A GUIDE TO GLOBAL CITIZENSHIP - THE 2021 CBI INDEX - in association with - WIC News
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Special Report
August/September 2021
A GUIDE
TO GLOBAL
CITIZENSHIP
THE 2021 CBI
INDEX
in association with
CORPORATE STATEMENT MAP
The 14 citizenship
by investment
jurisdictions
Austria
Bulgaria
Montenegro Turkey
St Kitts
and Nevis
Egypt
Antigua
and Barbuda
Malta
Cambodia
Dominica
Jordan
St Lucia
Vanuatu
Grenada
2 AUGUST/SEPTEMBER 2021
CONTENTS
August/September 2021 pwmnet.com cbiindex.com
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A GUIDE TO GLOBAL
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CITIZENSHIP
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THE 2021 CBI INDEX
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Having lost mobility during the health crisis, Change of Address
wealthy individuals are showing increased Notification
pwm@ft.com
interest in citizenship by investment schemes, © Financial Times 2021
though some programmes remain controversial
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12 NOMAD VISAS of the Financial Times Ltd.
All rights reserved. No part
STATEMENT
CBI jurisdictions stand to benefit from the new of this publication may be
reproduced or used in any form
work-from-home normal, and from the employees of advertising without prior
permission in writing from the
who want to trade in office life for a chance to editor. No responsibility for
06 THE 2021 CBI INDEX work overseas loss occasioned to any person
acting or refraining from acting
The CBI industry continues to evolve, with key as a result of material in this
developments including Cyprus abolishing its 14 PAYMENTS publication can be accepted.
On any specific matter,
reference should be made to an
Programme, a new Maltese citizenship offering, CBI and cryptocurrency already have a storied appropriate adviser. Registered
Office: Number One Southwark
and the addition of Egypt to the economic history, but with the rise of decentralised finance, Bridge, London SE1 9HL, UK
citizenship arena perhaps now is the time for jurisdictions to The Financial Times adheres to a
reconsider their stance on this new method self-regulation regime under the
07 LOOKING TO 2022
FT Editorial Code of Practice:
of payment www.ft.com/editorial code
Though family inclusiveness seems to have
reached an apex, it is expected that CBI nations 16 METHODOLOGY
will continue to enhance the integrity of their The CBI Index is built around nine pillars,
real estate offerings and may move closer to designed to measure global citizenship
harmonised due diligence standards programme features and jurisdictional
desirability
08 OPERATIONAL PROGRAMMES
Not all countries with CBI legislation are 20 KEY FINDINGS
included in the CBI Index. The question the The CBI Index’s key findings present
CBI Index asks is whether programmes are an evaluation of each country both overall
fully operational. and within the parameters of the nine
pillars
10 RESPONSIBILITY
Governments that fail to take due diligence 26 THE NINE PILLARS
seriously face a very real risk of a premature end An overview of the nine pillars that form the
to their economic citizenship programmes, as CBI Index, and where the 14 countries rank
seen recently in Europe among them
youtube.com/ Professional Wealth @FT_PWM Published in
FTPWM Management Group association with:
PWMNET.COM 3
Covid lockdowns add to the
appeal of second citizenships
WRITTEN BY YURI BENDER
Clients, he says, are particularly
INTRODUCTION
interested in island nations such
Having lost mobility during as Antigua and Barbuda, and St
the health crisis, wealthy Kitts and Nevis, although few plan I don’t believe that the
individuals are showing
increased interest in
to actually live permanently in the
jurisdictions they invest in. half-baked, politically-
citizenship by investment
While high net worth migrants
from restrictive regimes typically
motivated pressures to
schemes, though the
programmes remain
favour cities like London, Paris or clamp down on these
Los Angeles, there is a recognition
programmes will be
T
controversial among practitioners that the
he Covid-19 pandemic
more peripheral islands, as well
as providing a potential second
sufficient to suppress the
appears to have given
a new lease of life to a
passport, can serve as an ultimate
“bolthole” should things go wrong
demand side
PARAG KHANNA FUTUREMAP
colourful cross-border in the authoritarian country where
industry, which offers they make their money.
wealthy individuals and their Traditionally, clients came from
families second citizenships in Asia, Russia and the Middle East, obtaining a Maltese passport and the
return for investments into tourism but new sources of investment are protection it offered once issued.
facilities or infrastructure. also being identified. “We are seeing But following twin pressures from
Countries recently offering high- more and more clients from Africa, European regulators, and domestic
profile Citizenship by Investment and Nigeria in particular. Nigerians protests linked to the assassination
(CBI) programmes include are favouring a St Kitts passport to of journalist Daphne Caruana
Caribbean players St Kitts and Nevis, allow them to travel to London and Galizia, which led to the resignation
and Dominica, which have used CBI other places more easily,” reports Mr of prime minister Joseph Muscat in
revenues to successfully mitigate Errington. 2019, Malta replaced its Individual
the effects of national disasters, Investor Programme with a new
and Mediterranean jurisdictions, STORMS IN THE MED strategy. Maltese authorities have
Malta and Cyprus, where they have Once attractive Mediterranean hubs since promised greater transparency
encountered major political issues. have not, however, been enjoying and increased dialogue with the EU.
