High net worth individuals (HNWI) have been investing in programs and assets that not only protect their wealth, but also their ability to move around. One of these vehicles is the citizenship by investment program (CIP). There are many reasons to take up citizenship by investment programs, but what are the best ones? Here’s our definitive guide.
What is a Citizenship by Investment Program?
A citizenship by investment program (CIP) is an avenue for foreign nationals to secure a second nationality and passport without meeting the usual requirements of residency or extended stays in the host country. Instead, CIPs fast-track citizenship applications in exchange for an investment into the economy.
CIPs have existed for decades, with Austria, Switzerland and Belgium operating some of the oldest programs dating back to 1912, 1920 and 1924 respectively.
However, it was not until 1984 that St Kitts & Nevis became the first country to introduce a modern CIP open to all foreign investors, no matter their wealth.
Today there are over 20 active CIPs globally offering full citizenship rights in return for qualifying investments starting from around US$100,000.
Dominica introduced the world’s most affordable economic citizenship program in 1993 with a minimum outlay of just US$100,000 including all fees. It was also one of the first countries to offer visa-free travel to China with its passports in 2007,” Paddy Blewer, Director of Communications at CS Global Partners, tells CNBC.
What are the different types of investment?
CIPs typically require investments into either government bonds, real estate or approved business projects. Some programs also include Make a Donation options where applicants can donate to causes such as sustainability or hurricane relief instead.
“A common misconception is that citizenship by investment equates to simply investing in property. In fact, CIPs around the world offer three main qualifying investment options: government bonds; approved real estate developments; and registered businesses,” George Griffiths, Editorial Manager at Investor’s Guide explains.
What are the benefits?
There are many reasons why foreign nationals might want to consider citizenship by investment programs including but not limited to: easier travel with a second passport; visa-free or visa on arrival access to over 170 countries; permanent residency status; no tax on worldwide income for most citizenships (e.g Dominica); low taxes on domestic income and consumption (e.g St Kitts & Nevis); wealth diversification and asset protection; an improved quality of life; better education opportunities and healthcare provision.”
Secondly, holding a second passport means that you have greater freedom when it comes to travel. Not only does it allow you to live and work visa-free in the country of your second citizenship, but it also gives you visa-free or visa on arrival access to over 170 countries around the world.
This is ideal for anyone who wants to live a nomadic lifestyle or run a business internationally.
There are many additional benefits that come with having a second passport including but not limited to:
- Permanent residency status in the country of your second citizenship;
- No tax on worldwide income for most citizenships (e.g Dominica);
- Low taxes on domestic income and consumption (e.g St Kitts & Nevis);
- Wealth diversification and asset protection;
- An improved quality of life;
- Better education opportunities and healthcare provision
Griffiths continues, “It’s worth noting that each citizenship by investment program has its own specific benefits which are tailored to meet the needs of different investors.”
For example, Grenada introduced an Educational Trust Fund in 2016 where portion of CIP proceeds must be placed in trust to fund the educational expenses of all future generations of citizens. Antigua & Barbuda, on the other hand, offers citizenship to dependent children up to the age of 30 and parents above the age of 55.
What are the requirements?
In order to qualify for citizenship by investment programs, applicants must meet certain criteria set out by each individual country. Generally speaking, requirements include but are not limited to: being over 18 years of age; passing a series of due diligence checks carried out by international agencies; holding a valid passport; providing proof of funds; and making the required investment.
Once an application is approved, investors must usually visit the country in question to take part in a short naturalization ceremony where they will pledge allegiance to their new nation. After this final step, second citizens are free to live, work and travel as they please with all the same rights as any other national.”
“Citizenship by investment programs offer foreign nationals a number of benefits that go beyond financial gain. With new countries coming onto the market offering ever-more competitive terms, now is an excellent time explore what these opportunities can do for you and your family.”
CIPs are an excellent way for foreign nationals to gain a second nationality and passport without meeting the usual residency requirements.
Three main types of CIPs
There are three main types of investment for CIPs: government bonds; approved real estate developments; and registered businesses. Requirements for each CIP differ, but generally speaking, applicants must be over 18 years of age, pass due diligence checks, hold a valid passport and make the required investment.
After an application is approved, investors must usually visit the country in question to take part in a short naturalization ceremony where they will pledge allegiance to their new nation.
Now is an excellent time to explore citizenship by investment programs and discover how they can benefit you and your family.