Citizenship by Investment (CBI) programs allow individuals to legally obtain citizenship and a golden passport by investing in the economy of the host country. The golden passport gives immediate citizenship and a passport in the host country. It also allows the holders to travel to several other countries without requiring a visa. The citizenship is permanent and offers full citizenship rights such as voting rights. These programs are a means to attract foreign direct investment and provide economic opportunities. These programs typically require high investments thus are mostly marketed to high net worth individuals.
Investors can invest in real estate, bonds, non-refundable national development funds, corporate equity, bank deposits and non-refundable donations. Individuals investing in real estate and government bonds through CBI are however required to hold the property and bonds for some years before sale. The period depends on the host country. The government bonds are often interest free or low yields with the return for investors being citizenship and its associated benefits.
To obtain CBI one is required to submit required documents and due diligent checks are conducted and then the last step is obtaining approval from the government. The individual is expected to meet the investment requirements. CBI programs offer global mobility through the golden passport. Many CBI countries offer tax advantages such as no or low personal income tax and exemption from capital, wealth and inheritance taxes in some countries. The dual citizenship offers a plan B safeguarding the investor against political instability and economic constraints in the investor’s home country. Or countries with developed infrastructure, they provide the investors with better healthcare and education. CBI allows investors to diversify their portfolios globally.
CBI is mainly offered by European and Caribbean countries. Some of the countries that offer CBI are St. Kitts and Nevis, Dominica, Turkey, Greece, Italy, Cambodia and Austria. Most countries that offer CBI are small, offshore and low income. Many Caribbean countries use CBI to cushion themselves from debt and promote revenue for the country. For instance, CBI revenue contributed 37.0% to Dominica’s Gross Domestic Product (GDP) for the financial year ended June 2023. For the host country, CBI is a job creating avenue. It also provides low cost borrowing to minimize financial burden on the country. The downside of CBI programs is that it provides an avenue for terrorists and other criminals to avoid extradition, taxation and allows them to launder illicit funds. These programs also enable corruption in both the government and client levels.
While Kenya does not offer CBI programs there is a residency by investment through Class G Visa. This visa is issued to foreign investors who wish to invest in business or other income generating activities in Kenya. It does not involve direct employment with a Kenyan company. The permit is valid for one or two years and is renewable. Residency by Investment offers close to similar benefits while avoiding the risks involved in CBI. Class G visa has led to increased Foreign Direct Investment in Kenya.
