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The 4 Citizenship by Investment Programs We Never Talk About (And Why We Don't) · IMI Podcasts

• 0:00
  SPEAKER_00: This episode first appeared as an article titled The Four Citizenship by Investment Programs We Never Talk About and Why We Don't, and authored by Christian Henrik Nesheim on IMIDaily.com.
• 0:12
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• 0:28
  SPEAKER_00: By IMI's definition of citizenship by investment program, structured policies that offer citizenship directly in exchange for standardized and uniform investments or donations of explicitly prescribed sums, the world has 16 CIPs.
• 0:45
  SPEAKER_00: Most clients have heard of about eight or nine, but even most investment migration professionals would be hard-pressed to name more than a dozen, namely the CIPs of the Caribbean 5 and possibly El Salvador's new program, Turkey, Vanuatu, Malta, Jordan, Cambodia, and Egypt.
• 1:07
  SPEAKER_00: But the world has another four CIPs, to which the market practically never devotes any attention, for good reasons, as we shall see.
• 1:16
  SPEAKER_00: Today, we'll provide a cursory overview of each of these four obscure CIPs while aiming to answer the following questions.
• 1:24
  SPEAKER_00: What are the program's requirements?
• 1:27
  SPEAKER_00: Why is there no demand for the program?
• 1:29
  SPEAKER_00: Which improvements could make the program attractive?
• 1:32
  SPEAKER_00: Number one, Bangladesh.
• 1:34
  SPEAKER_00: According to a report on Bangladeshi citizenship from the Robert Schumann Center for Advanced Studies at the European University Institute, the laws governing citizenship in Bangladesh are both superfluous and contradictory.
• 1:48
  SPEAKER_00: This is also the case for the investment-based citizenship category.
• 1:52
  SPEAKER_00: What are the requirements?
• 1:54
  SPEAKER_00: Bangladeshi nationality law does not specify detailed requirements for the country's CIP.
• 2:01
  SPEAKER_00: Instead, they are subject to rules defined in the government's industrial investment policy.
• 2:07
  SPEAKER_00: The precise investment amounts required to qualify for citizenship are also not clear and vary by source.
• 2:14
  SPEAKER_00: According to the Central Bank of Bangladesh, foreign nationals can qualify for citizenship by investing a minimum of$500,000 or by transferring$1 million to any recognized financial institution.
• 2:30
  SPEAKER_00: The U.S.
• 2:31
  SPEAKER_00: State Department, meanwhile, indicates$1 to$2 million is the requisite amount, and that the sum should be transferred to a bank.
• 2:40
  SPEAKER_00: The European University Institute's report states that any person who invests an amount of$5 million or its equivalent in an industrial or commercial project of Bangladesh or transfers$1 million to any of the recognized financial institutions in Bangladesh may be granted citizenship through naturalization.
• 3:01
  SPEAKER_00: These investments are non-repatriable and hence may not be withdrawn.
• 3:06
  SPEAKER_00: Why is there no demand for the program?
• 3:09
  SPEAKER_00: One immediately salient shortcoming of the Bangladeshi CIP is the mentioned ambiguity around the size and nature of the prescribed investment.
• 3:19
  SPEAKER_00: Must the investment take the form of a bank deposit or an industrial project, and is the minimum$500,000 or$1 million?
• 3:28
  SPEAKER_00: The answers are not readily attainable, and in any case, the indicated amounts are far higher than what a citizenship of Bangladesh's caliber could reasonably command.
• 3:39
  SPEAKER_00: On most metrics by which CBI countries like to compare themselves, such as visa-free travel, human development, or standard of living, Bangladesh scores dismally.
• 3:49
  SPEAKER_00: The country's passport affords visa-free or visa-on-arrival access to a mere 42 countries, most of them in Africa.
• 3:57
  SPEAKER_00: On Henley and Partners Passport Index, Bangladesh ranks near the bottom, behind Eritrea and Sudan, in a shared 102nd place with North Korea.
• 4:07
  SPEAKER_00: The Bangladeshi travel document is unquestionably one of the world's feeblest.