Both private banks and law firms the success of their Caribbean peers. A recent judicial inquiry identified
report increased interest among The Cyprus Investment Programme, a “culture of impunity” within the
clients seeking new citizenships previously popular amongst a higher echelons of government,
and passports since the advent of Russian audience, appreciative of which had spread to regulatory
the pandemic. Wealthy investors, their country’s huge influence in bodies.
say commentators, only began to the coastal resorts of Larnaca and Both Malta and Cyprus had been
appreciate mobility once it was Limassol, where Russian is widely criticised by European authorities.
abruptly withdrawn due to Covid. spoken, has been withdrawn, Mr Errington says Malta in particular
following infringement procedures raised the ire of EU neighbours
OPENING UP from the European Commission in for going against the principles of
Many popular CBI destinations 2020. membership of the economic bloc.
are once again opening up to “The Maltese and Cypriot markets EU neighbours, critical of Malta’s
international visitors. “The have trailed off, mainly due to highly lucrative scheme denigrating
Caribbean islands remain popular scandals,” says Mr Errington. Until the traditional European freedom
and are quite easy to work with,” recently, he says, Asian investors of movement concept, were left
reveals John Errington, managing planning to extract their money “jealous and sceptical, if not hostile”.
director of London-based CBI from home territory found Malta Despite this negative publicity,
specialists Errington Bose attractive, due to an efficient most commentators believe there is
Immigration Services. banking system, the relative speed of an inevitability of rival jurisdictions
4 AUGUST/SEPTEMBER 2021
INTRODUCTION SPECIAL REPORT
vying to attract wealth through CBI tax avoidance and lax vetting are On hold: the Cyprus industry is increased collaboration
Investment
schemes, particularly within the often seized on and amplified by Programme has been between competing centres, which
realist, highly competitive political opposition movements, keen to withdrawn, following all share the aim of attracting
infringement
climate facilitated by Covid-19. create a political backlash against well-qualified, high net worth
procedures from the
“The more autocracy you have, CBI strategies. European entrepreneurs.
the more you will see citizenship “This does not mean the policy is Commission in 2020 Promoters of investment
for sale in the liberal jurisdictions,” wrong,” suggests Indian-American migration, including the likes of
suggests Loretta Napoleoni, an academic Parag Khanna, founder Malta, Ireland, Singapore and
Italian political commentator who of consultancy FutureMap and the United Arab Emirates, are
analyses international finance and author of ‘Move: The forces uprooting establishing ‘Green Zone Networks’
security issues. us’, which plots future migration of states respecting each other’s
“If you know where to go and you patterns. “When they get elected, standards of immigration control,
have the money, then everything is the opposition typically follows health regulation and monitoring of
for sale,” says Ms Napoleoni. the same policy, as fundamentally residency criteria. Mr Khanna also
“The super-rich buy their way it’s not about politics or protecting believes technological innovation
into countries and are welcomed an international reputation, but is correlated to openness and
for their money. Most people in that demographics, which is a domestic, circulation of people.
country think they will spend their fiscal issue.”
money there and expect a trickle- For these smaller nations, CBI is JOINT INITIATIVES
down effect. Public opinion is mostly vital to attract physical, tangible These emerging ‘clubs’ of nations
only opposing immigration at lower investment, replacing burdensome are compared by Mr Khanna to
levels, so I don’t see regulation sovereign debt with “sovereign modern-day re-incarnations of
happening.” equity”, a concept which needs to be the Hanseatic League, a medieval
Suggestions that criminal better communicated to voters. federation of trading states in
individuals are benefiting from “I don’t believe that the half- the Baltic and North Seas, which
second passports are often over- baked, politically-motivated advanced mutual commercial
cooked, she believes. Organised pressures to clamp down on these interests of member hubs and
criminals, she says, are more likely programmes will be sufficient to protected them against external
to use covert ways to enter other suppress the demand side of the aggression.
jurisdictions, rather than these equation from millions of people Improved due diligence of
highly public channels. who want to move, and it’s an open applicants should result from such
“Terrorist organisations do not use and shut case,” says Mr Khanna. joint initiatives. “We could have
the mainstream of buying houses or “The force that wins is the one better background checks,” suggests
making investments, they prefer to favouring mobility, not the force that Mr Khanna.
lean on corrupt officials. If you are a favours suppression. The fact that “We should curb money
known criminal, you would not go there are now 100 such programmes laundering and be careful about
through an official channel,” insists tells that story very clearly.” who is allowed in simply as a mask,
Ms Napoleoni. The most recent, overarching but we should not question the right
In smaller countries, however, trend he has observed among to be able to live in a better place to
these thorny issues of security, countries participating in the CBI cure the accident of birth.”
PWMNET.COM 5
CORPORATE STATEMENT THE CBI INDEX
The 2021 CBI Index
N
ow entering its fifth year, the end of 2020, while St Kitts and Nevis in last year’s CBI Index, Montenegro
CBI Index provides a extended its limited-time offer on announced its CBI programme would not
comprehensive, data-driven applications under the Sustainable Growth be extended beyond 2021. As the
analysis of the world’s active Fund, from its original end date of Programme remains open for applications
citizenship by investment (CBI) 15 January 2021. until 31 December 2021, Montenegro will
programmes and has become known as the New investment options have also been still be included in this year’s rankings.
industry’s most reliable comparison tool for introduced since the 2020 CBI Index. While Malta discontinued its Individual
CBI programmes. It also serves as a practical St Kitts and Nevis launched a private home Investor Programme, it unveiled an
guide for individuals and entities wishing to option, under which applicants can altogether new CBI policy, which this year’s
learn more about the CBI industry, the purchase a private home worth Index will assess, along with Egypt’s new
issues that affect it, and its future direction. U$400,000, and an ‘alternative investment CBI Programme. North Macedonia is only
Last year, prolonged disruption to option,’ under which applicants can invest now establishing the necessary frameworks
worldwide travel resulting from the in local approved projects not necessarily for an international audience to fully
Covid-19 pandemic forced many CBI linked to real estate or the tourism industry. engage with its CBI offering. As such, the
programmes to adapt their processing Meanwhile, Bulgaria scrapped its CBI Index will continue to monitor its
procedures and requirements. This year, government bond investment option, but progress as it transitions from its current
programmes have continued to adjust. now offers a wide variety of qualifying phase to a fully operational programme.
Antigua and Barbuda and Grenada, for investments, such as in undertakings for The 2021 CBI Index therefore examines
example, made provisions for the virtual collective investment in transferable the CBI programmes of 14 countries, and
administration of their oaths of allegiance in securities, alternative investment funds, evaluates them against nine pillars that
February 2021 and November 2020 and a range of Bulgarian companies. reflect investor priorities. As always, data
respectively, while Vanuatu’s travel Elsewhere in Europe, despite the was collated from relevant industry
requirement remains suspended. promise of new CBI regulations in the sources, including legislation, government
In the Caribbean, two limited-time summer of 2020, the Cypriot government circulars and memoranda, programme
offers implemented in the wake of took the decision to abolish its Programme application forms and guidelines, official
Covid-19 were extended to 31 December following mounting pressure from the media and statistics channels, and direct
2021. St Lucia extended its Covid-19 Relief European Commission. In another correspondence with governments and
Bond option, originally due to expire at the unexpected exit, after its first appearance their authorised representatives.
