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Global Residence and Citizenship Programs 2018–2019 provides the most comprehensive, systematic analysis and benchmarking of the world’s leading residence- and citizenship-by-investment programs. A distinguished panel of independent experts — immigration and citizenship lawyers, economists, country risk experts, academic researchers, and other specialists — have created the Global Residence Program Index and the Global Citizenship Program Index as part of the report. These two indexes have become the global standard by which to gauge and reflect on the relative worth of residence and citizenship programs around the world as they analyze a broad range of factors to produce an overall global view and ranking of the different investment migration programs on offer. These indexes are highly relevant not only to those who are interested in alternative residence or citizenship options, but also to industry professionals, private client advisors, and others with an interest in the subject, as well as to governments. The report includes analyses of factors such as immigration law, taxation, and quality of living as well as transparency and risk and compliance issues and conveys scores and ranks using clear infographics and figures complemented with concise explanations. Updated with new expert commentary, Global Residence and Citizenship Programs 2018–2019 is an invaluable tool for anyone with an interest in investment migration.

ISBN 978-3-9524742-4-2

USD 115 GBP 75 EUR 99

Global Residence and Citizenship Programs 2018–2019 The Definitive Comparison of the Leading Investment Migration Programs


Global Residence and Citizenship Programs 2017–2018

7


Global Residence and Citizenship Programs 2018–2019 The Definitive Comparison of the Leading Investment Migration Programs

New York • London • Zurich • Hong Kong


Copyright Š 2018 by Ideos Publications Ltd. All rights reserved. Published by Ideos Publications Ltd. in Zurich/Switzerland. This report can in no way substitute legal or other professional advice. While the publisher and authors have undertaken great care in preparing this report, they obviously cannot guarantee its correctness and completeness, and the explanations and strategies contained herein may not be suitable for your situation. Any comments and suggestions, praise and criticism will be gratefully received. If you feel that a particular topic or country should be added to this report, please let us know via the Contact page on ideospublications.com No part of this publication may be reproduced, stored, or transmitted in any form or by any means, electronic, mechanical, whether photocopied, recorded, scanned or otherwise, except as permitted by applicable national laws, without the prior written permission of the publisher. Requests to the publisher for permission should be addressed to the Permissions Department, Ideos Publications Ltd., Klosbachstrasse 110, 8024 Zurich, Switzerland or online via ideospublications.com Limit of liability and disclaimer: While the publisher and authors have used their best efforts in preparing this report, they make no representation or warranties with respect to the accuracy or completeness of the contents of this book. Neither the publisher nor the authors shall be liable for any loss of profit or any other damages, including but not limited to special, incidental, consequential, or other damages. The Henley & Partners symbol and Henley & Partners are among the registered and unregistered trademarks of Henley & Partners Holdings Ltd. All rights reserved. For general information on our other products and services, please visit ideospublications.com All Ideos publications are also available as e-books. The CIP Catalog record for this book is available from the British Library. ISBN (softback): 978-3-9524949-0-5 ISBN (e-Book): 978-3-9524949-1-2


Global Residence and Citizenship Programs 2018–2019 Incorporating The Global Residence Program Index (GRPI) The Global Citizenship Program Index (GCPI) Produced by Henley & Partners in collaboration with an independent panel of experts Dr. Diego Acosta, Associate Professor in Migration and European Law, University of Bristol, Bristol/UK Liam Bailey, Global Head of Residential Research, Knight Frank, London/UK Nadine Goldfoot, Partner, Fragomen LLP, London/UK Prof. Dr. Dimitry Kochenov, Chair in EU Constitutional Law, University of Groningen Groningen/The Netherlands, Chairman of the Board, Investment Migration Council, Geneva/Switzerland Dr. Robert W. Kuipers, Former Partner, Reward/Human Resource Services; and Stuart Jones, Senior Manager, PwC, Zurich/Switzerland Damien Martinez, CEO, Facepoint, Paris/France Irene Mia, Global Editorial Director, Economist Group, Economist Intelligence Unit, London/UK Marnin J. Michaels, Partner, Baker McKenzie, Zurich/Switzerland Daniel J. Mitchell, Chairman of the Center for Freedom and Prosperity, Alexandria/US Kamal Rahman, Partner, Mishcon de Reya Solicitors, London/UK Dr. Marcel Widrig, Partner, PwC and Global Private Wealth Leader, Zurich/Switzerland

Special contributions by Dr. Diego Acosta, Associate Professor in Migration and European Law, University of Bristol, Bristol/UK R. James Breiding, Author, CEO, Naissance Capital, Zurich/Switzerland Dr. JosĂŠ Caballero, Senior Economist, IMD World Competitiveness Center, Lausanne/Switzerland Prof. Dr. Yossi Harpaz, Assistant Professor of Sociology, Tel Aviv University, Tel Aviv/Israel Prof. Dr. Christian Joppke, Director, Institute of Sociology and Professor of General Sociology University of Bern, Bern/Switzerland Prof. Dr. Dimitry Kochenov, Chair in EU Constitutional Law, University of Groningen Groningen/The Netherlands, Chairman of the Board, Investment Migration Council, Geneva/Switzerland Karolina Laubscher, Head of Business Intelligence, Henley & Partners, Cape Town/South Africa Damien Martinez, CEO, Facepoint, Paris/France Daniel J. Mitchell, Chairman of the Center for Freedom and Prosperity, Alexandria/US Madeleine Sumption, Director, Migration Observatory, University of Oxford, Oxford/UK Prof. Dr. Kristin Surak, Associate Professor of Politics, SOAS, University of London, London/UK Dr. Marcel Widrig, Partner, PwC and Global Private Wealth Leader, Zurich/Switzerland The Economist/Henley & Partners


Contents

1

About Henley & Partners

The Global Residence Program Index

2

Philanthropy and Corporate Social Responsibility

4

About this Report

59 The Global Residence Program Index 2018–2019

6

Introduction — A Glimpse of Global Trends

60 Austria

Expert Commentary 12 The Pro-Growth Benefits of Investment Migration Programs 16

The Rise of Instrumental Citizenship

20 Country Competitiveness, Talent Acquisition, and Residence Programs 24

The Economist/Henley & Partners Guide to Investment Migration for Governments and Global Citizens — A Summary

28 Due Diligence in the Context of Investment Migration Programs 32 Compensatory Citizenship: Dual Citizenship as a Response to Global Inequality 36

Too Small To Fail

42

Ius Doni — Then and Now

62 Portugal 64 Italy 66

Thailand

68

United Kingdom

70 Malta 72 Belgium 74 Australia 76

United States

78 Switzerland 80 Canada 82

Dubai/UAE

84 Greece 86 Spain 88 Latvia

44 The Growing Market for Citizenship and Residence: A Policy Perspective

90 Jersey

46 The Expansion of Regional Free Movement Regimes and Its Impact on Investment Migration

94 Singapore

92 Monaco

96 Cyprus

48

The Migration of Millionaires

98

52

Global Movement of Billionaires

100 Bulgaria

Hong Kong


The Global Citizenship Program Index 105 The Global Citizenship Program Index 2018–2019 106 Malta 108 Cyprus 110 Austria 112 Antigua and Barbuda 114 Moldova 116 Montenegro 118 St. Kitts and Nevis 120 Grenada 122 St. Lucia 124 Dominica 126 Jordan 128 Turkey

Methodology 132 Developing an Index 132 The Global Residence Program Index 2018–2019 155 The Global Citizenship Program Index 2018–2019

Resources 179 Henley & Partners Group Offices 180 Useful Websites


Global Residence and Citizenship About Programs Henley2017–2018 & Partners

About Henley & Partners

The production of this annual research report has been made possible by the generous sponsorship of Henley & Partners — the global leader in residence and citizenship planning. With offices in over 30 countries worldwide, Henley & Partners is the world’s largest and most important investment migration firm. The concept of residence and citizenship planning was created by Henley & Partners in the 1990s at a time when most international lawyers and wealth planning professionals did not consider the subject to be of much relevance. Over the years, Henley & Partners has emerged as the world’s leading firm specializing in and focused on this particular area of practice. International residence and citizenship planning has itself become a major topic among the increasing number of internationally mobile entrepreneurs as well as the many wealthy individuals and families who are interested in looking at alternative residence and citizenship solutions. Lawyers such as Dr. Christian H. Kaelin, the firm’s Chairman, as well as many others, developed the discipline together with an esteemed group of specialists, most of whom now work at Henley & Partners. Today, individual clients as well as advisors and law firms worldwide rely on Henley & Partners for specialized advice and assistance in this delicate area, where our expertise and experience are unrivaled. The firm’s renowned Residence and Citizenship Practice Group advises private clients and their close advisors on investment migration solutions. Henley & Partners is in contact with the government authorities of all relevant countries and constantly monitors the worldwide situation.

Our unique Government Advisory Practice also assists in designing, implementing, and operating investment migration programs and gives relevant advice to governments. Three of the most recent mandates are from Thailand, Grenada, and Malta. In Grenada, Henley & Partners was mandated to enhance and revitalize the country’s citizenship-by-investment program. In Malta, Henley & Partners won a public call for services and was awarded a Public Services Concession for the design, implementation, and international promotion of the Malta Individual Investor Program, which went on to become the most successful and most reputable citizenshipby-investment program in the world. In addition to advising clients on the possibilities of acquiring resident status, permanent residenceand citizenship-by-investment, members of the Residence and Citizenship Practice Group advise on the (re-)acquisition of citizenship based on ancestry as well as on residence planning for private clients with a view to post-immigration citizenship acquisition. Residence planning for private clients involves finding solutions for individuals and families who move internationally, own property in different countries, and who often have complex international circumstances and exceptional personal requirements. For many years, Henley & Partners has organized the Global Residence and Citizenship Conference — the most important such event in the world. It is held annually in November, and in a different location each year. Please visit henleyglobal.com/ events to download the program and for detailed information and registration options for the next conference and all our upcoming events.

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Global Residence and Citizenship Programs 2018–2019

Philanthropy and Corporate Social Responsibility At Henley & Partners, our corporate social responsibility is expressed through the ethics and integrity of our business practice, actively engaged staff, and a long tradition of discreet and generous philanthropy. We are proud of the many worthy causes we have supported over the years, including social, education, and humanitarian projects. Our firm serves clients who enjoy the privilege of choosing where they want to reside in the world and even which citizenship to hold. This is why we have committed to provide support to those who do not have such choices, in particular those who are forced to flee their homes and restart their lives in another country. Today, the support of refugees is the main focus of Henley & Partners’ social investment and our contribution to a more just global society.

Supporting refugees — the UNHCR partnership Since 2014, Henley & Partners has been engaged with the world’s leading humanitarian agency, the United Nations High Commissioner for Refugees (UNHCR). Our support of the UNHCR has been primarily focused on funding refugee registration and identification as the starting point for all humanitarian assistance. UNHCR registration ensures that the identity of those seeking sanctuary from war and persecution is properly recorded and verified. It is the first and most critical step towards ensuring refugee assistance, access to basic services, and protection. Henley & Partners has already contributed over USD 1.5 million to UNHCR to assist with the registration and documentation of more than 50,000 people around the world. Each year, we honor our partnership with UNHCR with a special event, inviting clients and partners to join us in support of displaced people. The Henley & Partners Hero Scholarships As part of ongoing efforts to create opportunities for the development and empowerment of young people in the Caribbean, we created the Henley & Partners Hero Scholarships in partnership with the Halo Foundation in Antigua and Barbuda and Saint Mary’s University in Canada.

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Global Philanthropy Residence and and Citizenship CorporatePrograms Social Responsibility 2017–2018

The Hero Scholarships identify and support underprivileged students in the Caribbean who deserve recognition not only for their academic merits but also for their remarkable acts of bravery and kindness. The award aims to ease the financial barrier to tertiary-level education for students from disadvantaged backgrounds. The Andan Foundation Henley & Partners’ commitment for the future is through the Andan Foundation, a non-profit, public-benefit foundation based in Switzerland. It is devoted to addressing the global issue of forced migration and refugees. The foundation aims to propel and facilitate the private sector’s involvement in this area and to channel its creative power, resources, and entrepreneurial abilities towards public and private initiatives that expand economic, financial, and political opportunities for both the refugee populations and the communities that welcome them.

Share our vision We envisage a world that provides all people with the opportunity to live in dignity, security, and harmony in their country of birth or in their country of choice. A world where social and business communities, international organizations, and states work together to empower both families forced to leave their homes and their hosting communities to build a new, mutually beneficial way of living. The survival and safety of our society depends on how well we can address global issues together. As the leading global residence and citizenship advisory firm, we are committed to playing our part in creating a powerful nexus, raising awareness, mobilizing support, and gathering resources for innovative solutions and groundbreaking projects. Together with our staff, our clients, and friends of the firm we are making a difference in this important global cause of our time. If you are interested in working with us and if you have resources, passion, talents, or ideas to share please contact us at philanthropy@henleyglobal.com

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Global Residence and Citizenship Programs 2018–2019

About this Report

The Global Residence and Citizenship Programs report provides the most comprehensive, systematic analysis and benchmarking of the world’s leading residence- and citizenship-by-investment options. Henley & Partners, together with a distin­ guished panel of independent experts, including immi­gration and citizenship lawyers, economists, country risk experts, and academic researchers, has created the Global Residence Program Index (GRPI) and the Global Citizenship Program Index (GCPI) as part of the report. These two

indexes analyze a broad range of factors to produce an overall global view and ranking of different residence and citizenship programs on offer. The indexes are highly relevant not only to those interested in alternative residence or citizenship options but also industry professionals, private client advisors and others with an interest in the subject, as well as governments. The report, updated annually, analyzes the following factors:

Global Residence Program Index

Global Citizenship Program Index

• • • • • • • • • •

• • • • • • • • • •

4

Reputation Quality of Life Tax Visa-free or Visa-on-arrival Access Processing Time and Quality of Processing Compliance Investment Requirements Total Costs Time to Citizenship Citizenship Requirements

Reputation Quality of Life Visa-free or Visa-on-arrival Access Processing Time and Quality of Processing Compliance Investment Requirements Residence Requirements Relocation Flexibility Physical Visit Requirements Transparency


1st |

Austria

Austria is one of Europe’s wealthiest countries, offering a very high quality of life to its people. With a welldeveloped and stable economy and awe-inspiring natural attractions, Austria makes for an outstanding place of residence. The country is famous for being the birthplace of many renowned intellectuals, artists, and composers.

Austria

3

6

10

Citizenship Requirements

Reputation

7

10

Time to Citizenship

Quality of Life

8

2

under the age of 18 years. These assets have to be proven in the form of a statement of account from an Austrian bank or a major international bank). A university degree that is recognized in Austria or German language skills at A1 level, permanent accommodation in Austria, and health insurance that provides full cover in Austria are also required. Owing to a strictly applied quota system, it is important to submit the application at the beginning of January each year in which a residence card is required • Residence and Work Permit as a Key Manager – under the category of Key Manager, the main criteria are that the applicant has been appointed as a manager of an Austria-based company and is employed at a minimum salary of EUR 2,500 per month. This corresponds to approximately EUR 800 per month in effective costs for taxes and social security contributions The processing time for a residence permit can take up to 14 months. It is also possible to qualify for citizenship-by-investment — see the GCPI entry for Austria on page 111.

6

79

Total Costs

An Austrian residence permit allows one to travel to all Schengen Area states without the need for a visa. After ten years of legal residence, and in certain circumstances after six years, it is possible to apply for Austrian citizenship. There are minimum application requirements. Austria distinguishes between 10 types of residence permits. These permits differ depending on: (i) whether the applicant is allowed to work in Austria or not and (ii) whether the applicant is an employee or is self-employed. Other permits exist for students and for family members of persons who are already resident in Austria. For some of these permits, including those for persons of independent means, annual quotas apply that are implemented each year by decree. For all other residence permits, strict conditions have to be fulfilled. The potential routes to residence include: • Residence for Persons of Independent Means – under the category of Persons of Independent Means, the key criterion is that the applicant has sufficient funds (the applicant must be able to show liquid assets at their disposal of about EUR 40,000 per adult and EUR 10,000 per child

Austria

1

The Global Residence Program Index 2018–2019

Residence Program

Global Residence and Citizenship Programs About 2017–2018 this Report

Tax

Residence Required

183 days per year

Nature of Contribution Not applicable 10

Minimum Contribution None

10

Investment Requirements

Visa-free or Visa-on-arrival Access

4

4

Time to Citizenship

6–10 years

8

Compliance

Processing Time and Quality of Processing

Figure 7. The total score for Austria on the GRPI is 79/100, ranking it 1st out of 21 programs

German

Euro EUR

8,754,413*

USD 409.3 billion*

*Source: CIA, ‘The World Factbook’ (2018)

1st |

Malta

Malta is located in the center of the Mediterranean Sea and enjoys an excellent reputation for its splendid climate, friendly people, low crime rate, and superb quality of life. An attractive place in which to live or own a second home, Malta also has excellent air links.

Malta

3

8

6

Transparency

Reputation

8

7

Physical Visit Requirements

Quality of Life

10

10

79

Relocation Flexibility

Visa-free or Visa-on-arrival Access

The Malta Individual Investor Program (MIIP) is a modern citizenship-by-investment program designed, implemented, and globally promoted by Henley & Partners for the Government of Malta under a Public Services Concession. It is targeted at high-net-worth individuals and their families worldwide and is considered to be the world’s most advanced and most exclusive citizenship-byinvestment program. The MIIP requires applicants to make a nonrefundable economic contribution of EUR 650,000 to the National Development and Social Fund. In exchange, and subject to a very thorough application procedure that includes detailed due diligence and background verification checks, applicants and their families are granted full EU citizenship. The following conditions must be met: • Property – either the purchase of a residential property in Malta at a price of at least EUR 350,000, which must be held for five years, or the lease of a residential property with a rental of at least EUR 16,000 per annum, which also must be held for five years • Participation in Approved Financial Instruments – EUR 150,000 in a prescribed financial instrument, which must be held for five Visa-free or Visa-on-arrival Access

182 destinations*

Residence Required

1 year’s legal residence

Malta

1

The Global Citizenship Program Index 2018–2019

Citizenship Program

61

60

2

years, the details of which are published from time to time by the Malta Individual Investor Programme Agency (MIIPA) • Health Insurance – the holding of a valid global health insurance policy with medical expense cover amounting to at least EUR 50,000 per family member • Residence – legal residence in Malta for one year prior to application for citizenship • Oath of Allegiance – applicants up to five years of age: presence not required for the oath or passport collection; six to eleven years of age: presence required for the oath, but may not be present for passport collection; twelve years of age and over: presence required for the oath and passport collection Malta’s compliance and due diligence standards are considered to be the world’s strictest and aim to ensure that only highly respectable applicants are admitted. Applicants must be legal residents in Malta for one year prior to acquiring citizenship under the MIIP. Although the process for obtaining citizenship in Malta is very rigorous, it is also open and straightforward with no additional requirements, thus yielding a high transparency score on the GCPI.

Nature of Contribution Investments, real estate, insurance, and residence 8

6

Residence Requirements

4

Processing Time and Quality of Processing

6

Investment Requirements

Minimum Contribution Approximately EUR 1 million Time to Citizenship

12 months

10

Compliance

Figure 29. The total score for Malta on the GCPI is 79/100, ranking it 1st out of 12 programs

Maltese, English

Euro EUR

416,338**

USD 12.01 billion**

*Source: 2018 Henley Passport Index ranking, as of 10 July 2018 **Source: CIA, ‘The World Factbook’ (2018)

106

107

Key 1. Country Rank within GRPI or GCPI 3. Individual Factor Scores

2. GRPI or GCPI 4. Total Score

5


Global Residence and Citizenship Programs 2018–2019

Introduction — A Glimpse of Global Trends

Prof. Dr. Dimitry Kochenov Chair in EU Constitutional Law, University of Groningen, Groningen/The Netherlands The fourth edition of this report and the two indexes remain as incisive and relevant as the first. While the number of residence and citizenship programs on offer around the world has been steeply on the rise in recent years, professional comparative analyses of such programs, let alone their reliable rankings, are rare. It goes without saying that comparisons illuminate as they empower informed choices. The key attraction of the two indexes presented in this report is that they are designed with the investor in mind, since rankings, for obvious reasons, are bound to be organized differently depending on the perspective chosen: both the benefits of the states offering residence- and citizenship-byinvestment programs1 and the interests of the investors themselves are perfectly legitimate starting points. Yet, while states usually benefit from great resources in their program design, as well as from the scrutiny of the proposals in the context of the political process, individual investors cannot boast the same level of empowerment and are in need of clear and reliable advice. Opting for placing an emphasis on the person rather than on the state, Henley & Partners has thus made the right choice: this is precisely the most needed and also the most justified starting point to adopt in approaching the evaluation and ranking of residence- and citizenship-by-investment programs. The fact that a need has arisen to rank these programs testifies to the changing global understanding of citizenship and residence that the

1

2 3 4 5 6

6

world is currently going through. Crucially, the global ascent of residence- and citizenship-by-investment is not the cause but a consequence — as Prof. Spiro also underlined 2 — of the changing perception of the core of state power and the relationship between the individual and the state: in the majority of countries in the ‘Western’ world, we, the citizens, are being freed from the ‘suffocating bonds’. States, from a presumed and unalterable given — the role they used to play in human lives — become an object of choice and contestation. This is what I would like to present a glimpse of here: the rise of the programs in question is far from haphazard and is backed by clear legalhistorical roots that are connected — in the most direct way — with the contemporary legalphilosophical understanding of the nature of the state, of human worth, and of the idea of liberty. In short, a quasi-sacred nature of the state, as well as the idea of citizenship and residence as the two primary ways to establish the ties between an individual and a state authority, came to be naturally contested towards the end of the 20th century. This process, which is ongoing, triggered a global rethinking of the essential meaning of the individual–state connection: the ‘inevitable lightening of citizenship’.3 Our world is a reflection of ideas,4 and the idea of the state is, potentially, one of the most repugnant of them all,5 despite it being so much a part of our reality that, as you would expect, it is constantly taken for granted. At the origin of states and nations lies “creating or elaborating an ‘ideological’ myth of origins and descent”.6 In Mythologies, Roland Barthes explains that myths

The perspective adopted by Madeleine Sumption in her chapter in this report, ‘The Growing Market for Citizenship and Residence: A Policy Perspective’, 44 P. Spiro, ‘Cash for passports and the end of citizenship’ (2014) 1 EUI RSCAS in A. Shachar and R. Bauböck (eds) (2014) 9 C. Joppke, ‘The inevitable lightening of citizenship’ (2010) 51 European Journal of Sociology 9 P.L. Berger and T. Luckmann, The Social Construction of Reality: A Treatise in the Sociology of Knowledge (Ancor 1967) P. Allott, Eunomia (OUP 1990) A.D. Smith, The Ethnic Origin of Nations (Basil Blackwell 1986)


Global Residence Introduction and Citizenship — A Glimpse Programs of Global 2017–2018 Trends

are important not for the stories they tell but for what they do.7 The identity side of citizenship works in exactly the same way. Although the myth itself is always absurd (“nationality is to a greater or lesser degree a manufactured item”8 — l’oubli et l’erreur historique),9 the identity’s perceived true nature is not thereby undermined, ensuring that people are ready to sacrifice it all, mourir pour la patrie.10 While states and nations contribute significantly to human social organization, the ideological stances about their eventual ‘inherent good’ should be dismissed outright: a state or a nation cannot legit­ imately be approached as possessing any sacred value. This triggers numerous important questions, especially in those contexts where the willingness to die for the state abounds. “If national allegiances can be based on false beliefs, how is it possible for a purportedly rational institution such as morality to accommodate them?”.11 The same applies to citizenship. Unquestionably a truth created by law,12 being a citizen depends, to a lawyer at least,13 on one, and only one, thing: the possession of the status of citizenship in accordance with the law of a particular jurisdiction to which certain rights can be attached. Just like ‘nationality’

7

8 9

10

11 12 13

14 15 16

or ‘state’, ‘citizenship’ is a notion with no ethical content, notwithstanding the constant ideological specta­ cle surrounding it.14 The core element of citizenship is exclusion15 and the grounds for inclusion are as variable as they are random.16 There is no objective truth in who should belong and who should not — any principle accepted in a particular society can necessarily be criticized or overturned. The same largely applies to the legal notion of residence, which knows many forms and is not to be confused with presence in the territory. Residence is by definition elusive and, like citizenship, comes with a thick bundle of popular assumptions as well as legally consequential duties and entitlements. These can be held by an individual even in the legal contexts where residence and presence do not overlap. Residence and especially citizenship are thus profoundly problematic concepts. These problems, once realized and set against the background of the growing importance of tolerance and human rights as well as the general rise in world migration, which increases the exposure of people and groups with radically diverging world views to each other, result in the remarkable erosion of citizenship’s substantive content, which can be observed over

A. Lavers (trs), ‘In a mythical system causality is artificial, false; but it creeps, so to speak through the back door of Nature’ in R. Barthes, Mythologies (Strauss & Giroux 1972) D. Miller, ‘The ethical significance of nationality’ (1988) 98 Ethics 657 ‘Historical forgetfulness and wrongs’ in E. Renan, Qu’est-ce qu’une nation? et autres essais politiques (first published 1882, Agora 1992) ‘To die for the motherland’; For more on the patriotic sacrifice see M. Walzer, ‘Civility and Civic Virtue in Contemporary America’ (1974) 41 Sociological Research 4 D. Miller, op cit., 648; C. Chwaszcza, ‘The unity of people, and immigration in liberal theory’ (2009) 13 Citizenship Studies 451 J.M. Balkin, ‘The proliferation of legal truth’ (2003) 26 Harvard Journal of Law and Public Policy 5 E. Isin, ‘Citizenship in flux: The figure of the activist citizen’ (2009) 29 Subjectivity 367; E. Isin and G. Nielsen (eds), Acts of Citizenship (ZED books 2008) G. Debord, La Société de Spectacle (Gallimard 1996) J.H. Carens, ‘Aliens and citizens: The case for open borders’ (1987) 49 Review of Politics 250 M.J. Gibney, ‘The rights of non-citizens to membership’ in C. Sawyer and B.K. Blitz (eds), Statelessness in the European Union (CUP 2011) 41

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Global Residence and Citizenship Programs 2018–2019

recent decades. Citizenship and residence are in the middle of an important transformation. Neither of the two is ‘good’. Neither of the two is ‘sacred’. While states came to be more perceptive and tolerant of the actual differences between their citizens as human beings,17 the obligations of citizenship started fading away,18 just as the right to be left alone received prominence. Citizenship is now a sparer notion than it has ever been: the state cannot tell you whom to be; it respects whom you are.19 As a result, we are witnessing a certain rise of residence to prominence: as citizenship is thinning, residence has been thickening in a contrarian deve­lopment, partly replacing citizenship’s role as a legal connector between the individual and rights. Residence now grants access to non-discrimination claims in an ever-expanding number of important contexts; it comes with an articulated bundle of rights, including social rights even, and is recognized as greatly important also in relations between states as legal residence in certain countries can even be the basis for visa-free access to others. Despite the fact that such a presen­ tation is necessarily somewhat exaggerated, it is patently

17 18 19 20

8

clear and unquestionable that liberal democracies are having a hard time justifying their own nonexistent ‘uniqueness’, which, in the heyday of the nation-state, was simply presumed and formed the patriotic core of citizenship. It is now clear to the Dutch that they are in no way better — by virtue of being Dutch — than the British or the French:20 citizenship is now developing in the direction of becoming a purely legalistic status and it cannot be otherwise. Viewed against this general context, the rising trends of citizenship-by-investment and residence-by-investment are truly illuminating, as they exemplify the practical nature of the two concepts in the world where the word ‘sacred’ — previously applied to the state and the logic of belonging — has progressively fallen out of use. It has been a true privilege for me to participate as an expert and to contribute the introduction to this study — now already in its fourth year — as its interest and illustrative potential stretches much further than a simple ranking of a handful of investment migration programs: it is a testimony to the changing nature of the ties linking persons to authority in the contemporary world.

L. Bosniak, ‘Persons and citizens in constitutional thought’ (2010) 8 International Journal of Constitutional Law 9 D. Kochenov, ‘EU citizenship without duties’ (2014) 20 European Law Journal 482 C. Joppke, ‘The inevitable lightening of citizenship’ (2010) 51 European Journal of Sociology 9 This is a general trend. See, for example, J. Tilley and A. Heath, ‘The decline of British national pride’ (2007) 58 British Journal of Sociology 661


Global Residence Introduction and Citizenship — A Glimpse Programs of Global 2017–2018 Trends

Prof. Dr. Dimitry Kochenov holds a Chair in EU Constitutional Law at the University of Groningen in the Netherlands and chairs the Investment Migration Council, Switzerland. He has held numerous fellowships and visiting professorships worldwide, including at Princeton University (Crane Fellowship in Law and Public Affairs at the Woodrow Wilson School and Visiting Professorship at the Center for Human Values), NYU School of Law (Emile Noël Fellowship), Boston College Law School (Senior Clough Fellowship), Basel Institute for European Global Studies, and Osaka Graduate School of Law and Politics, as well as a Visiting Chair in Private Law (Citizenship) at the University of Turin, Italy. He publishes widely on different aspects of comparative and European citizenship law and migration regulation, and he consults for governments and international organizations on EU constitutional law and citizenship issues. His latest edited volumes include EU Citizenship and Federalism: The Role of Rights (Cambridge University Press, 2017) and The Enforcement of EU Law and Values (Oxford University Press, 2017, with András Jakab, University of Salzburg).

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Global Residence and Citizenship Programs 2018–2019

10


Global Residence and Citizenship Programs 2017–2018

Expert Commentary 12

The Pro-Growth Benefits of Investment Migration Programs

16

The Rise of Instrumental Citizenship

20 Country Competitiveness, Talent Acquisition, and Residence Programs 24

The Economist/Henley & Partners Guide to Investment Migration for Governments and Global Citizens — A Summary

28

Due Diligence in the Context of Investment Migration Programs

32

Compensatory Citizenship: Dual Citizenship as a Response to Global Inequality

36

Too Small To Fail

42

Ius Doni — Then and Now

44

The Growing Market for Citizenship and Residence: A Policy Perspective

46

The Expansion of Regional Free Movement Regimes and Its Impact on Investment Migration

48

The Migration of Millionaires

52

Global Movement of Billionaires

11


Global Residence and Citizenship Programs 2018–2019

The Pro-Growth Benefits of Investment Migration Programs Daniel J. Mitchell Chairman, Center for Freedom and Prosperity Alexandria/US Many nations seek to boost their prosperity by offering residence- and/or citizenship-byinvestment programs to attract individuals who are economically successful. Such programs generally require applicants — some of whom are from less advanced nations — to make significant investments in their new country in exchange for residence rights and/or an accelerated route to citizenship. Participating nations include large, prosperous countries, such as Australia, Canada, Switzerland, the UK, and the US; smaller wealthy jurisdictions, such as Dubai, Hong Kong, Jersey, Monaco, and Singapore; and nations that aim to improve their prosperity, such as Cyprus, Latvia, and St. Kitts and Nevis. While these programs are based on producing win–win scenarios for both nations and investors, they do generate a bit of controversy. Some critics worry whether there is sufficient due diligence to make sure bad people do not take advantage of the programs. Others assert it is somehow demeaning for a country to ‘sell’ residence rights or citizenship. And some fret that the price is not high enough, or that there are insufficient rules to ensure that investments produce promised benefits.

