The Global Citizen by Investment
About the authors: Rose Davis, Drew Hasson, and Anna Manafova are ’19 Master’s in International Policy graduates from Stanford University. Together as a research team they attended the Henley and Partners’ 12th Global Residence and Citizenship Conference in Dubai.
Did you ever dream of becoming a Global Citizen? Of having two, or even five, different passports that would allow you to allocate your wealth cleverly, find countries with the best tax treatment, acquire the strongest passport for visa-free travel, and give your kids the opportunity to study in the best universities of the world? Whether this idea is compelling to you or not, you better start thinking about global citizenship, or more precisely, of citizenship and residency-by-investment programs (CRBI). This phenomenon is growing rapidly and as all nascent industries, needs the attention of international policymakers to ensure it functions appropriately to benefit their countries and citizens.
Attracting the attention of policymakers and providing an overview of CRBI was our goal as we started to explore and research the industry. With this goal in mind and the support of generous FSI funding, in November 2018, we traveled to Dubai to attend a leading industry conference — Henley and Partners’ 12th Global Residence and Citizenship Conference. The full spectrum of industry stakeholders participated in the Conference –governments who presented their CRBI programs, service providers who help the wealthy individuals acquire citizenship and residency rights, lawyers, due diligence experts, property developers, and more. We had a chance to discuss the CRBI programs with all of them, ultimately making over 60 new contacts, conducting five extended interviews and attending dozens of info-sessions.
So, what are the major takeaways so far? First, according to various industry and media reports, the investment migration industry had grown to between USD 3–25 billion annually by 2018. Though it is not clear what this figure takes into account, its scale indicates the growing significance of the industry at global proportions. Second, the number of CRBI programs is growing and is expected to continue to grow. At the Conference in Dubai, two countries launched new programs — Montenegro and Moldova — and representatives of several other countries attended the Conference to assess their chances and strategies to start programs of their own. Third, there is a lack of consistent information about how the industry does business, who uses its services, and for what ultimate purposes, and this has made it a target of transparency campaigners, multilateral organizations, and even some governments. In 2018, the pace of criticism increased, with the new reports published by Transparency International, Global Witness, and the OECD.
Thus, one of the most significant issues so far is that opinions about the CRBI programs are polarized. CRBI programs have existed for more than 30 years, and are growing in popularity both among the potential investors and the prospective host countries. At the same time, it is necessary to shine light into troubling cases of international money laundering and sanctions violations exposed within existing programs. We hope that our research will be a neutral voice to fill the gap between the disparate data points provided by CRBI supporters and detractors.
As international policy students, our role is to explore the CRBI programs from a public interest perspective, to assess the risks in programs and provide policy solutions to address those risks. The industry is taking shape, growing, and transforming, and some industry leaders in Dubai were taking note of criticisms and working towards standardizing best practices. When will be a better time to make sure these programs serve the public interest, if not today?
