programmes have on the nations that adopt them. The contributions made by economic citizens are redirected to government projects such as the building of infrastructure, the sponsoring of businesses and skills development, and rehousing ventures. While it is well known that citizenship by investment has provided significant debt reduction and GDP augmentation for several countries, it is often overlooked that it has also played an instrumental role in the development of sustainable projects, including geothermal power plants and other forms of green energy.
There are significant benefits that flow from a well-run citizenship by investment programme, and this is why Antigua and Barbuda, Austria, Bulgaria, Cambodia, Comoros, Cyprus, Dominica, Grenada, Malta, Saint Lucia, St Kitts and Nevis, and Vanuatu have each taken steps to implement, and sometimes refine, their citizenship by investment programmes. The CBI Index serves to identify those countries that have successfully made their programmes appealing to the HNWI, with a view to supporting an industry that provides a helpful hand both to HNWIs wishing to improve their circumstances, and to countries wanting to see their economies, and their people, flourish.
=> You can download the full report at CBIIndex.com.
Written by: James McKay, an independent research analyst and consultant at CBI Index is a comprehensive ranking system that evaluates active citizenship by investment (CBI) programmes.
The views expressed in this article are those of the author alone and not the CEOWORLD magazine.