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What is the Quality of Your Nationality?

Dr. Christian H. Kälin, Group Chairman, Henley & Partners

10 November 2016

Rather than the typical naturalization procedures of lengthy stays of residence, language tests and other requirements, countries increasingly offer foreign individuals the option to become citizens if they make a significant direct investment in the country. A few countries have permitted citizenship-by-investment for many years, including Austria and St. Kitts and Nevis, and in recent years more and more countries have started to introduce such options. This article looks at how such countries are positioned in the Henley & Partners – Kochenov Quality of Nationality Index (QNI).

The QNI ranks countries according to four categories from very high to low based on internal factors (such as the scale of the economy, human development, and peace and stability) and external factors (including visa–free travel and the ability to settle and work abroad without cumbersome formalities). As expected, the European countries – Austria, Cyprus and Malta – come out very high, both in the overall ranking as well as in the very relevant Settlement Freedom ranking. Every year, Austria is ranked as one of the top 10 countries, while Cyprus and Malta are also in the top 10 in the Settlement Freedom ranking. This is no surprise as European Union (EU) citizenship is exceptionally strong: it gives the right of free movement and settlement in one of the world’s wealthiest regions and largest economic areas with over 500 million people. Accordingly, these three countries also require the most substantial investments: in Austria, no specified amount is set by law or regulation, but current practice requires several million Euros in the form of a donation for public purposes or investments that create employment. Malta requires a donation to its National Development and Social Fund of at least EUR 650,000, plus investments in government bonds of EUR 150,000 and real estate of EUR 350,000, or the rental of an equivalent property for at least five years. The most attainable citizenship–by–investment option in Europe is currently Cyprus, which requires a (recoverable) real estate investment of EUR 2.5 million.

There are now five Caribbean countries which run citizenship-by-investment programs: Antigua and Barbuda, Dominica, Grenada, St. Lucia and St. Kitts and Nevis. They are all part of the Caribbean Community (CARICOM), which provides conditional freedom of movement. It is important to note however, that as a CARICOM citizen, you also need a skills certificate together with your passport to avail yourself of the freedom of movement. Nationality alone does not qualify. This is why the individual CARICOM countries relevant here are ranked much lower in the Settlement Freedom category. This at first seems quite odd as countries like Benin (part of ECOWAS) or the former Soviet republics all rank much higher. However, one should note here that the skills certificate required to avail yourself of the free movement within CARICOM is easily obtainable in practice, de facto significantly boosting the quality of nationality of the Caribbean options.

On the QNI General Ranking, the Caribbean countries are well positioned: Antigua and Barbuda ranked high at 58th, just above St. Kitts and Nevis and both well above St. Lucia (86th), Grenada (91st) and Dominica (93rd). Panama, which does not have a citizenship-by-investment program but a residence program that comes with a non-citizens passport, ranks high and comes in just above Antigua and Barbuda in 57th place. A Caribbean passport can be acquired through contributions to national development funds or the treasury (ranging from USD 100,000 to USD 250,000 for a single applicant, more if dependents are included) or through real estate acquisition (starting at USD 300,000) and is thus one of the best options in the world in terms of “value for money”.

Other countries with citizenship–by–investment provisions in their law, such as the Comoros (ranked low at 144th), Montenegro (medium at 65th) and Seychelles (high at 56th), are spread across the QNI. In the Comoros you can acquire economic citizenship (with some limitations to ordinary citizenship) for as little as USD 45,000, making this currently the most affordable nationality in the world that you can officially acquire through investment. Montenegro and Seychelles both have provisions in the law but are very restrictive in their application, although Montenegro has indicated that it wishes to expand its program. As a country on the path to NATO and EU membership, and already quite well positioned in the 2015 QNI, Montenegro has the highest potential for improvement of all the citizenship-by-investment countries: once Montenegro joins the EU, it will catapult its position to the top tier alongside other EU countries.