Macro-economic benefits In theory, the benefits of migration are potentially enormous. This is partly because labor productivity is much higher in some jurisdictions than in others. This helps to explain why Indian, Lebanese, and Nigerian individuals (among others) who migrate to the US, for instance,

21

22

12

earn far more than those who remain in India, Lebanon, and Nigeria. Looking at the issue from a global perspective, John Kennan of the University of Wisconsin estimated significant benefits from open migration: There is a large body of evidence indicating that cross-country differences in income levels are associated with differences in productivity. If workers are much more productive in one country than in another, restrictions on immigration lead to large efficiency losses. …The estimated gains from removing immigration restrictions are huge. Using a simple static model of migration costs, the estimated net gains from open borders are about the same as the gains from a growth miracle that more than doubles the income level in less-developed countries.21 Lani Pritchet of Harvard has similar estimates of great economic benefits: …the estimates of the gains from the fanciful counter-factual of a complete liberalization of labor mobility are that world GDP would roughly double. At current levels of GDP this implies gains of 65 trillion dollars.22 Some argue that these large numbers are unrealistic because they do not measure whether large-scale migration would negatively impact on the policy environment in destination countries. In other words, gains from higher labor productivity may be overstated if mass migration causes antimarket policies. Economic migration programs are narrowly tailored, however, so neither the large estimates nor the theoretical objections are particularly relevant. The numbers quoted above are, nevertheless, primarily based on the potential

J. Kennan, ’Open Borders’ (2012) National Bureau of Economic Research Working Paper No. 18307, August 2012 nber.org/papers/w18307 accessed 11 July 2018 L. Pritchett, ’The Cliff at the Border’ (2010) sites.hks.harvard.edu/fs/lpritch/NEW%20docs,%20ppts,%20etc/Cliff%20 at%20the%20border.pdf accessed 11 July 2018


Expert Commentary: The Pro-Growth Benefits of Investment Migration Programs

benefits that materialize when low-skilled migrants move to nations that have higher levels of labor productivity than their countries of origin. In the case of investment migration programs on the other hand, successful applicants are usually well educated, highly skilled, and possess more wealth, all of which means that they will probably increase their incomes, thus boosting global GDP while also increasing the per-capita GDP of their new countries of residence.

National benefits Governments undoubtedly expect to gain when they set up investment migration programs. In some cases, they receive direct payments to their

23

treasuries. In other cases, they require investments in the private economy to bolster national income and create more economic opportunity. Substantial evidence exists that nations reap considerable benefits from such programs. The trade association for the American EB-5 program estimates that it has generated USD 22 billion of investment, which resulted — between 2010 and 2015 — in USD 37 billion of economic output, 276,000 jobs, and USD 5 billion of tax revenue.23 The EB-5 program is just one example; the US has a range of programs designed to bring economically successful people to the country, and its efforts are extremely effective, as reported in the Washington Post:

Invest In the USA, ‘Home’ (IIUSA, 2018) iiusa.org/ accessed 28 June 2018

13


Global Residence and Citizenship Programs 2018–2019

Countries are constantly competing for the most talented workers and, according to the best available immigration statistics, the US has been winning. The US is home to just 4.4 percent of the world’s population, but in 2010, it gained more skilled immigrants than all other countries combined. The United States is also home to the majority of immigrant inventors, based on global patent data. And the majority of immigrant Nobel laureates. …147 million potential immigrants worldwide identify the US as their top destination — 3.8 times as many choose the second most popular option, Germany. …Immigrants from an average developing country can expect their income to multiply by a factor of four or six after moving to the US, the authors write. Likewise, the US labor market places a higher value on skills, which makes it a particularly attractive destination for the most qualified migrants.24 Other nations have reaped significant rewards as well. Cyprus attracted USD 4 billion to the island in 2016,25 and the Government of Malta collected more than USD 200 million in the first two years after its program was launched by Henley & Partners in 2014.26 In 2016, USD 199.9 million was derived from the Malta Individual Investor Program, and Malta registered a surplus of USD 138.1 million.27 This is equivalent to 1.1% of GDP and a shift from the deficit of USD 127.3 million recorded in 2015.

24

25

26

27

28 29

14

Further strong GDP growth of USD 3.1 billion with a growth rate of 7.2% was recorded for the third quarter of 2017.28 To be sure, there are national losses. When relatively successful migrants relocate from Country A to Country B, this is not beneficial for Country A. Since economic migrants generally move from poorer nations to richer nations, there are critics who complain that the resulting ‘brain drains’ make wealthy nations more prosperous while compounding the economic challenges of less-developed countries. The counter-argument is that brain drains would presumably not occur if the affected governments had better policies in place. People usually feel affection for their birth nations and only move because they feel a need for greater security today and more hope for their children in the future.

Family benefits One assumes that the individuals who move from one country to another believe that migration will be in their interest. A recent World Bank study provides rich evidence that economic migrants on average do enjoy significantly higher earnings in their new countries, noting that “Migrants — high and low skilled — experience huge income gains on migrating”.29 Indeed, according to the report “…typical individuals from an average developing country should expect to earn four

A. Van Dam, ’How the U.S. Cornered the Market for Skilled Immigrants’ (Washington Post, 20 June 2018) washingtonpost. com/news/wonk/wp/2018/06/20/how-the-u-s-cornered-the-market-for-skilled-immigrants/ accessed 11 July 2018 G. Höhler and S. Ott, ’Greece’s Golden Visa Program Under Fire’ (Handelsblatt, 12 March 2018) global.handelsblatt. com/politics/greece-golden-visa-program-eu-897555 accessed 11 July 2018 H. Cooper, ’Malta Slammed for Cash-for-Passport Program’ (Politico, 23 August 2016) politico.eu/article/malta-cash-forpassports-program-individual-investor-programme/ accessed 11 July 2018 C.H. Nesheim, ‘Malta’s State Coffers Swell Thanks to Citizenship Program, €112.9M Budget Surplus Registered in 2016’ (Investment Migration Insider, 23 October 2017) imidaily.com/editors-picks/maltasstate-coffers-swell-thanks-citizenshipprogram-e112-9m-budget-surplus-registered-2016/ accessed 2 January 2018 Government of Malta (National Statistics Office, 2017) nso.gov.mt/ accessed 5 February 2018 World Bank, ’Moving for Prosperity: Global Migration and Labor Markets’ (The World Bank, 15 June 2018) worldbank.org/en/research/publication/moving-for-prosperity accessed 11 July 2018


Expert Commentary: The Pro-Growth Benefits of Investment Migration Programs

to six times their income upon moving to the United States�.30 This is a reflection of higher labor productivity in advanced countries, which is why low-income and/ or low-skilled migrants benefit. For the subset of successful migrants who contribute capital as well as labor, their ability to redeploy their investments in more market-oriented nations enables greater accumulation of wealth, which is another mutually beneficial situation for themselves and for their new countries of residence. This does not mean every migrant enjoys economic success. Some even return to their countries of birth. Having the freedom of choice by definition, however, means they are making decisions that are in their best interest.

Conclusion Economic migration is a net plus for the world, a net plus for developed nations, and a net plus for highly-skilled individuals and investors. There is, however, some degree of controversy regarding this process. Development proponents are perturbed about so-called brain drains, and tax authorities are concerned about the loss of taxable income, but at present these concerns are outweighed by the perception that people should have the freedom to move — assuming, of course, that there are nations that are willing to accept them.

30

Daniel J. Mitchell is Chairman of the Center for Freedom and Prosperity, a pro-market public policy organization he founded in 2000. His major research interests include tax reform, international tax competition, the economic burden of government spending, and other fiscal policy issues. Having also worked at the Heritage Foundation and Cato Institute, he has decades of experience authoring papers, writing editorials, working with the public policy community, and presenting the free-market viewpoint to newspaper, television, and radio media. He has spoken to a wide variety of groups in dozens of cities and more than 50 countries. He also serves on the editorial board of the Cayman Financial Review and holds a PhD in economics from George Mason University.

Ibid.

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Global Residence and Citizenship Programs 2018–2019

The Rise of Instrumental Citizenship

Prof. Dr. Christian Joppke Director, Institute of Sociology Professor of General Sociology, University of Bern Bern/Switzerland Citizenship-by-investment is part of a larger trend toward ‘instrumental citizenship’, in which citizenship loses its nationalist, state-sanctifying aura and becomes a mundane tool of strategic individuals around the world, incidentally rich and poor, that enables them to pursue their interests. A second example of this trend is ‘external citizenship’, in which people who no longer live in the state of their ancestry retain or actively acquire the citizenship of their parents or grandparents as a form of insurance in case things go wrong in their country of residence. Many contemporary Israelis are in this category, as are scores of nominal Italians in Argentina, and others. A third example is EU citizenship, which is a post-national citizenship without duties and loyalties that has ‘instrumentalism’ written on its forehead, in terms of free movement

16

rights. Political theorists and philosophers, who are accustomed to seeing citizenship through the Greek lenses of virtue and participation, have dreaded this trend, but they conveniently overlook that there has always been a competing tradition of Roman rights-providing citizenship with much thinner connotations of identity. Why is instrumental citizenship becoming so prominent now? At one level, it reflects the parting of the ways of citizenship status and citizenship identity that inevitably follows from the fact of international migration. As almost 97% of the world’s population continue to live and die in their countries of birth, instrumental citizenship concerns only a tiny minority — those wealthy enough to buy a citizenship of their choice (if they are born with one that impairs mobility), the (remote) descendants of emigrants, and the few mobile European movers, to mention only the three typical cases. This is a mere fraction of the miniscule 3% in the world who, technically, are on the move. Importantly, for the sedentary majority, citizenship is never an issue — they live their lives without ever showing a


Expert Global Commentary: Residence and TheCitizenship Rise of Instrumental Programs 2017–2018 Citizenship

passport, except if they have the means to vacation in exotic places. The great Austrian lawyer Hans Kelsen once observed that citizenship is “of greater importance in the relations between the States than within a State”.31 This is as true now as it was in the 1940s, had not the fact of migration blurred the lines of the foreign-domestic binary. In its formative inter-state context, citizenship is merely a mechanism of attributing people to states, and it lacks the layer of “metaphysical thinking”32 that it tends to adopt in domestic settings (to speak with another great constitutional lawyer, Alexander Bickel). Realism is, not by accident, the classic paradigm of international relations. By definition, instrumental citizenship is what citizenship is in this domain, both for states, which have always used this mechanism to further their interests, and — and this is the novelty — increasingly for individuals also. Indeed, that citizenship appears to us in this denuded form is historically new. Certainly, each of the types of instrumental citizenship grows out of a specific context, not to be mixed up and confused with the others. Yet there are significant communalities. Citizenship-by-investment is the state’s mimicking of the market, which has otherwise greatly diminished the state’s authority by privatizing everything — the selling and buying of citizenship is surely neoliberalism’s biggest imprint on the citizenship construct. By contrast, the instrumentalism connected with external citizenship is the ironic flip-side of the state’s (trans)nationalist assertiveness in Eastern Europe and elsewhere, where the privileged access to citizenship for putative co-nationals abroad has become a national priority. As for citizenship-

31 32

33

34

by-investment, external citizenship is enabled by contemporary globalization, yet in a different key and direction. EU citizenship, finally, grows out of a historically unique project of regional integration in a continent ravaged by war twice during its short 20th century, while still participating in a general trend toward the lightening of citizenship in liberal societies. Accordingly, the increasing internationalization that goes by the name of globalization is a significant communality of all three citizenship developments. The most important communality yet is the centrality of the individual and the slighting of the concerns of the community. Citizenship has always combined an individual with a collective element but the innovation is the decided shifting of the balance toward the individual. It may be too strong to depict citizenship as evolving from “contingent” to “sovereign”,33 as the French historian Patrick Weil thinks it is, particularly if one considers an opposite trend toward citizenship stripping in the context of toughened-up anti-terrorism laws. The latter is a sober reminder that citizenship itself is not a right or “right to have rights”,34 as the German-Jewish philosopher Hannah Arendt famously argued during the 20th century’s darkest hour, and it is not the property of the individual — every passport bears the imprint that it is the property of the passport-issuing state, and thus not of the individual who carries it. Citizenship is, however, still part of a general trend toward legal individualism in liberal societies. Well into the 1960s, a major function of law had been the protection of corporate entities such as family, nation, even God, the latter in the form of

H. Kelsen, General Theory of Law and State (Harvard University Press, 1949) 241 A.M. Bickel, ‘Citizenship in the American Constitution’ (1973) Faculty Scholarship Series. Paper 3957 digitalcommons.law. yale.edu/fss_papers/3957 accessed 6 August 2018 P. Weil, ‘From conditional to secured and sovereign: The new strategic link between the citizen and the nation-state in a globalized world’ (2011) 9(3–4) International Journal of Constitutional Law (ICON) 615–635 H. Arendt, ‘”The Rights of Man”: What Are They?’ (1949) Modern Review

17


Global Residence and Citizenship Programs 2018–2019

blasphemy laws. That this is no longer the case can be seen when looking at the laws regulating sex. American sociologist David Frank, who studied their development in no less than 194 countries, detected a general process of individualization, whereby persons become “disembedded from families, nations, and other corporate bodies, and…re-rendered…as autonomous, empowered actors”.35 The same individualizing process has long been observed in other branches of the law, such as family law, and, of course, there is the dying species of blasphemy law. In most countries, treason as a crime that only citizens could commit has disappeared and been replaced by sedition laws that are indifferent to citizen status. This reflects a weakening of the exclusive, loyalty-commanding nexus between citizen and nation-state. A century ago, Emile Durkheim declared the “human person” the subject of a new “religion in which man is at once the worshipper and the god”. In the meantime, the reach of individualism has greatly expanded, though in the direction of undermining the transcendence of state and community that Durkheim had not foreseen and would not have condoned. This is the wave (or should we call it a tsunami?) that instrumental citizenship is riding on. States, to repeat, have always been strategists in matters of citizenship. And nationalism is often not the opposite but the very content of these strategies, as in the contemporary forms of state (trans)nationalism that enable external citizenship, but also in the utilization of symbolically upgraded citizenship for containing immigrant diversity, which is happening in almost every European country today. The novelty is to see individuals also, and not only states, as citizenship strategists. This should be welcomed as a further step in the demystification of states and empowerment of individuals.

35

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D.J. Frank, B.J. Camp, and S.A. Boutcher, ‘Worldwide Trends in the Criminal Regulation of Sex, 1945 to 2005’ (2010) 75(6) American Sociological Review 867–893 doi.org/10.1177/0003122410388493


Expert Global Commentary: Residence and TheCitizenship Rise of Instrumental Programs 2017–2018 Citizenship

Prof. Dr. Christian Joppke holds a chair in sociology at the University of Bern. He is also a recurrent Visiting Professor in the Nationalism Studies Program at Central European University in Budapest and an Honorary Professor in the Department of Political Science at Aarhus University. He is a Member of the Expert Council of German Foundations on Integration and Migration (SVR), which advises the German Government on migration and integration policy. After obtaining a PhD from the University of California at Berkeley in 1989, he taught at the University of Southern California, European University Institute, University of British Columbia, International University Bremen, and American University of Paris. He is the author of nine monographs, most recently Legal Integration of Islam (with John Torpey) (2013), The Secular State Under Siege (2015), and Is Multiculturalism Dead? (2017). He is a leading scholar on immigration, citizenship, religion, and multiculturalism, with a recent interest in populism and nationalism.

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Global Residence and Citizenship Programs 2018–2019

Country Competitiveness, Talent Acquisition, and Residence Programs

Dr. José Caballero Senior Economist, IMD World Competitiveness Center Lausanne/Switzerland The IMD World Competitiveness Ranking,36 published by the IMD World Competitiveness Center, measures how well countries manage their overall resources to increase their long-term value creation. The ranking covers 63 countries and considers over 300 criteria, of which two-thirds are statistical indicators and onethird is survey data from the responses of over 6,300 international executives. This article traces the impact of two drivers of competitiveness: country image and the quality of life it offers. In addition, it delineates the relationship between competitiveness, talent development and/or acquisition, and the existence of residence programs. The competitiveness ranking includes a criterion related to the reputation of countries. To be precise, this criterion evaluates the image abroad of countries by asking executives to evaluate if the government of the country in which they reside encourages or discourages business development. The evaluation of a country’s image may reflect the impact of factors such as the executives’ perceptions about business regulation, the country’s adherence to the rules of international trade, and the existence of barriers to investment by foreign nationals (for example, the regulation of capital markets). The ranking also measures the quality of life by enticing executives to reflect on the level (whether they consider it high or low) of their country’s quality of life. Factors that may influence this criterion include the individual’s ability to meet their ‘material’ expectations (for example, access to specific goods and services), their life satisfaction (for example, ability to enjoy family time), and the absence of threats (for

36

37

20

example, effective government policies against crime and the protection of individual rights). The IMD World Competitiveness Center also publishes the yearly IMD World Talent Report.37 Talent is the set of skills and competencies necessary to successfully perform specific activities. The talent report assesses the extent to which countries develop, attract, and retain talent in order to sustain the talent pool available for enterprises operating in their economies. Table 1 introduces the overall 2018 IMD World Competitiveness Ranking, the two survey rankings based on the image abroad and quality-of-life criteria, another survey-based ranking assessing the availability of senior managers with international experience, and the overall 2017 IMD World Talent ranking. Please note that Table 1 presents only countries that are common to the IMD World Competitiveness/Talent Rankings and Henley & Partners’ Global Residence Program Index (GRPI; not shown in this article, see page 59). Overall, there is a strong correlation between a country’s overall competitiveness ranking and its international image as a place to do business. The sample includes six of the top ten countries from the overall competitiveness ranking. Five of those six countries also make it to the top ten for having an image abroad that encourages business development, according to executives in each of these countries. Some executives, however, are far gloomier about their countries’ images, which leads to some incongruities between the competitiveness ranking and a country’s image. For example, the US ranks 1st in overall competitiveness but reaches only the 42nd spot for image abroad. Similarly, Belgium ranks 26th and 40th, respectively and the UK, 20th and 30th. The low rankings of the US and the UK in image abroad capture the current ‘inward-looking’ foreign policy of both countries.

The two reports discussed, the IMD World Competitiveness Ranking and IMD World Talent Report cover the same 63 economies sample. See imd.org/wcc/world-competitiveness-center/ accessed 10 August 2018 ‘IMD World Talent Report’ (2017), IMD World Competitiveness Center, Lausanne imd.org/wcc/world-competitivenesscenter-rankings/talent-rankings-2017/ accessed 10 August 2018


Expert Commentary: Country Competitiveness, Global Residence Talent and Acquisition, Citizenship andPrograms Residence 2017–2018 Programs

Table 1. Competitiveness and relevant criteria Overall competitiveness ranking 2018

Image abroad 2018

Quality of life 2018

International experience 2018

Overall talent ranking 2017

US

1

42

24

22

16

Hong Kong SAR

2

6

32

3

12

Singapore

3

1

18

8

13

Switzerland

5

3

3

2

1

UAE

7

4

14

1

25

Canada

10

2

10

23

11

Austria

18

13

1

16

4

Australia

19

17

8

32

19

UK

20

30

29

17

21

Belgium

26

40

13

10

3

Thailand

30

23

37

20

42

Portugal

33

24

21

38

24

Spain

36

38

19

40

32

Latvia

40

39

41

21

35

Cyprus

41

41

25

39

17

Bulgaria

48

58

56

54

58

Greece

57

61

43

42

41

Country

Sources: ‘IMD World Competitiveness Ranking’ (2018) and ‘IMD World Talent Report’ (2017) imd.org/wcc/worldcompetitiveness-center/ accessed 10 August 2018

In relation to the quality of life, it seems that most executives residing in the top 10 countries of the competitiveness ranking find the quality of life in those countries in need of enrichment. For example, the US ranks 1st in competitiveness but reaches only the 24th place in the quality-of-life criterion. Of the sample presented, only Canada and Switzerland remain in the top 10 countries of both rankings. It is noteworthy, also, that while ranking in the

top 10 in competitiveness, Singapore and the UAE remain within the top 20 in quality of life. Executives from countries that are ranked lower in the competitiveness rankings conceived the quality of life in those countries as high. For example, Greece ranks 57th in competitiveness but 43rd in quality of life; similarly, Spain ranks 36th and 19th, respectively, while Austria ranks 18th in competitiveness but 1st in quality of life. This trend

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Global Residence and Citizenship Programs 2018–2019

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Expert Commentary: Country Competitiveness, Global Residence Talent and Acquisition, Citizenship andPrograms Residence 2017–2018 Programs

is consistent with studies that note an inverse relationship between economic progress and certain elements of the quality of life, such as a healthy environment.38 The IMD World Competitiveness Ranking and the GRPI largely coincide, although there are exceptions. In competitiveness, while Hong Kong, Singapore, and the UAE rank in the top half of the group (2nd, 3rd, and 7th, respectively), they are in the bottom half of the GRPI (19th, 17th, and 11th, respectively). Similarly, Portugal ranks 33rd in competitiveness (bottom half) while it is 2nd in the GRPI. The parallels between the overall IMD World Talent ranking and the GRPI are also interesting. Australia, Austria, Belgium, Canada, Portugal, Switzerland, the UK, and the USA rank in the top half of both rankings. However, as in competitiveness, there are disparities: Hong Kong, Singapore, and the UAE rank in the top half in talent (12th, 13th, and 25th, respectively) but they remain in the bottom half of the GRPI. Incongruences, however, do not lessen the importance of the dynamics: recent research highlights the positive impact of the internationalization of domestic workforces through exposure to global knowledge, broader experience, and understanding of a wider set of best practices due to the inflow of foreign personnel. Evidence suggests that there are links between such exposure and the drivers of business leadership capabilities and competencies.39 Residence- and citizenship-by-investment programs thus contribute to the development of local talent by improving the quality of business leadership available. Table 1 shows that most countries in the top half of the ranking that assess the availability of senior managers with significant international experience (namely, the International experience column), rank in the top half of the overall talent ranking and the GRPI. 38

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Dr. José Caballero is a senior economist at the IMD World Competitiveness Center. His research interests focus on the sources of competitiveness, with emphasis on enterprise competitiveness. He is particularly interested in behaviors and processes that strengthen the competitiveness of firms. He has conducted research at the IMD Global Board Center, the International Institute for Corporate Governance (Yale School of Management), and the National Bureau of Economic Research. In addition, he has acted as an academic advisor to the World Justice Project in the development of the Rule of Law Index. He has also worked as a consultant for the European Union Support Program for Central American Integration, the Private Sector Advisory Department at the World Bank, the International Investment Corporation (World Bank), and the Inter-American Development Bank. He has taught at the University of Warwick and the University of the West of England. He holds a PhD (Politics and International Studies) from the University of Warwick and an MA (Social Science: Government) from Harvard University.

E. Diener and E. Suh, ‘Measuring quality of life: Economic, social, and subjective indicators’ (1997) 40(1–2) Social Indicators Research 189 A. Bris, J. Caballero, and C. Cabolis, ‘Talent competitiveness and leadership quality’ in IMD Tomorrow’s Challenges Series (IMD 2017)

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Global Residence and Citizenship Programs 2018–2019

The Economist/Henley & Partners Guide to Investment Migration for Governments and Global Citizens — A Summary 40

More than half a century of rapid globalization George Soros, is among them. Mr. Rogers says his has linked nations, economies, and markets in many journeys convinced him of the necessity of a new configurations. Yet while global connectivity second passport. continues apace, static notions of nationality remain, “If you’ve seen the world, you know the world is and citizenship — the birth lottery that determines always changing, and whatever you think today is where individuals can travel and reside, what not going to be true in 15 years,” says Mr. Rogers. markets and networks they can access — continues “So you had better have a plan in case you’re in the to define and constrain people. wrong place at the wrong time.” He adds: “Many Wealth — what one has accumulated and also countries and people throughout history have learned the sum of one’s knowledge, talent, and connections that things change, and often for the negative, so — has traditionally been a buffer against chaos as everyone should have a Plan B that includes having well as a path to further success. Yet even wealthy some of your assets in other countries, and a way individuals and families, if they to live in another country if you are not globally connected, will need to. Everybody in my family Everybody in my has more than one passport. In my remain limited by the particular context, policies, and resources of view it’s a wise insurance policy family has more than their birth citizenship. These can and a wise investment.” hinder their ability to respond to Supply, too, has increased with a one passport…it’s a new threats or opportunities or to host of new investment migration access the global travel, lifestyle, programs emerging around the wise insurance policy culture, and residence options that globe. As of 2016 there were over and a wise investment 60 different programs, half of appeal to them. Individuals interested in insuring them set up since 2000.41 Jim Rogers against political and economic More than 35,000 investor visas Co-founder, Quantum Fund uncertainty, as well as those are issued annually, and a small determined to capitalize on the group of high-income nations — rapidly changing mix of markets, business, and Australia, Canada, Hong Kong, the UK, and the culture on offer around the globe, cannot afford to US — account for more than 80% of them. Most ignore the value of expanding their residence and Western nations operate some type of investment citizenship options. That is, they need to consider migration program.42 Canada established its Federal holding second or multiple passports, or — at least Immigrant Investor Program in the 1980s, followed — alternative residences, if they are to claim the by the US and the UK in the next decade. New power and flexibility of true global citizenship. Zealand, Australia, and Singapore followed suit.43 Alternative citizenship holds particular appeal Today, citizenship-by-investment has grown into for international investors. Jim Rogers, who coa roughly USD 3 billion industry, while residencefounded the legendary Quantum Fund with by-investment — which is slightly more difficult to 40

41

42 43

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The Economist Newspaper Limited and Henley & Partners, ‘A Guide to Investment Migration for Governments and Global Citizens’ (The Economist, 2018) investmentmigrationguide.economist.com/ accessed 13 July 2018 A. Gamlen, C. Kutarna, and A. Monk, ‘Re-thinking Immigration Investment Funds’ (2016) Working Paper No. 128, University of Oxford Ibid. K. Surak, ’Global Citizenship 2.0: The Growth of Citizenship by Investment Programs’ (2016) Investment Migration Working Paper 2016/3


Expert Commentary: The Economist/Henley & Partners Guide to Investment Migration for Governments and Global Citizens — A Summary

approximate — most likely exceeds tens of billions of dollars each year, according to Dr. Christian H. Kaelin, chairman of Henley & Partners and one of the world’s foremost experts on investment migration. “The investment migration industry is in a period of evolution and growth, with residence- and citizenshipby-investment now part of every savvy investor’s vocabulary. For millions of people, the confines of the state are no longer the limit of their ambitions and possibilities,” says Dr. Kaelin. “Mirroring that

44

trend, the number of investment migration programs is increasing steadily as governments tap into their potential to boost capital and talent inflows.” Looking ahead, the International Monetary Fund expects continued growth in the investment migration industry: “These programs are increasingly being mainstreamed, as high-net-worth individuals consider citizenship/residence as a means to improving international mobility, tax planning, and family security while also seeking investment opportunities.”44

The Economist Newspaper Limited, ’Avanti’ (The Economist, February 2011) economist.com/books-and-arts/2011/02/24/ avanti accessed 16 July 2018

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Global Residence and Citizenship Programs 2018–2019

If, however, investment migration is a legitimate, established phenomenon — and also a rapidly growing one — the reasons for this transcend financial and security concerns. The modern idea of citizenship emerged in the 19th century along with the nation-state and it has persisted since. Rising states worked to create ’nationalities‘ that molded individual notions of identity to suit the needs of the state. “We have made Italy, now we must make Italians,” Massimo d’Azeglio, a pioneer of Italian unification, said in 1861.45 In recent decades, however, many high-networth individuals have begun to see this notion of national citizenship as limiting in terms of travel, economic liberty, and culture. And large segments of the global population — far beyond the jet set — have also expanded their notions of community to include the entire globe. Certainly, some governments are resisting this globalist view of identity, instead reinforcing traditional ideas of citizenship and riding a populist wave to become more insular. Yet the proliferation of investment migration programs in recent years makes clear that many nations are embracing the idea that it is well worth granting residence rights or bestowing citizenship on carefully vetted individuals who bring benefits that include — but are not limited to — capital, connections, and talent. While nations granting residence permits or citizenship in return for investment is an economic transaction without regard to ethnicity or heritage, the transaction is safeguarded by rigorous background checks and due diligence. “Families with multiple passports or residence permits benefit from each country’s best practices and are less vulnerable to a single country’s risks, shortcomings, and unexpected changing fortunes,”

45

46

26

says Dr. Kaelin. “The more jurisdictions a family can access, the more diversified their assets will be and the lower their exposure to both country-specific sovereign risk and global volatility.” High-quality nationalities deliver precisely that level of access. Nations within the EU, for example, offer access to its 28 member states and several other countries associated with its freedom of settlement, plus a large number of countries to which to travel visa-free. “Immigrant Investor Programs are a site of vibrant policy experimentation and growth,” according to research on ‘Re-thinking Immigration Investment Funds’ published by the University of Oxford in 2016.46 These programs have the potential to advance two important policy objectives, the authors write: first, “attracting new financial and human capital to support government budgets and developmental agendas” and second, “cultivating economically engaged citizen-entrepreneurs who can drive economic growth and innovation”. Despite growing globalism, some jurisdictions with re-emerging nationalist and anti-immigration attitudes will view ‘global citizenship’ unkindly at best and, at worst, will seek to curb it. This phenomenon will actually render a second passport vital for many investors and high-net-worth individuals, especially those looking to hedge against possible future constraints on their travel and economic liberties. “The investment migration industry acts as a counterbalance to retrograde notions of nationality,” says Dr. Kaelin. “It has emerged and grown to serve those who favor a borderless world, where individuals, ideas, and capital flow freely between nations.” For the full report, see investmentmigrationguide. economist.com/

X. Xu, A. El-Ashram, and J. Gold, ’Too Much of a Good Thing? Prudent Management of Inflows under Economic Citizen ship Programs’ (May 2015) IMF Working Paper, International Monetary Fund Op. cit. Gamlen et al. (2016)


Expert Commentary: The Economist/Henley & Partners Guide to Investment Migration for Governments and Global Citizens — A Summary

27


Global Residence and Citizenship Programs 2018–2019

Due Diligence in the Context of Investment Migration Programs Damien Martinez CEO, Facepoint, Paris/France Several countries around the world offer economic citizenship or investment migration programs to attract global investors. In return for making an investment in the country, the investor receives citizenship and a passport. Investment may be indirect investment, which generally requires naturalization by a period of residence, or through a direct program involving a donation to charities, purchase of real estate, or investment in a business. Each program has mandatory conditions that must be satisfied before citizenship is granted but these vary by country. In some countries, the applicant has no obligation beyond the investment. It is critical that countries clearly understand the background and verify the good character of the applicant, as well as confirm that the source of funds invested is not from money laundering, drug- or human trafficking, or other criminal activities. Countries that offer these programs hope to benefit by stimulating their economies through the capital invested, as well as through the deployment of the skills and experience of the program applicants. Different programs have different degrees of state involvement in the investment. Certain countries may require the applicant to make a capital contribution to the state. This is the case in Antigua and Barbuda, Dominica, and St. Kitts and Nevis. The investment can be in the form of a donation to the state (as in Antigua and Barbuda and Dominica) or to a state charity (as in St. Kitts and Nevis). The country may require the applicant to make an investment in the economy. From a due diligence perspective, the nature of the investment determines the degree of involvement by the state. Regardless of the level of state involvement in the funds once received, there is a significant reputational risk for the country if it later becomes known that these funds have not been legally obtained. If a thorough due diligence process is not conducted on applicants this not only puts the country’s international reputation at risk but there may be consequences for all citizens, such

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as visa restrictions applied to all nationals by other countries. This also risks the future viability of the investment migration program should the country become less attractive to legitimate applicants. Political fallout can also be severe. The motivations for investors seeking economic citizenship can be grouped into four general cate­gories: the need to survive for political or national refugees from countries affected by civil war, natural disasters, famines or similar events; the desire to travel to access business and other opportunities; the ability for individuals to enjoy full civil rights, such as voting, buying property and the right to work and/or benefit from a more favorable tax regime, and the desire of criminals (suspected or confirmed) to escape justice. By the establishment of a robust due diligence process, states welcoming new citizens must verify initial motivations behind deciding on a new passport. In any case, the new citizenship may be granted for the wrong reasons. Our era of transparency does not forgive unnecessary risks, especially when it comes to citizenship and sovereignty, hence the extreme importance of conducting due diligence processes when examining a file. In reality, an investor’s motivation can be a combination of two or more factors. The categories themselves are strongly interdependent and diffi­cult to differentiate. It is critical that investment migration program administrators conduct sufficient due diligence on applicants to ensure that their motivations and source of funds are clearly under­ stood. This is a key step in differentiating between a political refugee, a person seeking legitimate tax benefits, and a terrorist or money launderer. Clearly, each category has different implications for the country. The risk of harboring undesirable applicants has led to a proliferation of treaties on international cooperation as well as extradition agreements. If a country inadvertently grants citizenship to terrorists, money launderers, or other criminals, the reputational damage it is likely to suffer will decrease its attractiveness to other law-abiding investors, damaging the prospects of its investment migration program. There is a reputational risk to a country if


Expert Commentary: Due Diligence GlobalinResidence the Context andofCitizenship InvestmentPrograms Migration 2017–2018 Programs

it is shown later to be ignorant of the source of any money invested into it via an investment migration program. Stimulating a country’s economy with the proceeds of crime is never a good idea. The country also runs the risk of being accused by other countries of harboring criminals. Corruption risk is also likely to increase should criminals identify that country as a good prospect for second citizenship. Government officials involved in the investment migration pro­gram are likely to be targeted with bribes. Countries may also face consequences from inter­ national institutions such as the UN or the Financial Action Task Force if evidence of due diligence or other such information is requested and the country cannot provide it. Such actions could have serious political, reputational, and financial consequences for the country. There is also a continual increase in regulatory requirements, many of which affect citizens outside the countries enacting them. The US Foreign Accounts Tax Compliance Act, for example, requires individuals to report their offshore financial accounts and obliges foreign financial institutions to report to the US Internal Revenue Service regarding their American clients. With the increase in regulations, countries need to ensure that where they have an obligation to ensure compliance, they do so. At the same time, increased regulation means an increase in people and entities that fall foul of these regulations and must be flagged as non-compliant or recalcitrant.

