A GUIDE TO GLOBAL CITIZENSHIP - THE 2018 CBI INDEX - in association with - Professional Wealth ...

 
A GUIDE TO GLOBAL CITIZENSHIP - THE 2018 CBI INDEX - in association with - Professional Wealth ...
Special Report

    A GUIDE
 TO GLOBAL
CITIZENSHIP
    THE 2018
   CBI INDEX

     in association with
A GUIDE TO GLOBAL CITIZENSHIP - THE 2018 CBI INDEX - in association with - Professional Wealth ...
CORPORATE STATEMENT MAP

                                         Austria

                                                Bulgaria
                                                             Turkey
      St Kitts
     and Nevis

                    Antigua
                  and Barbuda
                                       Malta            Cyprus
                                                                      Cambodia
                      Dominica
                                               Jordan
                            St Lucia
                                                                                 Vanuatu
                    Grenada

2   AUGUST/SEPTEMBER 2018
A GUIDE TO GLOBAL CITIZENSHIP - THE 2018 CBI INDEX - in association with - Professional Wealth ...
CONTENTS
August/September 2018 pwmnet.com                                                                               cbiindex.com
                                                                                                                                  Published by:

  SPECIAL REPORT
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  CITIZENSHIP
                                                                                                                                  Editor-in-Chief
                                                                                                                                  Yuri Bender 6376
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  THE 2018
                                                                                                                                  Deputy Editor
                                                                                                                                  Elisa Trovato 6374
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  CBI INDEX
                                                                                                                                  Chief Sub-Editor
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04       INTRODUCTION                                              12   THE CRYPTOCURRENCY CHALLENGE                              Annual subscriptions:
                                                                                                                                  £415 | €525 | $675
         CBI schemes offer individuals freedom of movement              Some jurisdictions have been quick to embrace             Subscription Enquiries:
                                                                                                                                  tel: +44(0)20 7873 4240,
         while providing vital funds to what are often                  cryptocurrencies while others have been wary to do        pwm@ft.com
         cash-strapped nations, yet continue to draw                    so, yet all will have to deal with the phenomenon         Change of Address
         criticism                                                                                                                Notification

                                                                   13   DUE DILIGENCE
                                                                                                                                  pwm@ft.com

06       THE CBI INDEX 2018                                             As more countries enter the citizenship market, due
                                                                                                                                  © Financial Times 2018

         Since last year, the citizenship by investment industry        diligence will be a defining element of differentiation
                                                                                                                                  PWM is a trademark of Financial
         has seen significant changes, from programmes                  between their programmes                                  Times. “Financial Times” and
                                                                                                                                  “FT” are registered trademarks
         lowering their minimum investment requirements, to
                                                                   14   DUE DILIGENCE IN THE CARIBBEAN
                                                                                                                                  and service marks of the
         fostering accountability among stakeholders                                                                              Financial Times Ltd. All rights
                                                                                                                                  reserved. No part of this
                                                                        The Caribbean CBI programmes are generally                publication may be reproduced
07       A HISTORY OF CBI                                               associated with far-reaching due diligence, explains
                                                                                                                                  or used in any form of
                                                                                                                                  advertising without prior
                                                                                                                                  permission in writing from the
         St Kitts and Nevis was the first country to launch a           Heyrick Bond Gunning, CEO of S-RM                         editor. No responsibility for loss
         CBI programme in 1984, while Jordan launched its                                                                         occasioned to any person acting

         scheme in 2018                                            16   METHODOLOGY                                               or refraining from acting as a
                                                                                                                                  result of material in this
                                                                                                                                  publication can be accepted. On
                                                                        The CBI Index is built around seven pillars,              any specific matter, reference
08       DEMYSTIFYING CBI                                               designed to satisfactorily measure global citizenship     should be made to an
                                                                                                                                  appropriate adviser. Registered
         The relationship that is formed between the state and          programme features and jurisdictional desirability        Office: Number One Southwark
                                                                                                                                  Bridge, London SE1 9HL, UK
         the economic citizen lasts a lifetime, unlike the one
         that is established with economic residents               20   KEY FINDINGS                                              The Financial Times adheres to
                                                                                                                                  a self-regulation regime under
                                                                                                                                  the FT Editorial Code of
                                                                        The CBI Index’s key findings present an evaluation of     Practice: www.ft.com/editorial
09       RECOGNISING POSSIBILITIES                                      each country both overall and within the parameters       code

         Similarities exist among citizenship by investment             of the seven pillars
         programmes, yet each has its own flaws and virtues
                                                                   24   INFOGRAPHIC
10       REAL ESTATE                                                    An overview of the seven pillars that form the CBI
         Insisting applicants purchase real estate is a common          Index
         feature of CBI schemes, but it can bring drawbacks as
         well as benefits                                          26   PROGRAMME PROFILES
                                                                        A closer look at the 13 citizenship by investment
11       FUTURE OF CBI                                                  programmes which make up the CBI Index
         The first CBI schemes were launched in the 1980s, and
         the industry has been in a state of constant evolution    34   COUNTRY SNAPSHOTS
         ever since                                                     Key information about the 13 nations that make up
                                                                        the CBI Index

                                                                                            Published in
youtube.com/           Professional Wealth    @FT_PWM                                   association with:
FTPWM                  Management Group

                                                                                                                                              PWMNET.COM               3
A GUIDE TO GLOBAL CITIZENSHIP - THE 2018 CBI INDEX - in association with - Professional Wealth ...
International critics fail to
                                    stem growing CBI industry
                                    WRITTEN BY YURI BENDER                     the UK and Europe have become much
                                    INTRODUCTION                               more aware of dual citizenship post-
                                                                               Brexit,” confirms Micha-Rose Emmett,
                                    CBI schemes offer wealthy                  CEO of CS Global Partners, specialising             Freedom m of movement
                                    individuals freedom of
                                    movement while providing
                                                                               in residency, citizenship, immigration
                                                                               and foreign investment law.                         is beccoming a key factor
                                    vital funds to what are often                 “Freedom of movement is becoming
                                                                               a key factor at a time when immigration
                                                                                                                                   as immigration policies
                                    cash-strapped nations, yet
                                    continue to draw criticism
                                                                               policies are getting more restrictive               are getting more
                                                                               around the world,” says Shelby du
                                                                                                                                   restrictive

