Insights
When thinking about citizenship by investment, one of your concerns might be about how the money you invest into a country is spent. It’s obviously preferable that your money goes toward the betterment of your new country, and so many CBI applicants try to ensure that they’re applying to a country that makes good use of those funds.
The good news is that CBI programmes are, by and large, hugely beneficial for the majority of countries that offer them. During the course of this article we plan to quantify what, exactly, those benefits are; we’ll also take a brief look at the history of CBI programmes, and look at how governments use the funds that CBI programmes bring into their countries.
It was the Americas’ smallest sovereign state – St. Kitts & Nevis – that started the world’s inaugural CBI programme in 1984. Their requirements were simple: that investors be of “good character”, were not a threat to the country, and that they made a “substantial investment in the state”.
Two more Caribbean nations followed Saint Kitts & Nevis’ suit – Dominica opened their CBI programme in 1990, and Grenada did likewise in 1994.
Recent years have seen a few strides forward on the CBI front; Saint Lucia and Antigua & Barbuda have joined their fellow Caribbean island nations in offering CBI programmes, and Türkiye has thrown its hat into the ring with a very intriguing Europe-adjacent location. Even within the EU, where CBI programmes are rare, Malta has begun offering a programme that, while not quite citizenship by investment (as there is a residency requirement), is about as close as it gets in the EU.
CBI programmes offer significant benefits to the countries that offer them, let’s take a look at the main areas where the investments from CBI programs contribute to the host countries economy.
One of the main incentives for offering CBI programmes is that it offers a unique chance for economic development through citizenship by investment. This is particularly true in Caribbean island nations, whose options for generating revenue tend to be rather limited in comparison with larger countries that are rich in natural resources.
In fact, in Saint Kitts & Nevis, CBI revenue accounted for a cumulative 65% of GDP during the period of 2017-2021. This is, needless to say, a staggering amount of revenue generated for the island country, and the fact that Saint Kitts & Nevis has a CBI programme was a massive contributing factor to their ability to weather the storm that was the Covid-19 pandemic. It’s also the reason that Saint Kitts & Nevis was, as of 2021, the country with the highest GDP per capita in the Eastern Caribbean Currency Union.
It’s no exaggeration, then, to state that CBI programmes can almost singlehandedly keep a country afloat, even in an area that’s negatively impacted by natural disasters (as many Caribbean countries, and even Türkiye, sometimes are).
For many CBI applicants, ensuring that their application fees are being used to directly benefit the citizens of their new country will be a priority. Fortunately, CBI dividend programmes ensure that this is the case.
In Saint Kitts & Nevis, for instance, citizens have twice benefited from CBI proceeds. The $23 million fund set up for the first one, paid in Christmas 2022, was divided into two sub-funds – one for ‘pensionable’ persons who had made 500 or more social security contributions, and one for those who had made 499 or fewer contributions. The former groups received EC $500 (USD $185), while the latter group received EC $250 (USD $92).
The Kittitian government promised further CBI dividend pay-outs.They delivered the second payment in June 2023, with the potential of further payments down the line.
Some CBI applicants don’t go the route of paying a one-off fee to their adopted homeland, but rather invest directly in that country. This might take the form of real-estate investment, or it might even involve setting up a new business – which, of course, creates jobs and generates revenue within the country.
When it comes to the latter option, few places offer as attractive an option as Türkiye, which requires applicants to create jobs for at least 50 people (as confirmed by the Ministry of Labour and Social Security).
It goes without saying that the creation of that number of jobs is fantastic for the local economy, and represents foreign capital being injected directly into the economy. Moreover, that money is going directly into the hands of the employees of the new business, rather than passing through a government ministry or some other third party.
Business investments aside, CBI funds are often put directly into infrastructure projects – meaning more hospitals, schools, roads and utilities for local residents.
Most CBI programmes are closely controlled or monitored by the governments of those countries. If investing into real estate, for example, it’s quite often necessary to choose from a selection of government-approved projects, which ensures that the funds invested are going to the kind of projects the government has deemed important.
This means that the funds are spent in a way that benefits the people of those nations, rather than simply passing from the hands of one wealthy businessperson to another. It means that those aforementioned schools and hospitals will get built sooner rather than later, if the government has identified a need for them. And it means that you can rest assured that your money is being spent appropriately.
A niche benefit of CBI programmes that isn’t examined enough is the fact that it helps to create a more socially diverse society for the countries that offer them. For instance, many of the Caribbean islands tend to be quite culturally monolithic, and the considerable amount of tourists that such islands receive does nothing to alleviate this, as many tourists simply stay in their hotel-resorts and interact with the locals little, if at all.
With citizenship by investment, however, investors are not simply dropping in for two weeks. They’re becoming actual citizens, with all that implies. They will often own homes in their new country of residence, and thus will become part of the local communities.
This will, inevitably, provoke an exchange of ideas and cultural mores. And in an increasingly globalized and multicultural world, that can only be a good thing.
Though it’s quite common to focus on the positive aspects of CBI programmes to the applicant, it’s important to bear in mind that impact investment is beneficial to both parties – and that locals stand to benefit a lot from investment, too.
Indeed, we need only look at the example of Saint Kitts and Nevis, which – though the smallest sovereign nation in all of the Americas, with little in the way of arable land or extractable natural resources – has acted as a pioneer in the CBI industry and demonstrated just how much countries that embrace such programmes can transform themselves in a beneficial way.
And though Saint Kitts & Nevis may have been the leader, many other countries have seen the benefits of offering CBI programmes, and have begun to reap the benefits thereof. With fellow Caribbean islands getting in on the action, as well as Malta and Türkiye, it seems clear that more and more nations are waking up to the idea of economic investment through citizenship by investment.
Though it’s quite common to focus on the positive aspects of CBI programmes to the applicant, it’s important to bear in mind that impact investment is beneficial to both parties – and that locals stand to benefit a lot from investment, too.
Indeed, we need only look at the example of Saint Kitts and Nevis, which – though the smallest sovereign nation in all of the Americas, with little in the way of arable land or extractable natural resources – has acted as a pioneer in the CBI industry and demonstrated just how much countries that embrace such programmes can transform themselves in a beneficial way.
And though Saint Kitts & Nevis may have been the leader, many other countries have seen the benefits of offering CBI programmes, and have begun to reap the benefits thereof. With fellow Caribbean islands getting in on the action, as well as Malta and Türkiye, it seems clear that more and more nations are waking up to the idea of economic investment through citizenship by investment.
Though it’s quite common to focus on the positive aspects of CBI programmes to the applicant, it’s important to bear in mind that impact investment is beneficial to both parties – and that locals stand to benefit a lot from investment, too.
Indeed, we need only look at the example of Saint Kitts and Nevis, which – though the smallest sovereign nation in all of the Americas, with little in the way of arable land or extractable natural resources – has acted as a pioneer in the CBI industry and demonstrated just how much countries that embrace such programmes can transform themselves in a beneficial way.
And though Saint Kitts & Nevis may have been the leader, many other countries have seen the benefits of offering CBI programmes, and have begun to reap the benefits thereof. With fellow Caribbean islands getting in on the action, as well as Malta and Türkiye, it seems clear that more and more nations are waking up to the idea of economic investment through citizenship by investment.
Get in touch to discuss how we can help you with your citizenship or residency by investment goals. One of our investment migration experts will contact you to discuss your case. With over 16 years of combined experience our team has helped hundreds of families achieve freedom.