A TIMELINE OF CITIZENSHIP BY INVESTMENT
1984 1985 1993 2009 2013 2016
St Kitts Austria Dominica Bulgaria Antigua St Lucia
and Nevis and Barbuda
Cambodia
Grenada
6 AUGUST/SEPTEMBER 2021
LOOKING TO 2022 CORPORATE STATEMENT
Reflections and
predictions for 2022
S
o far, 2021 has proved to be a well after the main applicant, questions have Visit pwmnet.com for Against the background of mounting
remarkable year for citizenship been raised as to whether spouses in these an expanded version scrutiny by multilateral bodies and
of the CBI Index,
by investment (CBI), with both jurisdictions can count as true ‘dependants.’ including detailed international organisations, it is expected
the implementation of new Indeed, this year’s CBI Index is more profiles of all 14 that increased emphasis on due diligence
citizenship by
programmes and the closure of nuanced than in previous years, penalising will continue into 2022, and there is hope
investment
longstanding and infant programmes alike. countries where family members do not programmes that the industry may move closer to
Trends have included family inclusiveness, receive citizenship with the main applicant. harmonised standards. More should be
sustained emphasis on due diligence, and Some CBI nations have been enhancing done, however, by Middle Eastern nations.
growing oversight of real estate projects their due diligence practices for many years. Although lower due diligence barriers to
available for investment under certain Malta, for example, whose due diligence entry are often a feature of newer CBI
CBI programmes. operations under the IIP already required a programmes, there is little to suggest that
Family inclusiveness seems to have hefty €7500 fee from the investor, now improvements to applicant vetting and
reached an apex in the Caribbean, where utilises two (and not merely one) external due diligence processes are being
Grenada in 2019, Dominica and St Lucia in due diligence firms – requiring an even prioritised, even as their programmes
early 2020, and St Kitts and Nevis and more substantial €15,000 fee. become better established. As
Antigua and Barbuda in late 2020, Vanuatu is also upgrading its due demonstrated by the abolition of the
expanded their definition of ‘dependant’ to diligence, having mandated in 2020 Cyprus Investment Programme, failure to
include siblings. regulations that checks be carried out by implement comprehensive due diligence
Malta’s Granting of Citizenship for an “international specialist firm” and processes in time can come with grave
Exceptional Services Regulations were requiring an extra US$3000 per consequences, including permanent
drafted to be wider than the regulations for application for its due diligence — a damage to a programme’s reputation.
Malta’s Individual Investor Programme substantial addition to the the previous This year has seen growing awareness of
(IIP), but only slightly, allowing adult US$2000. However, although Vanuatu the risks associated with, and consequent
children to apply with their parent investor checks applicants against the databases of oversight of, real estate investment
up to the age of 28, instead of 26. reputable due diligence firms, it does not options. In St Kitts and Nevis, for example,
There have been some improvements in appear that the country is working with a as of March 2021, new and existing
Bulgaria for spouses, but with Egypt also third-party firm to conduct stringent developers must submit a payment
allowing spouses to only obtain citizenship on-the-ground checks of applicants. schedule to the St Kitts Investment
Promotion Agency. This will govern the
way a project is financed, improving the
administration of funds provided to real
estate developments under the
Programme and increasing the likelihood
that developments will be completed
2017 2018 2019 2020 successfully and at pace.
Turkey Jordan Montenegro Egypt Turkey also tightened its real estate
rules. In March 2021, the country decided
Vanuatu Malta that a property that has been used to
obtain citizenship (whether through a title
deed transfer or preliminary sales contract)
could no longer be used in another CBI
application. The change limits the risk that
a real estate ‘bubble’ will form, and ensures
property is not recycled by CBI applicants.
Real estate controls are being applied in
CBI jurisdictions across the globe and
show no signs of being relaxed, and it is
expected that CBI nations will continue to
work to enhance the integrity of their real
estate offerings.
PWMNET.COM 7
CBI frameworks without
‘operational’ programmes
BANGLADESH However, CBI in Bangladesh falls
OPERATIONAL PROGRAMMES
CBI in Bangladesh finds its roots in the short of offering a clear, formal
Not all countries have operational Bangladesh Citizenship (Temporary framework and its application volume
CBI programmes, despite sharing Provisions) Order, with Article 2B(2) is non-existent.
some characteristics with those giving the government wide-ranging Unlike in many of the programmes
that do. powers to “grant citizenship of the CBI Index assesses, there is no
T
Bangladesh to any person who is a single government body tasked solely
he 2021 CBI Index analyses citizen of any state of Europe or North with administering CBI in Bangladesh.
countries with ‘operational’ America, or of any other state,” and Citizenship is broadly administered
citizenship by investment Article 4 stating that “The government by various entities, ranging from
(CBI) programmes. Such may, upon application made to it in this the Ministry of Home Affairs, to
programmes are rooted in law, subject to behalf in the manner prescribed, grant the police and the Investment
procedural rules and policies, readily citizenship to any person.” Development Authority.
promoted abroad, and have, if Although documentation on the Further, highlighting the
longstanding, processed a sizable number specific conditions for CBI in Bangladesh country’s unpopularity with investors,
of applications over their lifetime. is difficult to access, the Central Bank of only two people who naturalised as
Countries that lack one or more of Bangladesh states that citizenship may be citizens of Bangladesh obtained
these elements fall outside of the remit granted to any person who invests in citizenship through the making of an
of the CBI Index. Examples of such Bangladesh, including in a recognised investment between 1988 and 2016.
countries include Bangladesh, Papua financial institution, and does not Both were granted citizenship in 1997,
New Guinea, and Samoa. repatriate that investment. more than 20 years ago.