                            T
                                                                               Pasquier, head of the banking and
                                                  he concept of citizenship    financial services practice at Geneva               SHELBY DU PASQUIER LENZ & STAEHELIN
                                                  by investment (CBI)          lawyers Lenz & Staehelin, one of
                                                  – allowing wealthy           Switzerland’s leading experts in tax
                                                  individuals fast track       and wealth management. “It is not                                     that have been subjected to natural
                                                  to a second citizenship      surprising there is so much interest from                             disasters such as tropical storms,
                                    and passport in return for investment      Russia and Asia.”                                                     and smaller European island nations
                                    into real estate or a donation into           CBI programmes, he believes, also                                  which suffered in the financial crisis.
                                    a government fund – is becoming            offer an “alternative” back-up plan for                               “For these sponsoring countries, CBI
                                    increasingly attractive as a gateway for   nationals of jurisdictions threatened by                              programmes are a welcome source
                                    non-EU citizens to access Europe.          political turmoil or instability. “Many                               of revenues and a pole of attraction
                                       Freedom of movement within              of the people affected by these threats                               of high net worth individuals and
                                    the EU, especially in the wake of the      are looking for an additional citizenship                             entrepreneurs who may in turn
                                    UK’s contentious Brexit referendum,        as a precautionary measure in case the                                contribute to the development of
                                    is now central to the attraction and       situation should worsen in their country                              the country,” adds Mr du Pasquier.
                                                                                                                           Gateway to Europe:
                                    marketability of the schemes.              of origin,” says Mr du Pasquier.            Malta’s Individual
                                                                                                                                                     “Given their success, these types of
                                       The thorny European question               But they have also become an             Investor Programme is     programmes are unlikely to be stopped
                                    has been a key factor in boosting the      important source of revenue and often       particularly attractive   or curtailed in the near future.”
                                                                                                                           as it offers EU
                                    industry’s success, according to most      a lifeline for the sponsoring countries,    citizenship as part of       Dominica, which has performed
                                    commentators on the issue. “People in      many of them Caribbean jurisdictions        its package               well in the CBI Index, is an excellent
                                                                                                                                                     example of how such a scheme can be
                                                                                                                                                     used to rebuild after the twin disasters
                                                                                                                                                     of Hurricane Maria and Tropical
                                                                                                                                                     Storm Erika devastated the island’s
                                                                                                                                                     infrastructure.
                                                                                                                                                        The country’s list of economic
                                                                                                                                                     challenges is not one for the faint-
                                                                                                                                                     hearted. The Post Disaster Needs
                                                                                                                                                     Assessment following Hurricane Maria
                                                                                                                                                     identified total damage valued at $930m
                                                                                                                                                     and losses of $380m. The sum of these
                                                                                                                                                     two measures was equivalent to more
                                                                                                                                                     than twice the GDP generated in 2016.
    All images Getty unless specified

                                                                                                                                                     The housing sector suffered the greatest
                                                                                                                                                     damage, calculated at more than
                                                                                                                                                     $350m, with 44 per cent of buildings
                                                                                                                                                     experiencing either major structural
                                                                                                                                                     damage or being totally destroyed.
                                                                                                                                                        Many of the country’s “rehabilitation
                                                                                                                                                     projects” are funded with resources

4                                       AUGUST/SEPTEMBER 2018
A GUIDE TO GLOBAL CITIZENSHIP - THE 2018 CBI INDEX - in association with - Professional Wealth ...
INTRODUCTION SPECIAL REPORT

from the Citizenship by Investment
Programme. In fact, during 2017,
the entire capital budget of $222.9m
was financed with CBI funds. CBI
is directly funding housing and
hotel developments, plus tourism
and agriculture projects. Payouts              Ms Edwards sees opportunities for         Hong Kong and China      of individual countries, alongside
to householders of $34m and a               the possibility of not only broadening       have provided many of    advice from specialist international due
                                                                                         the applicants for CBI
government initiative to build 5,000        source markets, but also using openings      programmes, though
                                                                                                                  diligence firms.
homes will likely be financed by CBI        provided by second citizenships to           interest from Latin         There have been rumblings from
receipts.                                   facilitate the expansion of business         America, Africa and      IMPACS that their recommendations are
                                                                                         the Middle East is
   All funds received by the government     opportunities.                               increasing               not always followed, as some countries
of Dominica and the nature of their use        Residents of oil rich countries in                                 will prioritise economic development
are disclosed to parliament and subject     particular are expected to subscribe for                              and recovery over security.
to audit. The names of all applicants       more second citizenships. “Residents                                     Regulators insist they follow the
approved under the CBI system               of the Middle East are becoming                                       recommendations to make sure only the
are also published in the Dominica          more interested in these citizenship                                  highest quality applicants are accepted.
Official Gazette, a government bulletin     programmes in light of political                                      Law firms suggest that additional due
available for a $50 annual subscription.    instability at home,” confirms Natacha                                diligence, carried out by private experts
                                            Onawelho-Loren, head of Legal, Trust                                  like Exeger or Thomson Reuters, casts a
VOCAL CRITICS                               and Fiduciary at the Salamanca Group                                  wider net over applicants to Caribbean
But despite this economically               in Geneva. Global families will continue                              centres.
vital work, like other Caribbean            to search for security, she believes, with                               Keeping out “untoward characters”
governments, which are increasingly         political and economic stability across                               must always be a number one priority
co-operating under the regional             many regions accelerating this trend.                                 and challenge for promoters and
CARICOM umbrella to co-ordinate their          She points to Malta and Cyprus                                     regulators, believes Ms Emmett at CS
CBI initiatives, Dominica detects some      having particularly attractive                                        Global Partners.
international hostility to its programme.   programmes, as they offer EU                                             She is also expecting countries
   “The main challenges to us are the       citizenship as part of their package, with                            offering second citizenships to continue
continued misrepresentations of the         property ownership demonstrating a                                    broadening their reach. “A lot of new
CBI Programme,” says the country’s          “durable link” to a host country through                              markets are opening up as people are
financial secretary Rosamund                commitment to the local economy.                                      getting to understand what CBI is about.
Edwards. These critics, she says,              Broadly, due diligence processes                                   There is more interest now from Latin
“do not realise the tangible benefits       are improving, believes Ms Emmett at                                  America, the Middle East and Africa. It’s
to our small countries in meeting           CS Global Partners, with Caribbean                                    not just about China anymore.”
our development objectives and in           countries running perhaps the more                                       One major concern is a “race to the
achieving international benchmarks          robust programmes, because their                                      bottom” among Caribbean countries
such as the sustainable development         economies are more likely to depend on                                engaged in “wholesale discounting of
goals committed by all of our countries     CBI income.                                                           application and donation or investment
at the UN.”                                    There is however some controversy                                  fees,” says Christopher Ashby,
   Although CBI programmes are              in the Caribbean, as well as in other                                 chairman of Chanson D’argent Ltd, a
generally available to citizens across      jurisdictions, about whether due                                      Grenada-based property developer
the world, including Russia, the            diligence is as strong as it could be.                                specialising in CBI projects.
Middle East and China, it is often          There is an undoubted initiative from                                     “Though in many cases, there
these jurisdictions that many clients       CARICOM to curb organised crime                                       is an obvious business rationale
come from. Representatives of some          across the Caribbean region through its                               for increasing the throughput of
Caribbean jurisdictions report spending     Implementation Agency for Crime and                                   applications, the probability of the due
more than half of their time in Hong        Security (IMPACS), which also provides                                diligence process being compromised
Kong and China, which they describe as      recommendations on which applicants                                   increases exponentially with this
“the most lucrative market” for CBI.        to accept or reject for CBI programmes                                practice.”