• 4:12
  SPEAKER_00: Moreover, Bangladesh does not permit dual citizenship except under very limited circumstances, which improvements could make the program attractive.
• 4:20
  SPEAKER_00: Rare is the person for whom Bangladeshi citizenship would represent an upgrade from what they already have.
• 4:27
  SPEAKER_00: Few citizenships are less desirable.
• 4:30
  SPEAKER_00: But even a Bangladeshi citizenship is preferable to no citizenship at all, which means it could conceivably target the world's 15 million stateless individuals.
• 4:41
  SPEAKER_00: Consider that more than a million Rohingya Muslims, most of whom are stateless, fled to precisely Bangladesh from neighboring Myanmar following the genocide in 2017.
• 4:51
  SPEAKER_00: But even in that unenviable market, Bangladesh would not be without competitors since Vanuatu, which has a far superior nationality, is also open to applicants without citizenship.
• 5:04
  SPEAKER_00: To compete, Bangladesh would need to cater not merely to the stateless but to the non-high net worth individual stateless by offering an investment threshold considerably below Vanuatu.
• 5:17
  SPEAKER_00: Unless Bangladesh is prepared to offer citizenship for less than 50,000 US dollars, this program will continue to languish.
• 5:26
  SPEAKER_00: Number two, Pakistan.
• 5:28
  SPEAKER_00: Pakistan is home to the world's cheapest citizenship by investment program, but it's only open to a third of the world's population.
• 5:36
  SPEAKER_00: What are the requirements?
• 5:38
  SPEAKER_00: Compared to its subcontinental neighbor to the east, Pakistan's citizenship by investment terms are relatively clear and straightforward.
• 5:47
  SPEAKER_00: Section 20 of the Pakistani Citizenship Act allows the government to grant immediate citizenship by registration to Commonwealth citizens, of which there are some$2.7 billion at terms it can set at its discretion.
• 6:02
  SPEAKER_00: At present, those terms, as set by the Directorate General of Immigration and Passports, require that applicants deposit the equivalent of 5 million Pakistani rupee, about 18,000 US dollars, in foreign currency with the State Bank of Pakistan.
• 6:20
  SPEAKER_00: Once the deposit is confirmed, the applicant will receive an immigration visa for Pakistan.
• 6:27
  SPEAKER_00: Upon arrival in the country, the applicant will receive his or her newly minted Pakistani passport.
• 6:34
  SPEAKER_00: Why is there no demand for the program?
• 6:37
  SPEAKER_00: The chief reason Pakistan's citizenship by investment program garners little interest is the low quality of its citizenship.
• 6:45
  SPEAKER_00: With visa-free or visa-on-arrival access to only 34 countries, Pakistan's passport is even weaker than that of Bangladesh.
• 6:53
  SPEAKER_00: In fact, only three countries have a lower mobility score than Pakistan.
• 6:58
  SPEAKER_00: Which improvements could make the program attractive?
• 7:01
  SPEAKER_00: In a word, marketing.
• 7:04
  SPEAKER_00: While an impotent travel document, Pakistan's passport, unlike that of Bangladesh, is at least cheap enough to make passport aficionados and hobbyists ask themselves, why not?
• 7:16
  SPEAKER_00: After all, a second citizenship is a second citizenship.
• 7:20
  SPEAKER_00: This is precisely what happened when we first began discussing this program on social media, where at least one Canadian expressed an interest in adding it to his passport portfolio.
• 7:31
  SPEAKER_00: At an attainable 18,000 US dollars, a Pakistani passport could become, among a certain set of particularly interested enthusiasts, a curio, an obje d'ar, or a collector's item.
• 7:45
  SPEAKER_00: A well-devised advertisement campaign along those lines could well sow some modest demand for this program.
• 7:52
  SPEAKER_00: Considering how sentimental most people are about their citizenships, however, Pakistani officials would likely find such a campaign to be of poor taste.
• 8:01
  SPEAKER_00: 3.