CBI in Bangladesh
is held back by the
fact that there is no
single government
body overseeing
the application
process
8 AUGUST/SEPTEMBER 2021
OPERATIONAL PROGRAMMES CORPORATE STATEMENT
PAPUA NEW GUINEA character references from two Papua Samoa received a approved, the investor is granted a
total of two CBI
Over in Oceania, in 2016, Papua New New Guinean citizens who have known permanent resident permit valid for
applications
Guinea passed amendments to its them for at least two years. between 2017/2018 three years. The investor must reside in
Constitution and Citizenship Act to make CBI stands as an interesting route to and 2019/2020, Samoa for at least 15 days per year
with neither ending
provision for investors to obtain citizenship particularly for those who do in citizenship being
during the three-year period and comply
citizenship of the country. not have links to the host country. granted with the investment plan to be able to
Before being able to apply for Because Papua New Guinea insists on make the final application for citizenship.
citizenship of Papua New Guinea, those links even for investors, and limits Compared to Bangladesh and Papua
investors must make a K150,000 those who can access dual citizenship, it New Guinea, Samoa offers some of the
(US$42,800) investment in a company suffers from a lack of industry same features as the more popular CBI
or business in Papua New Guinea, and prominence, despite its low investment jurisdictions. It has, for example, a
seek a position and work permit from the threshold. Citizenship Investment Committee,
Department of Industrial Relations. application fees (albeit very expensive),
They must then apply for an Entry SAMOA due diligence fees and provisions to
Permit for Businesspersons/Investors. On 31 January 2017, Samoa’s Citizenship allow for an independent specialised
Unlike some of the world’s most Investment Act and Citizenship third party to perform background
popular CBI programmes, Papua New Investment Regulations entered into checks.
Guinea’s rules are aimed at those who force and Samoa began accepting However, Samoa’s high investment
already have ties to Papua New Guinea applications under its newly instated CBI threshold, minimum wealth requirement
and wish to relocate to the country. This scheme. (a feature shared, but then dropped, by
is because citizenship applicants must Investors are eligible to apply for CBI St Lucia), arduous investment plan
intend to permanently reside in Papua in Samoa if they intend to make a requirement, and taxing physical
New Guinea, and either renounce their minimum of WSt4m (US$1.55m) presence requirement, have had an
citizenship of origin or apply to be ‘qualifying investment’ within three years overall negative impact on investor
approved for dual citizenship. The latter of the date the application is granted, interest. According to MCIL’s past three
option, however, is only available to and, at the time of application, have a annual reports, Samoa received a total of
citizens of Australia, Fiji, Germany, New minimum net worth of WSt2.5m two CBI applications between the years
Zealand, Samoa, the UK, the US and (US$971,000). 2017/2018 and 2019/2020. Of these
Vanuatu, severely reducing the pool of Applications must be accompanied applications, one was withdrawn by the
prospective applicants. Additionally, by an investment plan for review by the applicant and the other was placed on
when making an application for Ministry of Commerce, Industry and hold due to missing documentation and
citizenship, investors must submit Labour (MCIL). If an application is unpaid due diligence fees.
PWMNET.COM 9
EU CBI: due diligence
and lessons learnt
reputation of a host country and its PROGRAMME RESPONSES
RESPONSIBILITY
programme, and often have widespread Cyprus
Governments that fail to take consequences for the entire industry. Having made several attempts to
background checks seriously risk a Due diligence concerns linked to improve its due diligence over the years,
premature end to their citizenship by European CBI programmes, for example, including by implementing a ban on
investment programmes. have led to tensions between CBI nations ‘high-risk persons’ in 2019 and
and the European Commission (EC). In a announcing new regulations tied to
A
January 2019 report, the EC highlighted anti-money laundering legislation in June
multi-layered due diligence concerns related to the security, money 2020, years of lax vetting procedures
system is an essential laundering, tax evasion and corruption have come back to bite Cyprus.
element of any successful risks it believed these programmes posed. In August 2020, an investigative series
citizenship by investment In October 2020, it commenced by Al Jazeera revealed that Cyprus had
(CBI) programme, as it combines infringement procedures against Cyprus granted citizenship to more than 50
internal government checks with and Malta for granting economic high-risk or politically exposed persons
research by specialist third-party due citizenship to individuals without a since the Programme’s inception. Further,
diligence firms, and assessments by ‘genuine link’ to the two countries, and in October 2020, Al Jazeera published a
regional and international bodies. again referenced the risks that it deemed video report, recorded one year prior, that
Failures in due diligence harm the “inherent in such schemes.” seemingly evidenced the readiness of
The European
Commission has
raised concerns that
CBI programmes
pose security,
money laundering,
tax evasion and
corruption risks
10 AUGUST/SEPTEMBER 2021RESPONSIBILITY CORPORATE STATEMENT
certain government officials and mounting due diligence scandals. Indeed, The sun set on the 2021, confirming that the Bulgarian
Cypriot CBI
registered service providers to help in November 2020, Malta launched a Immigrant Investor Programme was
programme as lax
applicants obtain citizenship in wholly new CBI policy, enshrined in the due diligence checks alive and ready for remodelling.
contravention of the Programme’s rules. Granting of Citizenship for Exceptional caused irreparable Traditionally one of Europe’s less
reputational damage
This revelation, coupled with the EC’s Services Regulations. popular CBI destinations, it will be
move to open infringement proceedings, The policy aims at clarifying the interesting to observe whether the
ultimately led to the abolition of the ‘genuine link’ between applicants and changes lead to an increase in
Cyprus Investment Programme in Malta, requiring them to reside in Malta applications in the coming year. With
February 2021. It is worth noting that for either 36 months or 12 months no external component to its vetting
despite this, the EC issued a reasoned (depending on the investment made), procedures, Bulgaria would nonetheless
opinion against Cyprus in June 2021, show physical presence in Malta, and do well to tighten its due diligence
noting that although Cyprus is no longer build ‘connecting factors’. It also takes procedures and avoid the same pitfalls
accepting new applications, it has steps to improve due diligence, requiring Cyprus was unable to address in time.
continued to process pending applications applicant clearance from two external due
and that the matter may be escalated to diligence providers. Montenegro
the European Court of Justice. A June 2021 letter of formal notice In March 2021, Montenegro announced
from the EC concerning Malta’s latest that its short-lived CBI programme would
Malta policy only raised matters connected to be wound down by 31 December 2021
Like Cyprus, Malta has also ended its the ‘genuine link.’ — the Programme ostensibly causing a
longstanding CBI programme, the barrier to Montenegro’s EU accession.