A country therefore needs to have strong procedures in place to ensure that it is able to both keep away undesirable investors and ensure that it complies with international regulations and guidelines. It is very clear that countries need to demonstrate their commitment to thoroughly understanding the background, source of funds, and likely intentions of investment migration applicants. At the very least, the procedures are likely to include verification of identity, background checks, and research based on the applicant’s nationality. It is also essential to check international databases and those of other countries to ensure that the subject does not have an undeclared second nationality. The country would also have to check that applicants are not subject to sanctions and establish whether they have a criminal record in another country. Certain flags indicate the need for enhanced due diligence. While every applicant needs to be care­ fully screened, there are certain indicators that should lead to a deeper investigation through enhanced due diligence. These include: persons residing in or having funds sourced from countries identified as having inadequate anti-money laun­ dering standards or representing high risk for crime and corruption and persons engaged in types of economic or business activities or sectors known to be susceptible to money laundering.

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Global Residence and Citizenship Programs 2018–2019

Financial institutions are required to apply due diligence to the process of understanding their customers through Know Your Customer (KYC) obligations. These arise from Organisation for Economic Co-operation and Development (OECD) recommendations, country-specific requirements, and international regulations such as the US PATRIOT Act. Investment migration program administrators face challenges similar to financial institutions in approving applications quickly and cost effectively, and the consequences of inadvertently approving the wrong applicants are severe. Taking the learnings and experience of KYC can help to transfer best practices to Know Your Immigrants (KYI). Where financial institutions have established effective methods to acquire new customers safely, these could be adapted and enhanced for use in investment migration programs. Residence and citizenship programs are often seen by countries as a way to attract skills and low-cost funding and stimulate the local economy. Potential applicants may view these programs as a welcome chance to access many benefits they may not enjoy in their home country, or to escape from unpleasant or dangerous conditions at home. Unfortunately, terrorists, money launderers, and other criminals often try to take advantage of these programs to circumvent travel restrictions, ‘launder’ their reputations, and evade justice. Where this happens, countries run the risk of severe reputational damage, international criticism, and sanctions. Financial institutions provide a useful precedent for government departments running investment migration programs. By adapting global best practice in KYC into KYI, program administrators can benefit from years of experience and development. By relying on objective country risk rankings and aggregated risk intelligence for screening of applicants, as well as enhanced due diligence reports for deeper inves­ tigation, government departments can apply bestpractice KYC principles to immigrant screening while streamlining processes. This provides assurance to public servants and citizens alike that applicants are screened effectively, quickly, and cost efficiently.

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Expert Commentary: Due Diligence GlobalinResidence the Context andofCitizenship InvestmentPrograms Migration 2017–2018 Programs

Damien Martinez is the CEO of Facepoint and the former director of Government, Risk and Compliance Western Europe at Thomson Reuters. He is the co-author of the biography Zarqawi — The New Face of Al-Qaida, which has been translated into eight languages. He is a regular participant at conferences in the fields of terrorism and economic crime and has worked on the topic of diligence in the course of Economic Citizenship programs. He is the former head of Terrorism Financing Prevention for the Credit Suisse Group. While at Credit Suisse, he served on the Wolfsberg Group, a professional association of 11 leading global banks, which aims to develop financial services industry standards and related products for KYC, anti-money laundering, and counter-terrorist financing policies. Prior to his time at Credit Suisse, he spent several years with the Swiss Federal Police working with the Federal Counter-Terrorism Unit and Serious Crimes and served as a member of Interpol’s Group of Experts on Terrorism. He participated as an expert on the CounterTerrorism Implementation Task Force under the lead of the UN Office on Drugs and Crime. Before this, he worked as a special investigator with the September 11 Class Action, representing more than 20,000 family members of the terrorist attacks.

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Global Residence and Citizenship Programs 2018–2019

Compensatory Citizenship: Dual Citizenship as a Response to Global Inequality Prof. Dr. Yossi Harpaz Assistant Professor of Sociology Tel Aviv University, Tel Aviv/Israel Citizenship is the key status that determines an individual’s position within a hierarchical global system. Those who are born with the ‘right’ citizenship — say, Swedish or Canadian — gain access to a formidable package of opportunities, rights, and security that is nearly unimaginable to persons born with Somali or Syrian citizenship. Only about 15% of the world’s population holds citizenship from Australia, Canada, an EU country, or the US. Relative to the remaining 85% of humanity, they constitute a global elite in terms of citizenship rights. The gaps between the West and (almost all) ‘the Rest’ are vast: the economist Branko Milanovic has calculated that the 5% of Americans with the lowest incomes still have an average income that is higher than 60% of the world’s population (they are in the 60th percentile of the global income distribution). Meanwhile, the earnings of the lowest-income Danes place them in the 90th percentile of the global distribution of incomes. The elite status of Western or EU citizenship becomes even more striking when we take into consideration its extraterritorial value — that is, the recognition that a passport receives from other countries besides the country that actually issued it. For example, Spanish citizenship offers a package that also includes the unrestricted right to reside and work in Germany or Sweden (through EU citizenship) and visa-free access to the US and Canada. Travel freedom has become particularly valuable in today’s globalized world, where the ability to cross international borders plays a key role in determining individuals’ economic opportunities, consumption habits, and social status — sometimes even their personal safety. We can view citizenship, then, as a sorting system that allocates individuals into different — and starkly unequal — slots within a global matrix of states and citizens. For most of the 20th century, this sorting system did not tolerate overlaps: countries demanded exclusive allegiance from their citizens and typically

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did not permit multiple citizenship. In 1990, only about a quarter of the countries in Europe and the Americas permitted dual nationality. Soon thereafter, legal norms began to change rapidly. Numerous factors, including a boost in international migration and the end of the Cold War, have combined to make dual citizenship legally and normatively acceptable. By 2010, three-quarters of European and American countries permitted it. Today, the acceptance of multiple citizenship has become the norm among developed countries. The few Western countries that resist this trend — for example, Austria and Norway — are now the exception. The acceptance of dual citizenship might appear at first as a minor, technical change, one that would carry consequences only for specific categories of individuals (such as immigrants and the children of parents of different nationalities). In fact, however, the waiving of the traditional requirement for exclusivity has the potential to change the basic ways in which states and individuals approach national membership. As citizenship becomes more flexible, many states now extend citizenship to populations that live outside their territory but are nonetheless desirable for other reasons — because of their ancestry or ethnicity, or even their value as potential entrepreneurs and investors. From the point of view of individuals, the change is even more dramatic. In the ‘traditional’ system of exclusive national membership, citizenship operated as a strict, rigid status: once determined (usually at birth), it could only be changed with great difficulty. Acquiring a second citizenship meant giving up the original one. All this changes once it becomes possible to hold more than one citizenship. Citizenship is now flexible and fungible. In sociological terms, citizenship is changing from being an ‘ascribed status’ — meaning a characteristic that is fixed and imposed from the outside — to an ‘achieved status’, meaning that it can be changed through individual striving. Persons around the world can strategize their citizenship status and seek the national affiliation that they expect will provide them with the greatest benefits for the smallest investment. While only a very


Expert Commentary: Compensatory Citizenship: Global Dual Residence Citizenship andasCitizenship a ResponsePrograms to Global2017–2018 Inequality

small percentage of humanity has actually strategized their citizenship status in this manner, the fact that such strategies are now possible leads to changes in the value and meaning of citizenship. Citizenship is being drawn into the capitalist market and is coming to be perceived as a piece of private property — even a commodity. The new principle of dual citizenship toleration — and the concomitant commodification of citizenship — adds dynamism into the rigid system of citizenship based global inequality, providing new ways for people to improve their position in the global hierarchy. The clearest expression of this is a phenomenon that I call compensatory citizenship: individuals from outside the West who obtain a second citizenship from a Western or EU country. The second, premium citizenship is ‘compensatory’ because it is typically used to complement the primary, resident citizenship rather than replace it. Most individuals who obtain this kind of citizenship do not emigrate; instead, they are interested in securing an ‘insurance policy’, a premium passport

and improved opportunities that their primary resident citizenship cannot offer them. Compensatory citizenship is found in countries that are in the middle of the global distribution of citizenship value and that host populations with a history of ancestral, ethnic, or migration ties with European and North American countries. This applies first and foremost to two regions: Latin America and Eastern Europe. When Italy and Spain offered dual citizenship to the descendants of emigrants, almost one million Argentineans and Brazilians applied for a second passport. In Eastern Europe, citizens of non-EU countries rush to secure co-ethnic citizenship from the countries that have joined the Union. Thus, hundreds of thousands of Moldovans, Ukrainians, and Serbians have secured citizenship from countries such as Hungary and Romania. In contrast, eligible individuals in the US and Western Europe showed very little interest in converting their roots into a second citizenship. This demonstrates that the main force driving the demand for ancestry-based European citizenship is global inequality: more specifically,

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Global Residence and Citizenship Programs 2018–2019

the wish to secure compensatory citizenship and the practical advantages that come with it. As millions of European descendants convert their ancestry into privileged access to the EU, individuals who do not have such ancestry are coming up with other approaches to secure compensatory dual citizenship. One strategy is ‘birth tourism’: traveling to the US and giving birth there with the aim of providing the newborn with automatic birthright citizenship. Given the expenditure involved in birth tourism — starting from USD 7,000 and ranging up to USD 25,000 or more — it is mostly practiced by wealthy families coming from a range of nationalities, for example, Chinese, Mexican, Nigerian, and Turkish. One other strategy of compensatory citizenship is strategic naturalization: naturalizing in a country with a liberal citizenship regime (for example, Spain, which allows Latin American immigrants to naturalize after a relatively short period) and — once citizenship is secured — returning to one’s country of origin. These developments lead to changes in the way in which people around the world understand and experience citizenship. I have conducted research on three study cases of compensatory citizenship: Israel, Mexico, and Serbia.47 I will briefly present the Israeli and Mexican cases. The Israelis I have studied were second- or third-generation immigrants who drew on their ancestry to obtain EU citizenship (above all, German, Polish, and Romanian); the Mexicans were northern elites who practiced birth tourism in the US. In spite of the geographical, cultural, and historical distance between the two settings, I found striking commonalities in the ways people related to citizenship. Around 20 to 30 years ago, these combinations of dual citizenship would be highly provocative and controversial. First of all, Mexico did not permit dual citizenship until 1998. Moreover, Mexicans traditionally condemned emigrants to the US —

I also conducted research on Hungarian dual citizenship in Serbia but I will not discuss it here

47

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or, even worse, people who took up American citizenship — as traitors or rotten persons (pochos). In Israel, dual citizenship was always permitted by law but there was strong social stigma against seeking German citizenship. In the eyes of many Israelis, taking German citizenship was an abomination — a blasphemous act tantamount to ‘forgetting the Holocaust’ and repudiating Zionism. Today, such discourses still exist in both countries, but only at the margins. Dual citizenship is seen as widely legitimate, even if the partner nation is a historical rival or victimizer, and dual citizens face little everyday censure. As for citizenship applicants themselves, they typically employed a language associated with

Figure 1. Percentage of countries per region that permitted dual citizenship (1990–2010) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Central & Eastern Europe

Latin America

Western US, Canada, Europe Australia, New Zealand 1990

Total sample

2010

Note: The bars show the percentage of countries in each world region that permitted dual nationality in 1990 (dark bar) and 2010 (light bar). Source: Reproduced from Y. Harpaz and P. Mateos, `Introduction: Strategic Citizenship: Negotiating Membership in the Age of Dual Nationality’ (2018), Journal of Ethnic and Migration Studies


Expert Commentary: Compensatory Citizenship: Dual Citizenship as a Response to Global Inequality

property and economic interests when discussing citizenship. Mexican parents spoke of birth tourism as a long-term investment in their children’s future. They calculated its costs against the expected benefits — above all, in terms of security, opportunities, and global mobility — while also taking into account associated additional costs (global taxation). In Israel, the decision to apply for dual citizenship was often explained in terms of seeking restitution. Applicants commonly described German or Polish citizenship as an asset that was stripped away unlawfully from their immigrant parents or grandparents. Acquiring EU citizenship offered a degree of restitution for the lives and property that their families lost in the Holocaust. As in Mexico, the second citizenship was envisioned as useful only for the younger generation — for whom it would supposedly provide “opportunities in Europe” (not in the specific origin country) and even make them “citizens of the world”. This final point helps explain the lowered public resistance to dual citizenship in Israel, Mexico, and elsewhere. Along with its ‘marketization’ and commodification, citizenship is also becoming denationalized, meaning that it is coming to be associated less with a specific nation and more with economic benefits and standing, within a global society.

Prof. Dr. Yossi Harpaz is an Assistant Professor in Sociology at Tel Aviv University. He earned his PhD from Princeton University in 2016. His research explores the implications of the worldwide move towards toleration of dual citizenship, focusing on the way this change reconfigures global inequality and creates new opportunities for individuals outside the West. His broader research interests include globalization, immigration, ethnicity, and nationalism. His work has been published in the International Migration Review, the Journal of Ethnic and Migration Studies, and other publications. His book manuscript, Compensatory Citizenship: Dual Nationality and the Rise of the Sovereign Individual is currently under review. The text above draws on the journal articles and the book manuscript.

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Global Residence and Citizenship Programs 2018–2019

Too Small To Fail

R. James Breiding Author, CEO, Naissance Capital Zurich/Switzerland

1988

Warren Buffett, probably the world’s most successful investor, has attributed much of his good fortune to the lottery of life, tracing it to being born “in the right country at the right time” — namely, America in 1930. Some six decades later, in 1988, The Economist wholeheartedly agreed with a study finding that the US was the most desirable place to spend a lifetime. But as with all lotteries, odds change. Redoing the analysis in 2013, the magazine put the US in the humble 16th spot on the global roster, below Taiwan and just above the UAE. Surging into the top ranks this time around were small countries with populations of less than 20 million people, such as Switzerland, Singapore, and Ireland. The Economist had a point. Small countries now make up 11 of the top 15 advanced economies in terms of income per capita. They hold four of the top five spots in the World Economic Forum’s global competitiveness league. And in 2016, they took 14 of the top 20 scores in the UN Human Development Index. What explains their remarkable ascendance?

Smaller is getting better Table 2. The Economist’s Where-to-be-born index 1988

Rank

Country

Score

9

Sweden

75

10

Netherlands

74

11

South Korea

74

12

Austria

73

13

Norway

72

2012 Country

Score*

1

Rank

Switzerland

8.22

2

Australia

8.12

3

Norway

8.09

4

Sweden

8.02

5

Denmark

8.01

6

Singapore

8.00

7

New Zealand

7.95

8

Netherlands

7.94

9

Canada

7.81

10

Hong Kong

7.00

11

Finland

7.76

12

Ireland

7.74

13

Austria

7.73

Country

Score

14

Taiwan

7.67

1

United States

93

15

Belgium

7.51

2

France

86

=16

Germany

7.38

3

West Germany

85

=16

United States

7.38

4

Italy

84

18

UAE

7.33

5

Canada

83

19

South Korea

7.25

6

Japan

82

20

Israel

7.23

7

Hong Kong

77

8

United Kingdom

77

Rank

36

* Out of a maximum of 10 Source: The Economist Intelligence Unit


Expert Commentary: Too Small To Fail

Crawling between the toes of the elephants Though there is almost infinite variety among the many small nations of the world, the most successful share certain common attributes, such as conducting their economies more openly, and relying heavily on foreign trade for their survival. Their economies are more exposed and thus sensitive to new opportunities and threats, making them more alert and adaptable. Their consumers are exposed to a greater variety of new products and their societies are more likely to attract talented immigrants. With this openness tends to come greater tolerance, enabling more level playing fields, often irrespective of gender, religion, or sexual preference, thus creating larger pools of talent. Since it is their human rather than their natural resources that determine their competitiveness, smaller states maintain education systems that better reflect the needs of industry. Teachers enjoy public respect and higher pay and are better able to work in tandem with parents to develop student skills. The children, in turn, grow up to embrace meritocracy and egalitarianism, not privilege and elitism. They learn at an early age to place more value in the community than in the individual, in collaboration than in rivalry, and in social norms than in regulations. Not just the universities but also vocational schools and apprenticeship systems equip them with the skills they need for a solid foothold in the middle class. Small countries also draw strength from their historical status as underdogs bullied by larger neighbors. Fifty years ago, newly independent Singapore lost its mandate to host port facilities for Britain’s Royal Navy at a time when its industrial base was weak, to nonexistent. Switzerland stood face to face with imperialist giants through most of its modern history, devising survival strategies such as neutrality to head off invasions. Denmark is but a shadow of its former imperial self, having lost vast swathes of territory through diplomatic mishaps and military defeats, but it has rebounded to learn how to do more with less. The Dutch found within themselves the ingenuity to deter the encroaching North Sea and applied it to building a global mercantile empire. The Finns lost more soldiers per capita in the Second

World War than the Americans, the British, and the French combined, but in the decades since have turned this vulnerability into a source of vigilance, flexibility, and renewal. Along with resilience, these experiences have instilled a useful modesty. Hardly a history lesson in Great Britain passes without children being reminded, for good or ill, of its past empire and the exploits of Admiral Nelson or Winston Churchill. France cherishes its legacy as La Grande Nation, while Bismarck embodied the mantra Deutschland über alles. The Chinese characters for ‘China’ mean ‘magnificent’ and ‘center’, reflecting their belief that the world revolves around Beijing and that countries like Korea and Japan are provincial satellites. In the US, Donald Trump’s potent battle cry ‘make America great again’ helped pave the way to his election. In an increasingly competitive world, however, modesty often provides a distinct advantage. After all, people prefer counterparts whom they can like and trust, and by contrast, greater humility breeds fewer conflicts. Smaller countries have learned the advantages of avoiding geopolitical rivalry on the

Table 3. The world’s happiest countries Rank

Country

1

Norway

2

Denmark

3

Iceland

4

Switzerland

5

Finland

6

Netherlands

7

Canada

8

New Zealand

9

Sweden

10

Australia

Source: World Happiness Report (2017)

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Global Residence and Citizenship Programs 2018–2019

global stage, thus sparing themselves the hefty cost of military spending and the temptation to demonstrate its results. They have become the virtuosos of soft power, skilled at achieving their goals not by aggression but through negotiation — and not coercion, payment, or government fiat. (One notable exception is Israel, a country that has arguably thrived because of conflict). Large countries tend to approach competition — be it in sport, war, or business — with a winner-takes-all mindset. Yet mutuality brings greater rewards. Small countries have realized the value of mutual respect and collaboration in a changing world, compared with hard-nosed rivalry. To take just the most obvious example, reciprocity is fundamental to trade, allowing both sides to benefit from their dealings. Cooperation rather than domination becomes the key to success. Counterintuitively, smaller countries often shun the perceived advantages of economies of scale, opting instead for more decentralized systems that instill a greater sense of self-reliance and empower people at the subsidiary level, where costs and benefits of government services are more readily ascertainable. These systems give a voice to their citizens, foster the sense of shared community, and even spur on domestic competition among government agencies.

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There is an even more fundamental, grassroots advantage to living in a smaller state. Notwithstanding their propensity for earning higher incomes, citizens of these countries tend to be less avaricious. In fact, the qualities of greed and self-interest are currently undergoing a major re-evaluation by economists. Since as early as the mid 18th century, thinkers — most notably David Hume — have argued that such impulses drive economic progress. But new evidence shows that citizens of smaller nations place less value on money for its own sake than their counterparts do in larger nations, which strengthens societies and economies on the whole. They also seem to be more willing to sacrifice for the sake of tomorrow. Rather than kick the can down the road, smaller countries have shown willingness to embrace long-term problems today in order not to mortgage their children’s futures. Debt levels tend to be substantially lower and concern for the environment stronger. Switzerland leads the world in clean energy production and Denmark is working toward becoming CO 2-neutral by 2025.

‘We’ versus ‘me’ societies Since the 1960s, traditionally cohesive institutions such as family, marriage, military, and religion have weakened. Harvard political scientist Robert Putnam


Expert Commentary: Too Small To Fail

argued in Bowling Alone in 2000 that we have become increasingly disconnected from one another and social structures — whether the PTA, church, or political parties. These loosened or, in many cases, broken bonds have been accompanied by a proliferation of new identities with regard to gender, generation, race, sexual preference, and ideology. It has been popular during the past few decades to celebrate diversity with the steady beat of the old slogan — E pluribus unum, or ‘out of many, one’ — as though its benefits were infinitely linear. But recent events suggest that identity has been blurred, which ultimately begs the question: Who exactly are ‘we the people’? The countries included in Too Small To Fail have managed to maintain their cohesiveness without restricting their ability to adapt and reinvent. They have achieved a greater sense of belonging and avoided the kind of stratification of communities that push common people out of sight and thus out of mind. With regard to gender, for example, Nordic countries have found ways to be equal without being the same. They remind us that, throughout human history, social norms — rather than the rules and laws characteristic

of larger states — have regulated much of our behavior. The Nobel Prize-winning economist Kenneth Arrow has shown that smaller, more homogenous societies are easier to govern and that democracy can grow dysfunctional when the electorate becomes substantially more diverse and polarized.

Towards smaller, nimbler nation states These models will only grow in relevance. For most of the past century, many nations enjoyed a win–win environment and grew wealthier from a more efficient global market and the easing of trade barriers. Now, however, according to Gideon Rachman, the foreign affairs commentator at the Financial Times, nations face a more zero-sum world where self-interest assumes far greater importance. Societies will have to cope with slower growth and do more with less. The haves will come under greater scrutiny and criticism from the have-nots. Studies show that we are more likely to feel empathy towards those with whom we feel a sense of belonging. In these instances, policies that redistribute wealth find more ready acceptance, as Scandinavia demonstrates.

Figure 2. What will nation states look like in future? Changing dynamics of state formation

High

High

Scale advantages

Scale advantages

Past

Low

Future

Low Low

High Heterogeneity costs

Low

High Heterogeneity costs

39


Global Residence and Citizenship Programs 2018–2019

The Danish, for example, believe that taxes are a necessary investment in a better society and that yes, individuals have rights but, for the collective to be cohesive, they also have duties. When a sense of belonging wanes, societies might begin to view taxes as an annual punishment for creating wealth and thus an infringement to be avoided — or at least minimized through a myriad of loopholes. Citizens may polarize themselves between ‘those who do’ and ‘those who mooch off those who do’, making it an unwieldy task to devise policies that redistribute income to reduce inequality. Supranational governance structures like the EU, as well as societies that feel uncomfortably placed in regional groupings that are legacies of an obsolete epoch, may find it more difficult to stay together under these circumstances. If smaller, nimbler, and less heterogeneous societies confer competitive advantages, then there will likely be more of them in the future. Legacy nation groupings burdened with incompatible ethnicity, language, and traditions could experience deepening fault lines, as recent monetary crises in the EU already provide a hint of things to come. The likes of Catalonia, Quebec, Scotland, and Middle Eastern ethnic and national groups will be tempted to push for autonomy or use such recalibrations to bargain for better social contracts under existing structures. To stretch the point somewhat, why could the six million people living in the Miami conurbation not join forces with Cubans and Puerto Ricans to create a Novo Havana as a proud vestige of the Spanish empire at its zenith? Why should Californians not seek independence? Indeed, a vote on Californian state sovereignty has already been slated for 2019. Proponents argue that California is subsidizing other states and would be better off as a separate, nimbler, empowered entity. Nonethless, while these ‘Davids’ may prevail over ‘Goliaths’, they are by no means utopias. On the contrary, they are laboratories struggling to deal with complex and challenging problems affecting us all, like climate change, immigration, inequality, pollution, obesity, and terrorism.

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Expert Commentary: Too Small To Fail

R. James Breiding is the author of Swiss Made — The Untold Story behind Switzerland’s Success (Profile Books) and co-author of Wirtschaftwunder Schweiz (NZZ). Both books achieved ‘best-selling’ status. Swiss Made has been translated by leading publishers into Chinese (Citic Press), French (Slatkine), German (NZZ), and Japanese (Nikkei BP), and is now offered by 50 Swiss embassies around the world as a diplomatic gift. He is currently working on his new book Too Small To Fail about how some small countries outperform larger ones (Harper Collins — expected to be published in late 2018). He is a graduate of IMD Lausanne and the Harvard Kennedy School. He has been selected as a fellow by Harvard University’s Center for International Development and Collegium Helveticum (ETH, University of Zurich) in connection with his research. His work has been widely published in publications like The Economist, Foreign Affairs, the Financial Times, the Wall Street Journal, the New York Times, and so forth. He worked as a chartered accountant and senior manager at Price Waterhouse Coopers, a director at NM Rothschild + Sons, and managing director at Templeton Investment. He founded, with the assistance of Sir John Templeton and other prominent investors, Naissance Capital, a Swiss boutique investment firm. He holds dual American and Swiss citizenship.

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Global Residence and Citizenship Programs 2018–2019

Ius Doni — Then and Now

Prof. Dr. Kristin Surak Associate Professor of Politics SOAS, University of London, London/UK Ius doni, or the acquisition of citizenship through exceptional donation, has a much longer historical background than is often recognized. The channel today, gradually spreading, can find distant forerunners in the ancient world. We often think of Athenians as the pioneers of the concept of citizenship as a shared political status that served as an accompaniment to governmental rule. Of course, at the time, citizenship was held by the privileged few in a society dependent on slavery and access to it was tightly circumscribed. The kinds of naturalization procedures we have today find no equivalent in those times: no one could apply for citizenship, which was typically passed down within elite families. Yet, in a minority of cases, when it was not inherited it was treated as a reward — a pragmatic show of gratitude — for benefits given to the state. In these cases, citizenship was not granted in an anonymous and bureaucratic manner but, in an exceptional show, it was conferred on specific individuals as payment for particular deeds. Initially, diplomats and rulers were the main recipients of citizenship by special grant, but by 230 BCE, men of commerce more frequently received the reward in recognition of their financial success or contributions to the government purse. In Byzantium, around the 4th century BCE, for example, citizenship could be obtained for a donation of 30 minae when the public coffers were empty. As the Peloponnese came under the control of the Romans, citizenship grants in recognition of financial benefits expanded further. Indeed, the imperial Romans were more eager than the hesitant Greeks to extend citizenship to those who provided the state with monetary resources. Slaves who purchased their freedom, for example, acquired the legal status of their owners, and if the owners were citizens, the ex-slaves became citizens as well, though with a diminished legal status for one generation. Plutarch even complains of a tribune who set up a stall in the Forum to sell Roman citizenship.

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Those who naturalized gained an improved legal status, but at a continuing cost. Once one became a citizen, the monetary grants did not stop for, as in Greece, the wealthy members of the city were expected to finance competitive games, public projects, and — above all — military endeavors. Medieval city-states in Europe, too, saw fit to grant local citizenship in exchange for monetary donations, essentially selling the privilege to trade and carry out business under their jurisdiction. In many boroughs, one did not have to live in the locality to be a member, and vice versa: nonresidents could be citizens and most residents were not. These practices continued in patches even through the 20th century. Liechtenstein, for example, mandated a ‘fiscal naturalization’ stream in 1920 that accounted for a substantial portion of new citizens — and public revenue — for a quarter of a century. But, of course, citizenship takes on a different meaning in the contemporary world where the vast majority of people are ascribed citizenship in the state of their birth. Yet for the globally mobile, the stateless, and others, acquiring citizenship through naturalization can be an attractive option. Comparing countries in Europe and the Americas,


Global Residence Expert Commentary: and Citizenship Ius Doni Programs — Then 2017–2018 and Now

the EUDO CITIZENSHIP Global Database identifies over two dozen bases for the acquisition of citizenship (and fifteen ways in which it can be lost), including spousal transfer, adoption, cultural affinity, and public service. Ius doni stands among these possibilities. Of the countries offering citizenship-byinvestment programs at present, nearly all include a government donation channel, either as the main form of contribution to the state or as part of a broader package. If managed well in a transparent manner these funds can serve as a beneficial means for small states to substantially enhance their economic prospects and social programs. Indeed, they are a particularly attractive option when natural resources are scarce, the tax base small, and imports essential. With the money going straight into state coffers rather than directly into the private sector, the possibilities are great for directing the funds to develop much-needed public works projects aimed at long-term social and economic improvements. Yet little research has been carried out on the best practices for managing these potential growth engines. As more countries consider ius doni channels for granting citizenship, the possibilities increase for exploring configurations that do the most to benefit the societies they represent.

Prof. Dr. Kristin Surak is a senior lecturer (associate professor) at SOAS, University of London, who specializes in international migration, nationalism, culture, and political sociology. She is a past Richard B. Fischer Member of the Institute for Advanced Study at Princeton. Her book Making Tea, Making Japan: Cultural Nationalism in Practice appeared with Stanford University Press in 2013 and received the Outstanding Book Award from the American Sociological Association’s Section on Asia. She has published in numerous academic and intellectual journals, including the European Journal of Sociology, International Migration Review, Ethnic and Racial Studies, New Left Review, and London Review of Books, and her work has been translated into German, Japanese, Korean, Spanish, and Swedish. For her scholarship, she has received awards and fellowships from the American Academy of Political and Social Science, Fulbright-Hays Foundation, Japan Foundation, European University Institute, Frankfurt University, University of California Board of Regents, and the Sainsbury Foundation, among others. Before joining SOAS, she taught at UCLA and at the University of Duisburg-Essen. She comments regularly for the BBC, Sky TV News, Deutsche Welle, and Al Jazeera. Currently, her research investigates temporary migrant labor programs in East Asia and across the globe, as well as the rise of citizenship-by-investment programs.

