It’s been the must-have item for many individuals of high net worth in recent years: a second passport (and in some cases even a third or fourth).
There are currently nearly 30 countries across the globe, including many in the EU, where an individual with financial resources to investcould acquire a whole new citizenship for a price. In fact, Citizenship by Investment programmes – or CIPs as they’re also known – are doing very well indeed.
The criteria for each country’s programme varies, as do costs, which range from as little as US$100,000 to as much as US$2.5 million. The principle remains the same though, in essence giving the chance for wealthy people to invest money in business or property. They can also simply donate cash or purchase government bonds, in return for citizenship and a second passport.
Background to Citizenship by Investment
The first scheme launched back in 1984 in the Caribbean, a year after cash-strapped, newly created St Kitts and Nevis gained independence from the UK. Initially slow to get going, the concept picked up in momentum quicklyafter 2009 when citizens from the Caribbean island nation were granted travel visa-free to the Schengen zone of 26 European nations.
Such schemes can be a massive boost for poorer countries in particular, helping them out of debt and often becoming their largest export. Indeed, the International Monetary Fund has cited St Kitts and Nevis as having earned 14% of its GDP this way in 2014, whilst some estimates are even higher.
Why is this Interesting for Wealthy Citizens of Developing Countries?
Although the schemes are not new they are growing rapidly, driven by wealthy private investors from emerging market economies including Russia, Turkey, China, Vietnam, India, Brazil and Mexico, as well as the Middle East.
Having a second passport can help to expand your investment horizons, offer enhanced freedom to work and travel abroad and could even save your life. In a world where governments are imposing tighter and tighter regulations on their citizens, a second passport is seen by many individuals almost as a kind of insurance policy.
Possessing dual citizenship can also dramatically increase your economic and personal freedom and is essentially a vital step in internationalising your life so that no single government “owns” you. This can mean great peace of mind, as it offer another place to turn to in case of any political or economic chaos.
Finally there’s always the simple fact that some country’s passports simply aren’t as good as others. For instance, if you own a passport that doesn’t offer visa-free travel to Europe or North America, you’re pretty limited in your abilities to carry out business in a number of the world’s largest economies. Take Saudi Arabia’s citizens, for example. Saudi passport holders cannot travel to the UK, China, Japan, the US, France, Germany and India without a visa which means they are excluded from countries with a GDP of more than $2 trillion. Additionally, Russia, much of South America and all of Australia is also off-limits to Saudi citizens unless they obtain a visa. This can all make Citizenship by Investment incredibly attractive.
Looking to Find Out More?
If you have any questions about Citizenship by Investment or would like to discuss your options, please do get in touch with our expert team who will be pleased to help. Contact us today.