‘Individual Investor Programme’, in the Bulgaria It should be noted, however, that
second half of 2020. However, unlike EU scrutiny does not seem to have Montenegro’s decision may equally be
Cyprus, the Programme was closed deterred Bulgaria’s parliament from tied to low uptake, with only
because it had reached its prescribed approving several amendments to 131 applications received, instead of the
application cap, and not because of Bulgaria’s Citizenship Act in in February 2000 envisioned by the government.
PWMNET.COM 11New horizons: the rise
of digital nomadism
citizenship and residence by investment Even countries with high immigration-
NOMAD VISAS
industries. The Covid-19 pandemic and generated income relative to gross
CBI jurisdictions stand to benefit the ascent of remote working, however, domestic product, such as some of the
from the new work-from-home have led to the unveiling of a new, yet CBI nations featured in this Index, have
normal, and from the employees comparable immigration system: the therefore begun to implement DNV
who want to trade in office life for digital nomad visa (DNV). rules to find further ways of tapping
Sometimes referred to as a remote- into the global mobility market.
a chance to work overseas worker visa, this allows a person to live
in a foreign country for an extended EXPLORING AVAILABLE
F
period and work remotely for DIGITAL NOMAD VISAS
or the countries implementing companies and individuals based Among European CBI jurisdictions,
them, citizenship by elsewhere. The visa usually specifies Malta has introduced a one-year
investment (CBI) programmes that the holder does not become ‘Nomad Residence Permit’ that costs
bring several opportunities. subject to additional income tax €300 and allows workers to stay in, and
Foremost among these is the ability to outside of that person’s normal country work remotely from, Malta for a year or
provide a valuable framework in which of tax residence. DNVs allow for an less, depending on the length of their
immigration rights are exchanged for extended stay compared to standard intended stay. To ensure that applicants
non-tax revenue. For many years, this tourist visas, but also prevent the holder do not become a burden, the
framework has been unique to the from undertaking local employment. government requires persons to have a
The Covid-19
pandemic has
forced a radical
rethink in how we
work, with millions
of people forced to
make their home
their new office
12 AUGUST/SEPTEMBER 2021NOMAD VISAS CORPORATE STATEMENT
gross income threshold of €2700 per widely benefit from such a programme, Thanks to advances an expected minimum income of
in communications
month, pass a background check, and particularly if it were to primarily target technology and
US$50,000. The NDR visa is valid
possess health and travel insurance. regional workers from Australia, infrastructure, for two years from the date of arrival
Evaluating the permit’s potential for New Zealand, and other countries many people can in Antigua and Barbuda, and visitors
now work from
profitability, Malta’s parliamentary in Oceania. almost anywhere
are required to maintain their own
secretary for citizenship, Alex Muscat, Perhaps the region that saw the in the world health insurance plan while staying in
stated that Malta estimates that “a digital highest uptake in the implementation the country.
nomad spends roughly €30,000 a year of DNVs, starting with Barbados in Dominica inaugurated its version of a
in [the] country” — a sum “close to what June 2020, was the Caribbean, DNV, dubbed ‘Work in Nature’ (WIN),
tourists spent […] in 2019” and equated including some of its CBI jurisdictions. earlier this year. The visa provides
the yearly expenditure of one digital The island nation of Antigua and applicants with the opportunity to work
nomad to “roughly what 260 tourists Barbuda was the first such CBI remotely for up to 18 months on the
would spend in a day.” jurisdiction to announce a DNV island. Fees for the WIN visa are
Meanwhile, as part of its Covid-19 programme. Named the ‘Nomad US$800 for individual applicants, and
recovery plan, it is speculated that the Digital Residence (NDR)’ and US$1200 for families, with an additional
Pacific island state of Vanuatu will launched in October 2020, the US$100 application cost. Businesses
introduce a Remote Worker Visa for programme is for remote workers able may also apply for their employees, at a
entrepreneurs, freelancers and to show both sufficient means to cost of US$800 for up to four
teleworkers. As a secluded destination support themselves (along with any employees, plus US$500 for each
with few Covid-19 cases, Vanuatu may family members joining them), and additional employee after the fourth.
PWMNET.COM 13Cryptocurrency and
CBI convergence
PAYMENTS
CBI and cryptocurrency
already have a storied
history, but with the rise of
decentralised finance,
perhaps now is the time for
jurisdictions to reconsider
their stance on this new
method of payment.
T
he economic and travel
uncertainties originating
from the Covid-19 crisis
have led many to reconsider
both their personal priorities and their
investment portfolios. Two
beneficiaries of this re-evaluation
process have been citizenship by
investment (CBI) and cryptocurrency
— owing to their shared capability to
provide greater financial freedom and
independence from a particular
government’s decision-making.
Perhaps not surprisingly, along with this
surge has been increased discussion as
to whether CBI programmes should
accept cryptocurrency as a form of
payment.
It is unclear whether cryptocurrencies as payment for
the benefits of
AN OLD DEBATE citizenship.
