Citizenship by Investment Programs (CBI or CIP for short) are not new. They’ve been around for almost four decades. Yet over the last ten to fifteen years, they started gaining traction and attracting thousands of high-net-worth individuals, wealthy entrepreneurs and investors from around the world for a variety of different reasons. Fayez Hwalla, Managing Partner of PASSWORLD LTD, in his article talks in detail about these programs and their benefits.

Nowadays, given the developments on the global geopolitical scene and the resulting uncertainties, demand for such programs is sky rocketing. For some it’s an immediate necessity to ensure they have undisrupted access to business, education, healthcare, or lifestyle choices. For others, it’s an insurance policy or a Plan B to mitigate future risks whether on the global front, or specific to their country of origin. Accordingly, CBI has become an integral part of the toolkit of wealth managers and financial advisors when structuring clients’ global presence. Like investment diversification, the concept is rapidly evolving towards advising for citizenship and residency portfolios to ensure that clients can develop, enjoy and sustain a Global Citizen status.

WHICH COUNTRIES CURRENTLY OFFER CBI PROGRAMS?

Many countries have relevant legislation for citizenship or residency through investment programs. Not all are active and out of those that are, few can be considered successful. Our experience when it comes to CBI specifically, the five East Caribbean programs (Grenada, Dominica, St. Kitts, Antigua and St. Lucia) have a proven track record and a very good reputation. From an EU standpoint, the two most prominent are Malta and Portugal, neither of which offers typical CBI programs. Malta has an exceptional investor naturalization program with more requirements, higher investment and longer lead time. Portugal has a residency program with a pathway to permanent residency or citizenship application in five years’ time. Every month we learn about a new country ratifying legislation for new programs, yet such programs need time to evolve and prove they have the right transparency, infrastructure, and track record before we can recommend these options to our clients.

WHICH NATIONALITIES ARE TYPICALLY INTERESTED IN CIP?

Interest is picking up globally, driven by many reasons such as geopolitical conflicts and their implications, regulatory and tax reforms in certain countries taking into consideration worldwide income taxation, or successful business leaders who don’t want to be bound by the restrictions imposed by their home countries. In some cases, applicants are renouncing their original citizenship (which they don’t have to) to break free from arguably unjust treatment or reforms imposed by their governments.

WHAT ARE THE BENEFITS OF CARIBBEAN CBI PROGRAMS?

Benefits are subject to how effectively features are put to use. These features fall into three main categories: Mobility with visa-free travel to 130+ countries including UK, EU Schengen Area, Singapore, Hong Kong and even China in the case of Grenada; Wealth Preservation through diversification and legal tax optimization strategies; and Lifestyle options like access to highly rated universities in Grenada and St. Kitts, or option to reside indefinitely in any of the 13 CARICOM countries including the Bahamas.

Important to note that there is no requirement to reside or even visit the host country (with the exception of Antigua which requires a 5-day visit) – the whole process is managed remotely and even certificates and passports are couriered to the applicant’s chosen address.

One specific feature worth highlighting, is exclusive to Grenada citizens. Grenada has an E-2 Treaty with the United States, thus allowing its citizens to apply for an E-2 investor visa.

WHAT IS E-2 INVESTOR VISA AND WHAT ARE ITS BENEFITS?

The treaty investor visa is a nonimmigrant classification that allows a national of a US treaty country to travel and reside in the United States for up to five years for the purpose of investing a substantial amount of capital in an approved US commercial enterprise. E-2 is highly sought after by foreign nationals and investors given its substantial benefits and privileges to the visa holder and family members.

Some of these key benefits are:
• Free education in US public schools
• More affordable, in-state tuition costs at US universities
• Spouses have the right to work anywhere in the United States
• Visa can be renewed indefinitely, provided the business maintains operations
• Visa holder can spend up to 120 days in the US without being subject to worldwide income taxation
• Visa holder can sponsor specialized employees from their nation (non-family members) to work for their business.

PATHWAY TO CITIZENSHIP

In general, all Caribbean programs have two paths, either investment in a government approved real estate project (typically hospitality projects to boost tourism) or a direct nonrefundable contribution to a specific economic development fund. In the real estate option, we normally expect a 2 to 4% ROI, always depending on project performance. CBI investors are required to hold their investment for 5 years (7 in the case of St. Kitts), and then they can resell their shares to another applicant while retaining their full citizenship status and features.

PROCESS, DUE DILIGENCE, AND TIMELINE

Application processes have been well streamlined to clarify all required documents and application forms. The documents required generally revolve around personal information, criminal records, some medical exams, and source of funds. Our processing team support the client during the document preparation phase and review each document to ensure right first-time submission. Once submitted, the CBI unit of the host country start their detailed due diligence process which includes checks against international crime databases and key intelligence agencies. Such thorough due diligence is critical, to ensure program reputation and integrity which in turn protects both investor and host country in the long term. Timeline spans between five and eight months, with some delays recently due to high volumes. CBI units are increasing capacity to cope with high demand.

WHAT’S THE INVESTMENT MAGNITUDE?

In this part of the world, CBI is perceived as a multi-million investment. This is not the case for the Caribbean. Investment depends on the program, pathway and number of dependents and their ages. To give you an example, a family of four applying for Grenada citizenship through the real estate path costs around $300k to $320k.

LAST THOUGHTS

Any successful business leader, owner, investor or entrepreneur, should take a step back from their busy schedules, and rethink their global presence and risk mitigation strategies during such volatile times and the prevailing grim global outlook. We’re one call away and look forward to extending our support on CBI and beyond.

Fayez Hwalla
Cert.IM
Managing Partner
PassWorld Ltd

+357 96 670 700
+357 25 011 700, 77 770 700
www.passworld-cbi.com
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