CS Global Partners’ Beatrice Gatti, tackles the concept of citizenship and how it has evolved, thanks to the introduction of citizenship by investment. She also discusses the importance that CBI programmes play in times of global crisis.
Aisha Mohamed: Can you explain what exactly Citizenship by Investment is?
Beatrice Gatti: Citizenship by investment is a legal process whereby a foreign investor is given the opportunity to become a citizen of a country in return for a significant investment in that country. It comes in various shapes and forms, although the most common one is either by a contribution to a government fund or via the purchase of real estate. This is the format we see most commonly in the Caribbean, for example, in St Kitts and Nevis and Dominica.
AM: How did the idea of Citizenship by Investment come about?
BG: Citizenship by investment started more than 30 years ago on an island nation in the Caribbean called the Federation of St Kitts and Nevis. The Federation of St Kitts and Nevis passed its Citizenship Act in 1984 and was followed shortly in 1983 by Dominica, which also passed legislation enabling citizenship by investment. Citizenship by investment didn’t become so important until around 2005, particularly in the aftermath of the closure of [St Kitts and Nevis’] sugar industry. After that, and in particular, after the economic crisis of 2008, many more countries started to adopt citizenship by investment to attract foreign direct investment. We see, for example, Antigua and Barbuda and Grenada launching their programmes in 2013. Malta did the same in 2014. St Lucia in 2016. More recently, Vanuatu launched its programme in 2017.
AM: In an interview, the head of CIU in St Kitts and Nevis, Les Khan, said that “It is now considered that a second citizenship is an insurance policy. It is something that people have recognized they need.” Why is having a second citizenship seen as a Plan B for so many people?
BG: Some see citizenship by investment as an insurance against the risk associated with their citizenship of origin, and these risks will vary from person to person, and they can include things like social turmoil and political instability in a country origin or lack of certain freedoms. There’s also economic uncertainty. So if you have an unstable currency or see that your country is not growing as quickly as you would like it to grow.
And of course, there’s lack of legal clarity. So when you don’t have an effective legal system, or it’s incredibly slow, you don’t really know what you can and can’t do and how to develop now. There are other reasons why people choose citizenship. One of the key ones we see is a good quality of life. This includes better healthcare and stronger education systems. There’s also the option to access new lucrative markets, and of course investment opportunities, and last but not least, flexibility and mobility. This is important to travel, whether it’s for leisure, to do business, or to visit your child who perhaps is studying abroad.
AM: We are going through very uncertain times during this pandemic where borders have tightened, and mobility has become restricted. Research shows that demand for Citizenship By Investment is going up around the world. In what countries is the demand highest? Why?
BG: I should first address your premise. One thing to note in this pandemic is that although many countries have closed their borders to foreigners, most have not closed borders to citizens and permanent residents, meaning that even in these extraordinary times, second citizenship is an important asset.
Next, to address your question on demand for citizenship by investment, I would say it’s still unclear how the COVID-19 crisis will affect demand for citizenship investment in the short and long term, but what is sure is that this is a growing industry. A few weeks ago, we heard that the Solomon Islands was considering launching its own Citizenship By Investment programme. As I said at the beginning of this episode, there has been an increasing interest in citizenship by investment on the part of governments. For example, at CS Global Partners. We see demand across many regions as some may be more obvious such as China, the Middle East, but there are some more surprising ones such as the United States.
This interview has been edited and condensed for length and clarity.