It is not the first time that questions
cryptocurrency use
will be deemed However, this is not to say that there Vanuatu was
have been raised about the potential is no recognition of the growing appeal
rumoured to have
enough by CBI
governments to
ties between CBI and cryptocurrency. outweigh some of
of cryptocurrency and of its underlying
In 2017, Vanuatu was rumoured to have
become the first country with an active
the challenges
posed by it
blockchain technology, as well as of
some of the arguments in favour of
become the first
CBI programme to accept bitcoin as a
form of payment for its citizenship;
allowing cryptocurrency payments
from prospective CBI investors.
country with an
however, these reports were active CBI
LOWER TRANSACTION COSTS
programme to
subsequently refuted by the nation’s
government. Similarly, in summer 2018, Cryptocurrency payments can lower
Antigua and Barbuda took steps to
integrate cryptocurrency in the nation’s
transactions costs for international
payments through the elimination of
accept bitcoin as a
CBI Programme, only to later clarify
that payment must still be made in US
banking fees while also allowing for
greater transaction mobility. Moreover,
form of payment for
dollars. Indeed, to date, no CBI the change would be easier to its citizenship in 2017
government accepts bitcoin or other implement following the digitisation of
14 AUGUST/SEPTEMBER 2021CASE STUDY CORPORATE STATEMENT
CBI units and the Covid-19 cyber FIGHTING FINANCIAL CRIME BALANCING ACT
acceleration witnessed in the last 18 Some reports suggest that the reality While cryptocurrency is likely to
months. of cryptocurrency being a magnet for remain on investor radars for some
financial crime is likely overstated, with time, it is unclear whether the benefits
MORE EFFECTIVE DUE only 0.5% of total transactions of cryptocurrency use will be deemed
DILIGENCE estimated to be used for illicit activity. enough by CBI governments to
High-end due diligence is costly. An In the case of bitcoin, transactions are outweigh some of the challenges
industry-wide, federated, permissioned public, traceable and permanently posed by it — the most obvious ones
blockchain could streamline some of stored in the network, and users must being the reputational risk associated
the vetting processes by allowing typically perform KYC and anti-money with digital currencies and their
access to immutable know-your-client laundering requirements on reputable connection to illicit activity, as well as
(KYC) data records on investors stored crypto exchanges. Rather than hinder a Owing to the huge cryptocurrencies’ volatility and the
on the blockchain by financial actors. country’s source of funds analysis for popularity of dangers of being overexposed to
cryptoassets such
Ultimately, this could improve due the investor, blockchain’s immutable as bitcoin, them. What is certainly clear is that
diligence in a manner that is cost ledgers could therefore help track the dedicated ATMs the industry, and investors, will
have started
effective and does not significantly source of funds and limit financial continue to watch this development
appearing in some
increase administrative burdens. crime exposure. countries closely.
PWMNET.COM 15Overview of the
methodology
Arriving at an appropriate rating for PILLAR 1: FREEDOM OF
METHODOLOGY
the nine pillars involves a complex MOVEMENT
The CBI Index is built around nine combination of benchmarking, Freedom of movement within and
pillars, designed to measure global statistical analysis, and comparative between countries is of paramount
citizenship programme features and investigation. importance to any individual seeking
jurisdictional desirability Each of the nine pillars is scored out second citizenship. This holds true
of a maximum of 10 points, calculated whether the individual wishes to travel
T
on an averaging basis from the scores for work purposes, to visit family, or
he CBI Index is a rating of composite indicators and for leisure.
system designed to measure sub-indicators. The maximum score In the 2021 CBI Index, the Freedom of
the performance and appeal attainable by a programme is 90, with Movement Pillar measures the relative
of global citizenship by all final scores also expressed in terms strength of each country’s citizenship on
investment (CBI) programmes across a of a percentage of the total points the basis of three equally weighted
diverse range of indicators. Its purpose available. For example, a perfect factors: the number of destinations to
is to provide a rigorous and systematic 90-point score would be expressed as which a country’s passport allows travel
mechanism for appraising programmes, 100 per cent. without restriction, the number of prime
to facilitate the decision-making It should be noted that, owing to the business hubs to which it provides
process for individuals considering vast number of statistics, indicators and access, and the degree to which a given
them, and to bring value to the sub-indicators available for analysis, no citizenship provides settlement rights in
CBI industry. single approach exists for the rating of other nations.
All countries with operational CBI CBI programmes. In framing the CBI It is assumed, for the purposes of this
programmes are assessed by the Index, Index, however, reliance was placed on pillar, that the passport used for travel is
which, in 2021, include the following 14 official sources and publications from an ordinary passport, and not a
nations: Antigua and Barbuda, Austria, institutions of the highest international diplomatic or service passport.
Bulgaria, Cambodia, Dominica, Egypt, standing, as well as on the specialised Emphasis was placed on the total
Grenada, Jordan, Malta, Montenegro, input of industry experts, whose number of countries and territories that
St Kitts and Nevis, St Lucia, Turkey, and contributions and responses were used may be visited without applying for a
Vanuatu. After officially opening in to obtain and interpret both qualitative visa. This includes both visa-free and
2020, Egypt becomes the latest and quantitative data used in the visa-on-arrival destinations, as neither
addition to the CBI Index, while Cyprus construction of the CBI Index. requires receipt of a visa in advance of
is no longer included due to the It should further be noted that, travel. Government and other official
Programme’s recent abolition. whenever possible, points were awarded sources, including data from the UN
The primary methodological based on evidence from official sources World Tourism Organisation, were used
objective of the CBI Index is to isolate and the letter of the law. Because to obtain up-to-date information on visa
factors — or ‘pillars’ — that satisfactorily announcements of changes to CBI requirements for holders of each of the
measure programme features and programmes are often made well in 14 passports under evaluation.
jurisdictional desirability. The nine pillars advance of their actual implementation, As business travel is a prime
that constitute this year’s CBI Index are: the CBI Index limits its evaluations to consideration for prospective global
changes confirmed by governments citizens, a passport’s ability to provide
1. Freedom of Movement themselves and associated legal facts. access to the world’s leading economic
2. Standard of Living Finally, the 2021 CBI Index does not and financial centres was also evaluated.
3. Minimum Investment Outlay consider temporary measures resulting The World Bank’s Ease of Doing
4. Mandatory Travel or from the Covid-19 crisis, except in the Business Index, the Heritage
Residence Certainty of Product Pillar, which takes Foundation’s Index of Economic
5. Citizenship Timeline into account a programme’s ability to Freedom, the World Economic Forum’s
6. Ease of Processing respond and adapt to present needs. Global Competitiveness Report, and
7. Due Diligence The more general impact of the Covid- other authoritative sources were used to
8. Family 19 pandemic on a nation’s wellbeing is arrive at a list of the top centres for
9. Certainty of Product factored in the Standard of Living Pillar. international business.
16 AUGUST/SEPTEMBER 2021METHODOLOGY CORPORATE STATEMENT
For both of these indicators, points as a relative value, within the context of affordable was selected for evaluation.