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Global Residence and Citizenship Programs 2018–2019

The Growing Market for Citizenship and Residence: A Policy Perspective Madeleine Sumption Director, Migration Observatory University of Oxford, Oxford/UK A growing number of countries now offer investment migration programs, exchanging residence rights or citizenship for a sizeable investment in their economies. From ‘cash-for-citizenship’ to incentives to invest in private-sector businesses or property, the market for investment migration has become increasingly diverse. But how much value are governments getting from these programs? In theory, the benefits of investment migration programs for the countries that offer them are straightforward. Destination governments can use them to generate revenues for social programs, infrastructure, or paying down the deficit. They can also use them to attract jobcreating investments in the private sector. For small countries, the proceeds from investment migration programs can be considerable. In practice, policymakers have often found the results disappointing. While small countries with large investment migration programs can raise substantial funds, investors’ activities in larger countries that have also embraced the programs — such as the US or the UK — are a drop in the ocean compared to the size of their economies. Designing programs to maximize economic benefits can be a challenge, and rigorous empirical evidence of their impacts is usually absent. The UK gives residence rights to investors who purchase ordinary, interest-bearing government bonds — a

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transaction whose benefits to the UK economy are close to zero. Several European countries, such as Portugal and Spain, simply require applicants to purchase residential property. The impacts of these transactions are also likely to be quite limited (barring some concentrated benefits for realtors and agents). Programs that require private-sector business investments, such as the US EB-5 visa, are somewhat more promising. But even this model’s impacts are hard to assess. Policies have only limited influence over how money is invested and whether investments actually create the expected number of jobs — especially since applicants can withdraw their investments as soon as they qualify for permanent residence or citizenship. The clearest economic benefits come from programs that encourage cash payments to the government or national development funds. While there is no guarantee that governments will spend this money wisely, this model has two advantages over the alternative options. Governments know exactly where the money is going and what is being done with it, and non-refundable donations cannot be withdrawn a few years later. However, the simple transparency of this model makes it controversial and unpopular, accentuating public concerns about whether it is appropriate to ‘sell citizenship’. Not all investment migration programs can accurately be described as ‘immigration’. Some impose no requirement to spend any time in the country, while others require only minimal visits of a few days per year. Such programs are often marketed for the access they provide to visa-


Expert Commentary: The Growing Market Global forResidence Citizenship and and Citizenship Residence:Programs A Policy 2017–2018 Perspective

free travel in other countries. Notable examples include the citizenship-by-investment programs in St. Kitts and Nevis and a handful of other Caribbean countries, which have relatively good access to visafree tourist and business travel worldwide. Most programs would struggle to attract applicants if they actually required investors to live in their country. Countries with minimal residence requirements have to be careful to protect the reputation of their programs. Screening procedures to weed out applicants with criminal backgrounds or illegally obtained wealth help to reduce reputational risks, which — in a worst-case scenario — could make other countries unwilling to offer visa-free travel to a country’s citizens. This screening is much more thorough than that which most countries require for their tourist or business visas, but has inherent limits, and the risk of bad apples gaining entry through such a program cannot be eliminated entirely. Where to next for residence and citizenship programs? Growing demand from the world’s new wealthy classes, particularly in China, seems likely to fuel investment migration for the foreseeable future. As governments rush to introduce new programs, learning from other countries’ experiences will be important. Popular destinations with longstanding programs, such as Australia and Canada, have recently reassessed their policies for good reasons, including looking for ways to admit immigrants who make more active economic contributions. The challenge will be to maintain the integrity and reputation of programs while more clearly demonstrating the economic value.

Madeleine Sumption is the Director of the Migration Observatory at the University of Oxford. The Migration Observatory provides impartial, independent, authoritative, evidence-based analysis of data on migration and migrants in the UK. Before joining the Observatory, she was Director of Research for the international program at the Migration Policy Institute in Washington, DC. She remains a non-resident fellow with the Migration Policy Institute Europe. Her research interests include the design and implementation of work-based visa policies; investor residence and citizenship programs; and the economic effects of immigration policies in Europe, North America, and other high-income countries. Her publications include, among many others, Selling Visas and Citizenship: Policy Questions from the Global Boom in Investor Immigration and The Economic Value of Citizenship for Immigrants in the United States.

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Global Residence and Citizenship Programs 2018–2019

The Expansion of Regional Free Movement Regimes and Its Impact on Investment Migration Dr. Diego Acosta Associate Professor in Migration and European Law, University of Bristol, Bristol/UK The expansion of human rights law coupled with the explosion of regional processes of integration are the two most important phenomena that have limited the state´s capacity to restrict the entry of foreigners and their rights. It should come as no surprise that regional agreements facilitating mobility have proliferated and now involve around 120 countries, either at a bilateral or multilateral level. For one thing, most global migration is regional, whether in Africa, Asia, Europe, or Southern and Central America. In addition, regional instruments can be agreed on more rapidly and, in principle, introduce higher standards of protection and rights because of the more limited number of actors involved in the negotiations. There is, of course, huge variation across regions as to the degree of development of the various agreements, the categories of individuals entitled to mobility and equal treatment, and their effective application and enforcement mechanism devices. Regional migration regimes transform the meaning of citizenship and the relationship between states, their territories, and foreigners. Through regional migration agreements, states renounce their control over the relationship between territory and population, since there is a group of non-nationals who obtain rights of entry and/or residence, coupled with other provisions on nondiscrimination in terms of access to work, family reunion, or even socio-economic entitlements. The EU has often been considered the paradigmatic example of a functioning regional mobility framework. However, many other regions, including South America, Central America, the Caribbean,

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Africa, the Post-Soviet space, and the Gulf countries now have regional agreements facilitating mobility and residence for regional migrants. Regional migration agreements also tell a different story about the alleged global trend of border closures. Contradicting this accepted narrative, regional migration agreements do open borders at least for those coming from certain countries. Examples are abundant. Their good state of health is clearly represented by the fact that more and more regions continue to discuss, negotiate, and adopt these kinds of agreements. For example, as recently as 1 January 2015, the coming into force of the Astana Treaty established the Eurasian Economic Union between Belarus, Kazakhstan, and Russia, with Armenia and Kyrgyzstan joining later. The Astana Treaty incorporates a full section on labor migration (Section XXVI). Articles 97 and 98 offer nationals of the participating states the right to work in another member state without the need to obtain a work permit, as well as, among other entitlements, automatic recognition of educational qualifications, equal treatment in access to medical services, and education rights for the children of workers. Very importantly, a common taxation scheme is also established for nationals of the member states through which workers in a second member state are subject to national treatment when it comes to taxes. These agreements transform the meaning of citizenship. For example, being an Armenian or Kyrgyz, or naturalizing as one, is a legal status that has consequences and offers life opportunities beyond the established borders of Armenia or Kyrgyzstan. Indeed, some of these agreements refer to nationals from the signatory states as regional citizens, thus opening up a new meaning for a word (citizenship) that has been historically associated with states. An example of this is the


Expert Commentary: The Expansion of Regional Free Global Movement Residence Regimesand andCitizenship Its Impact onPrograms Investment 2017–2018 Migration

Andean Community. Its 2015, non-legally binding Statute on Human Mobility refers, for the first time, to regional migrant workers as Andean citizens. Furthermore, and most notably, foreigners who regularly reside within the territory of any member state are also included within the scope of the Statute. This notable personal scope will possibly be confirmed with the adoption, in a date to be determined in either 2018 or 2019, of another legal instrument now under discussion, namely the Andean Migration Statute. Should this be the case, obtaining residence in Bolivia, Colombia, Ecuador, or Peru would come with residence rights in the other member states of the Andean Community as well. Regional citizenship, migration, and mobility schemes obviously have profound implications for residence- and citizenship-by-investment. The clearest examples are Austria, Cyprus, and Malta, countries that offer citizenship-by-investment schemes through which the individual also obtains EU citizenship, and thus residence and work rights in the other 27 member states (plus Iceland, Norway, and Switzerland, and with some limitations Liechtenstein as well). Moreover, regional mobility regimes also have the capacity to affect migration flows in certain situations by offering the individual a panoply of options that were not available before. The example of Venezuelans moving to countries such as Argentina or Uruguay, where they can benefit from the right to reside as deriving from the MERCOSUR Residence Agreement, is telling of the life-changing nature of regional instruments for the individual. To conclude, those working in the area of residenceand citizenship-by-investment need to understand, carefully assess, and anticipate developments on regional free movement agreements, which, by their very nature, have effects on the meaning of nationality and alienage and the various legal statuses in between.

Dr. Diego Acosta is a leading international expert on European and international migration law. His work discusses migration law as a central aspect of globalization and analyzes various processes of inclusion and exclusion and their profound implications for the rule of law in Europe, South America, and elsewhere. He is the author of more than 40 publications and his latest monograph (in print with Cambridge University Press) looks at the legal construction of the national and the foreigner in South America since independence in the early 19th century until today. He also currently participates as co-investigator in the project Prospects for International Migration Governance (MIGPROSP) that has received EUR 2.1 million in funding from for the period 2014–2019. He is also one of the authors of the proposal for a Model International Mobility Convention led by Columbia University in New York. He has provided consultancy for various governments, international organizations, law firms, political parties, and NGOs in Africa, Europe, Latin America, and the US. He produced the written observations for the applicant, which were submitted to the European Court of Justice in the recent case C-636/16 López Pastuzano, that was decided in favor of the applicant. He is regularly invited to present his work at some of the most prestigious universities around the globe and has been visiting researcher at several institutions including the University of New York (NYU) and the European University Institute (EUI) in Florence.

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Global Residence and Citizenship Programs 2018–2019

The Migration of Millionaires

Karolina Laubscher Head of Business Intelligence Henley & Partners, Cape Town/South Africa With a range of migration paths to choose from, including residence- and citizenship-by-investment programs, it is interesting to observe where millionaires are choosing to migrate to and from, and why they do so. A millionaire is a person with a net worth in excess of USD 1 million (the value of all financial assets and real estate after deducting any debt) but it is worth distinguishing between millionaires or high-net-worth individuals (HNWIs) who possess a net worth of USD 1 million in liquid assets, and ultra-HNWIs (UHNWIs) who possess more than USD 30 million in liquid assets.48 There are a myriad factors that motivate the wealthy to

migrate — and the reasons usually differ between millionaires and UHNWIs — but most millionaires are primarily driven by the desire for better quality education, personal security, healthcare, climate and cleanliness, and a more favorable tax environment. According to New World Wealth’s 2018 Global Wealth Migration Review,49 global wealth migration is accelerating: approximately 95,000 HNWIs migrated in 2017 compared to 82,000 in 2016 and 64,000 in 2015. A key driving factor behind this growing trend is the introduction by the Organisation for Economic Co-operation and Development (OECD) of the Standard for Automatic Exchange of Financial Account Information, which outlines automatic disclosure of financial account information between countries through a set of rules as outlined in the Common Reporting Standard (CRS). The principle

Figure 3. Top countries gaining or losing millionaires in 2017 2015 64,000

Canada +5,000

2016 82,000

Russian Federation -3,000

Switzerland +2,000 UK -5,000 France -5,000

US +9,000

2017 95,000

Turkey –6,000

Israel +2,000

UAE +5,000

China –10,000 India –7,000

Australia +10,000

Sources: Adapted from Visual Capitalist and New World Wealth (2018) New World Wealth, ‘Global Wealth Migration Review: Worldwide Wealth and Global Migration Trends’ (New World Wealth, February 2018) afrasiabank.com/media/2915/gwmr-2018.pdf accessed 4 July 2018 49 Ibid. 48

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Global Expert Residence Commentary: and Citizenship The Migration Programs of Millionaires 2017–2018

of banks being required to report information on foreign clients’ earnings to their domicile countries, or in the case of US citizens, to the US, has been applied in the EU and US for 10–15 years; the rest of the world now has to do the same. Millionaires in countries yet to implement the policy, particularly those in Asia, South America, and other developing markets, find themselves without many options and need to look for stable and secure countries to relocate to. Some wealthy families from emerging market countries where there are high levels of state corruption, whether at police, judicial, and/or political levels, are concerned about their personal safety and the potential misuse of exchanged financial data. These are serious and legitimate concerns. New World Wealth contends that the steady departure of HNWIs from China and India is not a great concern, however, as these countries generate more HNWIs than they lose, and the expectation is that many wealthy individuals will return to these countries once the standard of living improves.

The significant outflow of HNWIs from Turkey, on the other hand, is perturbing as the country is not producing sufficient HNWIs to replace them, and the total number of HNWIs in Turkey is dwindling. For the second consecutive year, Turkey has lost over 5,000 HNWIs and this has been attributed to its unstable political situation and stagnating wealth per capita, among other reasons. 2017 was the first year in the past three decades that the UK saw a significant outflow of HNWIs. Until last year, the UK was always the recipient of significantly high numbers of HNWIs. There are several contributing factors at play, including more favorable inheritance taxes elsewhere, new taxes on foreigners and non-domiciles who own homes in the UK, Brexit looming, and rising levels of crime and a compromised safety and security situation, particularly in London. While the CRS is not a main driving factor behind the exodus of millionaires from France, a tax regime that is perceived to be unfriendly by HNWIs from

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Global Residence and Citizenship Programs 2018–2019

both within and outside the country is, along with an increase in security and safety risks due to recent events. French HNWIs are moving to Canada, Switzerland, and the US, while Russian HNWIs are flocking to the Caribbean, Cyprus, Portugal, the UK, and the US.

The role of residence- and citizenship-byinvestment programs The New World Wealth figures focus only on those HNWIs and UHNWIs who have physically moved and who stay in their new countries more than half of the year. There are, however, many wealthy individuals who acquire residence in a country, but never actually move there. Citizenship-by-investment programs typically cater for those HNWIs and UHNWIs who do not want to migrate, but who seek the benefits associated with a specific nationality, for example, visa-free or visa-on-arrival travel, personal security, and the option to settle in a new country should the need arise. Wealthy people who migrate want to live elsewhere either because of push factors in their own country or pull factors in their destination country, and residence-by-investment programs cater well for these individuals and their families. In the past, the US’s EB-5 Immigrant Investor Program and Canada’s Federal Immigrant Investor Program were popular, but with the former now more restrictive and the latter now closed, although these two countries remain the second and third most popular options for migrating millionaires in 2017, entrepreneurs and investors are turning to other options. Australia is highly developed and one of the wealthiest countries in the world, with a high per capita income and excellent quality of life, healthcare, education, economic freedom, and stability. Another significant pull factor for Australia is its proximity to Asia, making it a prime location for conducting business in emerging Asian countries, and in 2017 it was the country with the biggest inflow of HNWIs for the third consecutive year. Popular among Chinese and Indian citizens, both Australia and New Zealand with their geographical

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distance from political and religious issues are also increasingly favored by wealthy migrants from the UK. The UAE’s low crime rate, excellent healthcare system, and low tax rates make it appealing to millionaires who are predominantly from India, Nigeria, Saudi Arabia, and Turkey. European countries are increasingly popular for their quality of life and travel freedom, in particular among the Chinese, while Israel and Switzerland each attracted 2,000 HNWIs in 2017. Israel has a strong IT sector and offers a tax exemption to new immigrants and returning Israelis. Switzerland is an attractive option thanks to its top health system, exclusive private schools, and favorable tax regime.

Figure 4. Losing millionaires 12,000 10,000 8,000 6,000 4,000 2,000 France

China

Brazil

India

Turkey

2017 2016 2015

UK

Russian Federation

Note: No data for 2015/2016 for UK; no data for 2016 for Russian Federation Sources: Adapted from Visual Capitalist and New World Wealth (2018)


Global Expert Residence Commentary: and Citizenship The Migration Programs of Millionaires 2017–2018

Increasing millionaire migration out of a country is often a sign of a growing lack of confidence, as HNWIs and UHNWIs have the means to leave and are thus first to exit. Along with their families, millionaires also bring to their host countries their wealth and the taxes they pay, which can be detrimental to the local economies and property markets of the countries they leave behind. In some cases, they also relocate their businesses — and the jobs they generate — as well as their skills, qualifications, and influence. Therefore, while millionaires may reflect only a small percentage of a country’s population, retaining them — or attracting them — is an important endeavor for any country.

Karolina Laubscher is an experienced strategist and marketing professional with over 15 years’ experience in global marketing management. Formerly an FMCG specialist in several countries, she brings thorough knowledge in cross-cultural and cross-country marketing. She has recently been appointed as Head of Business Intelligence for Henley & Partners, based in South Africa. Prior to this she was Head of Group Marketing, leading a team of over 25 professionals and running events, media, PR, publishing, and strategy across 30 countries.

Figure 5. Gaining millionaires 2,000 4,000 6,000 8,000 10,000 12,000 Australia

US

Canada

UAE

New Zealand

Israel

2017 2016 2015

Switzerland

Note: No data for 2016 for Israel; no data for 2015/2016 for Switzerland Sources: Adapted from Visual Capitalist and New World Wealth (2018)

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Global Residence and Citizenship Programs 2018–2019

Global Movement of Billionaires

Dr. Marcel Widrig Partner, PwC and Global Private Wealth Leader Zurich/Switzerland The majority of the world’s billionaires have made their fortune in the past 20 years, mostly originating in industry ‘sweet spots’ such as technology, finance, retail, and consumer services. In recent years — propelled by economic growth in Asia, particularly China — other industries such as materials, real estate, and industrials have also played a role in boosting the growing number of billionaires globally. A study series conducted by UBS and PwC as from 2015 onwards, called Billionaire Insights, which covers the development of ultra-high-net-worth individuals (UHNWIs) within the most relevant territories, estimated that an aggregate wealth of about USD 8.9 trillion was spread over some 2,000 individuals or families. When it comes to the global movement of billionaires, the first point to analyze is where these individuals come from. In the past, the US generated the most new billionaires by a significant lead; however, Asia has not only caught up, but in 2016 already outnumbered the US. The region now has more than 800 billionaires, while the US records slightly above 700 for 2017. Europe, where the preservation of wealth plays a more dominant role, remains stable at some 600 billionaires recorded.

The mobility restrictions Most billionaires are first generation entrepreneurs and are still closely connected to their businesses. This creates certain mobility limitations, which are less related to physical presence and more to the ownership structure and dividend-investment flows from and to the business. For example, a German-resident billionaire retaining a business in the country but moving to Monaco may find the new local income tax perspective attractive. However, the move could trigger withholding tax on dividend distributions from Germany to Monaco, which may not only offset any potential tax advantages but — especially

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Global Expert Residence Commentary: and Citizenship Global Movement Programs of 2017–2018 Billionaires

in combination with exit tax provisions — result in the individual being in a much worse tax position. From a legal perspective, billionaires do not face many mobility restrictions, especially given the budding number of residence- and citizenship-byinvestment programs working to attract wealthy individuals and/or families (which are in recent times under more supervision by organizations like the Organisation for Economic Co-operation and Development (OECD) or the EU to prevent potential loopholes in transparency provisions). As a result, billionaires and their families are increasingly global and individual family members are often spread around the globe. This — together with typically close ties to family businesses — results in UHNWIs and their families facing a threefold challenge from a tax perspective: First, family members residing in a number of different territories may trigger limited or unlimited tax liabilities in the respective countries. Second, they are often linked to businesses that are equally international and catalyze multiple tax liabilities as well. Third, the transfer of assets within the family may initiate inheritance or gift tax consequences, which are less co-ordinated at an international level than corporate or individual income taxes.

The current challenges Bearing in mind the often close ties billionaires maintain to their international businesses, corporate tax planning, up to the ultimate beneficial owner, is of paramount interest. In recent years, the international corporate landscape has undergone a dramatic change, culminating in the OECD’s business erosion and profit shifting (BEPS) project, which is aimed at preventing the shift of profits to low- or non-tax jurisdictions and/or the circumvention of tax rules by multinational companies. The project has led to a number of new internationally relevant tax laws coming into effect. While publicly quoted, large multinational groups traditionally had elaborate corporate tax structures that were often causal for these BEPS measures, privately held businesses have typically been kept

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Global Residence and Citizenship Programs 2018–2019

leaner with respect to such tax functions. With the new legislation, many of these businesses will need to undergo significant corporate restructuring in order to ensure compliance. Billionaires, being the ultimate beneficial owners of such businesses, often see themselves faced with a set of new holding requirements, which has an increasing influence on residence planning. At the same time, due to the Common Reporting Standard (CRS) and the resulting exchange of financial information between different nations and territories, care has to be taken that no misreporting or double reporting occurs. This is especially true for billionaires and their families, who are tied to their businesses through a number of holding and financing vehicles. In other words, while in the past wealthy families could focus on profitable businesses and did not need to concern

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themselves much with residence planning, both corporate tax laws (through BEPS) and individual tax laws (triggered by CRS) have led to a ‘perfect storm’ that internationally active billionaires must now weather.

The outlook Today, the biggest challenges billionaires and their families face is less of an infrastructural character and more of a tax and regulatory nature. Moving from one place to another and having offspring with business interests living in a number of different countries and studying or temporarily residing in other countries all prompt a growing number of tax questions both at individual and business levels. At the same time, countries expanding their restrictive tax laws — aimed at ‘taxing the rich’ — and the rising number of


Global Expert Residence Commentary: and Citizenship Global Movement Programs of 2017–2018 Billionaires

billionaires relocating from countries with limited governance are leading to a ballooning number of UHNWIs moving to safe and reliable countries that offer a reasonable tax environment. This movement will be supported by sophisticated tax and legal planning, as was in the past for large multi­national corporates. The main difference, however, will be that such planning will not primarily aim to reduce taxes, but rather to comply with necessary regulatory requirements to avoid the risk of double or multiple taxation of the billionaire’s income and wealth in a global context. Noteworthy in this respect is the fact that from a transparency perspective, the EU has introduced mandatory disclosure regimes (the so-called DAC6) to intermediaries and taxpayers for certain arrangements with an EU cross-border element in order to detect potentially aggressive tax arrangements.

Dr. Marcel Widrig is a partner at PwC based in Zurich, where he leads PwC’s private client network and is the global tax leader of UHNWIs. Dr. Widrig has more than 25 years of experience in international tax and legal planning for UHNWIs and their family offices. He publishes regularly in the various media and is a lecturer for tax law at the University of Zurich.

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Global Residence and Citizenship Programs 2018–2019

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Global Residence and Citizenship Programs 2017–2018

The Global Residence Program Index

59

The Global Residence Program Index 2018–2019

60

Residence Programs

57


The Global Residence Program Index 2017–2018

58


The Global Residence Program Index 2018–2019

The Global Residence Program Index 2018–2019 Acquiring resident status in a country affords certain rights, which may include the capacity to live there and enjoy a certain quality of life, work, be tax resident under that country’s tax system, and purchase property. It does not confer a passport, meaning residents will not enjoy the same travel freedom that citizens experience.

Figure 6. The Global Residence Program Index (GRPI) 2018–2019 Rank Program

Score

1

Austria

79

2

Portugal

77

3

Italy

72

4

Thailand

68

5

UK

67

6

Malta

66

7

Belgium

65

7

Australia

65

8

US

64

9

Switzerland

63

10

Canada

62

11

Dubai/UAE

59

12

Greece

55

13

Spain

54

14

Latvia

53

15

Jersey

52

16

Monaco

51

17

Singapore

50

18

Cyprus

47

19

Hong Kong

46

20

Bulgaria

42

Factors • • • •

Reputation • Processing Time and Quality Quality of Life of Processing Tax • Compliance Visa-free or Visa-on-arrival Access • Investment Requirements

• Total Costs • Time to Citizenship • Citizenship Requirements

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The Global Residence Program Index 2018–2019

Austria 6

10

Citizenship Requirements

Reputation

7

10

Time to Citizenship

Quality of Life

8

6

79

Total Costs

Tax

10

10

Investment Requirements

Visa-free or Visa-on-arrival Access

4

Compliance

8

Processing Time and Quality of Processing

Figure 7. The total score for Austria on the GRPI is 79/100, ranking it 1st out of 21 programs

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Austria

Austria is one of Europe’s wealthiest countries, offering a very high quality of life to its people. With a welldeveloped and stable economy and awe-inspiring natural attractions, Austria makes for an outstanding place of residence. The country is famed for being the birthplace of many renowned intellectuals, artists, and composers. An Austrian residence permit allows one to travel to all Schengen Area states without the need for a visa. After ten years of legal residence, and in certain circumstances after six years, it is possible to apply for Austrian citizenship. There are minimum application requirements. Austria distinguishes between 10 types of residence permits. These permits differ depending on: (i) whether the applicant is allowed to work in Austria or not and (ii) whether the applicant is an employee or is self-employed. Other permits exist for students and for family members of persons who are already resident in Austria. For some of these permits, including those for persons of independent means, annual quotas apply that are implemented each year by decree. For all other residence permits, strict conditions have to be fulfilled. The potential routes to residence include: • Residence for Persons of Independent Means – under the category of Persons of Independent Means, the key criterion is that the applicant has sufficient funds (the applicant must be able to show liquid assets at their disposal of about EUR 40,000 per adult and EUR 10,000 per child

Residence Required

under the age of 18 years. These assets have to be proven in the form of a statement of account from an Austrian bank or a major international bank). A university degree that is recognized in Austria or German language skills at A1 level, permanent accommodation in Austria, and health insurance that provides full cover in Austria are also required. Owing to a strictly applied quota system, it is important to submit the application at the beginning of January each year in which a residence card is required • Residence and Work Permit as a Key Manager – under the category of Key Manager, the main criteria are that the applicant has been appointed as a manager of an Austria-based company and is employed at a minimum salary of EUR 2,500 per month. This corresponds to approximately EUR 800 per month in effective costs for taxes and social security contributions The processing time for a residence permit can take up to 14 months. It is also possible to qualify for citizenship-by-investment — see the GCPI entry for Austria on page 111.

183 days per year

Nature of Contribution Not applicable Minimum Contribution None Time to Citizenship

German

6–10 years

Euro EUR

8,754,413*

USD 409.3 billion*

*Source: CIA, ‘The World Factbook’ (2018)

61

Austria

Residence Program

1st |


The Global Residence Program Index 2018–2019

Portugal GRP 7

8

Citizenship Requirements

Reputation

6

8

Time to Citizenship

Quality of Life

7

9

77

Total Costs

Tax

9

10

Investment Requirements

Visa-free or Visa-on-arrival Access

6

Compliance

7

Processing Time and Quality of Processing

Figure 8. The total score for Portugal on the GRPI is 77/100, ranking it 2nd out of 21 programs

62


Portugal

Portugal boasts an excellent reputation and is considered one of the world’s most globalized and peaceful nations, with a high quality of life and a very high Human Development Index* ranking. It is among the oldest countries in Europe with a rich history, lively culture, exceptional cuisine, stunning beaches, and idyllic countryside. The Portugal Golden Residence Permit Program is a five-year investment-based residence process for non-EU nationals. Portugal is a full member of the EU and residence allows visa-free access to the Schengen Area. The residence program requires a total of 35 days’ stay in Portugal during a five-year period. Five years as a resident renders eligibility to apply for citizenship. There are three qualifying options: Capital Contribution • EUR 1 million transfer into a Portuguese bank account or approved investment options • EUR 350,000 for research activities of public or private entities that are part of the national scientific and technological system† • EUR 250,000 in support of artistic production or in the recovery or maintenance of the national cultural heritage† • EUR 350,000 for the acquisition of units of investment funds or venture capital funds committed to the capitalization of companies incorporated under the Portuguese law, with a maturity of at least five years and with at least 60% of the investment portfolio in companies with a head office in the national territory Property Acquisition • A real estate purchase with a minimum value of EUR 500,000† • A real estate purchase with a minimum value

Residence Required

of EUR 350,000 for the refurbishment of properties older than 30 years or in an area of urban regeneration, including the cost of renovations† Business • Creation of a minimum of 10 new jobs† • EUR 350,000 for the incorporation or increase of the share capital of a company registered in Portugal, creating or maintaining a minimum of five permanent jobs, for a period of three years The threshold will be reduced by 20% should the funds be committed to a low population density area, which is defined as having fewer than 100 inhabitants per km² or having a GDP per capita below 75% of the national average. †

The procedures for residence applications are straightforward, and compliance standards and due diligence are comparably high. The Golden Residence Permit is valid for one year after issue and is renewable for two subsequent periods of two years, equaling a total of five years for the program. There is an option of another two-year extension or obtaining permanent residence status that will contribute towards eligibility for a citizenship application after five years as a resident.

35 days during a 5-year period

Nature of Contribution Capital transfer, various investment options, real estate, or business Minimum Contribution EUR 200,000 or creation of 8 jobs** Time to Citizenship

Portuguese

5 years

Euro EUR

10,839,514***

USD 211.7 billion***

*The UN Development Programme Human Development Index ranks non-economic development, namely health, education, and standard of living **Taking into consideration the 20% reduction for specific areas ***Source: CIA, ‘The World Factbook’ (2018)

63

Portugal

Residence Program

2nd |


The Global Residence Program Index 2018–2019

Italy 7

6

Citizenship Requirements

Reputation

7

8

Time to Citizenship

Quality of Life

7

10

72

Total Costs

Tax

7

10

Investment Requirements

Visa-free or Visa-on-arrival Access

5

Compliance

5

Processing Time and Quality of Processing

Figure 9. The total score for Italy on the GRPI is 72/100, ranking it 3rd out of 21 programs

64


Italy

Home to many great works of art and architecture, Italy’s strategic location in the heart of the Mediterranean Sea makes it an ideal place to live. Italy is a founding member of the EU and the third-largest economy in the eurozone. Italian residents enjoy high standards of living, education, and healthcare, and a unique quality of life. The Ministry of Economic Development launched its residence-by-investment visa program, the Investor Visa for Italy, in December 2017. The program offers a two-year visa to non-EU citizens who choose to stay in Italy and invest in strategic assets. The twoyear visa can be renewed for an additional threeyear period until permanent residence is granted after five years. The following four options are available to potential investors; a minimum investment of: • EUR 500,000 in an Italian innovative start-up† • EUR 1 million in an Italian limited company† • EUR 1 million donation to a philanthropic initiative • EUR 2 million in Italian Government bonds† †

These investments must be held for at least two years.

To obtain an investor visa, potential applicants first need a Nulla Osta (certificate of no impediment). They can then apply for a two-year investor visa at the

Residence Required

Italian representation in their country of residence. Formal documentation and certificates are required to complete the process. Italy is one of the leading countries in the world when it comes to pushing the global transparency agenda and boasts very high compliance standards. Processing time is fast, with The Investor Visa for Italy Committee aiming to review complete applications within 30 days, making it one of the fastest residence programs in Europe. There are special tax benefits for high-networth individuals in the form of an optional tax regime that allows new residents to substitute regular taxation on income generated outside Italian territory by paying an annual lump sum of EUR 100,000. The investor visa enables visa-free travel to Europe’s Schengen Area, and family and children of successful applicants also qualify for residence permits in Italy. The program leads to permanent residence in Italy after five years.

Yes, rented or owned accommodation

Nature of Contribution Investment and/or donation Minimum Contribution EUR 500,000 Time to Citizenship

Italian

10 years

Euro EUR

62,137,802*

USD 1.291 trillion*

*Source: CIA, ‘The World Factbook’ (2018)

65

Italy

Residence Program

3rd |


The Global Residence Program Index 2018–2019

Thailand 0

8

Citizenship Requirements

Reputation

0

9

Time to Citizenship

Quality of Life

10

10

68

Total Costs

Tax

10

5

Investment Requirements

6

Compliance

Visa-free or Visa-on-arrival Access

10

Processing Time and Quality of Processing

Figure 10. The total score for Thailand on the GRPI is 68/100, ranking it 4th out of 21 programs

66


Thailand

Thailand is a sought-after destination in Southeast Asia. The country offers an affordable and high standard of living, and its attractions include spectacular ancient ruins, scuba-diving sites, tropical islands, an exciting nightlife, palaces, Buddhist temples, and several UNESCO World Heritage Sites. The Thailand Elite Residence Program offers applicants the right to live in the country for up to 20 years and enjoy access to privileged services and benefits. To receive the Thailand Elite residence visa, foreigners must join Thailand Elite, an exclusive program offered by the Thailand Privilege Card Company Limited (TPC). The program was initiated in 2003 to attract wealthy global citizens who wish to spend extended periods of time in the country and take advantage of its affordable but high standard of living. The program offers seven options, of which the following three are most popular: • Elite Easy Access – a popular option for expats or business people to enter and exit Thailand. With a five-year residence visa, the one-time fee is approximately USD 16,000. There is no annual fee or age restriction. The visa cannot be transferred, but can be upgraded to the Elite Ultimate Privilege option for approximately USD 50,000 • Elite Family Excursion – designed for a minimum of two people with a five-year residence visa for each member. The one-time fee of approximately USD 25,000 covers both applicants, with an additional charge of approximately USD 10,000 per dependent. Dependents may include legitimate parents, step-parents, spouse (including by civil union), children, and step-children. There is no annual fee and no age restriction.

Residence Required

The residence visa cannot be transferred. The package includes complimentary VIP privileges such as airport transfers for international flights and government concierge services • Elite Superiority Extension – 20-year residence visa for individuals who pay a one-time fee of approximately USD 32,000. There is no annual fee and no age restriction. The package includes complimentary VIP privileges such as government concierge services and airport services TPC provides an efficient application process for residence. Approximately one month after application a visa is issued and may be collected from a designated international airport in Thailand. Once the visa has been collected, applicants may stay or reside in Thailand for as long as they desire under the terms of their chosen package. Applicants must, however, notify TPC if they stay in the country for a continuous period of more than 90 days. The residence visa obtained through the Thailand Elite Residence Program does not lead to permanent resident status or citizenship. Permanent residence can be obtained only when an individual has had a Thai non-immigrant visa for at least three years prior to the submission of their application. It is possible to apply for citizenship after holding permanent resident status in Thailand for 10 consecutive years.