                                                                                                                                               PWMNET.COM     5
A GUIDE TO GLOBAL CITIZENSHIP - THE 2018 CBI INDEX - in association with - Professional Wealth ...
CORPORATE STATEMENT THE CBI INDEX

                      The CBI Index 2018

                     N
                                    ow in its second year, the CBI   removal of Comoros from its list of                    guidance materials, official circulars and
                                    Index ranks and reviews          citizenship by investment programmes,                  data channels, and direct communication
                                    today’s active citizenship by    following the programme’s termination.                 with governments and their formal affiliates,
                                    investment programmes,           However, green shoots have emerged from                the CBI Index dispenses the latest industry
                      providing a practical and comprehensive        Comoros’ demise, as two new nations,                   information. At the same time, it follows the
                      guide to persons wanting to compare the        Jordan and Turkey, launched their own                  format of the inaugural 2017 edition,
                      world’s options for economic citizenship.      citizenship by investment programmes. In               measuring the value of each citizenship by
                         Since last year, the citizenship by         so doing, these countries became the first             investment country by its performance in
                      investment industry has seen significant       Middle Eastern nations to fully develop an             seven categories, or ‘pillars’, and thereby
                      changes, from programmes lowering their        option for economic citizenship, setting a             delivering continuity to its readers.
                      minimum investment requirements, to            regional record and standing as a testament                Ranging from ‘mandatory travel or
                      fostering accountability among                 to the industry’s growing popularity.                  residence’ to ‘due diligence’, the CBI Index
                      stakeholders. New challenges have also             The CBI Index therefore now comprises              pillars give readers the opportunity to
                      emerged, with cryptocurrency being a           an expanded total of 13 countries: Antigua             appraise programmes according to specific
                      major talking point. The CBI Index reflects    and Barbuda, Austria, Bulgaria, Cambodia,              criteria rather than merely as a whole.
                      these changes, and seeks to provide a          Cyprus, Dominica, Grenada, Jordan,                     However, for those who want to quickly
                      starting point for further discussion of       Malta, St Kitts and Nevis, St Lucia, Turkey,           determine the year’s best and worst
                      these issues and the compelling questions      and Vanuatu.                                           citizenship by investment options, individual
                      they may raise.                                    Armed with new material gathered from              pillar scores are also aggregated to produce
                         The 2018 CBI Index has seen the             countries’ legislation, application forms and          a final, overall score.

               A TIMELINE OF CITIZENSHIP BY INVESTMENT

                                      S Ki ts nd evis                                                                Do in ca
                                      1 8                                                                            9 3

                            1980’s                                                1990’s                                                                                    2000’s

                                               Austria
                                               19 5

6   AUGUST/SEPTEMBER 2018
A GUIDE TO GLOBAL CITIZENSHIP - THE 2018 CBI INDEX - in association with - Professional Wealth ...
HISTORY OF CBI CORPORATE STATEMENT

A history of CBI

R
           egulating citizenship is a         lull ensued, until the Commonwealth of      Visit pwmnet for an   slowing down, particularly in Europe,
           prerogative of the state, and      Dominica established its own citizenship    expanded version      where Moldova passed relevant
                                                                                          of the CBI Index,
           the implementation of              by investment programme in 1993.            including detailed    legislation to make way for a
           citizenship by investment is       Cyprus followed in 2002, although the       profiles of all 13    programme, and where Montenegro
therefore a consequence of states             Cypriot programme as we know it today       citizenship by        appointed a government commission to
                                                                                          investment
adopting laws and creating the                was designed more than a decade later.      programmes            oversee the creation of the Montenegro
structures necessary to support a             Vanuatu has a history of launching,                               Special Investor Programme (MSIP),
citizenship by investment programme.          terminating, and re-launching citizenship                         scheduled for October 2018.
   With its 1984 Citizenship Act, St Kitts    by investment programmes. Its most                                   Nearby Georgia is also rumoured to
and Nevis became the first-ever state to      recent Contribution Programme                                     be considering citizenship by
allow persons to be registered as citizens    became operational in 2017. 2013 was the                          investment. Article 7 of Georgia’s Law
after making a substantial investment.        most popular year for citizenship by                              on Citizenship, for example, already
The move was a significant one, as the        investment, with two Caribbean nations                            contains provisions to bestow honorary
Citizenship Act defined what it meant to      and Cambodia instituting new                                      citizenship to an alien who has made an
become a citizen of St Kitts and Nevis        programmes. 2017 saw the birth of the                             exceptional contribution to Georgia and
following its independence from Britain       Middle East’s first fully-fledged                                 to mankind, or who has a profession and
in September 1983. Also in the 1980s,         programme, set up by Turkey, and tailed                           qualification which is of interest to
Austria legalised granting nationality by     shortly after by Jordan.                                          Georgia, so long as bestowing
reason of a person’s actual or expected          The citizenship by investment                                  citizenship would be in the country’s
outstanding achievements. Thereafter a        phenomenon is showing no sign of                                  national interests.

                                                                      Antigua and           Malta                           Jordan
                                             B lgaria                    Barbuda            2014                            2018
                                               0 9                            03
                                                          2010’s                                                                      BEYOND

Cyprus                                                                 C m odia,                                   ur ey,
2 02                                                                    Gr na a                     t uci          a ua u
                                                                            2013                    2016          2017

                                                                                                                                            PWMNET.COM    7
A GUIDE TO GLOBAL CITIZENSHIP - THE 2018 CBI INDEX - in association with - Professional Wealth ...
CORPORATE STATEMENT DEMYSTIFYING CBI

               Demystifying CBI:
               citizenship vs residence
                                                                         other forms of investor immigration.     lasts a lifetime. This distinguishes the
               WHAT IS CITIZENSHIP?
                                                                            At the heart of the citizenship by    economic citizen from the ‘economic
               The relationship that is formed between                   investment process is the promise that   resident’. Economic residents are
               the state and the economic citizen lasts                  a successful applicant will receive      those who, having applied under a
               a lifetime, unlike the one that is                        ‘citizenship’ – that is, membership of   residence by investment programme,
               established with economic residents                       the nation under whose laws the          receive a set of temporary and fluid
                                                                         application was lodged. With that        rights, the most prominent of which is
                                                                         membership comes an array of civil,      the right to live and work in a country.
                                                                         economic and political rights and        Loss of economic residence remains a

