Citizenship by Investment (CBI) has been gaining ground over the past decade, transforming investment migration (or the residence and citizenship-by-investment industry) into a multibillion-dollar industry today.
Ultra-High-Net-Worth Individuals (UHNWI) and High-Net-Worth Individuals (HNWI) continue to invest in second passports for enhanced family security, better educational opportunities for their children, ease of travel and tax benefits.
In fact, the number of UHNWIs worldwide who have a second passport has increased to 36% in 2019. This year, a new catalyst has emerged that caused more people from around the world to consider obtaining a second passport: COVID-19.
The pandemic has highlighted the advantages of having a second passport, including access to safe and stable countries with quality healthcare and proactive pandemic responses.
However, as the demand for second citizenship increases, so does the number of legal entities wanting to take advantage of this trend. Hence, the Residence and Citizenship by Investment (RCBI) industry has seen an increase in less-than-desirable entities providing inauthentic second citizenship or alternative residency investment offers, putting not just their financial investment at risk but their application and citizenship as well.
How can you avoid falling prey to these illegal schemes?
Essential actions required to validate the legitimacy of your second citizenship application.
1. Check the relevant RCBI government website.
Currently, there are more than 15 countries offering citizenship and residency-by-investment programmes. For each jurisdiction, a specific set of requirements is imposed and a due diligence process is strictly followed. These include investment options, fees and other required documents to qualify for the programme.
This information is readily available on each country’s Residence and Citizenship-By-Investment (RCBI) government website; however, most jurisdictions require applicants to submit their application through verified and government-approved citizenship and residency firms, agents or partners.
It is crucial to keep in mind that the investment options offered to you are static. Any change will be announced and coursed through official government channels and verified partners. Hence, if and when in doubt of any details that you may come across, it is always best to request for an official government notification stating these changes.
A little research can also go a long way. The Investment Immigration Insider created the RCBI Company Directory©, the largest public resource of companies working within the RCBI industry. This platform can be utilised to check if the firm or consultant you are working with is verified or not.
2. Conduct personal due diligence.
An offer that appears to be unbelievably affordable, or does not match what is being officially offered, should be considered as a red flag. As a rule of thumb, any investment that falls below USD 100,000 should be questioned.
The reality is that you may come across websites stating that you can “purchase” a new passport lower than USD 100,000, with the promise of a fast-track access to a European or Caribbean citizenship. Hence, the starting point would be to conduct your personal due diligence, by checking the relevant Residence and Citizenship-By-Investment (RCBI) government websites to ensure the legitimacy of the investment option being offered to you.
3. Choose a trusted, government-approved consultant.
An essential step to take after conducting your personal due diligence is to choose a trusted, government-approved firm. Finding and choosing these trusted and verified firms will help ensure that you receive accurate information about all the different programmes. Furthermore, these professionals will handle and process your legal documentation, estimate the risks, take into consideration the requirements of a particular country and find the suitable citizenship programme that meets your goals for a second citizenship.
4. Check if the consultant is a government-approved facilitator or marketing agent.
Request to see legitimate business documents of the consultancy firm that is applying for your citizenship or alternative residency. Documents can be cross-checked against the concerned government website where the business is registered. Some of the programmes will provide an actual licence to the consultant and/or list the company on the government website (this is common for the Caribbean programmes).
Are the final quotations or offers sent to you via WhatsApp or a personal email address, or presented verbally with no branded documentation? If yes, then this is a red flag, as professional firms will always communicate with their clients through formal channels. All communication, especially ones that concern financial matters (e.g. quotation, invoices), should be coursed only through formal channels, such as the consultant’s work email address.
Ensure that the quotation sent to you contains the company’s letterhead and branding, inclusive of the business’s details, such as office address, website, contact information, etc.
5. Is the investment option that you have been offered listed on the RCBI government website?
As mentioned earlier, if the citizenship investment option offered to you is lower than USD 100,000, then this is a red flag. Hence, it is vital to conduct your personal due diligence by searching for the investment option on the RCBI government website or demand to see an official government memo.
6. Avoid any shortcuts with regards to your application documentation.
For all citizenship and residency programmes, it is imperative to comply with all required documents and processes. This is essential as it provides protection and safety of the programme’s reputation. Hence, if you are being advised that you can skip submitting some documents, then this could indicate that your application is not being managed and processed through the relevant legal channels.
7. Lastly, select a registered, government-approved firm to assess the legitimacy of your application.
An effective and efficient solution would be to visit the relevant RCBI government website, select one of the registered firms or agents and request for a consultation to assess the legitimacy of your second citizenship investment offer or application.
Understanding the risks involved with bogus investments
As with any investment, there may be risks involved. Therefore, it is a good practice to understand the risks before and after applying for any Residence and Citizenship-By-Investment (RCBI) programmes, as this process does not only involve any monetary investment, but also requires time and effort.
Potential Citizenship Getting Revoked
There have been cases where government entities find that the investments made are not legitimate, incomplete or coursed through unauthorised processes. In these cases, it could significantly increase the risk of a second citizenship getting revoked after obtaining it.
Citizenship or Residency Application Rejection
Investing in an illegitimate programme will surely lead to rejection of your second citizenship application, regardless if payments have already been made and refunds will not be given.
Protect your investment and future
With people on the move, globalisation has paved the way for many life decisions. One of which is the option to reside in another country – entrepreneurs looking to further expand their businesses, families who wish to enhance their living conditions, and individuals and families who would like to start a new life and discover opportunities elsewhere.
There is no doubt that there are numerous residency and citizenship-by-investment offers in the market and while the fear of being misled is real, conducting thorough background checks and your own personal research can help you protect yourself and your investment.
It may seem daunting and time-consuming, but in the end, it is your money and time that are secured through this meticulous process.
Having checked and cross-checked all the necessary information, a critical final step would be to choose a verified, government-approved industry expert, who will guide you into making the right investment choices. As a result, this will bring you much closer and faster to obtaining a legal second citizenship.
Next Generation Equity is one of the leading, trusted and government-approved facilitators of second citizenship and residency applications across Europe and the Caribbean. We specialise in delivering proven solutions, sound advice and practical support for clients from around the world, guiding them into investing in the right second citizenship or alternative residency.