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Dr. Christian H. Kaelin, TEP, FIMC, is Chairman at Henley & Partners.
A core premise of residence and citizenship programs is to enhance a country’s economy in exchange for domicile or naturalization rights for qualifying individuals. This is a good description of a classic ‘win–win’ formula. However, the benefits of such programs for host nations go far beyond extra funding for the national treasury or increased foreign direct investment. One of the sector’s unique and most positive attributes is its ability to endow nations with a source of considerable sustainable revenue without them having to increase debt and thereby burden future generations. This ability to expand a state’s ‘sovereign equity’ by increasing the number of citizens who actively contribute to its future well-being also has the invaluable capacity to reduce a key aspect of inequality within states, as well as to minimize inequality between them — a phenomenon that is uniquely facilitated by residence and citizenship programs.
Sovereign equity is a means for governments to improve public finances and support economic growth and employment creation without increasing their debt — meaningfully addressing the growing imbalances and inequalities inherent in traditional sovereign debt financing by engaging with the global community of high-net-worth investors.
There are many sovereign states around the world that lack the traditional capacity to raise sufficient revenue and that may even at times be locked out of financing through capital markets or international lenders. Countries can thus find themselves trapped in negative debt: short of discovering natural resources such as hydrocarbons or minerals, their ability to reduce debt, increase revenue, and attract investment is extremely limited.
Debt financing is helpful and often critical in times of crises. But as Dominica showed in the aftermath of hurricanes in 2017 and 2018 that destroyed large parts of the country’s infrastructure and devastated entire villages, citizenship by investment program inflows were a lifeline that enabled the government to rebuild and to support those affected. Post-pandemic, the island nation is showing signs of recovery. In his 2025/2026 budget address, the Hon. Dr. Irving McIntyre, Dominica’s Minister for Finance, Economic Development, Climate Resilience, and Social Security, reported that “CBI continues to be a critical source of financing mainly for capital expenditure”, with the country’s economy estimated to have grown by 3.5% in 2024 and expecting growth of 4.2% in 2025. Minister McIntyre also noted that of the projected recurrent revenue of XCD 1,3152.4 million, XCD 635.0 million is expected to be raised through the program, saying, “We have relied heavily on the CBI over the past 10 years. This has allowed Government to implement a host of developmental and social projects and programmes without increasing taxes”.
Outside a crisis, when countries find themselves lacking fiscal autonomy, they lose the ability to operate as truly sovereign states, forfeiting the gains from their economies to pay off creditors. They are also unable to invest sufficiently in core infrastructure, education, and health services that enhance the lives of their citizens. This can lead to a society’s best and brightest leaving to pursue opportunities elsewhere, depriving their birth countries of their skills, and in turn diminishing the prospects and quality of life of the general population.
Residence and citizenship programs are arguably the most effective means of addressing this dilemma. As a direct injection of liquidity into a country’s economy, they relieve stress on the national treasury without tying the country into debt-based obligations. Moreover, as well as being a source of income, they are a proven driver of foreign direct investment. This twin dynamic is extremely effective in mitigating the problems arising from sovereign debt and limited inbound investment, ultimately providing greater national autonomy and prosperity for all citizens.
Prudently managed residence and citizenship programs that conduct stringent due diligence on applicants and that have transparent structures can drive investment without adding to the burden of sovereign debt. The funding generated in this way can be used either to pay off existing debt or to create societal value through strategically targeted government spending. This provides governments with significantly increased fiscal autonomy, a key factor in the degree to which a country can be sovereign.
Such programs also act as remarkably successful foreign direct investment platforms to attract capital and skills to economies far beyond the specific investment requirements of each program. The numerous material benefits of foreign direct investment are clear, but it is in the beneficial social impact created by this type of investment that real human value is found.
Increased investment fosters valuable employment opportunities for citizens across the board, from architects and construction workers to employees of manufacturing and technology firms, in addition to the tourism sector and other service industries. The result is more business activity and job creation, leading to a more dynamic and positive socio-economic environment overall. The natural consequence of this is the alleviation of pressure on government spending, further increasing fiscal autonomy and ultimately establishing greater prosperity.
