Caribbean continues to dominate citizenship by investment, according to new Index

Caribbean nation Commonwealth of Dominica has for the third year claimed the title of offering the best citizenship by investment programme in the world, reports the CBI Index.

The Financial Times wealth management branch, Professional Wealth Management (PWM), has released the 2019 CBI Index, revealing the top five global citizenship by investment programmes to be in the Caribbean.

Dominica broke records with the highest ever score on the Index (91%), whilst St Kitts and Nevis and Grenada followed closely behind with scores of 89% and 87% respectively. St Lucia leapt to fourth place from fifth last year and scored 84%, while Antigua and Barbuda dropped one place to achieve 79%.

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Jordan was the lowest scoring (51%), just behind Austria and Cambodia, which jointly scored 54%.

Programmes are scored against seven ‘pillars,’ which examine different aspects such as the freedom of movement offered, the minimum investment outlay, and due diligence on prospective investors.

Citizenship by investment (CBI) is a growing market, with more and more persons looking to capitalise on the benefits of second citizenship, reports Yuri Bender, financial journalist and editor-in-chief of PWM. Industry stakeholders describe “increasing demand for their services” says Bender, put down to “growing wealth and the tendency for high net worth individuals to become more globally minded.”

“Wealthy individuals and their families seek second citizenship for a number of reasons, while the benefits for nations offering CBI schemes can be considerable.”

A shared vision

Increased cooperation and partnership between jurisdictions which offer CBI has been a notable industry development in recent years. The CBI Index labels these a “priority,” which have “proven fruitful, bringing positive outcomes for both applicants and the countries themselves.” Cyprus serves as a key example. In May this year, the country took measures to strengthen its cooperation with the European Union (EU), barring applicants who have been rejected for citizenship in any other EU member state and requiring applicants to present valid Schengen Visas.

Both the Caribbean and Malta held conferences where increased teamwork was a major topic of discussion. Common regulations and harmonised communication with intergovernmental players, for example, were brought to the table at the Caribbean Investment Summit 2019. At Malta’s second Citizenship by Investment Due Diligence Conference, industry-wide standards were promoted.

Whilst currently the special report recounts that collaboration is most present among “nations whose neighbours have also adopted citizenship by investment,” as the industry continues to grow and new players strive to enter the market, “collaboration will likely have a bigger role to play across all continents.”

The best programmes

Overall, it was the combination of “extensive due diligence with efficiency, speed, affordability, and reliability” that brought Dominica to the top spot, states the Index.

“St Kitts and Nevis also maintained its upward trajectory regarding visa-free and visa-on-arrival offerings and continued to demonstrate its commitment to enhanced due diligence,” scoring particularly well under ‘Citizenship Timeline’ due to its unique Accelerated Application Process (AAP). Grenada too benefitted “from its improved citizenship timeline, after the significant slowdown in 2018.”

“St Lucia surpassed Antigua and Barbuda for the first time,” with experts citing freedom of movement, speed, and due diligence as vital factors.

Increased security

This year the greater engagement and corresponding scrutiny from the global community brought attention to the due diligence measures adopted by CBI nations. Kieron Sharp, CEO of FACT Due Diligence, contributed to the Index by outlining the central steps in the due diligence process, as well as explaining why robust procedures are so important.

“Thorough due diligence is the cornerstone of the […] industry. Countries that offer [CBI] have a fundamental interest in ensuring that only quality applicants are accepted, not least because of the reputational and security threat that an unvetted applicant could pose.”

St Kitts and Nevis, the first jurisdiction to launch a CBI programme in 1984, established due diligence as part of its programme upon introduction, and has provided a model for others, such as Dominica, Grenada, and Malta, to emulate in later years.

Indeed, according to Sharp, “the Caribbean countries operate far-reaching, strict, and rigorous due diligence programmes – for which they have since become internationally recognised.”

Further on in the report, industry stakeholders comment that programmes must continue to adapt security measures in line with industry changes. For example, this year saw a greater of number of countries adopt measures to exclude applications from jurisdictions which could not be adequately vetted and posed a risk to national security. Some, such as St Kitts and Nevis, pioneered such measures many years ago; new joiners for 2018/19 include St Lucia.

Bulgaria, however, eliminated its list of restricted nationalities, while Austria, Jordan, and Turkey remained without the additional security procedure.

Other developments saw St Kitts and Nevis announce new legislation demanding applicants provide biometrics and Bulgaria request police records from “an applicant’s country of origin and of permanent residence.”

Seven pillars

Research analyst and consultant James McKay is the brains behind the CBI Index. With over a decade’s experience in the formation and execution of complex data-driven projects, McKay provided the necessary data analysis and research for the 2019 edition of the Index.

Assessing programmes against specific pillars allows for readers to see where particular programmes excel. European countries shine in two of the seven: freedom of movement and standard of living.

Citizens of Austria and Malta can access the most countries without first applying for a visa, (over 180), whilst Bulgaria and Cyprus both offer over 170. Under standard of living, Austria outperformed its peers, yet it is in Grenada that persons receive the greatest number of years of education – 16.9. Malta was also unique in its joining Dominica, Grenada, and St Kitts and Nevis in first place for due diligence.

The rest of the pillars are dominated by the Caribbean programmes, although with individual differences. Dominica and St Lucia are the most affordable, asking for US$100,000 for a single applicant.

Antigua and Barbuda asks that applicants complete five days’ residency in the country across five years. Presenting the most demanding residency requirement in the Caribbean, Antigua and Barbuda pales in comparison compared to Malta, where applicants must reside for 12 months prior to receiving citizenship.