Whether as a way to diversify investments or for political reasons, more people than ever are applying for second passports. According to recent figures, there has been a 45% spike in the number of second passport applications in the last year, predominantly in European and Caribbean nations. But although it is partly high-net-worth-individuals (HNWIs) who are responsible for these figures—the Guardian notes that prices range from $100,000 to $2.5 million—the real beneficiaries of citizenship by investment (CBI) are the countries themselves.
After all, as CS Global Partners note, applying for a second citizenship involves a substantial financial contribution to that territory’s “society, the economy, and other state interests”. These countries often use the money they receive via CBI programs to encourage tourists to visit, often through construction and redevelopment of hotels, which in turn creates new employment opportunities and generates renewed demand for further investment.
These are most often in sectors such as leisure, entertainment, and food and drink, but there are other areas where individuals with a second passport can provide economic benefits to nations who run CBI schemes.
Investments in the real estate sector
Much like how they can provide money and employment opportunities to the hotel and hospitality sector, CBI programs also often obligate applicants to invest in real estate in exchange for a second citizenship. Indeed, some CBI schemes allow applicants to invest in real estate in the country, which can provide a wealth of opportunities for interested parties.
Setting up a business in a country which runs a CBI program can help boost economic growth there, getting a nation in on the ground floor of startups and emerging sectors alike. This will then not only increase job prospects for its citizens but increase the country’s reputation abroad as a trailblazing hub for SMEs.
The best citizenship by investment programs
- Kitts & Nevis
One of the most well-regarded CBI programs currently operating, the two-island nation of St. Kitts & Nevis, is putting the money of those with second passports to very good use. According to BDaily, the tourism sector contributed to 26.8% of the country’s 2017 GDP, and much of this would have been made impossible without CBI, which has helped improve investments into infrastructure, including a new Ritz Carlton hotel.
The CBI program of Dominica is one of the most financially viable available, costing only $100,000, Dominica’s CBI program is consequently one of the most popular available. It was also ranked the best in the world by the Financial Times’ PWM report – CBI Index. The program also provides visa-free access to over 130 countries, including Hong Kong and the entire European Union.
St. Lucia has a world-class tourist industry and a thriving entrepreneurial scene, with government-funded incentives to bring local and international SMEs to the country. Many of the companies involved with these programs are already prospering outside of their home country, and many of these success stories would have been impossible without the financial contributions provided by the CBI program.