In the aftermath of the 2008 financial crisis, Malta’s economy was weak, as were many of the economies in Europe. Yet, just years after the launch of its first citizenship program in 2014, the country had one of the highest growth rates and one of the lowest unemployment levels in the European Union. Before the pandemic, Malta’s economy was the best performing in the European Union by almost any measure. Furthermore, between 2017 and 2019 (before the downturn caused by the pandemic), Malta reported annual budget surpluses for the first time in decades. In its six years of operation, Malta’s Individual Investor Programme attracted more than EUR 1.13 billion in contributions collected by the Community Malta Agency, EUR 320 million in property purchases and rent, EUR 220.9 million in investments in government stocks, and in donations EUR 5.9 million. Such results are virtually impossible to achieve using traditional public finance methods.
In the Caribbean, a similar success story has been unfolding. Since the reform and relaunch of the St. Kitts and Nevis Citizenship by Investment Program in 2007, the subsequent investment boom in the dual-island nation and in several other countries that launched or enhanced programs is remarkable, and unprecedented in the region’s history.
Following independence from Britain, the Federation of St. Kitts and Nevis witnessed a decline in its sugar industry. It became unsustainable to produce sugar on the islands and to compete in world markets, resulting in a significant annual deficit, which threatened to undermine the entire economy. Thanks to its citizenship by investment program, St. Kitts and Nevis was able to restructure its economy away from loss-making sugar production and raise hundreds of millions of dollars in foreign direct investment geared towards providing a sustainable transition and laying the foundations for future growth and development.
Program revenues bolstered St. Kitts and Nevis when the pandemic struck. According to the IMF, “St. Kitts and Nevis entered the Covid-19 pandemic from a position of fiscal strength following nearly a decade of budget surpluses. A significant part of the large CBI revenues were prudently saved, reducing public debt to below the regional debt target of 60 percent of GDP and supporting accumulation of large government deposits.”
During the closing session of Henley & Partners’ 15th Global Citizenship Conference in 2021, the Hon. Mark A.G. Brantley, Premier and Minister of Finance of Nevis said, “If you were to ask what saved St. Kitts and Nevis during the pandemic, I would say citizenship by investment. This experience has demonstrated that citizenship by investment has a place in this world, particularly for small countries like ours, and for countries which do not have access to vast resources.”
The St. Kitts and Nevis Citizenship by Investment Program continues to make a valuable contribution to the economy, with the IMF expecting revenues at 8.1% of GDP in 2024. In his 2025 budget address, the Hon. Terrance M. Drew, Prime Minister and Minister of Finance stated that in 2023 non-tax revenue exceeded the budget by 18.7% “mainly on account of the proceeds of the Citizenship by Investment (CBI) Program”, which he characterized as “a cornerstone of the national economy” that continues “to bring tangible benefits to the people of St. Kitts and Nevis” including “the unprecedented payment of two CBI Dividends”.
In neighboring Antigua and Barbuda, 2025 budget estimates are for collections from the citizenship by investment program, created in 2013, to bring in XCD 120 million or 54% of non-tax revenue, amounting to approximately 8.4% of total revenue. This income was expected to contribute to the dual-island nation generating a welcome surplus in 2025.
In 2021, the Hon. Gaston A. Browne, Antigua and Barbuda’s Prime Minister and Minister for Finance, Corporate Governance, and Public Private Partnerships stated: “The significant damage to our economy by the global effects of Covid-19 underscored the importance and benefits of the citizenship by investment program. As tax revenues fell rapidly and swiftly, it was — and continues to be — that the citizenship by investment program has helped to sustain our economy.” Program inflows are responsible for substantial investments in the construction sector that have helped to create a sustainable tourism and leisure industry, and at a regional summit in 2025, Prime Minister Browne said funds raised through the program had brought the country back from the brink of bankruptcy over the past decade.