• 8:02
  SPEAKER_00: Samoa.
• 8:03
  SPEAKER_00: Sporting 133 visa-free destinations, including all Schengen countries, the UK, Canada, and Russia, Samoa's citizenship is of high quality.
• 8:12
  SPEAKER_00: But the relatively high investment threshold and lengthy residency period make its CIP uncompetitive for now.
• 8:18
  SPEAKER_00: What are the requirements?
• 8:20
  SPEAKER_00: Samoa ordinarily offers the possibility to apply for naturalization after five years of residency.
• 8:28
  SPEAKER_00: A special provision in its nationality law, however, reduces this period to three years for individuals who can demonstrate a net worth of 2.5 million tala, about 900,000 US dollars, and make an investment of at least 4 million tala, about 1.45 million US dollars.
• 8:49
  SPEAKER_00: Even after citizenship is granted, the individual must also spend at least 15 days a year in the country, though this provision may not always be enforceable, especially if the applicant has given up his other citizenships.
• 9:02
  SPEAKER_00: Why is there no demand for the program?
• 9:05
  SPEAKER_00: Simply put, the price is too high and the residency period is too long.
• 9:10
  SPEAKER_00: Citizenships of equal or higher quality are available for a smaller investment, and without any residence period elsewhere, notably in the Caribbean and Vanuatu, but even Malta's main is cheaper.
• 9:22
  SPEAKER_00: Which improvements could make the program attractive?
• 9:25
  SPEAKER_00: To make a place for itself in the CBI sector, Samoa would need to concede that the market value of its citizenship is roughly on par with those of the Caribbean, Vanuatu, and perhaps Turkey.
• 9:37
  SPEAKER_00: To compete, it would have to lower its asking price by more or less one order of magnitude and do away with its three-year residence requirement.
• 9:46
  SPEAKER_00: 4.
• 9:46
  SPEAKER_00: Seychelles Like Samoa, the Seychelles offers a citizenship by investment program that fails to take its competitive position into account.
• 9:55
  SPEAKER_00: What are the requirements?
• 9:57
  SPEAKER_00: Under ordinary circumstances, an individual can apply for naturalization in the Seychelles after 15 years of residency.
• 10:06
  SPEAKER_00: Those who invest 1 million US dollars in a Seychellois business, however, see this residency period reduced to 11 years, hardly an upgrade.
• 10:16
  SPEAKER_00: Why is there no demand for the program?
• 10:19
  SPEAKER_00: While the Seychellois passport is the strongest travel document discussed in this article, 156 visa-free destinations, including the Schengen countries, the UK, China, Russia, Turkey, South Korea, and New Zealand, both the extremely long residency period and the unrealistic price point make this program an unattractive proposition to all but those with a particular affinity for the Seychelles, who would have invested there independent of the existence of a program.
• 10:47
  SPEAKER_00: Which improvements could make the program attractive?
• 10:50
  SPEAKER_00: As with Samoa, the Seychelles must take realistic stock of the value of its citizenship and adjust its asking terms accordingly.
• 10:58
  SPEAKER_00: This is a Tier II citizenship priced as though it were on the top shelf.
• 11:03
  SPEAKER_00: A more sober investment requirement would be in the$100,000 to$200,000 range, but even bringing it down to this level would do little to generate demand as long as there's a residency period.
• 11:16
  SPEAKER_00: Honorable mention, Cabo Verde.
• 11:19
  SPEAKER_00: Cabo Verde offers citizenship without a residency period in exchange for a substantial investment.
• 11:26
  SPEAKER_00: Unofficial reports indicate an investment of around$200,000 is considered sufficiently substantial, though there is no formal government policy stating this.
• 11:37
  SPEAKER_00: As such, Cabo Verde's path to citizenship through investment, while viable, is not a CIP in the strict sense.
• 11:45
  SPEAKER_00: Thanks for joining us today on IMI podcasts.
• 11:48
  SPEAKER_00: Subscribe for free to the IMI Daily Newsletter for breaking news and updates from the investment migration industry.
• 11:55
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