The Beginning of Citizenship by Investment Programs (CIP)
Citizenship by Investment Programs (CIP) have been proven in recent decades as a good business. And as an perfect way for states to fill in their earnings, the BBC writes.
Canada and the Caribbean island of Saint Kitts and Nevis started their programs in the 1980s. And the United States and the United Kingdom in the 1990s. Countries like Bulgaria and Ukraine have introduced this citizenship program only a few years ago. But thanks to good policy already gained strong positions.Bulgaria guarantees its European future. As a result, the country has provided economic prosperity and political security. On the other hand, beautiful Bulgarian nature and nice climate are also among the important factors that make it an attractive target for citizenship.
CIP programs allow foreigners to invest in business. As well as buy real estate. Or even donate money directly to the government in return for a visa or passport.
Saint Kitts and Nevis started their initiative in 1984 – one year after declaring their independence from the UK to get more money from entrepreneurs who wanted to take advantage of tropical beaches and low taxes.
At first, the island attracted only a hundred participants. But in 2009, passports on the island allowed visa-free entry into 26 Schengen countries and demand quickly increased.
The industry has achieved tremendous growth in recent years. In 2014, the US for the first time abolished immigrant visas for investors before the end of the fiscal period.
And next year, Bulgarian citizens will also be able to travel without a visa to the US and Canada.
Consulting companies (like VD&A and CSGP)
The role of intermediary between the investors and the state was assigned to consultancy companies such as the English CSGP and VD&A with offices in Sofia, Hong Kong and Dubai. CS Global Partners with headquartered in London, assesses investors in the process of obtaining a passport. The company says the interest in its services has increased fourfold in the past year.
“We see major changes. People from countries who have never been interested in second-level citizenship for investment ask questions online. For example, in March, consultations from Turkey went up by 400%, “says company director Misha Emmet.
Events, such as Britain’s decision to leave the EU and US presidential elections in 2016, have raised interest in the program. “The day the brekzit was announced, our phones did not stop ringing, there was a very obvious panic,” Emmett adds.
By Bulgarian company VD&A confirmed that in recent years has increased interest of Britons to Bulgarian citizenship (and CIP). It is associated with both Brekzit and the desire of many residents of the island to live in the beautiful Balkan country with a softer climate. The presence of world-class sea resorts, but much lower prices and amazing nature are also a big plus. Adding to the comparatively low standard of living, thanks to which the British can live in Bulgaria as kings even with an average British pension, the picture of the strong influx is clear.
Changing CIP Clients
According to the International Monetary Fund (IMF), rich private investors from emerging market economies are stimulating this trend. Data from the controversial US-based visa program EB-5, which allows foreigners to invest in real estate in exchange for an accelerated acquisition of citizenship or a green card, shows that demographics are changing. This is shared by Peter Joseph, General Manager of Invest In USA.
“China is the main source of applications, which make up a total of about 80%. But requests from countries like Vietnam, India and Brazil are also rising, “said Joseph Paul Williams of the La Vida Golden Visas organization, specializing in second-person citizenship and residence in Europe, working with clients from over 50 countries.
After Brekzit’s vote, interest from Britain also increased.
Citizenship – Hot Goods
According to the IMF, the granting of citizenship by investment programs amounts to 14% of St Kitts and Nevis GDP in 2014. And according to other data, the program may have helped for 30% of the government’s revenues in 2015.
But wealthy countries also offer “citizenship for money”. Similar citizenship programs in New Zealand cost 1.5 million NZ-dollars (US $ 1.07 million). This is a popular option among the Silicon Valley’s tech-elite in California. In the UK, the program costs 2 million pounds ($ 2.58 million), and US $ 500,000.
In Bulgaria the cost is EUR 1 million. The duration of the procedure: 18 months. And the advantages are great. Access to high-quality education. Access to the free European market. Visa-free travel to 145 countries in the world. Access to the rapidly developing Bulgarian real estate market and many others. Including citizenship for the spouse, children and parents of the main applicant. And requirements – minimum (here you can read the details of the Bulgarian Citizenship versus Investment program). This also determines the search for a particular program.
EB-5 (CIP in US)
Joseph also says the EB-5 program in the US is the most valuable for the country and is already carrying $ 1 billion for the US economy … quarterly. “We are seeing an exponential growth from the financial crisis in 2008, with growth so far over 1,200%.” The EB-5 program requires investing $ 500,000 in areas that help create jobs.
USA restrict the total number of visas issued each year through the program on 10 000. “Although currently has over 23,000 pending requests from investors,” said Joseph.
According to latest data, 23 countries – from Bulgaria to Singapore – offer some type of residence against an investment or citizenship plan. But other countries’ interest in this option is steadily increasing.
The Key is in Mobility
For $ 10 million in France, foreigners can buy a legal status to live, work, and have financial life in different countries. Perhaps the most important thing is to get access to visa-free travel to countries around the world.“ Some people determine the price according to the number of countries where a person can travel without a visa. First on this pointer (surprisingly) is a Singapore with visa-free travel to 189 countries worldwide. Second is Japan. By providing visa-free travel to the US and Canada next year, the Bulgarian passport will provide citizens with the opportunity to enter the country without a visa in 168 countries.
Andrew Henderson, an American entrepreneur and founder of the consulting firm Nomad Capitalist, has four passports and works for the fifth.
Different citizenships provide him with many entrepreneurial opportunities and fewer taxes.
Industry Can be Considered a Barometer
According to Williams, industry can be considered a barometer for the revival of the world, and many investors with whom it works look at the Citizenship Programs as a security net. “The majority of our clients do not live in the country they invest in. They consider citizenship as an insurance policy, “Williams adds.
CIP programs also cause some controversy. Should citizenship be sold? Opponents say – they should not. Others are concerned about money laundering. Or from criminal activity and avoiding normal immigration systems.
But in a world where borders are closing, the demand for these services will continue to grow, experts say.
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