                              A
                                          lthough ‘citizenship by        duties which, other than in extreme      real possibility for those who fail to
                                          investment’ is now a major     circumstances, are permanent and         abide by the conditions of their
                                          talking point for              irrevocable. These can range from the    residence, which often include physical
                                          governments, international     right to work, to the obligation to      presence, the retention or
                              organisations and the media,               respect and defend the constitution.     development of an investment, and
                              confusion persists as to the unique           The relationship that is formed       continued good behaviour.
                              nature of citizenship by investment        between the state and the individual –      Despite these significant
                              and the qualities that set it apart from   the ‘economic citizen’ – is one that     differences, citizenship and residence
                                                                                                                  by investment are often collapsed into
                                                                                                                  a single category: investor
      Confusion persists                                                                                          immigration.
      as to the unique                                                                                               The result can be misperception. In
      nature of
      citizenship by                                                                                              February 2018 for example, the
      investment and the                                                                                          OECD likened citizenship by
      qualities that set it                                                                                       investment to residence by investment
      apart from other
      forms of investor                                                                                           for its perceived susceptibility to abuse
      immigration                                                                                                 by wrongdoers seeking to conceal
                                                                                                                  their tax residence.
                                                                                                                     In so doing however, it overlooked
                                                                                                                  the fact that economic citizens do not
                                                                                                                  automatically become residents of
                                                                                                                  their country of citizenship, and that
                                                                                                                  most citizenship by investment
                                                                                                                  jurisdictions – particularly in the
                                                                                                                  Caribbean – do not issue documents
                                                                                                                  that indicate residence, let alone tax
                                                                                                                  residence. It also did not draw
                                                                                                                  distinctions between the robust due
                                                                                                                  diligence processes that characterise
                                                                                                                  the citizenship by investment industry
                                                                                                                  and that allow it to stand above
                                                                                                                  residence by investment.
                                                                                                                     The CBI Index sheds light on
                                                                                                                  citizenship by investment both as a
                                                                                                                  concept and as a process. Its goal is to
                                                                                                                  dispel unfounded fears, to ensure
                                                                                                                  assessments and critiques are based
                                                                                                                  on fact, and to empower the
                                                                                                                  prospective economic citizen through
                                                                                                                  knowledge and education.

8   AUGUST/SEPTEMBER 2018
A GUIDE TO GLOBAL CITIZENSHIP - THE 2018 CBI INDEX - in association with - Professional Wealth ...
RECOGNISING POSSIBILITIES CORPORATE STATEMENT

Recognising the
possibilities that lie ahead
SELECTING A SCHEME
Similarities exist among
citizenship by investment
programmes, yet each has
its own flaws and virtues

A
              n alternative citizenship can
              fundamentally affect a
              person’s life, family, and
              interests. The decision to
become a national of another country is,
therefore, in and of itself worth careful
consideration. This holds even truer for
prospective economic citizens, who,
unlike other citizens-to-be, have the
privilege – and burden – of choice.
There are 13 nations whose laws, and
whose internal systems, have been
sufficiently developed to sustain a
working citizenship by investment
programme.
    By region, the Caribbean provides the
highest number of citizenship by
                                                                                               Jordan's CBI
investment jurisdictions in the world.         apart from countries with residence by          programme, which     embraced citizenship by investment.
Each of its five citizenship by investment     investment programmes.                          launched in 2018,    Turkey’s experience was one of opening
programmes is spelled out in laws and             Vanuatu stands alone in the blue             has been met with    a programme with high investment
                                                                                               widespread
regulations, and dedicated government          vistas of Oceania. Uniquely, it recently        popularity among     thresholds, only to quickly announce it
bodies, normally identified as ‘units’,        instituted both a citizenship by                citizens of nearby   would reduce its requirements in light of
process applications. Some can lay claim       investment programme and an honorary            countries            low uptake. Jordan, on the other hand,
to decades of longevity and a high             citizenship programme. The CBI Index                                 has been met with widespread
likelihood of continued success. Others,       examines the workings of the former,                                 popularity, particularly among citizens of
in contrast, have only been in place for a     particularly as it is unclear what the status                        nearby countries.
handful of years, and have yet to stand        of ‘honorary citizen’ may truly entail.                                 While similarities exist among
the test of time.                              Within Vanuatu, honorary citizens have                               citizenship by investment programmes,
    Europe offers four citizenship by          no voting privileges and cannot                                      each has its own flaws and virtues – and
investment options. Its most                   participate in the political process, yet                            a regional approach alone will not, and
longstanding programme – that of               they are issued with a passport. Abroad,                             should not, satisfy the prospective
Austria – is also its murkiest. Two islands,   would nations that require renunciation                              citizen. Delving into the CBI Index, on
Cyprus and Malta, supply direct routes         of other citizenships view honorary                                  the other hand, will provide the close-up
to citizenship, while Bulgaria presents a      citizenship as an exception to this rule?                            analysis necessary for an educated
slower avenue to citizenship, which has           Another standalone nation is                                      assessment of citizenship by investment
led some commentators to characterise          Cambodia, this time presenting an                                    across the globe, giving readers the
its programme as a hybrid between a            option for Asian citizenship. Cambodia’s                             tools necessary to make the best
residence and citizenship scheme.              programme is currently under intense                                 citizenship decision for themselves,
Importantly however, Bulgaria does not         government scrutiny.                                                 their household, and their business and
require physical presence – setting it            The Middle East has only recently                                 personal activities.

                                                                                                                                                  PWMNET.COM     9
A GUIDE TO GLOBAL CITIZENSHIP - THE 2018 CBI INDEX - in association with - Professional Wealth ...
CORPORATE STATEMENT REAL ESTATE

     Investing in real
     estate for citizenship
                                                          A surge in demand
     REAL ESTATE                                          for luxury
     Insisting applicants purchase                        apartments in
                                                          Limassol has
     real estate is a common                              boosted the
                                                          construction
     feature of CBI schemes, but                          industry in Cyprus,
     it can bring drawbacks as                            but also priced
                                                          locals out of the
     well as benefits                                     market

     M
                        ost citizenship by
                        investment jurisdictions
                        incorporate a real estate
                        component into their
     programmes. In some, like Cyprus,
     investment in real estate is mandatory, while
     in others, like the Caribbean island-nations,
     it is an option that applicants can weigh
     against monetary contributions, or, in some
     cases, business investments or the purchase
     of government bonds. Malta is unique in
     giving applicants the possibility to either
     purchase or rent a residential property.                                   for homes, beginning with luxury                 sometimes even rent, real estate in coastal
         From an applicant’s perspective, having to                             apartments in waterfront areas and trickling     Limassol and other desirable cities around
     provide evidence of a real estate transaction                              down to the heart of the island. A report by     the country.
     presents a programme shortcoming, as the                                   PwC, based on information from the                   Applicants for economic citizenship in
     applicant must inevitably attend to all the                                Department of Lands and Surveys, noted           the Caribbean are not required to invest in
     complex procedures associated with                                         that sales of residential property worth         real estate, yet, should they decide to, their
     becoming a property owner or leaseholder.                                  €1.5m or more rose by 69 per cent                choice would be confined to government-
     There is a silver lining to every cloud                                    between 2016 and 2017, and by more than          approved projects, usually limited to shares
     however, as applicants who are required to                                 132 per cent between 2013 and 2017               of resorts and hotels, or units within those
     buy or rent real estate are generally given                                (Cyprus relaunched its economic                  developments.
     very few restrictions on location or property                              citizenship programme in 2014). On                   The Caribbean has no private residence
     type. Generally, all that is required is a private                         average, property sales across all of Cyprus     requirement, and only a minority of
     residence.                                                                 increased by 24 per cent between 2016 and        programmes offer applicants a choice of
         From a country’s perspective, the                                      2017. Of the 8,734 sales recorded in 2017,       apartments, houses, or condominiums. The
     decision to provide flexibility within the                                 27.5 per cent were made to non-Cypriots –        consequence has been an unmistakable
     framework of a fixed real estate requirement                               a near-33 per cent increase from the             trend towards the contribution option, but,
     presents both benefits and drawbacks. This                                 previous year.                                   when real estate investments are made,
     dichotomy is exemplified by Cyprus.                                            Growing demand for homes has inflated        they have had an overwhelmingly positive
         Under Cypriot law, successful applicants                               property prices and boosted construction,        effect on local populations.
     for citizenship by investment must                                         generating certainty for proprietors and             With each investment in a luxury resort
     purchase a residence worth at least                                        incentivising their spending. At the same        come jobs – first in construction, and then
     €500,000 ($585,000), which they must                                       time however, Cypriot wages have failed to       in upkeep and services – new options for
     hold for the remainder of their lives. Most                                keep up, remaining stagnant for almost a         tourists, and a raised international profile,
     applicants also choose to make an                                          decade. Those without the resources to           both for the nation itself and for the region
     additional three-year €1.5m investment in                                  purchase property have thus fallen back on       overall. And, as the investor and the local
     residential real estate – Cyprus’ most                                     rental properties, in turn increasing rent       citizen look to two different markets for
     affordable route to citizenship.                                           prices. This has caused distress to the locals   their real estate, the impact on local
         The result has been a surge in demand                                  who can no longer afford to buy, and             purchasing power is far less direct.