were awarded on a descending scale, with the other CBI countries. For example, Dominica offers a single
the highest score received by the country Reliance was placed on the UN Human applicant the choice between a direct
with visa-free or visa-on-arrival entry to Development Index for factors such as life contribution to the government and an
the highest number of foreign countries expectancy, education, safety and income. investment in pre-approved real estate,
or territories. Countries’ latest annual economic with the latter being the more expensive
While the freedom to access a high performance statistics were used to alternative. The first option was therefore
number of jurisdictions is of critical indicate present-day economic used to determine the minimum
importance to the citizenship investor, circumstances, as well as growth potential investment outlay for the Dominica
many also look at second citizenship as a — a particularly important indicator for CBI Programme.
gateway to ensuring long-term security investors. Data was sourced from the This Pillar considers pure investment
and stability for themselves and their World Bank’s Open Data Catalogue to requirements, exclusive of minor fees that
families. The settlement rights measure ensure accuracy and consistency. This may also apply. These may include
reflects this, making CBI countries that means that, for the 2021 CBI Index, application, processing or due diligence
are part of broad free-movement regimes statistics from 2020 were used. The fees that do not significantly alter the cost
more attractive. reader should thus be aware that this of a citizenship application. However,
In order to assess settlement rights, year’s data sets were somewhat distorted where countries had sizeable additional
value was placed both on the number of by the Covid-19 pandemic. fees amounting to US$15,000 or more,
jurisdictions accessible within a given free- The Standard of Living Pillar also such fees were taken into account.
movement regime and on the nature of examines a country’s ability to promote The highest number of points was
the rights afforded to the citizen, with freedom, and to protect the rights of awarded to the country requiring the
distinctions drawn for rights that are individuals to act and to express lowest minimum investment.
conditional on a citizen undertaking work. themselves without undue constraints.
The EU, the CARICOM Single Market Civil liberties and political rights within a PILLAR 4: MANDATORY TRAVEL
and Economy, the Association of jurisdiction were rated as part of this OR RESIDENCE
Southeast Asian Nations, the Community exercise, using sources such as Freedom The Mandatory Travel or Residence Pillar
of Sahel-Saharan States, and the Common House’s Freedom in the World Index. examines the travel or residence
Market for Eastern and Southern Africa conditions imposed on applicants both
free-movement regimes were also PILLAR 3: MINIMUM before and after the granting of
assessed against the total average UN INVESTMENT OUTLAY citizenship. Often busy with running a
Human Development Index score of the The Minimum Investment Outlay Pillar business or with international travel of
free-movement bloc under evaluation. measures one of the most practical and their own, citizens of the world have little
foremost considerations of CBI: how much opportunity to fulfil minimum stay
PILLAR 2: STANDARD OF LIVING capital is required for the investor to requirements.
The Standard of Living Pillar is a measure become an eligible applicant for the A careful examination of the laws,
of the quality of life offered by the 14 CBI programme of their choosing. regulations and policies pertaining to
jurisdictions under assessment. This pillar is The cost of applying for CBI increases each CBI programme was undertaken.
vital to those who yearn to relocate while with the number of dependants — or First, it was determined whether any such
securing a prosperous and fulfilling qualifying family members — included in prerequisites applied. Second, post-
lifestyle. Similarly, it is key to those wanting an application. In some jurisdictions, this citizenship requirements were examined,
to take advantage of local business increase is proportional, while in others the as well as the consequences of failing to
opportunities or needing to transfer and cost only increases following the inclusion fulfil them. Third, the extent of the travel
safeguard their assets. of multiple dependants. To remain or residence requirements were analysed,
For this Pillar, a wide range of official consistent across all jurisdictions, it was with physical visits for the purposes of
indicators were considered to allow for an assumed that one applicant was applying attending an interview, swearing an oath
accurate assessment. Consequently, for citizenship alone (i.e., the application of allegiance or giving biometric
establishing an appropriate benchmark consisted of a single applicant). information all considered.
was paramount, as a country’s score must Where a CBI programme offers It is important to note that physical,
be viewed both as an absolute value and multiple investment options, the most rather than nominal, requirements were
PWMNET.COM 17taken into consideration. layer of certainty for the applicant who is PILLAR 7: DUE DILIGENCE
In line with previous pillars, scrutiny urgently in need of second citizenship. The Due Diligence Pillar focuses on
focused on the main applicant, rather each nation’s commitment to ensuring
than any dependants that may be PILLAR 6: EASE OF that their programme remains
included in the citizenship application. PROCESSING transparent and effective at evaluating
As having year-round freedom to The Ease of Processing Pillar measures potential candidates for citizenship. It is,
travel is a highly valued liberty, the end-to-end complexity of the CBI therefore, a measure of each
programmes that waived both residence application process. In some programme’s integrity.
and travel requirements achieved the jurisdictions, the application process can The CBI Index focuses on the ability
best score, followed by those with be a labour-intensive and painstaking of governments to obtain information
minimal requirements. The lowest scores task that is time-consuming for the on and from applicants, such as by the
were attained by programmes with applicant; in others, it is streamlined and performance of internal and external
extensive requirements. the applicant receives clear directives on due diligence checks. Indicators
The scoring system under the how to proceed. The overall comprise police certificate requirements
Mandatory Travel or Residence Pillar effortlessness of the application process — including the number of nations from
combines the subtotals for mandatory is a particularly important component which a certificate must be provided —
travel requirements and residence and the promise of a smooth, hassle-free as well as requests for fingerprints or
requirements to yield the total pillar process can generate readiness to biometric data.
score. engage with a programme. Emphasis was also placed on a
Multiple indicators were considered, country’s ability to gather evidence on
PILLAR 5: CITIZENSHIP commencing with entry qualifications, the applicant’s source of funds, as this is
TIMELINE such as previous business experience, a a core step in denying citizenship to
The Citizenship Timeline Pillar looks at proven track record of achievement or those profiting from, or involved in, the
the average time taken for citizenship to fluency in a language. Knowledge of financing of illicit activity.