None

Nature of Contribution Single fee; with the exception of Elite Ultimate Privilege option Minimum Contribution USD 16,000 Time to Citizenship

Thai

13 years

Thai baht THB

68,414,135*

USD 437.8 billion*

*Source: CIA, 'The World Factbook' (2018)

67

Thailand

Residence Program

4th |


The Global Residence Program Index 2018–2019

United Kingdom 7

10

Citizenship Requirements

Reputation

6

7

Time to Citizenship

Quality of Life

5

7

67

Total Costs

Tax

6

4

Investment Requirements

Visa-free or Visa-on-arrival Access

7

Compliance

8

Processing Time and Quality of Processing

Figure 11. The total score for the UK on the GRPI is 67/100, ranking it 5th out of 21 programs

68


The UK has long been a significant world power, both economically and politically. London is the financial capital of the world, offering an international business environment. The UK is also renowned for having some of the best educational institutions in the world and an open, international culture. The Tier 1 (Investor) visa requires an individual to make a substantial financial commitment in the UK. To qualify, applicants must have held no less than GBP 2 million under their control for three months in advance of the initial application. Within three months of entry into the UK, applicants are required to commit at least GBP 2 million that must be maintained throughout the period, until permanent residence is granted. The GBP 2 million must be invested in UK government bonds, corporate bonds, or share capital/loan capital in active and trading UKregistered companies other than those principally engaged in property investment. Investment in offshore companies is not permitted. The investment must be maintained for five years. For an initial application, an applicant is not required to show business experience or the ability to speak English. Before the expiry of the initial three-year visa, applicants and dependent family members must apply for an extension of stay. The UK Government will grant a two-year extension if the applicant has maintained the required investment throughout the initial three-year term. The UK expects applicants to make the UK their main home by spending more time there than elsewhere. A maximum of 180 days in each of the 12 calendar month periods preceding the date of application for settlement may be spent outside the UK. If applicants

Residence Required

are planning to apply for citizenship following receipt of Indefinite Leave to Remain, they must have resided in the UK for at least 275 days in each of the five years prior to their application for naturalization. From a tax perspective, the UK presents an attractive base for wealthy individuals and their families. A special tax regime is available for those who are not domiciled in the UK whereby only income arising in the UK or remitted to the UK is taxable. The UK program offers fast investment migration application processing. No business or management experience is required. The entry criteria are very objective and the application outcome is predictable. Applicants must hold Indefinite Leave to Remain for 12 months before they are eligible to apply for citizenship. Thus the minimum time necessary to become eligible for citizenship, assuming an applicant has met all the requirements, is six years. The UK offers an excellent quality of life for its residents and is one of the most attractive places in the world, both as a business location and as a place for private residence. The UK Tier 1 (Investor) visa also has two other investment options: • GBP 5 million, leads to Indefinite Leave to Remain for the main applicant only, in three years • GBP 10 million, leads to Indefinite Leave to Remain for the main applicant only, in two years

185 days per year

Nature of Contribution Investment for 5 years Minimum Contribution GBP 2 million Time to Citizenship

English

6 years

UK pound GBP

65,648,100*

USD 2.565 trillion*

*Source: CIA, ‘The World Factbook’ (2018)

69

United Kingdom

United Kingdom

Residence Program

5th |


The Global Residence Program Index 2018–2019

Malta GRP 2

6

Citizenship Requirements

Reputation

2

7

Time to Citizenship

Quality of Life

8

9

66

Total Costs

Tax

7

10

Investment Requirements

Visa-free or Visa-on-arrival Access

7

Compliance

8

Processing Time and Quality of Processing

Figure 12. The total score for Malta on the GRPI is 66/100, ranking it 6th out of 21 programs

70


Malta

Malta has been a member of the EU since 2004 and is a neutral and highly respected country. Located in the center of the Mediterranean Sea, the Maltese archipelago has risen to be one of Europe’s leading investment locations, driven by its reputation for stability and security. A very attractive location for private residence, the island nation of Malta enjoys a stable political climate and is strategically located with excellent air links. The Malta Residence and Visa Program (MRVP) offers non-Maltese persons the possibility of acquiring an EU residence card that offers visa-free travel within the Schengen Area. In order to qualify, the main applicant must be at least 18 years of age and have an annual income of no less than EUR 100,000 or have in their possession capital of no less than EUR 500,000. The minimum requirements are: • An investment in government bonds of EUR 250,000 to be retained for a minimum period of five years • A non-refundable government contribution of EUR 30,000 (EUR 5,500 of which is an advance government administrative fee) • A property purchase of EUR 320,000 (EUR 270,000 in South Malta or Gozo); or a property lease of EUR 12,000 per annum (EUR 10,000 in South Malta or Gozo)

Residence Required

The main applicant and any dependents must have clean personal backgrounds with no criminal records, must be in good health, and have full medical insurance that is valid throughout the EU and worth at least EUR 30,000 per family member. The MRVP application requirements and procedures are reasonable and straightforward. The application is submitted to the responsible government agency, Malta Residency and Visa Agency (MRVA) with a non-refundable deposit of the contribution amount to the sum of EUR 5,500. After stringent due diligence checks, successful applicants will be requested to complete the qualifying investments and will then be issued a residence permit. The permit will be monitored annually for the first five years from its issue and every five years thereafter. Total costs are moderate compared to other residence programs on the GRPI. For the citizenshipby-investment route, refer to the Malta Individual Investor Program (MIIP), designed and operated by Henley & Partners, under the GCPI on page 107.

None

Nature of Contribution Investment, contribution, and real estate purchase or rental Minimum Contribution EUR 330,000 Time to Citizenship

Maltese, English

Not applicable

Euro EUR

416,338*

USD 12.01 billion*

*Source: CIA, 'The World Factbook' (2018)

71

Malta

Residence Program

6th |


The Global Residence Program Index 2018–2019

Belgium BRP 7

7

Citizenship Requirements

Reputation

8

7

Time to Citizenship

Quality of Life

5

5

65

Total Costs

Tax

8

10

Investment Requirements

Visa-free or Visa-on-arrival Access

4

Compliance

4

Processing Time and Quality of Processing

Figure 13. The total score for Belgium on the GRPI is 65/100, ranking it joint 7th out of 21 programs

72


Belgium

One of the founding members of the EU, with its headquarters in Brussels, Belgium is regarded as an important and highly reputable country in Europe. It is economically stable and has a conveniently central location, excellent transportation networks, and high-quality healthcare and education. For entrepreneurs, self-employed individuals, and investors, Belgium offers a path to residence status and eventually to acquiring Belgian citizenship after five years of legal stay. A residence permit allows visa-free travel to Europe’s Schengen Area and can be obtained within a reasonable amount of time. With a case-by-case decision process, the visa and residence application process can take three to twelve months, depending on individual circumstances. Various options are available, including the setup of an international holding structure in Belgium, investment in an existing Belgian company, or investment in a foreign company through a Belgian, holding company. A person who is employed by a Belgian company or a person who sets up or buys a Belgian company can apply for residence in Belgium, but it is critical to obtain a work permit first. More specifically, there are two main economic routes under which a person could qualify for residence, as

Residence Required

either: (i) a manager or highly skilled employee or (ii) an entrepreneur or self-employed individual. In order to qualify as a manager or highly skilled employee, the person must earn a yearly gross salary above a certain level as set by the Belgian authorities. Qualifying for this category of work permit would also entail a higher tax liability. A donation is not required for obtaining permanent residence. Belgium also has attractive corporate and personal taxation systems. Special tax incentives apply to certain categories, including intellectual property and shipping. Compliance standards and due diligence processes are adequate; applicants must submit the usual documents and supporting evidence relevant to their permit category. This positions Belgium as an excellent investment option within the GRPI. In general, the cost for obtaining residence may be attractive if one wants to physically live and work in Belgium.

Yes

Nature of Contribution Business Minimum Contribution None Time to Citizenship

5 years

Flemish, French, German

Euro EUR

11,491,346*

USD 491.7 billion*

*Source: CIA, 'The World Factbook' (2018)

73

Belgium

Residence Program

Joint 7th |


The Global Residence Program Index 2018–2019

Australia 8

9

Citizenship Requirements

Reputation

8

8

Time to Citizenship

Quality of Life

7

8

65

Total Costs

Tax

2

2

Investment Requirements

Visa-free or Visa-on-arrival Access

7

Compliance

6

Processing Time and Quality of Processing

Figure 14. The total score for Australia on the GRPI is 65/100, ranking it joint 7th out of 21 programs

74


Australia

Australia is one of the wealthiest countries in the world and has an excellent reputation. It is a developed, multicultural country with an extremely high Human Development Index* ranking and offers its people an excellent quality of life, economic freedom, and good protection of civil liberties and political rights. The immigration system is objective and merit-based with predictable outcomes. Permanent residents must spend at least two years in five in the country or demonstrate significant ties to Australia to maintain their residence status. There are six main streams under the ‘Business Innovation and Investment Program’: • Business Innovation Stream – applicants must pass a points test, have a successful business career with a minimum business turnover of AUD 500,000 and net assets of AUD 800,000, and obtain and maintain substantial ownership and management of an Australian business • Investor Stream – applicants must pass a points test, have three years’ investment experience, make a designated investment of AUD 1.5 million into an Australian state or territory bond for four years, and have net assets of at least AUD 2.25 million • Significant Investor Stream – applicants must invest at least AUD 5 million into a complying Australian investment for at least four years • Entrepreneur Stream – applicants must sign a formal agreement to receive AUD 200,000 in venture capital funding from an Australian company for the commercialization and/or development of a high-value business idea or product • Business Talent (Significant Business History Stream) – applicants must own or part-own a

Residence Required

business with a turnover of at least AUD 3 million per year. The applicant must pass a points test, have a successful business career, and have net assets of at least AUD 1.5 million. They must make a substantial investment into a new or established business in Australia and take an active role in managing the business • Business Talent (Venture Capital Entrepreneur Stream) – applicants must have sourced AUD 1 million in venture capital funding to fund the start-up or product commercialization of a high-value business idea in Australia and must establish (or participate in) that business The first four streams offer a direct pathway to permanent residence after four years, subject to meeting certain residence and investment or business turnover requirements. The last two streams offer direct permanent residence, and applicants must quickly become involved in the relevant business. Australia has relatively high tax burdens in comparison with other countries in the GRPI, and an Australian permanent resident does not enjoy many visa-free or visa-on-arrival travel privileges. Due diligence and compliance checks of applicants are much more onerous than in other residence programs, but Australia requires minimal additional conditions for citizenship.

2 years in a 5-year period

Nature of Contribution Investment or business Minimum Contribution Business turnover of AUD 500,000 and net assets of AUD 800,000 Time to Citizenship

English

4 years of permanent residence

Australian dollar AUD

23,232,413**

USD 1.39 trillion**

*The UN Development Programme Human Development Index ranks non-economic development, namely health, education, and standard of living **Source: CIA, ‘The World Factbook’ (2018)

75

Australia

Residence Program

Joint 7th |


The Global Residence Program Index 2018–2019

USA 8

8

Citizenship Requirements

Reputation

6

8

Time to Citizenship

Quality of Life

6

5

64

Total Costs

Tax

5

5

Investment Requirements

Visa-free or Visa-on-arrival Access

9

Compliance

4

Processing Time and Quality of Processing

Figure 15. The total score for the US on the GRPI is 64/100, ranking it 8th out of 21 programs

76


United States

The US is the third largest country on the globe and has been the leading economic and military power for the last century. Dominating the global economy, it accounts for nearly a quarter of the world’s GDP. The US offers a wide range of choices when it comes to lifestyle, culture, geography, and climate. The US remains one of the most desired destinations for migrants and investors from all over the world. The EB-5 Immigrant Investor Program offers an efficient route to permanent resident status (a Green Card) within a short period of time. The EB-5 Immigrant Investor Program requires that a foreign individual invests USD 1 million (or USD 500,000 if the investment is made in a rural area or an area with high unemployment) into a new commercial enterprise and creates 10 new full-time jobs. Funds must stay invested and be at risk for at least five years from the issuance of a Green Card. A certain number of visas are set aside for the Regional Center Program. Under this program, an applicant invests USD 1 million in a non-target employment area project or USD 500,000 in a target employment area project and relies on indirect job creation equivalent to 10 jobs rather than directly hiring 10 employees. The investment is managed by regional centers, therefore an applicant does not have to live where the project is and is free to live and work anywhere in the US.

Residence Required

There are no requirements with regard to age, language, or past business experience in order to qualify. Individual applicants must have a net worth in excess of USD 1 million and proof must be provided that their funds come from legal sources. They must have the intention to reside in the US to maintain their Green Card. The best approach is to remain physically in the US for at least 180 days per year and to create ties with the US. US citizens and residents holding a Green Card are subject to tax on their worldwide income regardless of how much time they spend in the US. Taxes are levied at both federal and state levels. In general, the US tax system is onerous and complicated, with comprehensive reporting requirements. Permanent residents are allowed to settle anywhere in the US, but they are limited in their visafree or visa-on-arrival travel options when compared to other countries. To be eligible for citizenship, a person must have lived continuously in the US for five years and must not have gone on trips lasting six months or longer. Other than a civics test, minimal additional conditions are required in order to obtain citizenship.

2.5 years in a 5-year period

Nature of Contribution Investment Minimum Contribution USD 500,000 Time to Citizenship

English, Spanish

5 years, provided a permanent Green Card has been issued

US dollar USD

326,625,791*

USD 19.36 trillion*

*Source: CIA, 'The World Factbook' (2018)

77

United States

Residence Program

8th |


The Global Residence Program Index 2018–2019

Switzerland (SRP) 0

10

Citizenship Requirements

Reputation

0

10

Time to Citizenship

Quality of Life

2

8

63

Total Costs

Tax

6

10

Investment Requirements

Visa-free or Visa-on-arrival Access

8

Compliance

9

Processing Time and Quality of Processing

Figure 16. The total score for Switzerland on the GRPI is 63/100, ranking it 9th out of 21 programs

78


Switzerland

Switzerland offers an excellent quality of life to its residents and ranks among the top countries in which to live. It is home to many international organizations and is noted for its multicultural and plurilingual society and its politically and economically stable environment. The Swiss taxation system is consistent with the country’s reputation as a center of international trade and finance. A flat rate tax (Forfait Fiscal) is available for qualifying foreign citizens, regardless of worldwide income, with minimum charges depending on the different cantons and other factors. The flat rate is not applicable in all cantons, however. Residence in Switzerland allows one visa-free access to Europe’s Schengen Area. EU/EFTA nationals can obtain a residence permit easily if they have an employment agreement with a Swiss employer, become self-employed in Switzerland, or can prove that they are financially independent with sufficient income or wealth to cover their living costs. The procedures for non-EU/EFTA citizens to apply for Swiss residence are complex, since applications are administered at canton level as well as at the federal immigration department; however, there are no minimum investment requirements. The typical processing time for applications is two to six months, depending on the canton and on individual circumstances. Total costs for a Swiss residence permit for non-EU/EFTA citizens are high compared to other countries on the GRPI. There are four main routes: • Foreign nationals may acquire a residence and work permit to become gainfully employed in

Residence Required

Switzerland if their Swiss employer can prove that they are indispensable for a specific function in the company, possesses the relevant qualifications for this function, and that no alternative suitable candidate can be found in the Swiss or European labor markets • If a foreign national establishes and is employed by a company in Switzerland in a senior position, generally a residence and work permit will be issued under the scope of the economic promotion program • To obtain a permit as a retired person, a foreign national must be at least 55 years old, show close ties with Switzerland, and have sufficient funds • Financially independent persons who are not gainfully employed in Switzerland but who agree to pay a certain minimum in net annual taxes can usually acquire a residence permit regardless of their age. This is provided as the granting of residence to a potential taxpayer and is considered to be in the ‘fiscal interest’ of the canton of residence Citizenship is very difficult to acquire in Switzerland. A minimum residence time of 10 years is mandated in addition to other requirements.

Minimum 180 days per year

Nature of Contribution Employment, tax commitment, or self-sufficiency Minimum Contribution None Time to Citizenship

German, French, Italian

10 years

Swiss franc CHF

8,236,303*

USD 680.6 billion*

*Source: CIA, 'The World Factbook' (2018)

79

Switzerland

Residence Program

9th |


The Global Residence Program Index 2018–2019

Canada 8

9

Citizenship Requirements

Reputation

7

10

Time to Citizenship

Quality of Life

6

4

62

Total Costs

Tax

5

3

Investment Requirements

Visa-free or Visa-on-arrival Access

8

Compliance

2

Processing Time and Quality of Processing

Figure 17. The total score for Canada on the GRPI is 62/100, ranking it 10th out of 21 programs

80


Canada

Canada is frequently voted as one of the best countries in the world to live in. It is well known for its high standard of living, clean environment, low crime rate, and outstanding infrastructure. Canada is the world’s second largest country in total area, with exquisite physical geography and multicultural, tolerant, and vibrant cities. There are several ways to become a permanent resident in Canada, and each program has a different set of conditions. Three key programs are: • The Quebec Immigrant Investor Program (QIIP) – for business applicants who want to make a passive investment in that province • The Federal Start-Up Visa Program – the first of its kind worldwide, linking immigrant entrepreneurs with experienced private sector organizations with expertise in start-ups • The Provincial Nominee Program (PNP) – a special category specific to a province or territory that nominates a specific person wanting to settle and work in that province or territory, based on employment or business investment Under the QIIP, main applicants must prove a minimum net worth of at least CAD 2 million and commit CAD 1.2 million to a zero-interest Quebec government bond for five years. Main applicants must prove business management experience for at least two of the last five years. English or French is an asset. The QIIP accepts a maximum of 1,900 applications per year, with a cap of 1,330 for Chinese nationals.

Residence Required

Applicants for the Federal Start-Up Visa must be proven, successful entrepreneurs with at least one year of post-secondary education, and demonstrate language competency in English or French by achieving a minimum of level 5, as assessed by the Canadian Language Benchmark. The program links main applicants with private sector organizations able to provide funding and guidance for establishing and operating a business in Canada. The exact financial contributions will vary. PNP requirements vary from province to province and the minimum capital requirement ranges from CAD 150,000 in Nova Scotia, to CAD 1 million in Ontario if the business is located in Toronto. Main applicants are expected to have business or senior management experience and actively manage their business in Canada. Canada taxes residents on their worldwide incomes. Application processing times differ per category, with extensive compliance and due diligence procedures. Strict physical presence is required to qualify for citizenship: residents must spend 1,095 days in Canada within a five-year period and have an adequate knowledge of English or French.

2 years in a 5-year period

Nature of Contribution Investment or employment Minimum Contribution CAD 150,000 Time to Citizenship

English, French

3 years after obtaining permanent residence

Canadian dollar CAD

35,623,680*

USD 1.64 trillion*

*Source: CIA, 'The World Factbook' (2018)

81

Canada

Residence Program

10th |


The Global Residence Program Index 2018–2019

UAE/Dubai 0

8

Citizenship Requirements

Reputation

0

7

Time to Citizenship

Quality of Life

7

10

59

Total Costs

Tax

8

5

Investment Requirements

Visa-free or Visa-on-arrival Access

6

Compliance

8

Processing Time and Quality of Processing

Figure 18. The total score for Dubai/UAE on the GRPI is 59/100, ranking it 11th out of 21 programs

82


Dubai/UAE

The UAE is a key country in the Arabian Gulf and offers modern infrastructure, transport, and communications. It is an excellent place in which to conduct business, with easy global access. Dubai is the second largest of the seven emirates and ranks as the UAE’s most important port and commercial center. Many initiatives have been taken to expand the UAE’s strength in innovation and entrepreneurship while creating areas dedicated to progress in the fields of art, culture, and education. The country maintains a good quality of life for its residents. Citizens and residents of the UAE are not subject to personal income tax, capital gains taxes, or net worth taxes; however, VAT was introduced in 2018. No general minimum investment is required for a UAE Residence Permit, but the establishment of a company in the UAE is key. Once a company has been fully set up and is in possession of the relevant trade license, the time frame for the application process will usually be one to two months. In general, the total cost of obtaining residence in the UAE is reasonable when compared to other countries in the GRPI. Foreigners are not eligible for UAE citizenship; naturalizations are extremely rare and are granted only in exceptional circumstances. Particularly in Dubai, many free zones have been established that allow foreign persons and entities

Residence Required

to apply for permits to conduct their business, establish companies, and buy property subject to licensing requirements. A different license fee is payable every year, and office space must be rented or bought in the relevant free zone. Each free zone is governed by an independent Free Zone Authority, which issues licenses and residence visas/permits for the employees of the relevant companies. The nature of commercial activity that will be carried out usually dictates which free zone should be used. Free Zone Establishments and Free Zone Companies have differing minimum share capital requirements depending on the free zone of incorporation and also have to pay annual license fees. Once an applicant has an entry visa, they must travel to the UAE, apply for an ID card, and pass a series of medical checks. Once approved, residence permit holders may settle in any of the seven emirates and must ensure that no more than six consecutive months are spent outside the UAE.

No more than 6 consecutive months spent outside the UAE

Nature of Contribution Business or property purchase Minimum Contribution None Time to Citizenship

Arabic, English

Not applicable

UAE dirham AED

6,072,475*

USD 378.7 billion*

*Source: CIA, 'The World Factbook' (2018)

83

Dubai/UAE

Residence Program

11th |


The Global Residence Program Index 2018–2019

Greece 0

6

Citizenship Requirements

Reputation

0

8

Time to Citizenship

Quality of Life

8

4

55

Total Costs

Tax

8

10

Investment Requirements

3

Compliance

Visa-free or Visa-on-arrival Access

8

Processing Time and Quality of Processing

Figure 19. The total score for Greece on the GRPI is 55/100, ranking it 12th out of 21 programs

84


Greece

Greece is a country strategically located at the crossroads of Europe and Asia. It is known for its charm and beauty, and is the birthplace of democracy, Western philosophy, the Olympic Games, and major scientific and mathematical principles. Greece offers a good quality of life to its residents. In 2013, Greece launched its Golden Visa Program. In return for an investment in real estate, a five-year residence permit that is renewable every five years is granted on condition that the initial qualifying investment continues to be held or an alternative qualifying real estate investment of the same value is made. No physical residence is required, and the real estate investment can be sub-let. The permit also grants the applicant the right to establish a business in Greece. Applicants must first apply for a national category D visa for permission to enter Greece or must hold a valid Schengen visa in order to make a real estate investment and then apply for a residence permit. The national category D visa is issued at a Greek consulate or embassy in an applicant’s home country. It usually takes five to ten days for the application to be processed, and the applicant is then requested to appear for an interview. Upon being granted a national category D visa, applicants must purchase a property or properties to a total value of at least EUR 250,000 or fund a lease or timeshare agreement with a minimum duration of 10 years and start the permanent residence procedure within 90 days of their first entry into Greece.

Residence Required

Once the funds have been committed, the application process can vary in duration from one to two months, depending on the location of the property and therefore the regional office responsible for processing. Due diligence processes are less strict compared with other countries on the GRPI. There is no minimum period of ownership, and the investment can be held in a company name subject to 100% ownership of the share capital. The purchase of a single property or multiple properties to the value of at least EUR 250,000 is competitive when compared with other investment programs on the GRPI. The program provides flexibility regarding the type of real estate purchase that is made. Holders of a Golden Visa residence permit may apply for Greek citizenship following a period of seven years of lawful residence in Greece subject to meeting the legal requirements that include considerable time being spent in Greece and passing a language test. In addition to dependent children up to 21 years of age, dependent parents and dependent parentsin-law of the main applicant can be included in the same application.

None

Nature of Contribution Real estate Minimum Contribution EUR 250,000 Time to Citizenship

Greek

7 years (under certain conditions)

Euro EUR

10,768,477*

USD 204.3 billion*

*Source: CIA, 'The World Factbook' (2018)

85

Greece

Residence Program

12th |


The Global Residence Program Index 2018–2019

Spain 0

8

Citizenship Requirements

Reputation

1

9

Time to Citizenship

Quality of Life

7

5

54

Total Costs

Tax

7

10

Investment Requirements

Visa-free or Visa-on-arrival Access

3

Compliance

4

Processing Time and Quality of Processing

Figure 20. The total score for Spain on the GRPI is 54/100, ranking it 13th out of 21 programs

86


Spain

Spain has one of the most important economies in Europe and is a full member of the EU. It is a vibrant country admired for its majestic landscapes and excellent quality of life with a rich history and unique culture and traditions. A Spanish residence permit enables visa-free travel to Europe’s Schengen Area. Spain also offers attractive corporate and private taxation schemes to its residents. The program allows foreigners wanting to enter Spanish territory to make a significant investment and apply for an investor visa. A residence permit is obtainable through investment in one of the following: • Real Estate – the acquisition of real estate with a minimum value of EUR 500,000 per applicant • Business Projects – the creation and development of a business project recognizably of general interest to Spain • Investment – a minimum commitment of EUR 2 million to government bonds, or EUR 1 million into an active company’s shares or bank deposits Documentary evidence of the investment must be provided as integral to the visa application process. In the first phase, applicants apply in their home country for a Spanish Residence Visa. A residence visa stamped in their passport allows applicants to reside and work in Spain and travel freely within the Schengen Area for a period of one year. The Spanish Residence Visa can be approved within 10–15 days. If an investor already has a valid permit to stay in Spanish territory at the time of making application

Residence Required

for a residence permit, there is no need to pre-apply for a residence visa in their home country. In the second phase, applicants apply for a Spanish Residence Permit. The investors’ residence permit has an initial duration of two years, renewable for five years upon request. Residence permits are usually issued after a 20-day consideration period. For applications not resolved within that time, tacit authorization is considered. There is no minimum stay requirement to maintain residence status in Spain, but permit holders must travel at least once to Spain during the period preceding each renewal. Residents may apply for citizenship only in the 10th year of residence in Spain, a comparatively lengthy wait, and dual citizenship restrictions apply to foreign nationals from most countries. Non-residents are taxed in Spain only on Spanish-sourced income, in accordance with applicable Tax Treaty provisions. Taxation depends on the nature of the income and on the investor’s tax residence status. Low tax rates may apply to dividends, interest, and royalties of investors from countries that hold a tax treaty with Spain, while capital gains may be tax exempt or taxed at 21%. Compliance and due diligence standards are less strict than other countries in the GRPI.

1 visit

Nature of Contribution Investment, real estate, or business Minimum Contribution EUR 500,000 Time to Citizenship

10 years

Spanish

Euro EUR

48,958,159*

USD 1.307 trillion*

*Source: CIA 'The World Factbook' (2018)

87

Spain

Residence Program

13th |


The Global Residence Program Index 2018–2019

Latvia 0

4

Citizenship Requirements

Reputation

3

5

Time to Citizenship

Quality of Life

7

7

53

Total Costs

Tax

8

10

Investment Requirements

Visa-free or Visa-on-arrival Access

4

Compliance

5

Processing Time and Quality of Processing

Figure 21. The total score for Latvia on the GRPI is 53/100, ranking it 14th out of 21 programs

88


Latvia

Latvia is situated within Europe’s Schengen Area, on the Baltic coast. Riga, its capital, was founded in 1201 and is a UNESCO World Heritage Site. Approximately half of Latvia’s territory is covered in forests, offering many nature trails and parks. Latvia offers excellent transport and cultural links with Russia. The Latvia Residence-by-Investment Program was launched on 1 July 2010. Foreign nationals may apply for a residence permit in Latvia through one of the following options: • Acquisition of real estate with a minimum value of EUR 250,000 plus a lump-sum payment of a government fee of 5% of the property value • Investment of EUR 50,000 into equity capital of a Latvian company (provided that the company pays at least EUR 40,000 in taxes annually) or investment of EUR 150,000 into equity capital without any tax liabilities • Investment of EUR 280,000 in a subordinated loan (deposit) in one of the Latvian banks plus a lump-sum payment of a government fee of EUR 25,000 • Acquisition of interest-free government bonds determined for a special purpose to the value of EUR 250,000 plus a lump-sum payment of EUR 25,000 to the state budget Investors should also demonstrate the availability of funds (EUR 12,960 per year for a single principal applicant, EUR 17,280 per year for a principal

Residence Required

applicant and spouse, and EUR 19,872 per year for a married couple with one child) to warrant the family’s standard of living without needing to seek social assistance from the Latvian Government. The processing of documents takes approximately 30–90 days. Investors must visit Latvia within three months of approval to collect their temporary residence permit in person. The residence permit is valid for five years, and the ID card must be renewed annually. There is no requirement for a minimum number of days of physical presence in Latvia in order to renew a residence permit. After holding a residence permit for five years, applicants may apply for a permanent residence permit. They must have resided in the country for four out of the five years, have passed a Latvian language test, and have a proven knowledge of the general history of Latvia and the country’s national anthem. When compared to other countries on the GRPI, Latvia’s taxes are very low. It is possible to apply for citizenship in Latvia after 10 years of legal residence in the country. Latvia has improved its due diligence and compliance standards in recent years.

None

Nature of Contribution Investment or real estate Minimum Contribution EUR 50,000 Time to Citizenship

Latvian, Russian

10 years

Euro EUR

1,944,643*

USD 30.18 billion*

*Source: CIA, 'The World Factbook' (2018)

89

Latvia

Residence Program

14th |


The Global Residence Program Index 2018–2019

Jersey (HVR) 8

7

Citizenship Requirements

Reputation

2

6

Time to Citizenship

Quality of Life

3

7

52

Total Costs

Tax

5

4

Investment Requirements

Visa-free or Visa-on-arrival Access

3

Compliance

7

Processing Time and Quality of Processing

Figure 22. The total score for Jersey on the GRPI is 52/100, ranking it 15th out of 21 programs

90


Jersey

Jersey is the largest of the Channel Islands. Situated between Britain and France it provides a convenient location and a relaxed lifestyle. It has a stable economy, an attractive tax system, and is an idyllic place to raise a family. Its residents enjoy a high standard of living and there are excellent flight connections. From a tax perspective, Jersey is popular for its low income tax and lack of estate duties. The application procedures for residence in Jersey are extremely efficient and the entire application process can usually be completed in as little as one month unless additional information is required. The purchase and occupation of residential real estate in Jersey is controlled by the government through its Housing Committee. Fundamentally, only persons who possess Jersey housing qualifications are granted consent to purchase property. It is possible, however, for high-net-worth individuals to obtain a license, namely 2(1)E, which derives its name from Jersey’s current housing law. To achieve High Value Residency (HVR) status and be eligible to purchase property in Jersey, the prospective applicant must make a major contribution to the island’s tax revenues. At the present tax rates, the annual tax contribution would be in the region of GBP 145,000, calculated on a sliding scale based on 20% of the first GBP 725,000 of worldwide income and 1% on

Residence Required

all income thereafter. Applicants are required to provide documentation in support of their application to take up residence in Jersey, evidencing sufficient capital wealth to produce in excess of GBP 145,000 in tax revenues for the island. Once HVR status has been granted, the applicant may apply for consent to purchase a property and will be granted the same status as other residentially qualified islanders. They can be employed, employ, and set up their own businesses on the island, and are expected to purchase a single residential property worth more than GBP 1.75 million. Jersey is a low tax jurisdiction and derives its income principally from income tax, goods and services tax, excise tax, and duties. No taxes are levied on capital, capital gains, inheritances, or gifts. The regulations for citizenship are the same as in the UK, and the British Government is responsible for administering the laws covering British citizenship through the British Nationality Act 1981, which also applies to Jersey.