10   AUGUST/SEPTEMBER 2018
FUTURE OF CBI CORPORATE STATEMENT

                        Adaptability as a mark of
                        endurance and success
                                                                                   local property developers eager to get their                           the National Development Fund were
                                     THE FUTURE OF CBI
                                                                                   projects underway by launching a second,                               reduced by 50 per cent.
                                     The first CBI schemes were                    $200,000 real estate arm to its Citizenship                                St Kitts and Nevis took the opportunity
                                     launched in the 1980s, and                    by Investment Programme. In May 2018,                                  to establish a provisional route to citizenship:
                                     the industry has been in a                    yielding to European pressure, Cyprus                                  a Hurricane Relief Fund that, in the words of
                                     state of constant evolution                   announced that it would cap its programme                              the prime minister, would enable “the
                                                                                   at 700 per year and apply enhanced due                                 country and its people to recover more
                                     ever since                                    diligence on all applicants, extending the                             quickly and to ensure that the infrastructure
                                                                                   expected processing time to six months.                                and people’s homes are fit and habitable

                    C
                                                  itizenship by investment can         By responding to direct calls for change                           where they have been damaged by this
                                                  trace its roots back more than   from internal and external parties, citizenship                        season’s hurricanes”.
                                                  three decades, when St Kitts     by investment programmes have ensured                                      More recently, St Kitts and Nevis
                                                  and Nevis passed Section 3(5)    their survival and retained their place in the                         unveiled a new, permanent citizenship
                                    of its Citizenship Act, thereby enabling a     modern immigration landscape. A different                              option in the form of the Sustainable
                                    person to be registered as a citizen if        kind of response, not involving outsider                               Growth Fund (SGF). The SGF marked a
                                    “cabinet is satisfied that such person has     appeals, has however also begun to shape                               significant maturation in the citizenship by
                                    invested substantially in St Christopher and   the citizenship by investment industry.                                investment market, as the scope of the SGF
                                    Nevis”. Yet longevity has not produced         Indeed, in late 2017 and 2018, citizenship by                          was closely aligned to the 17 Sustainable
                                    stagnancy, and the industry has been in        investment jurisdictions began to take steps                           Development Goals set by the United
                                    constant evolution, with its momentum          to modify their programmes in response to                              Nations to be achieved by 2030. The SGF,
                                    renewed by investor demand, stakeholder        their shifting environment, with directives for                        arguably today’s most popular option for
                                    needs, and international oversight.            amendment coming from the governments                                  economic citizenship despite its youth,
                                       Examples are copious and diverse. In        themselves.                                                            stands as a primary case in point of how, by
                                    2014, Malta introduced a one-year                  One illustration is the speed with which                           identifying global interests and taking active
                                    residence requirement under its Individual     certain Caribbean island-nations modified         St Kitts and Nevis   steps towards the pursuit of those interests,
                                    Investor Programme to alleviate EU             their existing programmes to overcome the         launched its         governments can create a strategy for
                                    concerns that economic citizens lacked a       impact of devastating climatic events in          citizenship by       citizenship by investment that enables their
                                                                                                                                     investment scheme
                                    genuine link to the state. That same year,     September 2017. In Antigua and Barbuda,           more than three      programmes not merely to last, but to
                                    Dominica made a showing of support for         the minimum investment amounts under              decades ago          thrive.
Pic courtesy of St Kitts Tourism Authority

                                                                                                                                                                                            PWMNET.COM       11
CORPORATE STATEMENT CRYPTOCURRENCIES

               The cryptocurrency
               challenge
                                                                          transactions through advanced                has voiced its intent to be at the
                CRYPTOCURRENCIES
                                                                          cryptography recorded on a blockchain        “frontline” of blockchain technology,
                Some jurisdictions have been quick to                     ledger.                                      something it described as a “crucial
                embrace cryptocurrencies while others                        How have citizenship by investment        innovation”.
                have been wary to do so, yet all will                     jurisdictions responded to the                  Just like countries considering
                have to deal with applicants who have                     cryptocurrency revolution?                   cryptocurrency, countries adverse to
                                                                             In October 2017, Vanuatu was widely       mingling their economic citizenship
                exposure to the phenomenon                                publicised as the first citizenship by       programmes with digital currencies will
                                                                          investment nation to accept bitcoin – the    have to contend with the ‘bitcoin

                              C
                                          itizenship by investment is     world’s most recognised cryptocurrency.      millionaire’ and ‘bitcoin billionaire’ whose
                                          rapidly expanding and taking    Shortly after the media storm however,       source of funds is an investment in
                                          different shapes across the     Vanuatu’s Citizenship Office denied the      bitcoin (or its equivalent).
                                          globe. In devising new          reports, stating that Vanuatu would only        A survey released in May 2018
                              economic citizenship programmes,            accept payments in US dollars as             showed that, out of more than 600 high
                              governments must be mindful of the issues   prescribed by its regulations.               net worth respondents, 35 per cent had
                              and doubts that their programmes could         In July 2018, Antigua and Barbuda’s       already gained exposure to
                              inherently generate. But even countries     Lower House of Parliament passed an          cryptocurrency or intended to gain such
                              with tried-and-tested programmes must       amendment to the Antigua and Barbuda         exposure by the end of the year.
                              react and adapt to the challenges that      Citizenship by Investment Act, enabling      Countries will also need to contend with
                              come with the world’s rapidly shifting      receipt of payments via cryptocurrency.      programme agents who accept
                              socio-political, economic, and even         Forewarnings of the move had generated       cryptocurrencies and convert them into
                              technological landscape.                    anxiety as to the projected use of bitcoin   legal tender for purposes of fee
                                 2017 and 2018 saw the rise of            cash payments, the liquidity of large        payments.
                              cryptocurrency – virtual currencies that    cryptocurrency assets, market volatility,       Instituting strict due diligence checks
                              enable financial transactions between       and the complexities associated with         on applicants and agents alike, including
                              persons without the need for banks, or      tracing the origin of cryptocurrency.        enhanced due diligence, is therefore
                              other centralised financial                    In Malta, while cryptocurrency and        essential to the sustainability of
                              intermediaries. Crucially,                  citizenship by investment have yet to be     citizenship by investment in our cyber
                              cryptocurrencies allow secure               formally intertwined, the government         age: an old solution to a new problem.