be secured by the applicant. local history or culture assessments and Increasingly, strict anti-terrorism and
The speed at which application forms interview requirements were also anti-money laundering legislation has
and supporting documentation are weighed. prompted some governments to
processed, and the steps involved in By its very nature as a naturalisation exclude persons of certain nationalities
approving an application, vary between process, CBI involves a significant from their programmes or to restrict
programmes. Therefore, a thorough amount of paperwork, including both funds transferred from certain
inspection of applicable laws, forms and supporting documents. jurisdictions, in order to ensure
regulations, and policies was made to Having the support of an official compliance with international sanctions.
determine the official processing times government website and of a dedicated These trends are included among this
mandated by each jurisdiction. CBI body to seek and obtain clarification pillar’s indicators.
Extensive reliance was also placed on was thus a factor in awarding points to a The greater a country’s ability to
the first-hand experience of applicants, programme. perform background checks on
agents and other stakeholders, whose Extensive communication with applicants, the higher the score attained.
contributions proved to be an invaluable advisors and legal experts is required
tool in ascertaining citizenship timelines. where a jurisdiction mandates the PILLAR 8: FAMILY
One of the key merits of CBI purchase of real estate or other assets, The Family Pillar measures the extent to
programmes is their ability to provide a and hefty paperwork must also be which investors can obtain citizenship
rapid route to second citizenship; as submitted as evidence of that purchase. with their immediate and extended family.
such, the highest scores were awarded to Therefore, countries with compulsory The CBI Index recognises that the rise
the programmes with the shortest purchasing requirements were deemed of increasingly complex family
turnaround times. to burden the application process. relationships is driving investors to seek
Additional merit was given to Programmes with fewer demands programmes that allow for a more diverse
programmes offering fast-track placed on the applicant, and with range of family members to be included
processing options (even if at an relatively straightforward procedures, under a primary application. Indeed, while
additional fee), as these provide an extra achieved higher scores for this pillar. the large majority of CBI programmes
18 AUGUST/SEPTEMBER 2021METHODOLOGY CORPORATE STATEMENT
provide for the inclusion of spouses and investors with a means of differentiating a
minor children, only a handful of programme’s relative robustness. THE RESEARCHER
countries do so for adult children and ‘Longevity’ measures the age of a
extended family. Introducing a further given programme. ‘Popularity and The CBI Index was created by James
layer of nuance to its scoring system, this renown’ evaluates the number of McKay, a research consultant and
year’s CBI Index also draws a distinction applications and naturalisations under the founder of McKay Research with
between family members who are each programme per year, as well as a more than 14 years of experience in
allowed to apply with, and obtain programme’s eminence in the industry. the design and execution of complex,
citizenship at the same time as, the main As applicants and service providers data-driven research and analysis
applicant, and those who obtain prize continuity throughout the projects. Having read psychology and
citizenship at a later stage and as a application process and beyond, the statistics at University College London,
consequence of the main applicant stability of each programme was also Mr KcKay provides strategic custom
having already received citizenship. assessed. Here, importance was placed research and consulting solutions
Multiple family member categories on whether any calls to end a particular across a wide range of sectors, and
were considered, with points being programme have been made by actively works with some of the world’s
awarded for adult children, parents, authorities within or external to the CBI biggest independent providers of
grandparents and even siblings. jurisdiction. market intelligence across several
Additional merit was also given to Additionally, countries with no cap on industries including investment,
programmes with provisions for family the number of applications that can be technology, and manufacturing.
members of the main applicant’s spouse. processed over the life of the programme Mr McKay, who used guidance
Additionally, the degree of flexibility scored more highly than jurisdictions that from the OECD’s Handbook on
within each of these categories can differ imposed a yearly maximum or a fixed Constructing Composite Indicators,
radically from programme to programme. total over a given period. For example, employed a three-stage process
In the adult children category, for Montenegro’s CBI programme is both to produce the latest version of
example, programmes that allow for the time- and volume-limited, with the the CBI Index. The first phase
inclusion of children aged over 18 years government planning to end the scheme involved comprehensive primary and
with few restrictions achieved the most after 31 December 2021 and limiting the secondary research to chart all major
points. Those that require proof of a high total number of investors to 2000. developments in the world of economic
degree of dependency — for example The reputation of a programme was citizenship over the past 12 months.
with a requirement that the child is in full- determined by the amount of negative The second phase comprised a detailed
time education and fully supported by the press or the number of scandals it has exploration of official macroeconomic
main applicant — achieved fewer points. been linked to, affecting investors’ and programme statistics to be used
As inclusivity has become an issue of broader perceptions of a given country. in evaluating CBI Index country
global importance and increasingly Just as important, however, is evidence performance. The third and final
relevant to the CBI industry, a point was that programme funds are being utilised stage involved critically analysing and
awarded to those programmes that make for social good. Points were awarded for a inputting all data collected throughout
provision for dependents living with a jurisdiction’s transparent use of CBI funds, the research process, paying careful
disability. for example for the development of attention to maintaining the statistical
domestic healthcare, education, tourism continuity and integrity of the original
PILLAR 9: CERTAINTY OF and other infrastructure. index architecture.
PRODUCT Lastly, ‘adaptability’ reflects a After a comprehensive review
The Certainty of Product Pillar programme’s ability to rapidly respond to, and methodological update for
encompasses a range of factors that and sometimes even predict, the needs of the 2020 edition of the CBI Index,
measure a programme’s certainty across applicants and the industry. More points the nine-pillar index architecture
five different dimensions: longevity, were awarded to jurisdictions that have now provides investors with an
popularity and renown, stability, shown capacity to communicate with enhanced toolset with which to
reputation and adaptability. With the CBI applicants, prospective applicants and measure the performance and
industry continuing its rapid growth, it is stakeholders, and to tweak their appeal of global citizenship by
more important than ever to provide requirements accordingly. investment programmes.
PWMNET.COM 19You can also read