More time spent in Jersey than anywhere else

Nature of Contribution Tax contribution Minimum Contribution A minimum of GBP 145,000 tax paid per annum Time to Citizenship

English

5 years

UK pound GBP

98,840*

USD 4.524 billion*

*Source: CIA, 'The World Factbook' (2018)

91

Jersey

Residence Program

15th |


The Global Residence Program Index 2018–2019

Monaco 0

6

Citizenship Requirements

Reputation

0

7

Time to Citizenship

Quality of Life

2

10

51

Total Costs

Tax

5

10

Investment Requirements

Visa-free or Visa-on-arrival Access

5

Compliance

6

Processing Time and Quality of Processing

Figure 23. The total score for Monaco on the GRPI is 51/100, ranking it 16th out of 21 programs

92


Monaco

Located on the Mediterranean Sea, with France as its only neighbor, the Principality of Monaco is the second smallest country in the world. Monaco offers a high standard of living, temperate weather, a high level of personal security, a modern and efficient infrastructure, and an absence of income or capital gains tax. The Principality of Monaco is an independent sovereign state and a full member of the UN. French is the official language, and Italian and English are also widely spoken. There is a customs and monetary union with France, and French VAT applies. The requirements to become resident in Monaco are not as strict as commonly thought, but it is nevertheless advisable to employ a consultant or a lawyer to handle an application for residence on one’s behalf. To become a resident, one must be able to show sufficient means to afford the lifestyle and, in particular, be able to afford to rent or purchase real estate, the cost of which in Monaco is comparable to large capital cities. Residents of Monaco (with the exception of French citizens) are not subject to income, capital gains, or wealth tax, giving Monaco an excellent tax score on the GRPI. A residence permit in Monaco allows visa-free travel to Europe’s Schengen Area. Unless one is an EU national, a holder of a French residence permit, or a national of Iceland or Norway, one has to obtain a long-stay visa to reside in Monaco. Once a visa application is submitted to the relevant French consulate, it can take up to three months to be approved. Once the visa has been

Residence Required

obtained, an application for a carte de résident has to be made at the Foreigner’s Section at the central Monaco police station (the Service des Étrangers). The process of obtaining a carte de résident takes eight to ten weeks and requires the completion and presentation of an application form together with other supporting documents at the interview at the Service des Étrangers. Compliance and due diligence tests are moderate when compared to other residence programs in the GRPI. Required documentation includes proof of accommodation by way of a lease or purchase agreement and proof of sufficient funds to live in Monaco (either a letter from a bank in Monaco, proof of employment in Monaco, or the set-up of a business in the Principality), although no minimum investment is required. Acquisition of citizenship is extremely difficult because before qualifying one must have held a Monegasque residence permit for at least 10 years as an adult over the age of 21. Furthermore, the applicant is not permitted to perform national service abroad and must submit an official letter to the Prince to renounce any other sovereign nationality they hold.

Proof of presence such as utility bills

Nature of Contribution Business or proof of funds to live in Monaco Minimum Contribution None Time to Citizenship

French

10 years

Euro EUR

30,645*

USD 6.006 billion*

*Source: CIA, 'The World Factbook' (2018)

93

Monaco

Residence Program

16th |


The Global Residence Program Index 2018–2019

Singapore 3

9

Citizenship Requirements

Reputation

7

8

Time to Citizenship

Quality of Life

3

8

50

Total Costs

Tax

2

2

Investment Requirements

Visa-free or Visa-on-arrival Access

5

Compliance

3

Processing Time and Quality of Processing

Figure 24. The total score for Singapore is 50/100 on the GRPI, ranking it 17th out of 21 programs

94


Singapore

Singapore is frequently voted the best Asian city in which to live due to its excellent infrastructure and public services. It has one of the lowest crime rates in the world and offers a high quality of life to its residents. Globally it is rated one of the wealthiest countries when measured by GDP per capita. Singapore has emerged as a world-class destination with a harmonious multiracial and multicultural community. The country is politically stable and economically prosperous, with a reputable education system and a highly reliable healthcare system. The country has a friendly tax regime and over recent years has continued to introduce tax regulations favoring foreign investors. Singapore’s taxation system operates on a territorial basis. A Singaporean residence permit does not, however, provide as many visa-free or visa-on-arrival travel privileges as do other countries in the GRPI. The procedure to gain permanent residence under the Global Investor Program (GIP) takes a considerable length of time. Applicants must submit a personal profile using an e-application form (which must in addition be supported by hard copies that have to be compiled and forwarded) and are then required to attend an interview, usually within two to four months of submission of the application. If all the criteria are met, an approvalin-principle is issued, valid for a six-month period during which applicants must make the requisite investment under the chosen investment option and submit documentary proof thereof.

Residence Required

The GIP offers three investment options: • Option A – an investment of at least SGD 2.5 million in a new business entity or an existing business operation • Option B – an investment of SGD 2.5 million in one of the GIP-approved funds • Family Office – an investment of SGD 2.5 million to establish a Single Family Office in Singapore with a minimum of SGD 200 million assets under management The above options represent a costly investment requirement and higher total costs than for other GRPI countries. Singapore scores reasonably for compliance standards and due diligence. Upon issuance of the final approval letter, applicants must formalize their permanent residence status within 12 months of the letter’s date. After two years of permanent residence in Singapore it is possible to apply for citizenship. Singapore is a strictly single-citizenship country so applicants must relinquish all their existing citizenships before naturalization is possible. All male Singapore citizens and permanent residents are obliged to participate in the country’s compulsory two-year National Service.

Presence in Singapore for at least 50% of the time

Nature of Contribution Investment Minimum Contribution SGD 2.5 million Time to Citizenship

Mandarin, English

2 years

Singapore dollar SGD

5,888,926*

USD 305.8 billion*

*Source: CIA, 'The World Factbook' (2018)

95

Singapore

Residence Program

17th |


The Global Residence Program Index 2018–2019

Cyprus

0

6

Citizenship Requirements

Reputation

2

7

Time to Citizenship

Quality of Life

6

9

47

Total Costs

Tax

5

2

Investment Requirements

Visa-free or Visa-on-arrival Access

4

Compliance

6

Processing Time and Quality of Processing

Figure 25. The total score for Cyprus on the GRPI is 47/100, ranking it 18th out of 21 programs

96


Cyprus

Cyprus is a beautiful island and a hub for international trade. It enjoys a Mediterranean climate and the lowest crime levels in the EU. The island offers a good quality of life, an excellent healthcare system for its residents, and diverse options for education at its private English schools and universities. In line with the Cypriot Government’s intention to increase foreign investment and spur economic development, it has recently simplified its processes for issuing residence permits to applicants from non-European countries. The main requirement is the purchase of new, immovable property for a total market value of at least EUR 300,000 plus VAT. Applicants must submit an application form accompanied by a contract of sale and proof of payment of at least EUR 200,000 plus VAT. The contract of sale must have been submitted to the Cyprus Department of Land and Surveys. The property can also be purchased by a company provided that the company is registered in the name of the applicants or the applicants and their spouses, and they are sole shareholders or beneficial owners. An applicant may purchase up to two residential properties, or one residential unit and one shop, or one residential unit and one office provided that the combined value exceeds EUR 300,000. The Government of Cyprus has specified that new properties qualify, but can be purchased directly from a developer only. If an applicant buys two units, both must be purchased from one developer.

Residence Required

Applicants must submit a letter from a Cyprus bank confirming they have deposited a minimum capital amount of EUR 30,000 from abroad into a local account, which will be locked for three years. At the expiration of this period the money will be released without restrictions. Applicants must provide supporting evidence of a secured annual income of at least EUR 30,000 derived abroad. This income must be increased annually by EUR 5,000 for the spouse and each child, and by EUR 8,000 for each dependent parent. These figures may include income from employment, rents, pensions, and dividends from shares. Upon completion of these steps, the residence permit generally becomes available within two months. The residence permit has unlimited duration and is considered permanent as long as the applicant remains the owner of the purchased property. Residence permit holders are entitled to apply for Cypriot citizenship through naturalization after holding a residence permit for seven years, enabling them to qualify for a Cypriot passport. Cyprus also offers a citizenship-by-investment program — the Cyprus Investment Programme — described under the GCPI on page 109.

1 visit required every 2 years

Nature of Contribution Real estate Minimum Contribution EUR 300,000 Time to Citizenship

7 years

Greek, English

Euro EUR

1,221,549*

USD 21.11 billion*

*Source: CIA,'The World Factbook' (2018)

97

Cyprus

Residence Program

18th |


The Global Residence Program Index 2018–2019

Hong Kong 0

9

Citizenship Requirements

Reputation

0

6

Time to Citizenship

Quality of Life

5

8

46

Total Costs

Tax

5

2

Investment Requirements

Visa-free or Visa-on-arrival Access

5

Compliance

6

Processing Time and Quality of Processing

Figure 26. The total score for Hong Kong on the GRPI is 46/100, ranking it 19th out of 21 programs

98


Hong Kong

Hong Kong is a diverse, leading metropolis offering a unique blend of Eastern and Western traditions. It is one of the world’s most business-friendly cities and has a world-class infrastructure. Hong Kong has an open economy with a free market and low taxation and is an important international finance and trade center. Although its Capital Investment Entrant Scheme has been suspended since 2015, Hong Kong offers several other residence programs: • Quality Migrant Admission Scheme – a quotabased entrant system allowing qualified applicants aged 18 and over to settle in Hong Kong The employment-investment tier includes various categories, such as: • General Employment Policy (GEP) – application for a visa or entry permit to take up professional employment under the GEP. Persons must have a good educational background, relevant experience, a confirmed offer of employment in Hong Kong relevant to their professional abilities, and a remuneration package commensurate with the prevailing Hong Kong market levels • Admission Scheme for Mainland Talents and Professionals – an entry permit for Chinese residents of mainland China possessing special skills, knowledge, or experience of value. Applicants’ specific skills or experience must not be readily available in the local Hong Kong work force, and they must provide a confirmed offer of employment relevant to their experience • Investment as Entrepreneurs – entry arrangements for persons wishing to enter or stay in Hong Kong for investment as

Residence Required

entrepreneurs under the GEP, to establish or join a business. Applicants with good educational backgrounds, technical qualifications, proven professional abilities, and/or relevant experience may be accepted if they can make a substantial contribution to the Hong Kong economy • Technology Talent Admission Scheme – a three-year pilot scheme providing a fast-track arrangement for technology companies or institutes to admit non-local technology talent to undertake research and development work in the Hong Kong Special Administrative Region. Eligible companies or institutes must first apply for a quota. Those allotted a quota by the Innovation and Technology Commission can sponsor suitable persons to apply for an employment visa or entry permit within the six-month validity period The process begins with submission of the application to the Immigration Department. Upon receipt of all required documents an approval-in-principle is given. Applicants must then fulfill the conditions of entry to the program for which they applied. Generally, the process takes at least three months, and entry permits are issued for a two-year period. Applicants must meet eligibility criteria set up by the Immigration Department before applying (for example, there must be no security objection and no record of serious crime).

A continuous period of not less than 7 years

Nature of Contribution Not applicable Minimum Contribution None Time to Citizenship

Cantonese, English

Not applicable

Hong Kong dollar HKD

7,437,712*

USD 334.1 billion**

*Source: Worldometers.info, ‘Hong Kong Population’ (2018) **Source: CIA, ‘The World Factbook’ (2018)

99

Hong Kong

Residence Program

19th |


Global The Global Residence Residence and Program Citizenship Index Programs 2018–2019 2018–2019

Bulgaria 2

3

Citizenship Requirements

Reputation

9

4

Time to Citizenship

Quality of Life

3

8

42

Total Costs

Tax

3

2

Investment Requirements

3

Compliance

Visa-free or Visa-on-arrival Access

5

Processing Time and Quality of Processing

Figure 27. The total score for Bulgaria on the GRPI is 42/100, ranking it 20th out of 21 programs

100


20th |

Bulgaria

Bulgaria is strategically located in the center of southeast Europe. A member of the EU, NATO, the UN, and the World Trade Organization, and a founding state of the Organization for Security and Co-operation in Europe, Bulgaria has a high Human Development Index score, ranking 56th* in the world. Conveniently situated at the place where the main roads that link Europe to Asia pass through, Bulgaria offers a combination of incentives for doing business, with the lowest tax rate and one of the lowest labor costs in the EU. Non-EU nationals and their families are able to obtain permanent residence in Bulgaria through the Bulgarian Investment Immigration Program. Permanent residence affords the same rights as those enjoyed by Bulgarian citizens, excluding the right to vote. Bulgarian residence grants visa-free travel to the EU and the right to live and work in Bulgaria. Five years of permanent residence entitles the holder to apply for Bulgarian citizenship. Permanent residence can be acquired through the following two options:

Residence Required

• Investment in Government Bonds – an investment of EUR 512,000 in government bonds, to be refunded at the end of a five-year term • Investment under Trust Agreement – an investment of EUR 512,000 that is deposited into a Bulgarian bank under a Trust Agreement for no less than five years. The amount will be invested in assets chosen by the investor — such as real estate, land, or company shares. At the end of the fiveyear period the investor is free to sell the assets One can apply for citizenship if the investment is maintained for five years. If the investment is increased to EUR 1,024,000, it is possible to apply for citizenship after only 12 months (fast track).

None

Nature of Contribution Investment Minimum Contribution EUR 512,000 Time to Citizenship

Bulgarian, Turkish, Romani

5 years (ordinary), 1 year (fast track)

Bulgarian lev BGN

7,101,510**

USD 55.95 billion**

*Source: United Nations Development Programme Human Development Reports (2016) **Source: CIA, ‘The World Factbook’ (2018)

101

Bulgaria

Residence Program

The Global Citizenship Program Index – 2017/2018


The Global Citizenship Program Index 2017–2018

102


Global Residence and Citizenship Programs 2017–2018

The Global Citizenship Program Index

105 The Global Citizenship Program Index 2018–2019 106 Citizenship Programs

103


Global Citizenship Program Index 2018–2019

The Global Citizenship Program Index 2018–2019 In contrast to residence, the acquisition of citizenship of a country through a citizenship-by-investment program confers all the rights of a citizen of that country, including a passport. With a passport, citizens will benefit from visa-free or visa-on-arrival access to all countries with such visa agreements in place.

Figure 28. The The Global Citizenship Program Index (GCPI) 2018–2019 Rank Program

Score

1

Malta

79

2

Cyprus

72

3

Austria

70

4

Antigua and Barbuda

64

5

Moldova

63

6

Montenegro

62

7

St. Kitts and Nevis

61

8

Grenada

59

9

St. Lucia

57

10

Dominica

55

11

Jordan

51

12

Turkey

45

Factors • Reputation • Quality of Life • Visa-free or Visa-on-arrival Access

• Processing Time and Quality of Processing • Compliance • Investment Requirements

• • • •

Residence Requirements Relocation Flexibility Physical Visit Requirements Transparency

105


The Global Citizenship Program Index 2018–2019

Malta

8

6

Transparency

Reputation

8

7

Physical Visit Requirements

Quality of Life

10

10

79

Relocation Flexibility

Visa-free or Visa-on-arrival Access

8

6

Residence Requirements

Processing Time and Quality of Processing

6

Investment Requirements

10

Compliance

Figure 29. The total score for Malta on the GCPI is 79/100, ranking it 1st out of 12 programs

106


Malta

Malta is located in the center of the Mediterranean Sea and enjoys an excellent reputation for its splendid climate, friendly people, low crime rate, and superb quality of life. An attractive place in which to live or own a second home, Malta also has excellent air links. The Malta Individual Investor Program (MIIP) is a modern citizenship-by-investment program designed, implemented, and globally promoted by Henley & Partners for the Government of Malta under a Public Services Concession. It is targeted at high-net-worth individuals and their families worldwide and is considered to be the world’s most advanced and most exclusive citizenship-byinvestment program. The MIIP requires applicants to make a nonrefundable economic contribution of EUR 650,000 to the National Development and Social Fund. In exchange, and subject to a very thorough application procedure that includes detailed due diligence and background verification checks, applicants and their families are granted full EU citizenship. The following conditions must be met: • Property – either the purchase of a residential property in Malta at a price of at least EUR 350,000, which must be held for five years, or the lease of a residential property with a rental of at least EUR 16,000 per annum, which also must be held for five years • Participation in Approved Financial Instruments – EUR 150,000 in a prescribed financial instrument, which must be held for five Visa-free or Visa-on-arrival Access

182 destinations*

Residence Required

1 year’s legal residence

years, the details of which are published from time to time by the Malta Individual Investor Programme Agency (MIIPA) • Health Insurance – the holding of a valid global health insurance policy with medical expense cover amounting to at least EUR 50,000 per family member • Residence – legal residence in Malta for one year prior to application for citizenship • Oath of Allegiance – applicants up to five years of age: presence not required for the oath or passport collection; six to eleven years of age: presence required for the oath, but may not be present for passport collection; twelve years of age and over: presence required for the oath and passport collection Malta’s compliance and due diligence standards are considered to be the world’s strictest and aim to ensure that only highly respectable applicants are admitted. Applicants must be legal residents in Malta for one year prior to acquiring citizenship under the MIIP. Although the process for obtaining citizenship in Malta is very rigorous, it is also open and straightforward with no additional requirements, thus yielding a high transparency score on the GCPI.

Nature of Contribution Investments, real estate, insurance, and residence Minimum Contribution Approximately EUR 1 million Time to Citizenship

Maltese, English

12 months

Euro EUR

416,338**

USD 12.01 billion**

*Source: 2018 Henley Passport Index ranking, as of 10 July 2018 **Source: CIA, ‘The World Factbook’ (2018)

107

Malta

Citizenship Program

1st |


The Global Citizenship Program Index 2018–2019

Cyprus

6

7

Transparency

Reputation

9

7

Physical Visit Requirements

Quality of Life

10

9

72

Relocation Flexibility

Visa-free or Visa-on-arrival Access

9

8

Residence Requirements

Processing Time and Quality of Processing

4

Investment Requirements

3

Compliance

Figure 30. The total score for Cyprus on the GCPI is 72/100, ranking it 2nd out of 12 programs

108


Cyprus

Cyprus is located in the southeastern Mediterranean Sea, at the crossroads of Europe, Asia, and Africa. The strategic location of the island has played an important role in its development as a financial and trade center. With its warm climate and convenient geographical position, Cyprus is an appealing country to global citizens. The Government of Cyprus has established and revised the Cyprus Investment Programme to attract investors and individuals. Key factors that make Cyprus an attractive destination for investment are its highly specialized human capital, reliable legislative and regulatory framework, stable tax system, and safety and stability conditions. The Cyprus Investment Programme requires a significant economic contribution to the country. In exchange, subject to a stringent vetting and due diligence process hat includes thorough background checks, applicants and their families are granted citizenship. There are four qualifying options: • Real Estate, Developments, and Infrastructure Projects – applicants must commit at least EUR 2 million to the purchase or construction of real estate • Purchase or Establishment of or Participation in Cypriot Businesses and Companies – applicants must commit at least EUR 2 million to the purchase or creation of or participation in businesses or companies that are based and operating in Cyprus. These businesses or companies should have a demonstrable and tangible presence in Cyprus and employ at least five Cypriot or EU citizens

• Investment in Alternative Investment Funds or Financial Assets of Cypriot Companies or Organizations Licensed by the Cyprus Securities and Exchange Commission – applicants must purchase units amounting to at least EUR 2 million from alternative investment funds • A Combination of the above Options – applicants may choose a combination of the above, provided that the total investment amounts to at least EUR 2 million. This combination may include the purchase of special government bonds of the Republic of Cyprus up to the value of EUR 500,000 The main applicant must be the owner of a residential property in Cyprus with a purchase price of at least EUR 500,000 plus VAT if applicable, which must be held for life. Members of the same family who submit different applications as investors can buy a residential property collectively, provided that the total value of the residential property equals or exceeds the amount of EUR 500,000 for each applicant. Obtaining approval and the citizenship certificates takes approximately six months. Only registered service providers may submit citizenship applications, and applications must include a World-Check report.

Visa-free or Visa-on-arrival Access

171 destinations*

Residence Required

Prior to naturalization applicants must possess a residence permit for 6 months

Nature of Contribution Real estate, business, or investment Minimum Contribution EUR 2 million Time to Citizenship

Greek, English

6 months

Euro EUR

1,221,549**

USD 21.11 billion**

*Source: 2018 Henley Passport Index ranking, as of 10 July 2018 **Source: CIA, ‘The World Factbook’ (2018)

109

Cyprus

Citizenship Program

2nd |


The Global Citizenship Program Index 2018–2019

Austria

9

2 Transparency

Reputation

8

10

Physical Visit Requirements

Quality of Life

10

10

70

Relocation Flexibility

Visa-free or Visa-on-arrival Access

10

3

Residence Requirements

Processing Time and Quality of Processing

2

Investment Requirements

6

Compliance

Figure 31. The total score for Austria on the GCPI is 70/100, ranking it 3rd out of 12 programs

110


Austria

Austria is considered one of the most stable countries in the world and is credited for its high standard of living. Although one of the smaller states in Europe, it has a world-class capital, Vienna, which has a varied history and a rich cultural heritage. Austria also has a beautiful countryside with snow-capped peaks and spectacular scenery. A substantial contribution to the Austrian economy is required from applicants under the citizenshipby-investment provisions, ranking Austria as the costliest among the list of countries on the GCPI. An applicant can invest in the form of a joint venture or a direct investment in a business, by creating jobs, or by generating new export sales. Passive investments in, for example, government bonds and real estate, generally do not qualify, however. The granting of citizenship on the basis of a capital contribution requires government approval at various levels including, eventually, at the highest level (cabinet). It is therefore essential that applicants receive expert advice from the outset, with the individual cases being carefully prepared and informal approvals being obtained from the key authorities before the formal application process is initiated. Substantial fees apply depending on the individual cases and the number of persons included in an application. There are no residence requirements, and applicants and their dependents become citizens of Austria upon attending a citizenship ceremony before a senior representative of the government.

Visa-free or Visa-on-arrival Access

186 destinations*

Residence Required

None

The application process differs from case to case and Austria is ranked alongside two other countries as the least transparent in the GCPI. The processing time for citizenship is lengthy when compared to other citizenship programs, since it generally takes between 12 and 36 months. A completely clean personal record (a certificate of no criminal record, and so forth), a comprehensive curriculum vitae, background business information, and impeccable references must be provided by every applicant. Previously, basic knowledge of German was required for main applicants, but this condition was abolished in early 2006. Nonetheless, the language requirement remains in place for dependents. Children up to 18 years of age can be included in the same application, but those over 18 cannot, and no exceptions are possible. A separate application may be prepared and lodged simultaneously. This application may, however, be included under the same capital contribution, although the amount of the contribution would then need to be higher than the minimum requirement.

Nature of Contribution Donation or investment Minimum Contribution Variable Time to Citizenship

German

2–3 years

Euro EUR

8,754,413**

USD 409.3 billion**

*Source: 2018 Henley Passport Index ranking, as of 10 July 2018 **Source: CIA, ‘The World Factbook’ (2018)

111

Austria

Citizenship Program

3rd |


The Global Citizenship Program Index 2018–2019

Antigua and Barbuda

3

6

Reputation

Transparency

9

4

Physical Visit Requirements

Quality of Life

4

7

64

Relocation Flexibility

Visa-free or Visa-on-arrival Access

9

8

Residence Requirements

Processing Time and Quality of Processing

8

Investment Requirements

6

Compliance

Figure 32. The total score for Antigua and Barbuda on the GCPI is 64/100, ranking it 4th out of 12 programs

112


Antigua and Barbuda is an independent Commonwealth state in the Eastern Caribbean. With its excellent air links to North America and Europe, and over 365 beaches of white sand and turquoise waters, the tropical islands of Antigua and Barbuda are considered to be among the most beautiful places in the world. The Antigua and Barbuda Citizenship-by-Investment Program is appealing to applicants wanting a second citizenship while acquiring desirable properties or contributing to the islands’ National Development Fund (NDF). The program was designed and implemented by Henley & Partners under a government mandate. Applicants are required to make an economic contribution to the country, which continues to be less costly than other programs on the GCPI. There are three qualifying options available: • Real Estate – the purchase of real estate with a minimum value of USD 400,000 from an approved project. Another option is for two applicants to make a joint investment by each investing a minimum of USD 200,000 — this offer is valid until 31 October 2018, but discussion is underway to make it permanent. The real estate cannot be disposed of within a five-year period • Business – the individual direct purchase of an eligible business for a minimum amount of USD 1.5 million, or a joint purchase where each person contributes at least USD 400,000, totaling a minimum of USD 5,000,000 • NDF Contribution – a minimum non-refundable contribution of USD 100,000 Visa-free or Visa-on-arrival Access

149 destinations*

Residence Required

5 days in 5 years

Antigua and Barbuda has a residence requirement of five days within five years of becoming a citizen, further enhancing the program’s flexibility and attractiveness. Upon approval, successful applicants must make a mandatory visit to their new country to affirm allegiance to the dual-island nation by taking the Oath of Allegiance in the presence of a local Notary Public. The five-day stay requirement and oath applies only to applicants over the age of 18; when an applicant reaches the age of 18, the residence requirement and the requirement to take the oath must be fulfilled. Given its straightforward, transparent application process and its total costs for citizenship, Antigua and Barbuda’s citizenship-by-investment program is one of the most popular and best-value citizenship options in the Caribbean. The expected processing time is approximately three to four months, which makes for a highly efficient program. The government authority responsible for administering the program is the Antigua and Barbuda Citizenship-by-Investment Unit, which undertakes strict due diligence checks. An application is immediately declined if an applicant makes a false statement or omits any relevant information.

Nature of Contribution Real estate, business investment, or NDF contribution Minimum Contribution USD 100,000 Time to Citizenship

English

3–4 months

East Caribbean dollar XCD

94,731**

USD 1.535 billion**

*Source: 2018 Henley Passport Index ranking, as of 10 July 2018 **Source: CIA, ‘The World Factbook’ (2018)

113

Antigua and Barbuda

Antigua and Barbuda

Citizenship Program

4th |


The Global Citizenship Program Index 2018–2019

Moldova

7

2

Transparency

Reputation

10

3

Physical Visit Requirements

Quality of Life

2

5

63

Relocation Flexibility

Visa-free or Visa-on-arrival Access

10

8

Residence Requirements

Processing Time and Quality of Processing

6

Investment Requirements

10

Compliance

Figure 33. The total score for Moldova on the GCPI is 63/100, ranking it 5th out of 12 programs

114


Moldova

Nestled between Europe and Asia, the Republic of Moldova is home to more than four million people. It is a member state of the UN, the Council of Europe, and the World Trade Organization. Moldova is one of the world’s main wine exporters, with wine-making practices that date back almost 5,000 years. Moldova gained independence in 1991 and in 2014 it signed and ratified an Association Agreement and a Free Trade Agreement with the EU. The country has strong agricultural and food-processing industries and a growing free-market economy. Moldovan passport holders can access 121 destinations* visa-free or with a visa-on-arrival, including Russia, Turkey, and the Schengen Area countries. The official language is Romanian (termed ‘Moldovan’), and thanks to Moldova’s close relationship with the EU, English usage is growing fast among the country’s multi-ethnic population. Launched in the second half of 2018, the Moldova Citizenship-by-Investment (MCBI) program was developed by the Government of Moldova in partnership with Henley & Partners and the Moldovan Investment Company. The program requires applicants to make a defined economic contribution to the country through the Public Investment Fund. In exchange, and subject to a stringent vetting and due diligence process including thorough background checks, applicants and their families are granted citizenship. To qualify for citizenship, main applicants must be over the age of 18, meet the application requirements, and make the primary qualifying contribution Visa-free or Visa-on-arrival Access

121 destinations*

Residence Required

None

to the Public Investment Fund, starting from EUR 100,000 for a single applicant. EUR 115,000 is the minimum requirement for a couple, EUR 145,000 for a family of four, and EUR 155,000 for a family of five or more. Applicants must also pay a government service provider and licensed agent fee of EUR 35,000 per application and government application processing fees of EUR 5,000 for the main applicant, EUR 2,500 for a spouse and/or dependent child 16–29 years of age, EUR 1,000 for a dependent child 0–15 years of age, and EUR 5,000 for a dependent parent. Dependent children can be up to 29 years of age, and parents of the main applicant and dependent parents of the spouse who are 55 years of age or older can be included. Citizenship of Moldova is transferable to future generations without restrictions. The issuance of a certificate of naturalization and passport under the MCBI program will take a maximum of three to four months from the date on which the completed application is submitted provided the due diligence processes are carried out without difficulties and biometrics are done. Moldova has developed a four-tier due diligence system, which is considered the most thorough in the world for this kind of program.

Nature of Contribution Investment Minimum Contribution EUR 135,000 Time to Citizenship

Romanian/Moldovan Russian

3–4 months

Moldovan leu MDL

4,039,773**

USD 7.945 billion***

*Source: 2018 Henley Passport Index ranking, as of 10 July 2018 **Source: Worldometers.info, ‘Moldova Population’ (2018) ***Source: CIA, ‘The World Factbook’ (2018)

115

Moldova

Citizenship Program

5th |


The Global Citizenship Program Index 2018–2019

Montenegro 7

4

Transparency

Reputation

10

5

Physical Visit Requirements

Quality of Life

2

6

62

Relocation Flexibility

Visa-free or Visa-on-arrival Access

10

5

Residence Requirements

Processing Time and Quality of Processing

7

Investment Requirements

6

Compliance

Figure 34. The total score for Montenegro on the GCPI is 62/100, ranking it 6th out of 12 programs

116


Montenegro

Montenegro is a sovereign state in Southeastern Europe. The World Bank classifies Montenegro as one of the fastest growing Balkan economies, and the nation is establishing itself as a strategic destination for industry. Montenegro joined NATO in 2017 and is currently moving forward on its EU accession process. Montenegro is a land of great natural beauty. The south has become a luxury destination thanks to its impressive yachting harbour — Porto Montenegro — while in the north there is a burgeoning tourism industry. In July 2018, Montenegro announced that it would be launching a citizenship-by-investment program. From October 2018 onwards, 2,000 applicants from non-EU countries will be able to apply for Montenegrin citizenship. Although not an official member of the eurozone, Montenegro uses the euro as its currency, and EU legislation is being integrated into its national law. Montenegro joined the World Bank and International Monetary Fund in 2007 and the World Trade Organization in 2011. In 2012, the country began negotiations to join the EU, having met the conditions set down by the European Council. There are two options available to investors who seek mobility, security, business prospects, and a better quality of life:

Visa-free or Visa-on-arrival Access

123 destinations*

Residence Required

6 months

• A Government Fund Donation of up to EUR 100,000 and an investment of EUR 250,000 in approved real estate in an undeveloped region (namely, the north of the country) • A Government Fund Donation of up to EUR 100,000 and an investment of EUR 450,000 in approved real estate in a developed region (namely, the south of the country) Montenegrin passport holders enjoy visa-free or visa-on-arrival access to 123 destinations* including Russia, Turkey, and the countries in Europe’s Schengen Area. There is a thorough due diligence process, and the application process is efficient. Citizenship is granted within six months of permanent residence and, once acquired, extends to family members and can be passed on to future generations by descent.

Nature of Contribution Government fund donation, real estate Minimum Contribution EUR 350,000 Time to Citizenship

Montenegrin, Serbian

6 months

Euro EUR

642,550**

USD 4.405 billion**

*Source: 2018 Henley Passport Index ranking, as of 10 July 2018 **Source: CIA, ‘The World Factbook’ (2018)

117

Montenegro

Citizenship Program

6th |


The Global Citizenship Program Index 2018–2019

St. Kitts and Nevis

4

3

Transparency

Reputation

10

3

Physical Visit Requirements

Quality of Life

4

7

61

Relocation Flexibility

Visa-free or Visa-on-arrival Access

10

8

Residence Requirements

Processing Time and Quality of Processing

7

Investment Requirements

5

Compliance

Figure 35. The total score for St. Kitts and Nevis on the GCPI is 61/100, ranking it 7th out of 12 programs

118


St. Kitts and Nevis is a dual-island Caribbean destination offering pristine beaches and tropical landscapes. Its culture is diverse, with Carib, British, French, and African influences. It is an attractive location for owning a second home in the Caribbean, with good air links to Europe and North America. Since 1984, the St. Kitts and Nevis Citizenship Act has allowed foreign investors to acquire citizenship, making it the oldest existing citizenship-byinvestment program in the world. In 2007, Henley & Partners was mandated by the government to completely reform the program and to promote it internationally (until July 2013). During the course of this mandate the program became the most successful of its kind in the world. With a St. Kitts and Nevis passport, a citizen can currently travel visa-free to Europe’s Schengen Area, Hong Kong, the Republic of China (Taiwan), Russia, Singapore, and the UK. For qualifying options, the government requires a choice of one of the following: • Real Estate – the purchase of real estate with a minimum value of USD 400,000 for one applicant or USD 200,000 each for two applicants in an approved real estate development • Sugar Industry Diversification Foundation (SIDF) Contribution – a contribution to the SIDF of at least USD 250,000 • Sustainable Growth Fund (SGF) – a contribution to the SGF of at least USD 150,000

Visa-free or Visa-on-arrival Access

151 destinations*

Residence Required

None

The usual time frame for processing applications is between three and four months from submission of the application to the Citizenship-by-Investment Unit (CIU), which is moderate when compared to other programs in the GCPI. There is also an Accelerated Application Process (AAP) that allows applications to be fast-tracked to a 60-day processing period. Some applications are completed in as little as 45 days. This is the only fast-track process of its kind in the region, making it an excellent option for applicants. Compliance standards and due diligence checks are strict. The CIU performs thorough background checks and will decline an application if the applicant makes a false statement or omits any relevant information. In some cases, the CIU may request that the applicant attends an interview, although this is not generally a requirement. St. Kitts and Nevis citizens may take up residence in the country at any time and for any length of time with no mandatory minimum requirements. Compared with other citizenship programs, the total cost for a citizenship application in St. Kitts and Nevis is reasonable.

