Citizenship by investment - a passport for a price

The demand for a 'second passport' has resulted in citizenship being offered for 250k - but what are the advantages?

St.Kitts, also known more formally as Saint Christopher Island within the West Indies has a rather unusual commodity to sell -- citizenship.

For the bargain price of $250,000, an individual is able to buy their way into island citizenship and declare themselves a Kittian. You do not need to ever step foot on the shore of St.Kitts, and the process may only take a few months to complete -- several agencies online that offer to organize this for you stating time frames between 4 and 8 weeks on average.

But why are people enticed to spend this amount on a second passport, and perhaps go even further to renounce their citizenship in their home country?

Established in 1984, the 'Citizenship program of St.Christopher' allows investment in real estate as a means of 'country development'. Applicants must be willing to hand over at least $250,000 dollars to invest in real estate, and each application for citizenship requires a fee of $35,000 -- plus an additional $15,000 for each dependent (for example, a spouse or children).

It can include tax breaks of up to 15 years, the introduction of tax-free goods in to the U.S. market, and over 100 countries can be visited without the need of a visa -- including Europe and Canada. Any income earned outside of the islands of St.Christopher & Nevis is not liable for tax within the island's economic system.

There are a number of reasons why individuals may apply for these second passports. David Lesperance, a Canadian immigration lawyer, has cited increasing taxation, civil lawsuits, and political instability in home countries as some of the popular reasons for applying.

However, St.Kitts is not the only area which has 'cashed in' on this kind of venture. Austria allows foreign nationals to apply if they have contributed "extraordinary service" to the country. This is reported to include investments in the same fashion, although the Austrian embassy disputes the claims.

It may be 'exclusive', or it may simply be a means to control immigration levels -- which result in benefits for a country's economy as part of the process. An island in the English channel, Jersey, is known for its exclusivity and tax breaks, and to gain the means to move to a country such as the U.S. or Australia, many hoops have to be jumped, sometimes resulting in extensive individual investment to attain a stamp of approval.

Not only enticing due to tax breaks or beautiful surroundings, gaining island citizenship and then renouncing your home country can also be pursued for other reasons. In 2011, government records revealed that 1,788 Americans renounced their citizenship -- some in order to escape taxation rates, others due to political or family concerns.

In Dominica, the issue of 'buying' your way into citizenship is a topic under raging debate. Crispin Gregoire, Dominica's former ambassador to the UN says:

"I am not a fan of the economic citizenship program. As it stands, it encourages people with something to hide. I understand that it must be a big source of income for the state, but they're not doing a good job of regulating it."

This raises some interesting questions about what it now actually means to be a country's citizen. Is it now less about what we perceive as part of our individual identities, and more about escaping high taxation rates if you can afford it?

(via Reuters)

Image credit: Karl Baron


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