Global Residence and Citizenship Handbook. Christian H. Kälin

the children born in the country to become citizens at birth.

      If you know where you were born you can find out relatively easily whether you may have the right to another passport – or, in case of the US, whether you may actually be a US citizen (and possibly never filed tax returns and therefore need to consult urgently with a US tax lawyer).

      You can plan your children’s citizenship portfolio to a certain extent. If your children are born in a country that grants them citizenship either right away, or will make the acquisition easier later on, the right steps need to be taken prior to their birth.³⁵ Some countries faced significant birth tourism³⁶ and adjusted their laws to make it more difficult to just fly in and give birth. Countries which did not adjust their laws, like the US and some Caribbean nations, are trying to be restrictive in granting visas to pregnant women.

      Ancestry

      Many people may not be aware that they are entitled to an alternative citizenship by virtue of their ancestry. The principle that citizenship is passed on by descent is called ius sanguinis (law of the blood). Americans (and Argentineans, Australians, Canadians etc.) in most cases have traceable ancestry in Europe. If the ancestry is not too far back, it may be possible for them to re-acquire the citizenship of their ancestors. For example, many US citizens are entitled to Irish, Polish or Italian citizenship due to the mass immigration from these countries to the US in the early twentieth century. An Irish-born grandparent, or also a grandparent from Poland or Lithuania, may be the basis for a successful claim to Irish, Polish or Lithuanian citizenship and – as a result – to an EU passport. In Croatia, having proof of Croatian ancestry, no matter how far removed, is sufficient justification to reclaim citizenship.

      Even though many countries have tightened their nationality laws, it is constructive to investigate the option, especially if one of your closer ancestors was born in another country. Dual or multiple citizenships offer numerous benefits beyond the possibility of taking up residence in the country of citizenship (and in case of citizenship of an EU country, to have the right of establishment throughout the EU).

      Naturalization

      For a person who cannot rely on the ancestral option there are residence and immigration options available to skilled people, investors and wealthy individuals in numerous countries:³⁷ Australia, the Bahamas, Canada, Hong Kong, Monaco, Singapore, Switzerland, and the UK are just a few examples of countries which offer residence to wealthy individuals and investors.

      This book deals with the most attractive countries where residence permits are available to investors and wealthy individuals. Thus, the emphasis is not just on general quality of life, business and employment opportunities (in which case, for example, Australia or New Zealand would be among the immigration countries of choice), but specifically on factors concerning wealthy individuals, such as personal tax, privacy and personal security. The countries have also been selected with a view of citizenship planning and the possibility of acquiring an attractive alternative citizenship with relative ease. All these countries are welcoming foreign persons who are willing to invest.

      Citizenship-by-Investment

      There are currently only seven countries which offer citizenship programs that provide a direct route to citizenship based on investment and which have passed Henley & Partners’ country due diligence.³⁸ These are Antigua and Barbuda, Austria, Cyprus, Dominica, Grenada, Malta and St. Kitts and Nevis. Of these, Antigua and Barbuda enacted the relevant legislation in early 2013 and is now operating a program that is very similar to that of St. Kitts and Nevis. More recently, Malta has introduced a state-of-the-art program, which is the only such program that has the approval of the EU Commission. It held a public tender process for a public services concession to establish a citizenship-by-investment program, which is called the Malta International Investor Program. It is the most attractive citizenship-by-investment program in the world today, featuring the highest standards of due diligence, an efficient application process, and a reasonable contribution requirement. Cyprus has an opaque, and unclear, as well as very expensive, program that is still evolving; while Dominica, having a long-standing but poorly regulated program, and Grenada, which also recently enacted legislation to reestablish its badly run program that had closed in 2001, both have a bad reputation and are therefore of limited interest. Thus, Malta, St. Kitts and Nevis and Antigua and Barbuda are the three most relevant citizenship-by-investment options today. Citizenship-by-investment offers the opportunity to legally acquire a new citizenship quickly and easily, without any disruptions to one’s life.³⁹

      Apart from these seven countries, there are several others which have similar provisions in their laws to allow the granting of citizenship to substantial investors.⁴⁰ However, there is no established and clear practice in these countries; or the structures and processes involved are not transparent; or the conditions not clear and the decisions mostly arbitrary.⁴¹ Also, in many countries there are suspicions that an element of corruption may be involved in the citizenship acquisitions. Therefore, if the intention is to acquire citizenship based on investment extreme care has to be exercised. In fact, in most cases it is not advisable unless a real, substantial investment is contemplated in the particular target country.

      Some countries also have provisions to grant non-citizens passports⁴² or honorary citizenships⁴³ which are legal but largely useless as no full citizenship status is acquired and thus the documents are often not recognized by other countries. Furthermore, as no citizen status is acquired, there is no protection and the documents can be revoked at any time just like residence permits, therefore not giving the kind of security that is desirable when acquiring an alternative citizenship.

      Caveat emptor

      With regard to the acquisition of alternative citizenship, it is important to always obtain proper advice from reputable legal advisors, and to check the citizenship laws and procedures of the relevant country. This is particularly important if citizenship is sought on the basis of an investment or other direct contribution to a country. Unfortunately there are many illegal activities and it is safe to assume that many offers are fraudulent. What makes matters worse is that sometimes even seemingly reputable professionals have been found to be involved in what turned out to be fraudulent offers. For example, between November 2010 and May 2011 a Canadian immigration lawyer and a private client lawyer based in Switzerland simultaneously offered citizenship in Iceland for a US$400,000 investment in some private equity fund. Iceland’s citizenship law requires the passing of a parliamentary bill in order to grant citizenship to a foreigner outside the normal naturalization procedures. A simple check of the Citizenship Act would have revealed this, yet the “marketing” activities of these lawyers made it necessary for the Icelandic Government to publish an unequivocal statement. The government statement underlined that Iceland has never had in the past and has no intention to establish any kind of citizenship-by-investment program.⁴⁴

      Bulgaria has an Investor Immigration Program that leads to permanent resident status if certain investments are made and conditions are met, which later on can lead to citizenship. However, Bulgaria does not have a citizenship-by-investment program as such (although provisions in its law would allow it, and are sometimes used to give citizenship to business people under unclear circumstances). Despite this, some agents mislead interested investors to make them believe that Bulgaria does in fact offer a formal citizenship-by-investment program.

      Likewise, there are many companies now which provide services under legal programs (like St. Kitts and Nevis) but where either the company or persons involved have a questionable reputation or are linked to government officials, or real estate developments are being promoted which do not pass closer scrutiny.

2.4 Criteria to consider when acquiring citizenship

      The most important criterion when acquiring alternative citizenship is that the acquisition is in accordance with the constitution and laws of the country, i.e. that it is legal. This seemingly obvious premise needs to be pointed out specifically in this context.

      Citizenship documents and passports obtained by illegal means such as bribery are sadly not uncommon. In many countries it is possible to make (illegal) direct payments to corrupt government officials in return for passports and