Nature of Contribution Real estate or contribution Minimum Contribution USD 150,000 Time to Citizenship

English

4 months

East Caribbean dollar XCD

52,715**

USD 939 million**

*Source: 2018 Henley Passport Index ranking, as of 10 July 2018 **Source: CIA, ‘The World Factbook’ (2018)

119

St. Kitts and Nevis

St. Kitts and Nevis

Citizenship Program

7th |


The Global Citizenship Program Index 2018–2019

Grenada

4

4

Transparency

Reputation

10

4

Physical Visit Requirements

Quality of Life

4

6

59

Relocation Flexibility

Visa-free or Visa-on-arrival Access

10

4

Residence Requirements

Processing Time and Quality of Processing

7

Investment Requirements

6

Compliance

Figure 36. The total score for Grenada on the GCPI is 59/100, ranking it 8th out of 12 programs

120


Grenada

Grenada is a picturesque island with exotic, diverse topography, breathtaking beaches, and a year-round temperate climate. Often referred to as the ‘Spice Island’ for its nutmeg and mace crops, Grenada is an English-speaking Commonwealth country with a common law legal system and a stable government. The Grenada Citizenship-by-Investment Program was launched in August 2013 as a means of developing Grenada’s economy to be more prosperous and independent. The National Transformation Fund (NTF) finances various projects in Grenada for the benefit of its numerous industries, including tourism, agriculture, and alternative energy. Henley & Partners was formally mandated in 2016 by the Government of Grenada to revitalize and enhance the program. Grenadian passport holders enjoy visa-free or visa-on-arrival access to 141 destinations* including China (visa-free), Hong Kong, Europe’s Schengen Area, Singapore, the UK, and other key business and lifestyle destinations. It is the only citizenship-by-investment program in the Caribbean holding an E-2 Investor Visa Treaty with the US, affording Grenadian nationals the eligibility to make application to work, study, and reside in the US, and the only Caribbean program offering visa-free access to China.

Visa-free or Visa-on-arrival Access

141 destinations*

Residence Required

None

The Grenada Citizenship-by-Investment Program requires applicants to make a significant economic contribution to the country. There are two key options: • NTF Contribution – making a minimum non-refundable contribution of USD 150,000 for a single applicant or USD 200,000 for a family of up to four members • Real Estate – acquiring property from a government-approved real estate project for a minimum of USD 350,000. The real estate must be held for a minimum of three years From submission of an application, the government usually gives an initial answer within 60 working days. With its upgraded application forms the program now boasts one of the most straightforward processes of all the Caribbean programs. To qualify for citizenship there are no residence requirements, and applicants will not have to travel to Grenada.

Nature of Contribution Donation or investment in an approved real estate project Minimum Contribution USD 150,000 for a single applicant or USD 200,000 for a family of up to 4 members Time to Citizenship

English

4 months

East Caribbean dollar XCD

108,294**

USD 1.111 billion***

*Source: 2018 Henley Passport Index ranking, as of 10 July 2018 **Source: Worldometers.info, ‘Grenada Population’ (2018) ***Source: CIA, ‘World Factbook’ (2018)

121

Grenada

Citizenship Program

8th |


The Global Citizenship Program Index 2018–2019

St. Lucia

5

4

Transparency

Reputation

10

3

Physical Visit Requirements

Quality of Life

4

5

57

Relocation Flexibility

Visa-free or Visa-on-arrival Access

10

4

Residence Requirements

Processing Time and Quality of Processing

8

Investment Requirements

4

Compliance

Figure 37. The total score for St. Lucia on the GCPI is 57/100, ranking it 9th out of 12 programs

122


St. Lucia

St. Lucia lies in the eastern Caribbean Sea, northwest of Barbados and south of Martinique. A volcanic island still mostly covered in rainforest, it is famous for its twin peaks — the Pitons — and its magical beaches. St. Lucia is a member of the Commonwealth and CARICOM and has excellent air links to Europe and North America. The island nation of St. Lucia attracts foreign business and investment, especially in its international banking and tourism industries. Tourism is St. Lucia’s main source of jobs and income. Accounting for 65% of its GDP, tourism is also the island’s main source of foreign exchange earnings. Its manufacturing sector is the most diverse in the eastern Caribbean area. Crops such as bananas, mangos, and avocados are grown for export. The St. Lucia Citizenship-by-Investment Program is the latest citizenship-by-investment offering in the Caribbean, having been launched in January 2016. The program is still in the process of being firmly established, and there are some concerns around its design and level of transparency. A St. Lucian passport provides visa-free or visa-onarrival travel to Hong Kong, Europe’s Schengen Area, Singapore, the UK, and many other countries. There are four routes to citizenship: • Purchase of Real Estate – with a minimum value of USD 300,000 from an approved real estate development that must be held for a minimum period of five years. Additional costs may also be incurred depending on the real estate developer

Visa-free or Visa-on-arrival Access

142 destinations*

Residence Required

None

• Participation in an Approved Enterprise Project – with a minimum contribution of USD 3.5 million plus the creation of no less than three permanent jobs or a joint contribution of USD 6 million (each applicant committing a minimum of USD 1 million) plus the creation of no less than six permanent jobs • National Economic Fund (NEF) Contribution – a non-refundable contribution to the NEF of a minimum of USD 100,000 • Purchase of Government Bonds – with a minimum value of USD 500,000. The government bonds are non-interest bearing and have a fiveyear holding bond The documentary requirements of the program are reasonable, and the procedures are straightforward. The application process should take no longer than four months from submission of the application to issuance of the passport, assuming there are no areas of concern. Under the real estate option, the time frame may vary depending on the development. There are no residence requirements, and the investment and processing costs are moderate.

Nature of Contribution Donation, real estate, enterprises, and government bonds Minimum Contribution USD 100,000 Time to Citizenship

English

3–4 months

East Caribbean dollar XCD

164,994**

USD 1.717 billion**

*Source: 2018 Henley Passport Index ranking, as of 10 July 2018 **Source: CIA, ‘The World Factbook’ (2018)

123

St. Lucia

Citizenship Program

9th |


The Global Citizenship Program Index 2018–2019

Dominica

3

3

Transparency

Reputation

10

2

Physical Visit Requirements

Quality of Life

4

5

55

Relocation Flexibility

Visa-free or Visa-on-arrival Access

10

7

Residence Requirements

Processing Time and Quality of Processing

8

Investment Requirements

3

Compliance

Figure 38. The total score for Dominica on the GCPI is 55/100, ranking it 10th out of 12 programs

124


Dominica

The Commonwealth of Dominica is an English-speaking island state often referred to as the ‘nature island of the Caribbean’. It is a former British colony and a member of the British Commonwealth, the UN, the Organization of American States, CARICOM, and other international organizations. Dominica boasts a wide range of unique natural attractions, including rain forests, an abundance of spectacular waterfalls, hundreds of rivers and streams, the second largest volcanic boiling lake in the world, and world-class hiking trails in the island’s many nature reserves. Travelers have described Dominicans as being the friendliest people in the Caribbean, which is supported by the country’s low crime rate. Owing to the mountainous terrain, only about a quarter of the island is cultivated, but the rich soil produces good domestic and export crops. Organic agriculture is encouraged and has great economic potential. In terms of reputation and quality of life, Dominica’s score is lower than other members of the Organisation of Eastern Caribbean States on the GCPI. A Dominican passport facilitates visa-free travel to the UK and the Schengen Area. The processing time for applications takes two to three months. The procedural requirements are aligned with those of the other Caribbean countries, and compliance standards are in keeping with regional requirements. Dominica ranks as the cheapest option on the GCPI in terms of the investment requirement.

Visa-free or Visa-on-arrival Access

136 destinations*

Residence Required

None

Dominica’s citizenship program requires making an economic contribution to the country in the form of a direct, non-refundable payment made to the Dominican government. Under the current regulations, there are two options for obtaining Dominican citizenship: • Non-refundable Contribution – a minimum of USD 100,000 • Real Estate – an investment in an approved real estate development with a minimum value of USD 200,000 There are no residence requirements in Dominica. A successful applicant has the right to take up residence in Dominica at any time and for any length of time. The government does, however, encourage new citizens to become further involved in the economy and has implemented substantial incentives to make this an attractive option. Dominica has been focusing on improving the transparency of its citizenship-byinvestment program. There is no requirement for an interview in person. Successful applicants and their families receive full citizenship that can be passed on to future generations by descent.

Nature of Contribution Economic contribution, investment in real estate Minimum Contribution USD 100,000 Time to Citizenship

English

2–3 months

East Caribbean dollar XCD

73,897**

USD 608 million**

*Source: 2018 Henley Passport Index ranking, as of 10 July 2018 **Source: CIA, ‘The World Factbook’ (2018)

125

Dominica

Citizenship Program

10th |


The Global Citizenship Program Index 2018–2019

Jordan 2

5

Transparency

Reputation

5

5

Physical Visit Requirements

Quality of Life

2

3

51

Relocation Flexibility

Visa-free or Visa-on-arrival Access

10

9

Residence Requirements

Processing Time and Quality of Processing

5

Investment Requirements

5

Compliance

Figure 39. The total score for Jordan on the GCPI is 51/100, ranking it 11th out of 12 programs

126


Jordan

The Hashemite Kingdom of Jordan is strategically located at the crossroads of Asia, Africa, and Europe and is a stable, business-friendly location. Jordan strikingly combines the ancient and the modern worlds, from its historic archaeological site of Petra to its capital, Amman, the country’s economic, political, and cultural center. Amman is characterized by its diverse people and varied architecture, and Jordan is a relatively calm place in a tumultuous region. Access to Jordanian citizenship is therefore appealing to applicants from nearby countries faced with the uncertainty of war and political upheavals. The country plays an active role within the UN and is a member of the World Trade Organization. There are several routes to citizenship: • Bank Deposit – placing a zero-interest, five-year USD 1.5 million deposit at the Central Bank of Jordan (CBJ) • Treasury Bonds – purchasing treasury bonds valued at USD 1.5 million at an interest rate to be decided by the CBJ and for a minimum period of 10 years • Securities – buying securities valued at USD 1.5 million from an active investment portfolio in Jordan • SMEs – investing USD 1 million in SMEs for a minimum of five years

Visa-free or Visa-on-arrival Access

50 destinations*

Residence Required

None

• Local Project Leading to Employment Creation – investing USD 2 million in any location in Jordan (USD 1.5 million for a project that is registered in any governorate other than Amman) provided the project creates at least 20 employment opportunities and is operational for a minimum of three years Applications are sent to a government committee for consideration, where a decision is made as to whether the applicant is eligible or not. The final decision is made by the Prime Minister. The eligibility criteria are applied to 500 cases annually following a security clearance and confirmation of the applicant’s financial adequacy. Applicants who acquire Jordanian citizenship will have the right to obtain citizenship status for their spouse; unmarried, widowed, or divorced daughters; sons below 18 years of age; and dependant parents if they are their sole supporters. Any violations of the conditions will lead to the citizenship being revoked.

Nature of Contribution Investment, business Minimum Contribution USD 1 million Time to Citizenship

Arabic, English

3 months

Jordanian dinar JOD

10,248,069**

USD 40.49 billion**

*Source: 2018 Henley Passport Index ranking, as of 10 July 2018 **Source: CIA, ‘The World Factbook’ (2018)

127

Jordan

Citizenship Program

11th |


The Global Citizenship Program Index 2018–2019

Turkey

2

2

Transparency

Reputation

5

6

Physical Visit Requirements

Quality of Life

2

4

45

Relocation Flexibility

Visa-free or Visa-on-arrival Access

10

5

Residence Requirements

Processing Time and Quality of Processing

6

Investment Requirements

3

Compliance

Figure 40. The total score for Turkey on the GCPI is 45/100, ranking it 12th out of 12 programs

128


Turkey

Turkey is a major transcontinental country that is strategically located and bordered by three seas. A popular tourist destination, Turkey’s location facilitates connectivity with key markets via excellent transport links. Although Ankara is its capital, the leading global city of Istanbul is Turkey’s largest and its main commercial and cultural center. Turkey launched its citizenship-by-investment program in 2016. Successful applicants will initially receive permanent residence, gaining full citizenship after three years. When the respective requirements have been met and approved by the appropriate authorities (for example, in the case of financial investment, when the Banking Regulatory and Supervisory Board gives its approval that the condition of a three-year holding period has been met), the Ministry of Interior will write to the Cabinet, and in the first weekly meeting, approval will be given. Once applicants’ names have been published in the official gazette, they are considered to be a citizen. There are five possible routes for foreign investors to choose from to gain Turkish citizenship: • Real Estate – a USD 250,000 investment in real estate that cannot be sold for three years • Local Real Estate Investment Funds or

Visa-free or Visa-on-arrival Access

111 destinations*

Residence Required

None

Venture Capital Funds – a USD 1.5 million investment that must be held for three years • Fixed Capital Investment – of USD 500,000 • Bank Balance – keeping a bank balance of at least USD 500,000 in a Turkish bank for a minimum of three years • Employment Creation – an investment that creates employment for 50 Turkish citizens There are better options for those who seek travel freedom. Although Turkey was guaranteed free access to the Schengen Area if it dealt with its immigration issues, for various political and social reasons this is not imminent. There are no residence requirements in Turkey. In terms of its due diligence process, applicants are asked to submit criminal records from their country of origin and their Interpol history is checked.

Nature of Contribution Real estate, capital investment, employment creation Minimum Contribution USD 250,000 Time to Citizenship

Turkish, Kurdish

3 years

Turkish lira TRY

80,845,215**

USD 841.2 billion**

*Source: 2018 Henley Passport Index ranking, as of 10 July 2018 **Source: CIA, ‘The World Factbook’ (2018)

129

Turkey

Citizenship Program

12th |


Global Residence and Citizenship Programs 2018–2019

130


Global Residence and Citizenship Programs 2017–2018

Methodology 132

Developing an Index

132

The Global Residence Program Index 2018–2019

155

The Global Citizenship Program Index 2018–2019

131


Global Residence and Citizenship Programs 2018–2019

Developing an Index

The primary purpose of the Global Residence Program Index (GRPI) and the Global Citizenship Program Index (GCPI) is to arrive at a comprehensive standard for assessing and comparing the attractiveness of residence- and citizenship-byinvestment programs of destination countries. Accordingly, we sought to develop a more thorough and detailed analysis than what is currently available. This will enable prospective applicants for residence and/or citizenship, their advisors, and policy makers in governments to make informed decisions. Devising a comprehensive benchmark by way of a composite indicator is a process that entails the consideration of multiple variables (or sub-indicators) aggregated to comprise relevant factors (or indi­ cators). Identifying such variables, devising helpful categories, and aggregating these indicators into an index to facilitate ranking is a process that does not have a single methodology, primarily because there is no single publicly available source for obtaining data to populate these indicators and sub-indicators. It has been necessary, therefore, to rely on multiple sources and experts to obtain and interpret the mostly qualitative data used in the construction of the indexes. Given that we have sought to rely primarily on: (i) the expertise of residence and citizenship analysts and (ii) the experience of investors and government officials, the explanatory power that supports the scores provided to the different categories is based

on surveys and interviews with respondents and opinions solicited from selected informants. A panel of experts has developed the surveys and interviews and conducted the subsequent analysis. Where possible, the subjectivity of the various factors has been assessed against publicly available data and widely accepted composite indicators. Following the above process, we calculated a score on a scale of 10 for each factor or indicator. Subsequently, each indicator (irrespective of the varia­bles and criteria it contains) was assigned equal weight (10%) in arriving at a composite score. Countries have been ranked in the GRPI and GCPI based on this score. The data for surveys and interviews has been collected from a representative sample in a consistent fashion, taken from among a sample group of respondents, expert informants regarding citizenship, and practitioners who have been in­ volved in qualitative research design in global mobility and related spaces. Our sample frame for respon­ dents consists of existing and potential investors, their advisors, and government officials in countries that either have in place, or are in the process of establishing, residence- and citizenship-by-investment programs. It may be noted that, in placing reliance on potential clients, we also included respon­ dents who decided against proceeding with any particular program.

The Global Residence Program Index 2018–2019 In the following pages, each factor is explained in detail and the ranking of countries within each factor is provided. It may be noted that the individual ranks provided for each indicator are not taken into account in the composite indicator, but are provided only to indicate how the countries analyzed fare comparatively. In the event of a tie between two

132

countries in the scores given for an indicator, no tiebreaker is applied, since the individual scores are taken into account on arriving at a composite score and the corresponding composite rank. The description provided for each factor in the following pages indicates some of the aspects that inform the scores assigned to the destination countries.


The Global Residence Program Index Methodology

Figure 41. The Global Residence Program Index (GRPI) 2018–2019 Rank Program

Score

1

Austria

79

2

Portugal

77

3

Italy

72

4

Thailand

68

5

UK

67

6

Malta

66

7

Belgium

65

7

Australia

65

8

US

64

9

Switzerland

63

10

Canada

62

11

Dubai/UAE

59

12

Greece

55

13

Spain

54

14

Latvia

53

15

Jersey

52

16

Monaco

51

17

Singapore

50

18

Cyprus

47

19

Hong Kong

46

20

Bulgaria

42

Factors • • • •

Reputation • Processing Time and Quality Quality of Life of Processing Tax • Compliance Visa-free or Visa-on-arrival Access • Investment Requirements

• Total Costs • Time to Citizenship • Citizenship Requirements

133


Global Residence and Citizenship Programs 2018–2019

Reputation Reputation places reliance on the perceptions of investors and advisors regarding the image of the countries in which they invest. This indicator is by nature subjective, but, much like the Attractiveness Indicators employed by the IMD in its Executive Opinion Surveys, its intention was to allow the space for our respondents and informants to consider intangible and unanticipated factors for assessing the reputation of destination countries. The endeavor to assess reputation is not new, and the relationship between reputation and outcome is a popular mechanism of assessing the competitiveness of organizations, cities, and even regions.50 Furthermore, much like corporate reputation, the reputation of a country is a historical indicator that allows assessment of the levels of success of

50

its previous efforts to meet investor expectations. In this regard, for example, since the launch of the Investor Class Visa in 1986, Canada has been at the forefront of residence-by-investment and business immigration; pursuant to their EU membership, countries such as Malta have been rapidly developing a favorable reputation. As the relatively less positive reputations of Greece or Bulgaria demonstrate, on the other hand, membership of the EU alone is not sufficient for the acquisition of a favorable reputation; as the interviews reveal, expectations regarding political and economic stability, the rule of law, consistency of tax and other policies affecting individual residents and citizens, reliability of public institutions, and similar factors need to be met.

Drawing on organizational and regional reputation, the reputation of a country could be characterized as the aggregation of a single stakeholder’s perceptions of the capacity of the country to meet the demands and expectations of several stakeholders. Further, given ‘brand management’ exercises performed by different countries, the satisfaction of perceived expectations is an important criterion. See W. Lever, ‘Competitive Cities in Europe’ (1999) 36 Urban Studies 1029; S. Anholt, Competitive Identity: The New Brand Management for Nations, Cities and Regions (Palgrave McMillan, 2007)

134


The Global Residence Program Index Methodology

Figure 42. Reputation Rank Program

Score

1

Austria

10

1

UK

10

1

Switzerland

10

2

Australia

9

2

Canada

9

2

Singapore

9

2

Hong Kong

9

3

Portugal

8

3

Thailand

8

3

US

8

3

Dubai/UAE

8

3

Spain

8

4

Belgium

7

4

Jersey

7

5

Italy

6

5

Malta

6

5

Greece

6

5

Monaco

6

5

Cyprus

6

6

Latvia

4

7

Bulgaria

3

135


Global Residence and Citizenship Programs 2018–2019

Quality of Life The assessment of Quality of Life (QoL) has, in different contexts, relied on diverse methods of assessing subjective perceptions of different sample groups, as well as developing factors that are independent of subjective perceptions. Like Reputation, QoL could well benefit from taking into account the experiences of investors and what is particularly relevant to the type of person seeking to invest in a residence program. We are aware, furthermore, that there are substantial institutional efforts in developing composite indicators for QoL,51 with the UN Human Development Index being one of the most comprehensive (placing reliance on life expectancy at birth, schooling, literacy rates, and gross national income per capita).52 These factors

51

52

53 54 55

are not sufficient to cover all civil and political liberties, for which Freedom House’s Freedom in the World 53 is a preferable indicator for assessing democratic values. As our focus is (also) on investment, the World Bank’s Doing Business reports54 are pertinent, since investors may have to negotiate the regulatory environment of destination countries for a variety of economic activities. We have sought to anchor the framing of our questions against established indicators,55 but recognize that such indicators do not necessarily correspond to what is being assessed in the GRPI. This explains why the ranking achieved by the countries for this indicator is different from the ranking in Reputation and does not correspond exactly with other international indicators.

For a review of issues in constructing a composite QoL index and a discussion of existing QoL indexes, see M.R. Hagerty and K.C. Land, ‘Issues in composite index construction: The measurement of overall quality of life’ in K.C. Land, A.C. Michalos, J. Sirgy (eds), Handbook of Social Indicators and Quality of Life Research (Springer 2012) These are the factors that are taken into account in the index. In addition, other indicators are used in monitoring trends in the QoL. For a ranking and explanation, see the latest UN Development Programme Human Development Report available on hdr.undp.org/en For the latest report, see freedomhouse.org/report/freedom-world/freedom-world-2018 For the latest report, see doingbusiness.org/reports/global-reports/doing-business-2018 This is why we have not relied on ad hoc measures of quality of life, such as happiness or life satisfaction indicators

136


The Global Residence Program Index Methodology

Figure 43. Quality of Life Rank Program

Score

1

Austria

10

1

Switzerland

10

1

Canada

10

2

Thailand

9

2

Spain

9

3

Portugal

8

3

Italy

8

3

Australia

8

3

US

8

3

Greece

8

3

Singapore

8

4

UK

7

4

Malta

7

4

Belgium

7

4

Dubai/UAE

7

4

Monaco

7

4

Cyprus

7

5

Jersey

6

5

Hong Kong

6

6

Latvia

5

7

Bulgaria

4

137


Global Residence and Citizenship Programs 2018–2019

Tax The question this factor raises is the extent of the tax burden that a resident is required to bear with regard to both corporate and personal economic activities. It is rare for a country not to impose any taxes on its residents; the only two countries in our list that have that distinction are Monaco and the UAE, since they do not require payment of personal income tax, property tax, capital gains taxes, or net worth taxes. For the rest of the countries, waivers and incentives for applicants with significant investments heavily influence the score arrived at. Corporate tax incen­ tives may be provided depending on the size of the investment and even on investment in particular sectors of the economy. Personal tax incentives may be provided for principal investors, as well as for families who satisfy certain criteria, such as not deriving income from employment in destination countries (for example, in Belgium, among others). It should be noted that the tax burden in some countries is different for temporary residents and permanent residents, with the latter attracting a special tax status, as in the case of Malta. The primary point of reference for this variable is a database of taxes imposed by countries for different activities and areas of engagement. The PwC/World Bank Group Paying Taxes reports56 and work conducted by firms in formulating tax residence rankings have been consulted, but not solely adhered to. Rather, these have been taken into account in conjunction with the responses we received and other sub-factors that we have considered in conceptualizing tax residence.

56

Differences in tax legislations and rules in destination countries can have a significant impact on one’s tax burden. A notable example is variances in inheritance tax, given that wealth transfers to the next generation are extremely relevant, since a significant percentage of new investors are a highnet-worth group who are also at an age of seeking post-retirement investment security and tax planning. In addition to variances in tax burden for a range of engagements, tax privacy is an issue taken into consideration when determining a score. In countries such as the US and Germany, there is regulatory access to the details of bank accounts, which has influenced the decision of many citizens to choose a different tax residence. Furthermore, taking a cue from the PwC/World Bank Group Paying Taxes reports, the time taken to file and pay taxes, whether online filing is a possibility, the legal processes for filing taxes (such as filing and auditing of statutory accounts), and the responsiveness, accessibility, and reliability of tax authorities have been considered. Finally, which tax regime is deemed applicable during the initial five years of residence for a newly tax-resident individual who has little or no local source income, as an alternative to the usual tax regime applicable to ordinary, long-term residents, was taken into consideration too. This explains the high scores of, for example, Australia and the UK: their nominal income tax rates are very high; however, for newly resident individuals who derive their income from sources outside the country, the effective tax rate can be very low or nil.

The reports have quite an extensive definition of taxes (corporate income tax, social contributions, and labor taxes paid by the employer as well as property, property transfer, dividend, capital gains, financial transactions, waste collection, vehicle and road taxes, and any other small taxes or fees) and methods of payment (including time taken). For the latest report, see pwc.com/gx/en/paying-taxes/pdf/pwc_paying_taxes_2018_full_report.pdf

138


The Global Residence Program Index Methodology

Figure 44. Tax Rank Program

Score

1

Italy

10

1

Thailand

10

1

Dubai/UAE

10

1

Monaco

10

2

Portugal

9

2

Malta

9

2

Cyprus

9

3

Australia

8

3

Switzerland

8

3

Singapore

8

3

Hong Kong

8

3

Bulgaria

8

4

UK

7

4

Latvia

7

4

Jersey

7

5

Austria

6

6

Belgium

5

6

US

5

6

Spain

5

7

Canada

4

7

Greece

4

139


Global Residence and Citizenship Programs 2018–2019

Visa-free or Visa-on-arrival Access The act of acquiring residence often enhances the mobility of individuals regarding their travel to other destinations and is therefore definitely a factor that motivates residence investments. While a Chinese national can travel visa-free or with no prior visa to 72 destinations,57 a Chinese citizen resident in Europe’s Schengen Area can travel visa-free to an additional 26 destinations within the area as well as some additional destinations that honor Schengen residence documents. The US EB-5 Immigrant Investor visa offers permanent residence and therefore provides

57

140

visa-free or visa-on-arrival access to a number of destinations, especially in the Americas. Smaller countries, such as St. Kitts and Nevis, provide far more favorable visa-free or visa-on-arrival commercial and leisure travel when compared to larger countries that are home to a significant percentage of the world’s HNWIs. The methodology for this factor is relatively straightforward; it seeks to compile an increase in the mobility of or additional visa-free or visa-onarrival access for an investor as a result of being resident in a parti­cular jurisdiction.


The Global Residence Program Index Methodology

Figure 45. Visa-free or Visa-on-arrival Access Rank Program

Score

1

Austria

10

1

Portugal

10

1

Italy

10

1

Malta

10

1

Belgium

10

1

Switzerland

10

1

Greece

10

1

Spain

10

1

Latvia

10

1

Monaco

10

2

Thailand

5

2

US

5

2

Dubai/UAE

5

3

UK

4

3

Jersey

4

4

Canada

3

5

Australia

2

5

Singapore

2

5

Cyprus

2

5

Hong Kong

2

5

Bulgaria

2

141


Global Residence and Citizenship Programs 2018–2019

Processing Time and Quality of Processing The processing time and the quality of processing applications are two distinct aspects that are assessed differently. Some countries may offer a short processing time between lodging an application and issuing a visa or permit, but there may be uncertainties in administrative processes. In this regard, input from informants and respondents has proved valuable: the responses and analysis have both verified the official or declared processing time and complemented the ‘hard’ data on actual processing time taken (namely, the number of days), including obstructions faced.

58 59

142

The US EB-5 Immigrant Investor Program presented unique problems in this regard: there had been cases of corruption and deception by intermediaries and, importantly, a visa could be revoked if the Department of Homeland Security found that an investor made “material changes to the business plan”.58 Canada is in a difficult position not only because it closed its flagship Immigrant Investor Program in February 2014, but because there were several thousand applications waiting to be processed, some of which had been pending for over five years.59

See ‘US citizenship and immigration policy services’, 2013 Policy Memorandum on EB-5 Adjudications Policy 25 J. Chow and A. Macdonald, ‘Canada scraps lax investor-visa policy’, Wall Street Journal (New York City, 12 February 2014)


The Global Residence Program Index Methodology

Figure 46. Processing Time and Quality of Processing Rank Program

Score

1

Thailand

10

2

Switzerland

9

3

Austria

8

3

UK

8

3

Malta

8

3

Dubai/UAE

8

3

Greece

8

4

Portugal

7

4

Jersey

7

5

Australia

6

5

Monaco

6

5

Cyprus

6

5

Hong Kong

6

6

Italy

5

6

Latvia

5

6

Bulgaria

5

7

Belgium

4

7

US

4

7

Spain

4

8

Singapore

3

9

Canada

2

143


Global Residence and Citizenship Programs 2018–2019

Compliance Countries have different procedures and compo­ nents with regard to due diligence requirements for profiling the backgrounds of applicants (including criminal records and financial statements), sources of funds, the manner of fund transfers, and the vulnerability to abuse of the funds invested. The standard measures adopted by countries are best practices developed by international associations and professional agencies in relation to anti-money laundering (AML), counter-terrorist financing (CTF), and anti-bribery and corruption (ABC). The EU, unlike the US, does not have a federal procedure for conducting due diligence

144

and, as such, countries within the EU differ widely in terms of their national rules. Clear information and rules regarding due diligence facilitate better risk assessments for potential investors. A more intensive due diligence requirement may be of advantage, since this translates into less uncertainty in private investments (given that banks and financial institutions usually engage in Know Your Customer audits regardless of the regulations in place for investment migration programs). Vulnerability to money laundering in different sectors could, furthermore, be avoided in the presence of clear regulations.


The Global Residence Program Index Methodology

Figure 47. Compliance Rank Program

Score

1

US

9

2

Switzerland

8

2

Canada

8

3

UK

7

3

Malta

7

3

Australia

7

4

Portugal

6

4

Thailand

6

4

Dubai/UAE

6

5

Italy

5

5

Monaco

5

5

Singapore

5

5

Hong Kong

5

6

Austria

4

6

Belgium

4

6

Latvia

4

6

Cyprus

4

7

Greece

3

7

Spain

3

7

Jersey

3

7

Bulgaria

3

145


Global Residence and Citizenship Programs 2018–2019

Investment Requirements The upfront investment amounts for residence differ in terms of stated amount, nature of investment, and additional costs attached. For this indicator, we take into account the stated amounts of investment. The range in the stated amounts is broad: from EUR 50,000 in Latvia to EUR 200,000 in Portugal, AUD 1.5  million in Australia, and GBP 2 million in the UK. The nature of the investment is not always left to the discretion of the investor. Options for different forms of investment are specified by destination governments, largely depending on policy considerations for benefits to their respective countries. The Migration Policy Institute classifies residenceby-investment as investments with private entities or investor–government transactions.60 The amount is usually lower if there are more investments in government programs (by way of cash payments, charitable donations, or purchase of government bonds) and if the investment is in a relatively small country. Even so, some countries in the EU provide attractive options for investing in private

60

residential property. Thus, specific relationships within these two broad categories affect the size and conditions of investment. Generally speaking, offering more choice in how to invest and requiring lesser amounts (including additional costs) of investment enable a country to achieve a higher score. If we take Cyprus, for instance, an acquisition of property of a minimum of EUR 300,000 is a way of acquiring permanent residence. Under the US EB-5 Immigrant Investor Program, an investor can either invest USD 1 million in a qualified US business or USD 500,000 in a ‘targeted employment area’ that is rural or facing considerable unemployment. In return, the investor and their family are able to live, work, or study anywhere within the US. Conditional investment is quite stringent in the UK. In December 2012, new immigration rules were introduced that permit the Home Office to curtail the leave of a Tier 1 Investor migrant to remain in the UK if the required investment level has not been maintained.