       In October 2017,
       Vanuatu was widely
       publicised as the
       first citizenship by
       investment nation
       to accept bitcoin –
       the world’s most
       recognised
       cryptocurrency -
       but it subsequently
       denied the reports

12   AUGUST/SEPTEMBER 2018
DUE DILIGENCE CORPORATE STATEMENT

Developing
due diligence
DUE DILIGENCE
As more countries enter the
citizenship market, due
diligence will be a defining
element of differentiation
between their programmes

T
              he CBI Index treats due
              diligence as an asset. Within a
              citizenship by investment
              jurisdiction, a comprehensive
background screening policy, applied both
consistently and methodically, filters
criminals and other morally questionable
actors, as well as individuals who could
otherwise become a liability or a financial
burden to current citizens. Outside the
jurisdiction, it provides certainty to other     Russia, as well as Moldova and Indonesia.     A comprehensive        Caribbean legislation or are enforced by
governments, which can trust economic                Some citizenship by investment nations    background             the relevant Caribbean citizenship by
                                                                                               screening policy can
citizens to have been fully vetted.              have expanded their commitment to due         mean extensive         investment unit through custom – but not
    To the applicant, this translates into       diligence from a merely domestic realm, to    visa-free travel       all citizenship by investment jurisdictions
citizenship of a country with sound borders,     one that considers, and includes, entire      rights for             make a nod to the international
                                                                                               applicants, as other
strong national security, and high               regions. With its Citizenship by Investment   nations look           community. Neither Cyprus nor Vanuatu,
international standing. Essentially, it also     (Amendment) (No. 2) Act, 2017, for            positively on the      for instance, exclude applicants with a
                                                                                               citizenship by
means extensive visa-free travel rights, as      example, Grenada amended its laws to                                 history of visa refusals.
                                                                                               investment
other nations look positively on the             refuse citizenship to any applicant who “is   jurisdictions and          Overall however, the trend among well-
citizenship by investment jurisdictions and      denied citizenship by investment in another   those who become       established citizenship by investment
                                                                                               their citizens
those who become their citizens.                 Caribbean jurisdiction”.                                             nations continues to be one of
    This theory finds its test in St Kitts and       Another call for unity was sounded with                          strengthening due diligence and
Nevis. In November 2014, the Federation          the establishment of the Citizenship by                              international collaboration.
lost visa-free travel rights to Canada, which    investment Programmes Association                                        The 2018 Caribbean Investment
expressed concerns about the country’s           (CIPA), whose founding members,                                      Summit, held from 16 to 19 May, was
passport and identity management. Since          Antigua and Barbuda, Dominica, Grenada,                              conducted under the theme ‘Unity in the
2015 however, and in the wake of an              St Kitts and Nevis, and St Lucia, aim to                             Age of Division: Emerging Trends of CIPs
extensive internal and external review of its    both harmonise and raise their standards                             in an Uncertain World’. On 21 May, 2018,
practices, St Kitts and Nevis has been           and regulations.                                                     Cyprus announced it would inaugurate an
leading the charge in transparency and due           Regard for global safety measures is a                           era of more enhanced due diligence, with
diligence.                                       mainstay of several citizenship by                                   application processing expected to last six
    The result has been overwhelming             investment jurisdictions. Malta, for                                 months. On 22 May, 2018, Malta held its
support from the international community,        example, bars any applicant who, without                             First Citizenship by Investment Due
evidenced by the Federation securing, in         being able to demonstrate special                                    Diligence Conference.
2018, the highest number of visa-free            circumstances, “has been denied a visa to a                              As more countries enter the citizenship
destinations than any other Caribbean            country with which Malta has visa-free                               market, due diligence will be a defining
citizenship by investment jurisdiction.          travel arrangements and has not                                      element of differentiation between
Some of the countries that recently signed       subsequently obtained a visa to the country                          countries, their programmes, and the
travel treaties benefitting Kittitians and       that issued the denial”.                                             applicants who become their economic
Nevisians include traditionally isolationist         Similar provisions exist across                                  citizens.

                                                                                                                                                     PWMNET.COM     13
The due diligence process
               in the Caribbean
                                                                             while their processes may not be                 Address verification – Each applicant
               CASE STUDY
                                                                             completely interchangeable, they all follow      is required to detail his or her residential
               The Caribbean CBI programmes are                              the same structure: requirements for             history for at least the last 10 years.
               generally associated with far-reaching                        extensive disclosure compounded by               Verification of their current residential
               due diligence, explains Heyrick Bond                          supporting documentation,                        address is undertaken, either through a
               Gunning, CEO of S-RM                                          comprehensive investigation by                   site visit or through contacts located in
                                                                             independent and professional firms, and          the country who are familiar with the
                                                                             information exchange with both regional          applicant.
                                                                             and international entities involved in crime

                             D
                                          ue diligence varies dramatically   detection. It is this structure that greatly     Passport verification – The passports
                                          across citizenship by              dissuades individuals who may hope to use        of the applicant and any dependants are
                                          investment (CBI) programmes        the Caribbean’s CBI programmes to                verified through an algorithmic check
                                          – at one end of the spectrum       circumvent the Common Reporting                  and by the respective issuing authority.
                             only basic disclosure requirements are          Standard (CRS) or to conduct other illicit
                             implemented, while at the other extreme         activity.                                        Police clearance certificates –
                             there are transparent, thorough, and robust        Growing interest in the topic of              Applicants and all dependants (above a
                             requirements. The quality of a CBI              immigration, and investor immigration in         certain age) are required to provide
                             programme rests on its ability to embrace       particular, makes it essential to provide        certificates evidencing no criminal
                             transparent and at times exacting due           clarity on the steps that are taken to           records for each of the jurisdictions they
                             diligence processes, ongoing monitoring of      examine individual CBI applicants in             have resided in within the last 10 years. If
                             applicants in case their circumstances          certain jurisdictions. It is in S-RM’s purview   any further jurisdictions are identified,
                             change, and absolute clarity around the         to provide that clarity with respect to the      police clearance certificates are
                             on-boarding decision-making process.            Caribbean, and to the reports that it            requested by the CBI jurisdiction. The
                                 The Caribbean CBI programmes are            provides to the CBI jurisdictions in that        authenticity of these police clearance
                             generally associated with far-reaching due      region. Each report covers the following         certificates is verified with the issuing
                             diligence, and with good reason. Indeed,        areas:                                           authorities.

       Passport
       verification is an
       important
       component of the
       Caribbean
       programmes’ due
       diligence process

14   AUGUST/SEPTEMBER 2018
CASE STUDY CORPORATE STATEMENT

Business profile – Applicants are
required to detail all business interests
and employment activity for at least the
last 10 years. These positions are
verified, and further searches are
conducted to ensure there are no
omissions. Investigations are undertaken
to ensure the legitimacy of these entities,
both in terms of registration and their
business activities.

