Unfortunately, fraudulent schemes are all too common in the investment industry. Those interested in obtaining a second citizenship are often faced with an overwhelming amount of information, trying to decipher what is a legitimate government-run Citizenship by Investment (CBI) programme.
A new program in Guatemala is the latest attempt to confuse and exploit. It offers applicants the promise of a whole new identity. Programmes like this one are designed to target the vulnerable, or worse, criminals trying to avoid persecution in their home nations.
Here are 6 questions you need to ask when identifying a legitimate Citizenship by Investment (CBI) programme:
1. Does the government endorse the programme?
Countries with longstanding, legitimate programmes often have developed official government websites that outline the programme and assist applicants in determining fees and programme requirements. St Kitts and Nevis, for example, has a dedicated programme website, which may be accessed on www.ciu.gov.kn.
2. Does the programme offer a processing timeframe that would be sufficient to perform adequate due diligence on an applicant?
Legitimate programmes will run lengthy background checks on their applicants. Some of the most time-efficient programmes in the world are offered in the Caribbean. Generally, all Caribbean programme applications take approximately 3 months to process. Programmes that promise a return in a handful of days, or weeks, should sound alarm bells.
3. Is the citizenship offer too inexpensive?
Citizenship by investment programmes are win-win solutions for applicants and countries alike, with countries reaping the benefit of investment into their economies. Few countries are likely to offer their citizenship to foreigners if the return on that offer is not substantial – with the size and economic prosperity of a country having an impact on what substantial may mean. Beware, therefore, of schemes that purport to offer Russian citizenship for US$25,000. If the deal sounds too good to be true, it probably is.
4. Does the citizenship programme require applicants to present in-depth data about themselves and the source of their funds?
The more a programme is operated by a responsible, transparent government, the more documentation is likely to be requested. Generally, all Caribbean programmes operate stringent due diligence checks on all its applicants, utilising both in-house monitoring and independent, international due diligence firms to evaluate them. They also collaborate with intergovernmental, regional, and international partners to obtain a full picture of applicants prior to awarding them citizenship. Applicants for citizenship must provide police certificates, birth and marriage certificates, evidence of employment, bank statements, references, and more in advance of receiving their citizenship.
5. Is the programme written in the laws and regulations of a nation?
Citizenship is a matter of high importance, and no citizenship programme can come into existence unless it is first discussed by the local government and transcribed into the country’s legislation. Anyone seeking to apply for citizenship in Dominica, for example, can read the relevant legislation in the Commonwealth of Dominica Citizenship Act, the Commonwealth of Dominica Citizenship by Investment Regulations, 2014, and the Commonwealth of Dominica Citizenship by Investment (Amendment) Regulations, 2016.
6. Is the agent or service provider offering citizenship recognised as an official representative of the government?
To safeguard the application process, the majority of citizenship by investment jurisdictions only accept applications from agents who have been previously vetted, and whose licences can be removed if they fail to present genuine applications. A list of these agents is often made available online. Dominica, for example, regularly updates its list of ‘authorised agents’ and ‘authorised marketing promoters,’.