High-net-worth individuals looking to establish citizenship outside their home country should look to the Caribbean, according to an index from Professional Wealth Management, a Financial Times publication.
The index identified 12 countries with citizenship by investment programs and ranked them based on seven key factors. The top five countries are all in the Caribbean, where some of the longest-running programs are based.
“Considering the stability and longevity of the programs in the Caribbean, it is no surprise that the Caribbean jurisdictions ranked in the CBI Index’s top five positions,” according to the index.
Citizenship by investment (CBI) programs give individuals a way to establish citizenship in a country in addition to their home country that is easier and faster than traditional paths to citizenship, and give host countries a way to attract capital and build up their economies.
For example, International Monetary Fund data shows that the CBI program in St. Kitts and Nevis, a pair of islands in the Lesser Antilles, accounted for 12% of national GDP in 2015, and helped cut the national debt to 68% of GDP, from 159% in 2010, according to the index.
“The trend will accelerate to attract those with capital, in need of stability or simply not wishing to be subjected to the whims of their own government,” Natacha Onawelho-Loren, head of Legal, Trust and Fiduciary at the Salamanca Group in Geneva, said in the report.
Emmanuel Nanthan, ambassador and head of the Citizenship By Investment Unit in the Commonwealth of Dominica, noted that “obtaining a second or third citizenship does not necessarily change one’s identity, but rather it broadens the opportunities available to a person, whether it be venturing into another market or calling a new place home.”
St. Kitts and Nevis established the first CBI program in 1984, according to the index. Austria created a program the following year, but CBI programs were relatively rare until 2008, when eight new countries established their own programs.
Although Canada started offering investor visas in the 1990s, it ended its program in 2014. The United States gives foreign investors resident status under the EB-5 program if they invest at least $500,000 in a business that creates or preserves at least 10 jobs, but stops short of granting citizenship.
The index ranked programs based on seven factors, awarding a maximum of 10 points in each category:
- Freedom of movement, which considers how many countries and business hubs the passport gives the holder access to. European programs dominated in this category.
- Standard of living, although it’s important to note that not everyone seeking a second citizenship would move full time to the new country. This measure also considered a host country’s “ability to promote freedom, and to protect the rights of individuals to act and to express themselves without undue constraints.”
- Minimum investment outlay. There are big differences in the minimum investment required to qualify for CBI programs. The index didn’t consider application and due diligence fees that investors may incur, which can be considerable and increase with spouses and dependents.
- Mandatory travel or residence. HNW individuals may not have extensive time to fulfil minimum stay requirements. Programs with few restrictions on in-person application or residence requirements received a higher score.
- Timeline to acquiring citizenship. Some countries offer faster turnaround times on applications and were rated more favorably.
- Ease of processing. Some countries required language fluency or familiarity with local history and culture as part of the approval process.
- Due diligence. The report noted that CBI programs have the potential for abuse from people looking to escape money laundering or terrorism financing laws. The index measured a program’s due diligence process in weeding out applicants with those connections.
Best Countries for Investment: Caribbean Countries
Total points: 63
The best country in the index for investors interested in dual citizenship, Dominica launched its program in 1993. It scored 10 out of 10 points for minimum required investment (a $100,000 contribution to the Government Fund, or a $200,000 investment in designated real estate), mandatory travel (there isn’t any), ease of processing (the application process is fast and transparent) and due diligence (officials use “unique data collection and due diligence features” to vet applicants).
If investors do choose to spend time in Dominica, English is the official language and the currency is pegged to the U.S. dollar.
St. Kitts and Nevis
Total points: 61
With a total score of 61 out of 70, St. Kitts and Nevis came in just behind Dominica. The two countries tied in freedom of movement, mandatory travel, ease of processing and due diligence. However, the St. Kitts program is more expensive at $250,000, and the standard of living is slightly lower.
Total points: 60
Investors can qualify for Grenada’s CBI program by making a $200,000 contribution to the National Transformation Fund or a $350,000 investment in a government-approved real estate project.
The program, established in 2013, boasts one of the simplest approval processes, with no interview or mandatory travel, no business experience and no language requirement, according to the index. English is the official language.
Antigua and Barbuda
Total points: 55
The former British territory gives investors three ways to become citizens: through a $200,000 contribution to the National Development Fund, a $400,000 investment in a government-approved real estate project, or a $1.5 million investment in a government-approved business project.
Investors must sign an oath of allegiance (though they’re not required to relinquish their original citizenship), and spend at least five days on either of the islands within five years of being granted citizenship.
Total points: 53