Reputation – A thorough analysis is
conducted of the applicant’s business
reputation through online media and
litigation searches, as well as through
contact with professional acquaintances,
competitors, industry bodies, and a variety
of other sources, to certify that the
applicant presents no reputational
concerns.

AML/CTF/ABC – The applicant is
required to provide supporting
documents to validate reported financial      political exposure. Information from
information, including corporate filings      in-country contacts is also used to
(such as incorporation documents or           determine any political links held and the
annual accounts), title deeds for land or     risk they may present.                                     Exhaustive due
property assets, stock portfolios, and
bank statements. This information is             Due diligence is the most substantial
                                                                                                         diligence reports,
then analysed for any signs of illicit
activity. The applicant’s business
                                              contributing factor to a CBI
                                              programme’s capacity to attract the right
                                                                                                         such as the ones
interests are also investigated by            individuals as citizens. Exhaustive due                    that are undertaken
in-country contacts to ensure there are
no allegations of unlawful or otherwise
                                              diligence reports, such as the ones that
                                              are undertaken on behalf of Caribbean                      on behalf of
dishonest activity. There is then a
detailed assessment of anti-bribery and
                                              jurisdictions, should therefore be a staple
                                              of all CBI programmes that aspire to
                                                                                                         Caribbean
corruption (ABC), anti-money                  success and durability.                                    jurisdictions, should
laundering (AML), counter-terrorism
funding (CTF), and related reputational
                                              Heyrick Bond Gunning is CEO of S-RM.
                                                                                                         be a staple of all CBI
and integrity risks.                          S-RM is among the panel of due diligence
                                              providers that lend their expertise to                     programmes that
Sanctions, wanted lists, and political
exposure – The applicant, as well as his
                                              jurisdictions with CBI programmes. S-RM
                                              provides these services for several CBI
                                              jurisdictions in the Caribbean and elsewhere
                                                                                                         aspire to success
or her family, corporate affiliations, and    around the world. S-RM also provides
                                              similar services to the banking and private                and durability
associates are checked through the            equity sectors, corporate clients, and other
global wanted lists and sanctions             governments. This has allowed S-RM to
                                              acquire a broad understanding of the levels
databases to which we subscribe. The          of due diligence undertaken across a variety
same individuals are run through global       of sectors, and to be able to provide a sound
                                              opinion on their strengths.
compliance databases to ascertain any

                                                                                                                         PWMNET.COM   15
Overview of the
              methodology
                                                                               Each of the seven pillars is scored out
              METHODOLOGY
                                                                            of a maximum of 10 points, calculated
              The CBI Index is built around seven                           on an averaging basis from the scores of
              pillars, designed to satisfactorily                           composite indicators and sub-indicators.           Reliance was only
              measure global citizenship
              programme features and
                                                                            The maximum attainable score
                                                                            achievable by a programme is 70, with all
                                                                                                                               placed on official
              jurisdictional desirability                                   final scores expressed in terms of a
                                                                            percentage of the total points available.
                                                                                                                               sources and
                                                                            For example, a perfect, 70-point score             publications from

                             T
                                         he CBI Index is a rating           would be expressed as 100 per cent.
                                         system designed to measure            It should be noted that, due to the             institutions of the
                                         the performance and appeal
                                         of global citizenship by
                                                                            vast number of statistics, indicators, and
                                                                            sub-indicators available for analysis, no
                                                                                                                               highest international
                             investment programmes across a broad
                             range of indicators. Its purpose is to
                                                                            single approach exists for the rating of
                                                                            citizenship by investment programmes.
                                                                                                                               standing and on the
                             provide a rigorous and systematic              In framing the CBI Index however,                  specialised input of
                             mechanism for assessing citizenship            reliance was only placed on official
                             programmes, to facilitate the decision-        sources and publications from                      industry experts
                             making process for individuals                 institutions of the highest international
                             considering them, and to bring value to        standing and on the specialised input of
                             the citizenship industry.                      industry experts, whose contributions
                                The CBI Index assesses all countries        and responses were used to obtain and              Freedom of movement within and
                             with operational citizenship by                interpret both qualitative and                  between countries is of paramount
                             investment programmes, which today             quantitative data used in the                   importance to any individual seeking
                             include the following 13 nations: Antigua      construction of the CBI Index.                  second citizenship. This holds true
                             and Barbuda, Austria, Bulgaria,                   It should further be noted that,             whether the individual wishes to travel
                             Cambodia, Cyprus, Dominica, Grenada,           whenever possible, points were awarded          for work purposes, to visit family, or for
                             Jordan, Malta, St Lucia, St Kitts and          on the basis of evidence from official          leisure.
                             Nevis, Turkey, and Vanuatu.                    sources and the letter of the law.                 Emphasis was placed on the total
                                A primary methodological objective          Because announcements of changes to             number of countries and territories that
                             was to isolate factors that could              citizenship by investment programmes            may be visited without applying for a
                             satisfactorily measure programme               are often made many weeks and months            visa. This included both visa-free and
                             features and jurisdictional desirability.      in advance of their actual                      visa-on-arrival destinations, as neither
                             Seven factors, or ‘pillars’, were identified   implementation, the CBI Index limits its        require persons to receive a visa in
                             for this purpose. The seven pillars that       evaluations to changes confirmed by             advance of travel. Government and
                             constitute the CBI Index include:              governments themselves and associated           other official sources, including data
                                                                            legal facts.                                    from the United Nations World Tourism
                               1. Freedom of Movement                                                                       Organisation (UNWTO), were used to
                               2. Standard of Living                        PILLAR 1: FREEDOM OF                            obtain up-to-date information on visa
                               3. Minimum Investment Outlay                 MOVEMENT                                        requirements for holders of each of the
                               4. Mandatory Travel or Residence             The Freedom of Movement Pillar                  13 passports under evaluation.
                               5. Citizenship Timeline                      measures a passport’s relative strength by         As business travel is a prime
                               6. Ease of Processing                        the number of destinations to which it          consideration for prospective global
                               7. Due Diligence                             allows travel without restriction, and by the   citizens, a passport’s ability to provide
                                                                            amount of prime business hubs to which it       access to the world’s leading economic
                               Arriving at an appropriate rating for        provides access. It is assumed, for the         and financial centres was also evaluated.
                             the seven pillars involved a complex           purposes of this pillar, that the passport      The World Bank’s Ease of Doing
                             combination of benchmarking, statistical       used for travel is an ordinary passport, and    Business Index, Forbes’ Best Countries
                             analysis, and comparative investigation.       not a diplomatic or service passport.           for Business, the World Economic

16   AUGUST/SEPTEMBER 2018
METHODOLOGY CORPORATE STATEMENT

                                                                                                                    investors. Data was sourced from the
                                                                                                                    World Bank's Open Data Catalogue to
                                                                                                                    ensure accuracy and consistency.
                                                                                                                       The Standard of Living Pillar also
                                                                                                                    examines a country’s ability to promote
                                                                                                                    freedom, and to protect the rights of
                                                                                                                    individuals to act and to express
                                                                                                                    themselves without undue constraints.
                                                                                                                    Civil liberties and political rights within a
                                                                                                                    jurisdiction were rated as part of this
                                                                                                                    exercise, using sources such as Freedom
                                                                                                                    House’s Freedom in the World Index.