In addition, citizenship program inflows have been a major driver in Antigua’s transition to renewable energy. Thousands of solar panels have been successfully installed on government buildings and land, in significant part paid for by the country’s citizenship by investment program. The program was also essential in providing the necessary capital to support efforts to rebuild Barbuda after Hurricane Irma devastated the island in 2017.
On the macro level, before Covid-19 struck, the liquidity injected into the sovereign balance sheet and the long-term income streams created by new businesses and their associated tax revenues had helped the island nation to pay off its entire external debt to the IMF — over XCD 320 million — built up after the economy shrank by one quarter during the 2008 global financial crisis. Following the economic impact of Covid lockdowns, which resulted in overall debt of 94% of GDP in 2020 during the pandemic, authorities were quick to reduce this to a more sustainable 75% in 2023, and even further to an anticipated 62% in 2024.
The Caribbean’s newest program — the St. Lucia Citizenship by Investment Program — was launched in December 2015 and achieved record-breaking total revenue of XCD 240.3 million in the 2023/2024 period, remitting XCD 64.1 million in funding to the National Economic Fund while generating a surplus of XCD 89.9 million, a nearly fourfold increase on the 2022/2023 surplus of XCD 22.8 million.
In his 2024/2025 budget address, the Hon. Phillip J. Pierre, Prime Minister of St. Lucia, explained that the government’s new infrastructure option, introduced in December 2023, which requires developers to raise financing to undertake approved projects in selected areas and recover their expenses through inflows from the citizenship program, means “improvement in the road network, community development projects, and housing can be implemented to improve the lives of our people without increasing the debt burden of the country”.
Another Caribbean nation hosting a citizenship by investment program is Grenada, which relaunched its program in 2014. This has been a notable success: in June 2024, the IMF reported that “Grenada’s economy is experiencing sustained, strong growth supported by buoyant tourism. A surge in citizenship-by-investment (CBI) revenue has resulted in a large budget surplus, an increase in government deposits, and lower public debt.”
Grenada’s economy subsequently faced a significant setback due to the destruction caused by Hurricane Beryl on 1 July 2024, yet economic growth for 2025 was still anticipated to reach 3.9%, buoyed by investment migration program inflows. According to Grenada’s 2025–2027 Medium-Term Fiscal Framework, “The rebranded Investment Migration Agency Grenada (IMA)…recorded a 58.5 percent increase in revenues compared to the same period in 2023…In 2024 IMA Revenues amounted to 88 percent of non-tax revenue, an 11.0 percentage point increase compared to 2023.”
In his keynote speech at Henley & Partners’ 17th Global Citizenship Conference in 2023, the Hon. Dickon Mitchell, Prime Minister of Grenada said, “It is our experience in Grenada that such citizenship programs support economic growth and allow our transformation agenda to be more sustainable than it would have been had we relied solely on the debt-financing market. This provides far greater national autonomy. This new source of income is also a resource that can be used to service debt and lessen dependence on industrialized nations of the Global North, or to multi-lateral finance institutions.”
Montenegro, which launched its citizenship by investment program in 2019, has also experienced an extremely positive impact. According to information published by the Montenegrin Investment Agency, 866 applications had been approved by September 2025, contributing EUR 117.8 million into funds for the development of less developed municipalities and the Innovation Fund of Montenegro, as well as EUR 43.5 million to Montenegro’s budget through program fees. Development projects had seen about EUR 251 million invested, allowing for substantial luxury hotel developments across the country, including by renowned brands such as Intercontinental, Pullman, Radisson, SIRO, and Swissotel.
Montenegro can be satisfied with the success of the program, which has the potential to conclude on a highly successful note with an estimated total contribution of more than EUR 500 million to the Montenegrin economy over the course of its implementation.
