Global Residence and Citizenship Handbook. Christian H. Kälin
of an EU country, to have the right of establishment throughout the EU).
Naturalization
For a person who cannot rely on the ancestral option there are residence and immigration options available to skilled people, investors and wealthy individuals in numerous countries:33 Australia, the Bahamas, Canada, Hong Kong, Monaco, Singapore, Switzerland, and the UK are just a few examples of countries which offer residence to wealthy individuals and investors.
This book deals with the most attractive countries where residence permits are available to investors and wealthy individuals. Thus the emphasis is not just on general quality of life, business and employment opportunities (in which case for example Australia or New Zealand would be among the immigration countries of choice), but specifically on factors concerning wealthy individuals, such as personal tax, privacy and personal security. The countries have also been selected with a view of citizenship planning and the possibility of acquiring an attractive alternative citizenship with relative ease. All these countries are welcoming foreign persons who are willing to invest.
Citizenship-by-Investment
There are, however, only five countries at the moment that legally offer citizenship-by-investment programs that do not require a specific period of residence in the country. These are Antigua and Barbuda, Austria, Cyprus, the Commonwealth of Dominica, and St. Kitts and Nevis. Of these, Antigua and Barbuda has only very recently enacted the relevant legislation – which is very similar to that of St. Kitts and Nevis - and it will take time until it is fully operational, whereas Cyprus has a very opaque and complicated, as well as very expensive program that is still evolving, while Dominica has a bad reputation and is therefore of limited interest from that perspective. Thus, Austria and St. Kitts and Nevis are the two most relevant citizenship-by-investment options today. Citizenship-by-investment offers the opportunity to legally acquire a new citizenship quickly and easily, without any disruptions to one’s life.34
Apart from these five countries, there are several others which have similar provisions in their laws to allow the granting of citizenship to substantial investors.35 However, there is no established and clear practice in these countries; the processes involved are not transparent, the conditions not clear and the decisions mostly arbitrary.36 Also, in many countries there are suspicions that an element of corruption may be involved in the citizenship acquisitions. Therefore if the intention is to acquire citizenship based on investment extreme care has to be exercised. In fact, in most cases it is not advisable unless a real, substantial investment is contemplated in the particular target country.
Some countries also have provisions to grant non-citizens passports37 or honorary citizenships38 which are legal but largely useless as no full citizenship status is acquired and thus the documents are often not recognized by other countries. Furthermore, as no citizen status is acquired, there is no protection and the documents can be revoked any time just like residence permits, therefore not giving the kind of security that is desirable when acquiring an alternative citizenship.
Caveat emptor
With regard to the acquisition of alternative citizenship, it is important to always obtain proper advice from reputable legal advisors, and to check the citizenship laws and procedures of the relevant country. This is particularly important if citizenship is sought on the basis of an investment or other direct contribution to a country. Unfortunately there are many illegal activities in this “field” and it is safe to assume that most offers are fraudulent. What makes matters worse is that sometimes even seemingly reputable professionals have been found to be involved in what turned out to be fraudulent offers. For example, between November 2010 and May 2011 a Canadian immigration lawyer and a private client lawyer based in Switzerland simultaneously offered citizenship in Iceland for a US$400,000 investment in some private equity fund. Iceland’s citizenship law requires the passing of a parliamentary bill in order to grant citizenship to a foreigner outside the normal naturalization procedures. A simple check of the Citizenship Act would have revealed this, yet the “marketing” activities of these lawyers made it necessary for the Icelandic Government to publish an unequivocal statement. The government statement underlined that Iceland has never had in the past and has no intention to establish any kind of Citizenship-by-investment program.39
2.4 Criteria to consider when acquiring citizenship
The most important criterion when acquiring alternative citizenship is that the acquisition is in accordance with the constitution and laws of the country, i.e. that it is legal. This seemingly obvious premise needs to be pointed out specifically in this context.
Citizenship documents and passports obtained by illegal means such as bribery are sadly not uncommon. In many countries it is possible to make (illegal) direct payments to corrupt government officials in return for passports and citizenship documents. Holders of such documents run a serious risk of exposure, arrest and deportation. Even in those countries where the law gives the President, Prime Minister or other government ministers relative discretion regarding the granting of citizenship, if any payments are involved, these are bribes – a crime in almost every country. Often the result is a revocation of previously granted citizenship and passports, for example after a change of government. Persons who have acquired documents this way are also frequently blackmailed and forced to pay further “fees” later on.40 It is therefore crucial that citizenship is obtained based upon specific provisions in the law and clear, official procedures.
A related criterion is that the granting of citizenship and the passports issued in conjunction therewith have to be recognized by other countries. If full citizenship has been granted based on the legal provisions of a country, it will normally be recognized by other countries. However if only non-citizens passports are granted, generally this is not a good option. One example is Panama where a (legal) non-citizens passport under the retiree residence program can be acquired.
Other important points to consider when intending to become a citizen of choice include the geographic location of the country, the official language, political and economic stability, the legal system, the banking and business environment, visa-free travel possibilities for passport holders of that country, the reputation of the country and the passport, and of course initial and future overall costs.
You will also need to consider restrictions on dual citizenship. Some countries do not allow you to hold any other citizenship besides theirs. About half of the world’s countries allow dual nationality, and the other half does not allow you to be a citizen of another country at the same time. Among those countries which do not allow dual nationality, various degrees of strictness can be observed, but often the acquisition of another citizenship without first obtaining a formal permission (which may or may not be obtainable) leads to the automatic loss of one’s current citizenship. Therefore, one needs to carefully check the legal situation in the home country with regard to dual citizenship, prior to taking any steps to acquire another citizenship.
The following is an overview of citizenship regulations in selected countries.41
Among others, the following countries allow the acquisition of another citizenship:
| Antigua and Barbuda | Australia |
| Austria42 | Bangladesh |
| Barbados | Belgium |
| Belize | Brazil |
| Bulgaria | Canada |
| Colombia | Croatia |
| Cyprus | Dominica |
| Dominican Republic | El Salvador |
| Egypt43 | Finland |
| France | Germany44 |