                                                                                                                    PILLAR 3: MINIMUM
                                                                                                                    INVESTMENT OUTLAY
                                                                                                                    The Minimum Investment Outlay Pillar
                                                                                                                    measures one of the most practical and
                                                                                                                    foremost considerations of citizenship
                                                                                                                    by investment: how much capital is
                                                                                                                    required for the investor to become an
                                                                                                                    eligible applicant for the programme of
                                                                                                                    his or her choosing.
                                                                                                                       The cost of applying for citizenship by
                                                                                                                    investment increases with the number of
                                                                                                                    dependants – or qualifying family
                                                                                                                    members – included in an application. In
                                                                                                                    some jurisdictions this increase is
Forum’s Global Competitiveness                     For this pillar, a wide range of official   Freedom of           proportional, while in others the cost
Report, and other authoritative sources         indicators were considered to allow for        movement within      only increases following the inclusion of
                                                                                               and between
were used to arrive at a list of the top        an accurate assessment. Consequently,          countries is of      multiple dependants. To remain
centres for international business.             establishing an appropriate benchmark          paramount            consistent across all jurisdictions, it was
   For both indicators, points were             was of paramount importance, as a              importance to any    assumed that one applicant was applying
                                                                                               individual seeking
awarded on a descending scale, with the         country’s score must be viewed both as         second citizenship   for citizenship alone. That is to say, that
highest score received by the passport          an absolute value, and within the context                           the application consisted of a ‘single
with visa-free or visa-upon-arrival entry       of the other citizenship by investment                              applicant’.
to the highest number of foreign                countries – that is to say, as a relative                              Where a citizenship by investment
countries or territories.                       value.                                                              programme offers multiple investment
                                                   Reliance was placed on the United                                options, the most affordable option was
PILLAR 2: STANDARD OF LIVING                    Nations Human Development Index                                     selected for evaluation. For example,
The Standard of Living Pillar is a measure      (HDI) for factors such as life expectancy,                          Dominica offers a single applicant the
of the quality of life offered by the 13        education, security, and income.                                    choice between a contribution to the
citizenship by investment jurisdictions            Because past performance is not                                  Economic Diversification Fund (EDF)
under assessment. This pillar is vital to       always a guarantee of future results in                             and an investment in pre-approved real
those who yearn to relocate and to secure       the field of economic growth in a rapidly                           estate, with the latter being the more
a prosperous and fulfilling lifestyle.          developing world, a country’s latest                                expensive alternative. The EDF option
Similarly, it is key to those wanting to take   annual GDP growth statistics were used                              was therefore used to determine the
advantage of local business opportunities,      to indicate present-day economic                                    minimum investment outlay for the
or needing to transfer and safeguard their      circumstances as well as growth potential                           Dominica Citizenship by Investment
assets.                                         – a particularly important indicator for                            Programme.

                                                                                                                                                     PWMNET.COM     17
This pillar considers pure investment        requirements. The lowest scores were
     requirements, exclusive of minor fees          attained by programmes with extensive
     that may also apply. These may include         requirements.
     application, processing, or due diligence                                                       The speed at which
     fees that do not significantly alter the
     cost of a citizenship application.
                                                    PILLAR 5: CITIZENSHIP
                                                    TIMELINE
                                                                                                     application forms
       The highest number of points was
     awarded to the country requiring the
                                                    The Citizenship Timeline Pillar looks at
                                                    the average time it takes for citizenship
                                                                                                     and supporting
     lowest minimum investment.                     to be secured by the applicant.                  documentation are
                                                       The speed at which application forms
     PILLAR 4: MANDATORY TRAVEL                     and supporting documentation are                 processed, and the
     OR RESIDENCE
     The Mandatory Travel or Residence
                                                    processed, and the steps involved in
                                                    approving an application, vary from
                                                                                                     steps involved in
     Pillar examines the travel or residence
     conditions imposed on applicants both
                                                    programme to programme. Therefore, a
                                                    thorough inspection of applicable laws,
                                                                                                     approving an
     before and after the granting of full          regulations, and policies was made to            application, vary
     citizenship. Often busy with running a         determine the official processing times
     business or with international travel of       mandated by each jurisdiction.                   from programme to
     their own, citizens of the world have little
     time on their hands to fulfil minimum
                                                       Extensive reliance was also placed on
                                                    first-hand experience from applicants,
                                                                                                     programme
     stay requirements.                             agents, and other stakeholders, whose
        A careful examination of the laws,          contributions proved to be an invaluable
     regulations, and policies pertaining to        tool in ascertaining citizenship timelines.
     each citizenship by investment                    As one of the key merits of citizenship    overall effortlessness of the application
     programme was undertaken. First, it was        by investment programmes is their             process is a particularly critical
     determined whether any travel or               ability to provide a rapid route to second    component and a smoother, hassle-free
     residence prerequisites applied. Second,       citizenship, the highest number of points     process can generate readiness to
     post-citizenship requirements were             was awarded to the programmes with            engage with a programme.
     examined, as well as the consequences          the shortest turnaround times.                   Multiple indicators were considered,
     of failing to fulfil those requirements.          Additional merit was given to              commencing with entry qualifications
     Third, the extent of the travel or             programmes offering fast-track                such as previous business experience or
     residence requirements were analysed,          processing options at an additional fee,      fluency in a language. Knowledge of
     with physical visits for the purposes of       as these provide an extra layer of            local history or culture assessments and
     attending an interview, swearing an oath       certainty for the applicant who is            interview requirements were also
     of allegiance, or giving biometric             urgently in need of his or her second         weighed.
     information all taken into account.            citizenship.                                     By its very nature as a naturalisation
     Additionally, mandatory travel that                                                          process, citizenship by investment
     could only be waived or eased following        PILLAR 6: EASE OF PROCESSING                  involves a significant amount of
     the payment of a costly fee was also           The Ease of Processing Pillar measures        paperwork, including both forms and
     given consideration.                           the end-to-end complexity of the              supporting documents. Having the
        In line with previous pillars, scrutiny     citizenship by investment application         support of an official government
     focused on the main applicant rather           process. In some jurisdictions, the           website and of a dedicated citizenship
     than any dependants that may be                application process can be a labour-          by investment unit to seek and obtain
     included in the citizenship application.       intensive and painstaking task that is        clarification was thus an influential factor
        As having year-round freedom to             time-consuming for the applicant; in          in awarding points to a programme.
     travel is a highly-valued liberty,             others, it is streamlined and the applicant      Extensive communication with
     programmes that waived residence and           receives clear directives on how to           advisors and legal experts is required
     travel requirements achieved the best          proceed. For the ever-busy,                   where a jurisdiction mandates the
     score, followed by those with minimal          internationally-minded individual, the        purchase of real estate or other assets,

18   AUGUST/SEPTEMBER 2018
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