M. Sumption and K. Hooper, ‘Selling visas and citizenship: Policy questions from the global boom in investor migration’ (2014) Migration Policy Institute

146


The Global Residence Program Index Methodology

Figure 48. Investment Requirements Rank Program

Score

1

Austria

10

1

Thailand

10

2

Portugal

9

3

Belgium

8

3

Dubai/UAE

8

3

Greece

8

3

Latvia

8

4

Italy

7

4

Malta

7

4

Spain

7

5

UK

6

5

Switzerland

6

6

US

5

6

Canada

5

6

Jersey

5

6

Monaco

5

6

Cyprus

5

6

Hong Kong

5

7

Bulgaria

3

8

Australia

2

8

Singapore

2

147


Global Residence and Citizenship Programs 2018–2019

Total Costs The stated amount of investment does not constitute the total actual cost an investor has to bear to acquire residence status, and given that the nature of investment differs considerably across programs, it is difficult to compare the total actual cost of investment.61 As we examined in Investment Requirements, the nature of investment has an impact on the amount of investment. Crucially, how an investment is fulfilled also impacts on its maturity and how it can be retrieved. Investment in government bonds (such as in Bulgaria or the UK) for a number of years is a fairly low-risk form of investment in the case of countries with a good credit rating, as the original capital is returned after a fixed period of time. Government bonds bear an opportunity cost, however, as the investor loses out on the interest for the stipulated period. In addition, they carry a higher risk in the case of countries with a low credit rating. The assessment of opportunity costs and country risk provides a useful heuristic device in examining total cost, since investors often forego other investment options to invest in residence or citizenship options. The risks associated with an investment are often not simple to determine. For instance, in Bulgaria, invest­ments in licensed credit institutions are permitted, but only banks fall under this description, and the country risk and credit risk of these institutions need to be taken into consideration. In addition, there are transaction

61

62

costs that have to be incurred, including processing fees, agent fees, and due diligence fees. Documentary evidence supporting a residence appli­ cation requires references from legal pro­ fessionals (or other professional persons of stand­ ing), bank references, and similar documentation in some countries, and the potential costs incurred in obtaining such verification are considered. In this regard, the presence of an extensive bureaucratic framework with several departments at different levels of government, as in the case of Cyprus or Bulgaria, would work against a favorable score. The US EB-5 Immigrant Investor Program is an inter­ esting case in point: though most investors prefer the substantially lower ‘targeted employment area’ investment amount, the investments are mediated by ‘regional centers’, which have been found to pose substantial tech­nical and logistical challenges and have been susceptible to corruption.62 The nature of investment also affects the involvement of the investor in the day-to-day management of the business, thereby influencing the total cost. Offering more investment options would elicit a higher score in this sub-indicator, although some investors have raised questions about the uncertainties and volatility of foreign markets and the value of choosing safer options. Generally speaking, we find that destination countries that take steps to reduce the opportunity costs of investors by providing a wider choice of investments or offering incentive-based investments are considered to be more attractive.

M. Sumption and K. Hooper, ‘Selling visas and citizenship: Policy questions from the global boom in investor migration’ (2014) Migration Policy Institute A. Singer and C. Galdes, ‘Improving the EB-5 Investor Visa Program: International financing for US regional development’ (2014) Project on State and Metropolitan Innovation (Brookings-Rockefeller)

148


The Global Residence Program Index Methodology

Figure 49. Total Costs Rank Program

Score

1

Thailand

10

2

Austria

8

2

Malta

8

2

Greece

8

3

Portugal

7

3

Italy

7

3

Australia

7

3

Dubai/UAE

7

3

Spain

7

3

Latvia

7

4

US

6

4

Canada

6

4

Cyprus

6

5

UK

5

5

Belgium

5

5

Hong Kong

5

6

Jersey

3

6

Singapore

3

6

Bulgaria

3

7

Switzerland

2

7

Monaco

2

149


Global Residence and Citizenship Programs 2018–2019

Time to Citizenship Among the criteria relevant to assessing the attractiveness of residence programs is the time it will take until citizenship may be acquired in the target country. In countries that are attractive destinations in this regard a relatively fast path to citizenship is offered, as is the case in Australia, Belgium, and Canada. This is primarily because the effective time taken for naturalization in these countries is low compared to the others. What is considered here, however, is not only the formal time required, but also any physical presence required in the country within

150

the time period. For example, although the UK has a relatively low requirement of five years before one can apply for citizenship, it has significant and strict physical presence requirements. Countries that are prohibitive regarding allowing the transition from residence to citizenship — for example, Switzerland and Hong Kong (which in reality restricts the acquisition of Chinese citizenship to ethnic Chinese applicants) — are assigned a score of zero. For this indicator, data is publicly available, and our assessments match those of the respondents and informants.


The Global Residence Program Index Methodology

Figure 50. Time to Citizenship Rank Program

Score

1

Bulgaria

9

2

Belgium

8

2

Australia

8

3

Austria

7

3

Italy

7

3

Canada

7

3

Singapore

7

4

Portugal

6

4

UK

6

4

US

6

5

Latvia

3

6

Malta

2

6

Jersey

2

6

Cyprus

2

7

Spain

1

8

Thailand

0

8

Switzerland

0

8

Dubai/UAE

0

8

Greece

0

8

Monaco

0

8

Hong Kong

0

151


Global Residence and Citizenship Programs 2018–2019

Citizenship Requirements When assessing this factor, we examine all the requirements needed to qualify for naturalization after the required minimum time is fulfilled. The major factors include: (i) minimum physical presence requirements and how these are applied in practice; (ii) additional investment requirements or other ‘commitment’ requirements, if any; and (iii) other requirements to qualify for citizenship, including language requirements and tests to assess the cultural integration of applicants. In some countries, such as Australia, the transition from permanent residence to citizenship is less demanding than in other countries and there are minimal additional requirements. By contrast, some countries that provide conditions conducive to attracting investors have stringent physical presence requirements (for example, Austria requires six to ten years of almost uninterrupted presence), but have fewer additional requirements

63

152

that need to be met. Providing proof of continuous presence can be burdensome, owing to the requirement to provide documents such as tax returns and tenancy agree­ments. Although the US EB-5 Immigrant Investor Program has physical presence requirements and a five-year transition period to apply for naturalization, it remains one of the easiest and most sought-after programs for acquiring citizenship following a period of residence. The additional requirements for transitioning from residence to citizenship can often prove to be onerous even in liberal democracies, owing to a prevailing sense of cultural integration being a duty that prospective citizens must satisfy.63 In this regard, the traditional ‘immigration countries’, namely Australia, Canada, and the US, appear to demonstrate less prejudice than several member states of the EU.

See D. Kochenov, ‘Mevrouw de Jong Gaat Eten: ‘EU citizenship and the culture of prejudice’ (2011) European University Institute and Robert Schuman Centre for Advanced Studies Working Paper No. 2011/06


The Global Residence Program Index Methodology

Figure 51. Citizenship Requirements Rank Program

Score

1

Australia

8

1

US

8

1

Canada

8

1

Jersey

8

2

Portugal

7

2

Italy

7

2

UK

7

2

Belgium

7

3

Austria

6

4

Singapore

3

5

Malta

2

5

Bulgaria

2

6

Thailand

0

6

Switzerland

0

6

Dubai/UAE

0

6

Greece

0

6

Spain

0

6

Latvia

0

6

Monaco

0

6

Cyprus

0

6

Hong Kong

0

153


Global Residence and Citizenship Programs 2018–2019

154


The Global Citizenship Program Index Methodology

The Global Citizenship Program Index 2018–2019

The methodology employed for the Global Citizenship Program Index (GCPI) is the same as that of the Global Residence Program Index (GRPI) discussed in the previous section (page 132). Accordingly, the explanations provided for several of the GRPI indicators also apply to the GCPI indicators. It may

be noted that among our respondent and informant base for the GCPI are government officials and consultants engaged in citizenship-by-investment programs that have been discontinued, as well as those that are in the process of being established or reformed.

Figure 52. The Global Citizenship Program Index (GCPI) 2018–2019 Rank Program

Score

1

Malta

79

2

Cyprus

72

3

Austria

70

4

Antigua and Barbuda

64

5

Moldova

63

6

Montenegro

62

7

St. Kitts and Nevis

61

8

Grenada

59

9

St. Lucia

57

10

Dominica

55

11

Jordan

51

12

Turkey

45

Factors • Reputation • Quality of Life • Visa-free or Visa-on-arrival Access

• Processing Time and Quality of Processing • Compliance • Investment Requirements

• • • •

Residence Requirements Relocation Flexibility Physical Visit Requirements Transparency

155


Global Residence and Citizenship Programs 2018–2019

Reputation Reputation places reliance on the perceptions of investors and advisors regarding the image of countries in which they invest. This indicator is by nature subjective, but, much like the Attractiveness Indicators employed by the IMD in its Executive Opinion Surveys, its intention was to allow the space for our respondents and informants to consider intangible and unanticipated factors for assessing the reputations of destination countries. The endeavor to assess reputation is not new, and the relationship between reputation and out­come is a popular mechanism of assessing the competitiveness of organizations, cities, and even regions.64

64

Furthermore, much like corporate reputation, the reputation of a country is a historical indicator that allows assessment of the levels of success of its previous efforts to meet investor expectations. Although St. Kitts and Nevis was the first country to introduce a citizenship-by-investment program, in 1984, prior to this it would not have measured up favorably against this indicator. In 2006/2007, however, it significantly revised its program with the professional assistance of Henley & Partners, which was mandated until mid-2013 under a government contract related to the citizenship-by-investment program and in particular to its global promotion.

Drawing on organizational and regional reputation, the reputation of a country could be characterized as the aggregation of a single stakeholder’s perceptions of the capacity of the country to meet the demands and expectations of several stakeholders. Further, given ‘brand management’ exercises performed by different countries, the satisfaction of perceived expectations is an important criterion. See W. Lever, ‘Competitive cities in Europe’ (1999) 36 Urban Studies 1029; S. Anholt, Competitive Identity: The New Brand Management for Nations, Cities and Regions (Palgrave McMillan, 2007)

156


The Global Citizenship Program Index Methodology

Figure 53. Reputation Rank Country

Score

1

Austria

9

2

Cyprus

7

3

Malta

6

4

Jordan

5

5

Montenegro

4

5

Grenada

4

5

St. Lucia

4

6

Antigua and Barbuda

3

6

St. Kitts and Nevis

3

6

Dominica

3

7

Moldova

2

7

Turkey

2

157


Global Residence and Citizenship Programs 2018–2019

Quality of Life The assessment of Quality of Life (QoL) has in different contexts relied on diverse methods of assessing subjective perceptions of different sample groups and developing factors that are independent of subjective perceptions. Like Reputation, QoL could well benefit from taking into account the experiences of investors and what is particularly relevant to the type of person seeking to invest in a citizenship program. We are aware, furthermore, that there are substantial institutional efforts in developing composite indicators for QoL,65 with the UN Human Development Index being one of the most comprehensive (placing reliance on life expectancy

65

66

67 68 69

at birth, schooling, literacy rates, and gross national income per capita).66 These factors are not sufficient in covering all civil and political liberties, for which Freedom House’s Freedom in the World 67 is a preferable indicator for assessing democratic values. As our focus is (also) on investment, the World Bank’s Doing Business reports68 are pertinent, since investors may have to negotiate the regulatory environments of destination countries for a variety of economic activities. We have sought to anchor the framing of our questions against established indicators,69 but recognize that such indicators do not necessarily correspond to what is being assessed in the GRPI.

For a review of issues in constructing a composite QoL index and a discussion of existing QoL indexes, see M.R. Hagerty and K.C. Land, ‘Issues in composite index construction: The measurement of overall quality of life’ in K.C. Land, A.C. Michalos, J. Sirgy (eds), Handbook of Social Indicators and Quality of Life Research (Springer 2012) These are the factors that are taken into account in the index. In addition, other indicators are used in monitoring trends in the QoL. For a ranking and explanation, see the latest UN Development Programme Human Development Report available at hdr.undp.org/en For the latest report, see freedomhouse.org/report/freedom-world/freedom-world-2018 For the latest report, see doingbusiness.org/reports/global-reports/doing-business-2018 This is why we have not relied on ad hoc measures of quality of life, such as happiness or life satisfaction indicators

158


The Global Citizenship Program Index Methodology

Figure 54. Quality of Life Rank Country

Score

1

Austria

10

2

Malta

7

2

Cyprus

7

3

Turkey

6

4

Montenegro

5

4

Jordan

5

5

Antigua and Barbuda

4

5

Grenada

4

6

Moldova

3

6

St. Kitts and Nevis

3

6

St. Lucia

3

7

Dominica

2

159


Global Residence and Citizenship Programs 2018–2019

Visa-free or Visa-on-arrival Access Reliance has been placed on the 2018 Henley Passport Index (HPI) that curates data from 227 different travel destinations, including countries, territories, and micro-states, collated by IATA70 to arrive at the ranking. The HPI is an index that compiles, compares, and updates data on the number of destinations that a citizen of a given country can visit without requiring a prior visa. Other than being an end in itself, a relaxed travel policy signals characteristics of a country's political regimes and the extent of its civil liberties.71

70 71

Our informants corroborate with our respondents that visa-free or visa-on-arrival access is an essential indicator for selecting a particular country for which to apply for citizenship. As in the GRPI, EU member states fare well in this indicator. Among the other destinations, visa-free or visaon-arrival access to countries in the Schengen Area or to the UK is possible either because of colonial ties that allow easier travel for citizens of overseas territories of EU member states, or because of visawaiver agreements that have been signed.

International Air Transport Association, Netherlands J. Alemán and S. Woods, ‘No way out: travel restrictions and authoritarian regimes’ (2014) 3 Migration and Development 285

160


Global TheResidence Global Citizenship and Citizenship Program Programs Index Methodology 2017–2018

Figure 55. Visa-free or Visa-on-arrival Access Rank Country

Score

1

Malta

10

1

Austria

10

2

Cyprus

9

3

Antigua and Barbuda

7

3

St. Kitts and Nevis

7

4

Montenegro

6

4

Grenada

6

5

Moldova

5

5

St. Lucia

5

5

Dominica

5

6

Turkey

4

7

Jordan

3

161


Global Residence and Citizenship Programs 2018–2019

Processing Time and Quality of Processing Some countries may offer the advantage of a short processing time between lodging an application and approval of citizenship, but the enjoyment of this advantage may be obstructed by uncertainties in administrative processes. In this regard, input from our informants and respondents has proved

162

very valuable: their responses and analyses have both verified the official or declared processing times and complemented the ‘hard’ data on actual time taken (namely, the number of days), including obstructions faced during the processing of a citizenship application.


The Global Citizenship Program Index Methodology

Figure 56. Processing Time and Quality of Processing Rank Country

Score

1

Jordan

9

2

Cyprus

8

2

Antigua and Barbuda

8

2

Moldova

8

2

St. Kitts and Nevis

8

3

Dominica

7

4

Malta

6

5

Montenegro

5

5

Turkey

5

6

Grenada

4

6

St. Lucia

4

7

Austria

3

163


Global Residence and Citizenship Programs 2018–2019

Compliance Countries have different procedures and com­ ponents with regard to due diligence requirements for profiling the backgrounds of applicants (including criminal records and financial statements), sources of funds, the manner of fund transfers, as well as the vulnerability to abuse of the funds invested. The standard measures adopted are best practices developed by international associations and professional agencies in relation to anti-money laundering (AML), counter-terrorist financing (CTF), and anti-bribery and corruption (ABC). Clear infor­

164

m­ ation and rules regarding due diligence facilitate better risk assessments for potential investors. A more intensive due diligence requirement may be of advantage, since this translates into less uncertainty in private investments (given that banks and financial institutions usually engage in Know Your Customer audits regardless of the regulations in place for investment mig­ration programs). Vulnerability to money laundering in different sectors could, furthermore, be avoided in the presence of clear regulations.


Global TheResidence Global Citizenship and Citizenship Program Programs Index Methodology 2017–2018

Figure 57. Compliance Rank Country

Score

1

Malta

10

1

Moldova

10

2

Austria

6

2

Antigua and Barbuda

6

2

Montenegro

6

2

Grenada

6

3

St. Kitts and Nevis

5

3

Jordan

5

4

St. Lucia

4

5

Cyprus

3

5

Dominica

3

5

Turkey

3

165


Global Residence and Citizenship Programs 2018–2019

Investment Requirements Investment for residence and investment for citizenship are two distinct categories, and there may be a route to direct citizenship without having to fulfill a residence requirement. Given the unique nature of the citizenship-byinvestment programs, the investment amounts are substantial, and the accompanying conditions do not provide much choice regarding the nature of investment. There is a pattern that can be noticed among the investments required for such programs: they involve investments of amounts that are generally greater than those required by residence-by-invest­ ment programs, there is usually a requirement or at least an option to purchase real estate, and there is usually a requirement or an option to make a nonrefundable contribution. Dominica has no residence requirement and offers citizenship for the least amount of investment; it should be noted, however, that such investment in the country is in the form of a compulsory nonrefundable contribution. Among those programs that

166

allow a recoverable investment, a distinction may be made between active and passive investments. Generally speaking, active investments in the citizenship route usually have several conditions attached, such as specific types of businesses and projects (export oriented, public sector) that investors can invest in, and the conditions that need to be fulfilled (creation of jobs, for instance). Different options of how investments can be made are sometimes provided, as is the case in Cyprus and in Antigua and Barbuda. The latter allows choices from a few options, namely an investment that is nonrefundable (of a lower amount), a passive investment in a real estate project, and an active investment in business. Contrary to the responses to the Investment Requirements indicator for the GRPI, it appears that those who invest in countries that have citizenship-byinvestment programs prefer safer and more passive investments, primarily because of the information costs associated with negotiating in new markets.


The Global Citizenship Program Index Methodology

Figure 58. Investment Requirements Rank Country

Score

1

Antigua and Barbuda

8

1

St. Lucia

8

1

Dominica

8

2

Montenegro

7

2

St. Kitts and Nevis

7

2

Grenada

7

3

Malta

6

3

Moldova

6

3

Turkey

6

4

Jordan

5

5

Cyprus

4

6

Austria

2

167


Global Residence and Citizenship Programs 2018–2019

Residence Requirements None of the countries ranked impose onerous conditions of residence — such is the nature of citizenship-by-investment, namely, one of the key ele­ments of the citizenship-by-investment concept is that the residence requirements are reduced substantially or waived. Smaller countries keen

168

on attracting investment avail themselves of the competitive advantage of waiving or substantially reducing residence requirements. As is clear from Figure 59, residence requirements imposed by Austria, most of the Caribbean countries, Jordan, and Turkey are either absent or minimal.


Global TheResidence Global Citizenship and Citizenship Program Programs Index Methodology 2017–2018

Figure 59. Residence Requirements Rank Country

Score

1

Austria

10

1

Moldova

10

1

Montenegro

10

1

St. Kitts and Nevis

10

1

Grenada

10

1

St. Lucia

10

1

Dominica

10

1

Jordan

10

1

Turkey

10

2

Cyprus

9

2

Antigua and Barbuda

9

3

Malta

8

169


Global Residence and Citizenship Programs 2018–2019

Relocation Flexibility An assessment of the number of citizenship investors in different countries reveals that a substantial percentage apply for the migration of family members with the intention of either settling in the destination country or keeping the option open for an exit strategy in the event that there is a need to leave their home countries. First, we evaluated the number of investors who indicated their intention to relocate, compared to the number of investors who have actually relocated, to gauge which countries are conducive to relocation. Subsequently, we assessed the factors that facilitate relocation. In this regard, member states of the EU have a clear advantage, as a citizen of an EU member state can consider relocating to another member state or several additional countries that have agreements with the EU, such as Switzerland. Though

170

such relocation is not automatic, the rules are well established, they provide clarity on how and when relocation to another EU member state is permissible, and the process entails lower information costs. Furthermore, EU law imposes very few restrictions on the freedom to relocate for those citizens who are able to support themselves financially. The rule of law has played an important part in informing investors’ choices in relocation: in their confidence in there being fair processes in place for securing personal freedom, settling investment disputes, and the ability to negotiate with government authorities all point towards a higher score. Destination countries’ efforts towards enabling family unification and the ease with which they deal with private property lessen the uncertainties that relocation might entail.


The Global Citizenship Program Index Methodology

Figure 60. Relocation Flexibility Rank Country

Score

1

Malta

10

1

Cyprus

10

1

Austria

10

2

Antigua and Barbuda

4

2

St. Kitts and Nevis

4

2

Grenada

4

2

St. Lucia

4

2

Dominica

4

3

Moldova

2

3

Montenegro

2

3

Jordan

2

3

Turkey

2

171


Global Residence and Citizenship Programs 2018–2019

Physical Visit Requirements This indicator assesses whether physical visits are required as part of the citizenship application process, usually for the purpose of: (i) interviews and oathtaking ceremonies and (ii) the renewal of passports. In the event that there are such requirements, we have sought to identify the number of visits required and the nature of the bureaucratic processes that precede such visits.

172

In general, more European programs require visits than Caribbean programs. Malta requires two mandatory visits, and Cyprus requires a minimum of two visits — at submission and upon issuance of a passport. Austria’s requirements are variable and are set on a case-bycase basis. Most Caribbean programs do not require a physical visit, and citizenship can be confirmed at an embassy or through a lawyer or notary.


Global TheResidence Global Citizenship and Citizenship Program Programs Index Methodology 2017–2018

Figure 61. Physical Visit Requirements Rank Country

Score

1

Moldova

10

1

Montenegro

10

1

St. Kitts and Nevis

10

1

Grenada

10

1

St. Lucia

10

1

Dominica

10

2

Cyprus

9

2

Antigua and Barbuda

9

3

Malta

8

3

Austria

8

4

Jordan

5

4

Turkey

5

173


Global Residence and Citizenship Programs 2018–2019

Transparency The World Economic Forum identifies four indi­ cators of transparency for a citizenship-byinvestment program: public support, evaluation studies, availability of public data, and criteria for due diligence.72 Currently, no countries in the GCPI publish evaluation studies of the investments that flow in from applicants, and this, therefore, does not feature in our assessment. The other three criteria have, however, informed the structure of our surveys, and informants were consulted on these points. We have sought to inquire about access to clear information about the different stages of the application process, including the due diligence process and the utilization of funds injected into the destination country by prospective citizens. We find the latter to be a sub-indicator worth noting, because many respondents wish to understand (and, if possible, choose) the purposes for which their investments are used.

72 73

Since the manner in which investments are deployed is often predetermined it is difficult to influence such choices. The subsequent visibility of such contributions in domestic projects and the earmarking of funds have, however, been found to play a role in investors’ decisions, and have influenced their perceptions of transparency. One clear advantage of such information being made available is that it enables investors to conduct meaningful risk assessments; further, the impact of investments on existing and potential businesses in destination countries could influence business decisions.73 The most important aspects for transparency, however, are the rules and regulations and the processes and their implementation in the day-to-day administration of the program. Here, countries such as Malta, which have a clear framework of rules and regulations and a highly transparent and accountable system of process and administration of its program, score highest.

World Economic Forum, ‘Global Citizenship: Planning for Sustainable Growth’ (Geneva 2014) For a case study on the impact of large investments in destination countries, see A. Bongardt and M. Santos Neves, ‘The Chinese business community at a crossroads between crisis response and China’s assertive global strategy: The case of Portugal’ (2014) 2 Migration Policy Centre

174


The Global Citizenship Program Index Methodology

Figure 62. Transparency Rank Country

Score

1

Malta

8

2

Moldova

7

2

Montenegro

7

3

Cyprus

6

3

Antigua and Barbuda

6

4

St. Lucia

5

5

St. Kitts and Nevis

4

5

Grenada

4

6

Dominica

3

7

Austria

2

7

Jordan

2

7

Turkey

2

175


Global Residence and Citizenship Programs 2018–2019

176


Global Residence and Citizenship Programs 2017–2018

Resources 179

Henley & Partners Group Offices

180

Useful Websites

177


Global Residence and Citizenship Programs 2018–2019

178


Resources

Henley & Partners Group Offices For a complete and up-to-date list of all Henley & Partners group office locations worldwide, visit henleyglobal.com

Antigua and Barbuda

Grenada

Singapore

+1 268 562 2625 antigua@henleyglobal.com

+1 473 443 4000 grenada@henleyglobal.com

+65 6438 7117 singapore@henleyglobal.com

Australia

Hong Kong

South Africa

+61 3 8680 2525 australia@henleyglobal.com

+852 3101 4100 hongkong@henleyglobal.com

+27 21 850 0524 southafrica@henleyglobal.com

Austria

Jersey/British Isles

South Korea

+43 1361 6110 austria@henleyglobal.com

+44 1534 514 888 jersey@henleyglobal.com

+82 2 2008 4664 korea@henleyglobal.com

Canada

Latvia

St. Kitts and Nevis

+1 514 288 1997 canada@henleyglobal.com

+371 66 05 10 09 latvia@henleyglobal.com

+1 869 465 6220 stkitts@henleyglobal.com

China

Malaysia

St. Lucia

+86 20 2206 0499 china@henleyglobal.com

+603 2731 9340 malaysia@henleyglobal.com

+1 758 458 9777 stlucia@henleyglobal.com

Croatia

Malta

Switzerland

+385 21 321 027 croatia@henleyglobal.com

+356 2138 7400 malta@henleyglobal.com

+41 44 266 22 22 switzerland@henleyglobal.com

Cyprus

Moldova

Thailand

+357 2531 1844 cyprus@henleyglobal.com

+373 607 58525 moldova@henleyglobal.com

+662 041 4628 thailand@henleyglobal.com

Dubai/UAE

Philippines

UK

+971 4 392 77 22 dubai@henleyglobal.com

+63 2 8669 2771 philippines@henleyglobal.com

+44 207 823 10 10 uk@henleyglobal.com

Greece

Portugal

Vietnam

+30 21 0983 8705 greece@henleyglobal.com

+351 213 970 977 portugal@henleyglobal.com

+84 28 3911 1667 vietnam@henleyglobal.com

179


Global Residence and Citizenship Programs 2018–2019

Useful Websites General International Professional Associations International Bar Association – ibanet.org International Fiscal Association – ifa.nl International Tax Planning Association – itpa.org Investment Migration Council – investmentmigration.org Society of Trust and Estate Practitioners – step.org

Country Information CIA World Factbook – cia.gov/library/publications/the-world-factbook/ Country Watch – countrywatch.com Economist Intelligence Unit – eiu.com European Citizenship Laws – eudo-citizenship.eu/national-citizenship-laws European Succession Laws – successions-europe.eu Henley & Partners – Kochenov Quality of Nationality Index – nationalityindex.com Henley Passport Index – henleypassportindex.com IATA Travel Centre Visa Information – iatatravelcentre.com Mercer Quality of Living Reports – mercer.com/qualityofliving US State Department Travel Information – travel.state.gov

International Organizations CARICOM – caricom.org EFTA – efta.int European Commission – ec.europa.eu Financial Action Task Force – fatf-gafi.org International Monetary Fund – imf.org OECD – oecd.org World Bank – worldbank.org

180


Global Residence and Citizenship Programs 2017–2018 Resources

Selected Countries Antigua and Barbuda

Dominica

Government – ab.gov.ag Antigua and Barbuda Investment Authority – investantiguabarbuda.org Antigua and Barbuda Citizenship by Investment Unit – cip.gov.ag

Government – dominica.gov.dm Invest Dominica – investdominica.dm Commonwealth of Dominica Citizenship by Investment Unit – cbiu.gov.dm

Dubai/UAE Australia Government – australia.gov.au Department of Immigration and Border Protection – border.gov.au/citizenship

Austria Federal Government – help.gv.at Vienna Government – wien.gv.at Austrian Business Agency – investinaustria.at

Belgium Federal Government – belgium.be Investment Agency – business.belgium.be Foreign Affairs and Foreign Trade – diplomatie.be

Bulgaria Government – government.bg Ministry of Foreign Affairs – mfa.bg

Canada Federal Government – canada.gc.ca Federal Immigration and Citizenship – cic.gc.ca Border Agency – cbsa.gc.ca Québec Immigration – immigration-quebec.gouv.qc.ca

Cyprus Government – cyprus.gov.cy Ministry of Interior – moi.gov.cy Cyprus Investment Promotion Agency – investcyprus.org.cy

Federal Government – government.ae/en Ministry of Foreign Affairs – mofa.gov.ae/mofa_english Abu Dhabi Government – abudhabi.ae/en Dubai Government – dubai.ae Jeleb Ali Free Zone – jafza.ae Dubai International Financial Center – difc.ae Jumeirah Lakes Tower Free Zone – dmcc.ae

Greece Government – parliament.gr Enterprise Greece – enterprisegreece.gov.gr

Grenada Government – gov.gd Grenada Citizenship by Investment – cbi.gov.gd

Hong Kong Government – gov.hk Immigration Department – immd.gov.hk Tax Authorities – ird.gov.hk Trade and Industry Department – tid.gov.hk

Jersey Government – gov.je Locate Jersey – locatejersey.com Jersey Finance – jerseyfinance.je Jersey Business – jerseybusiness.je Chamber of Commerce – jerseychamber.com

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Global Residence and Citizenship Programs 2018–2019

Latvia

St. Kitts and Nevis

Government – saeima.lv Office of Citizenship and Migration Affairs – pmlp.gov.lv

Government – gov.kn Sugar Industry Diversification Foundation – sidf.org St. Kitts and Nevis Citizenship by Investment Unit – ciu.gov.kn

Malta Government – gov.mt Ministry of Finance – finance.gov.mt Tax Authorities – ird.gov.mt Malta Financial Services Authority – mfsa.com.mt Finance Malta – financemalta.org Malta Enterprise – maltaenterprise.com Identity Malta – identitymalta.com

Moldova

St. Lucia Government – govt.lc St. Lucia Citizenship by Investment Unit – cipsaintlucia.com

Switzerland Federal Government – admin.ch Federal Office for Migration – auslaender.ch Federal Tax Authorities – estv.admin.ch

Government – gov.md/en

Thailand Monaco Government – gouv.mc

Government – mfa.go.th Thailand Elite Official Direct Application Portal – thailandelite-direct.com

Portugal Government – portugal.gov.pt Portugal Global Trade & Investment Agency – portugalglobal.pt Immigration and Borders Service – sef.pt

United Kingdom Government – direct.gov.uk Immigration Authorities – ukba.homeoffice.gov.uk Foreign and Commonwealth Office – fco.gov.uk Tax Authorities – hmrc.gov.uk

Singapore Government – gov.sg Economic Development Bureau – edb.gov.sg Entering Singapore for Business – sedb.com Monetary Authority – mas.gov.sg

Spain Government – lamoncloa.gob.es Ministry of Foreign Affairs and Cooperation – exteriores.gob.es

182

United States Federal Government – usa.gov Tax Authorities – irs.gov Department of Homeland Security – dhs.gov Transportation Security Administration – tsa.gov Citizenship and Immigration Services – uscis.gov


Global Residence and Citizenship Programs 2017–2018

7


Global Residence and Citizenship Programs 2018–2019 provides the most comprehensive, systematic analysis and benchmarking of the world’s leading residence- and citizenship-by-investment programs. A distinguished panel of independent experts — immigration and citizenship lawyers, economists, country risk experts, academic researchers, and other specialists — have created the Global Residence Program Index and the Global Citizenship Program Index as part of the report. These two indexes have become the global standard by which to gauge and reflect on the relative worth of residence and citizenship programs around the world as they analyze a broad range of factors to produce an overall global view and ranking of the different investment migration programs on offer. These indexes are highly relevant not only to those who are interested in alternative residence or citizenship options, but also to industry professionals, private client advisors, and others with an interest in the subject, as well as to governments. The report includes analyses of factors such as immigration law, taxation, and quality of living as well as transparency and risk and compliance issues and conveys scores and ranks using clear infographics and figures complemented with concise explanations. Updated with new expert commentary, Global Residence and Citizenship Programs 2018–2019 is an invaluable tool for anyone with an interest in investment migration.

ISBN 978-3-9524742-4-2

USD 115 GBP 75 EUR 99

Global Residence and Citizenship Programs 2018–2019 The Definitive Comparison of the Leading Investment Migration Programs

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Global Residence and Citizenship Programs 2018–2019  

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