The program’s impact on the development of the country is evident in the effect it has had on fostering and advancing innovation, specifically through the Innovation Fund of Montenegro. The Fund has financed 71 projects worth over EUR 3.2 million during 2024 alone and recognizes that the contributions obtained through the program’s implementation are “an important potential source of financing innovations”. During his term as Minister of Economic Development, the President of Montenegro, Jakov Milatović, recognized the important role the program would play in promoting innovation: “The innovation fund will receive a strong injection from the economic citizenship program — which will make Montenegro the regional leader in allocation for innovation! In this way — by developing tourism — we strongly support the development of innovations — as the basis of accelerated economic development!”
In addition to boosting fiscal health and economic growth, the enhanced inflow of investment generated by the citizenship program may enable Montenegro to be more competitive and its economy to be more sustainable, resulting in greater autonomy. This sovereign equity may see Montenegro less dependent on foreign lending and better able to drive national resources to where they are most needed. Ordinary citizens will feel the benefits in economic growth, employment opportunities, better social services, and improved infrastructure and education.
The concept of sovereign equity is both self-evident and revolutionary. It has the potential to fundamentally shift how sovereign states approach sovereign funding, attracting investment from abroad, and public finance. Sovereign equity also addresses persistent global inequality. Foreign direct investment has been shown to be essential for developing, transitional, or recovering economies, but it can also be critical for regional development in large, advanced economies. Sovereign equity, possible through residence and citizenship programs, will support ongoing economic growth and prosperity.
The benefits of sovereign equity enable countries to turn away from debt and dependency and turn towards fiscal autonomy, stability, and independence. For those countries that are able to offer them, residence and citizenship programs are important opportunities for growth and economic development, creating societal value and encouraging productive members of the community to remain and contribute to the host country rather than emigrate.
All of this was true before the pandemic, which fundamentally damaged the global economy and was rapidly followed by Russia’s invasion of Ukraine, the crisis in the Middle East, and, more recently, uncertainty about US trade and foreign policy, which continue to affect global markets. Sovereign equity could be a partial solution to the challenges that government decision-makers will face in the months and years to come.
All sovereign states need capital, ideally from a debt-free source of liquidity. Even with cheap debt, there is insufficient liquidity. The pandemic saw central banks in advanced and emerging market economies taking unprecedented actions to ease financial conditions and support economic recovery, including interest-rate cuts and asset purchases. In late 2021, however, policymakers began tightening policy, with inflation at multi-decade highs in many countries, and pressures broadening beyond food and energy prices. As the global economy showed signs of improvement and inflation fell, monetary policy eased somewhat, but the upturn was fragile and significant downside risks and geopolitical tensions persisted. In 2025, increased trade barriers and policy uncertainty led the OECD to forecast slower growth in both 2025 and 2026 than in 2024, while noting that boosting investment would be “instrumental to revive…economies and improve public finances”. Countries are constantly competing for vital foreign direct investment and talent to diversify their economies, reduce risk, and introduce opportunities to their societies. What sovereign states require is a competitive edge — this is what sovereign equity can provide.
Nation states can use residence and citizenship programs as an innovative financing tool to allocate funds to development projects that benefit their citizens. Investors gain a long-term yield as alternative residence or citizenship is a unique investment that permits them to be as globally diversified as their wealth portfolios.
Furthermore, the liquidity pool will continue to expand. An increasing number of millionaires with global wealth portfolios are finding their mobility restricted by their birth citizenship. This has fueled growing demand for sovereign equity solutions. To meet this demand, more sovereign equity offerings are expected to emerge – some as premium extensions from existing providers, others from nations entering the market to attract capital and talent. Governments may introduce residence or citizenship options to rebalance their socio-economic profiles amid ongoing geopolitical instability, from the wars in Africa, the Middle East, and Ukraine to rising trade uncertainty.
In short, residence and citizenship programs are a long-term positive solution, injecting liquidity into an economy, generating sustainable income streams that can support public financial needs, and attracting much-needed foreign direct investment, creating significant sovereign and societal value.
Henley & Partners assists international clients in obtaining residence and citizenship under the respective programs. Contact us to arrange an initial private consultation.
