A second passport, to an island paradise, does sound pretty sweet
We tend to think of “industries” as steel, information delivery, and stuff like financials. What I had not realized is that citizenship itself, in particular, the acquisition of an additional passport, has become a real commodity and the basis of a $2 billion industry of its own.
And yet, when I was in the Caribbean recently, reporters kept asking about my opinion regarding the Citizenship by Investment Program. It has emerged as the top export of the gorgeous St. Kitts and Nevis islands.
Before attending this event, I didn’t really have an opinion. Now I do. I absolutely love it. The market for second passports is one of the bright lights of freedom in the world today. It is legal. It is acceptable. And it is being used ever more. Rightly so.
In a world of prison states and restricted mobility, a world in which nearly every human being is forced to beg and depend on the discretion of bureaucrats in order to exercise the basic human right to be mobile, the market for citizenship provides at least one safe haven against economic calamity, tyranny, and war. It’s available only to the very rich today. It should be available to everyone.
“A lot has changed since 1984 when our Citizenship by Investment Programme (CIP) began as an ambitious start-up venture,” St. Kitts Prime Minister Timothy Harris said at the Caribbean Investment Summit where I just spoke. He noted that there this is now a growing market in this product and industry.
“As to be expected, competition has surged along with interest in Citizenship by Investment Programmes — so much so that, within the past several years, Antigua and Barbuda (2013), Grenada (2013; re-launched in 2016) and St. Lucia (2015) entered the CIP market, and Dominica reshaped its CIP in 2014 after having launched it two decades earlier in 1993. Cyprus (2011; restructured in 2013) and Malta (2014) also introduced their own CIPs several years ago. As I speak, other countries are considering getting into the lucrative CIP market,” Prime Minister Harris said.
I’m guessing that most readers when hearing about this are triggered to think of nefarious plots. Money laundering. Tax evasion. Protection programs. Secret plots. Actually, this is all nonsense. It’s true that these places typically have no capital gains or income taxes (nor did anywhere have these before the 20th century). But both St. Kitts and Nevis have been removed from the grey list of list of tax havens by the EU.
The basis of the 2nd passport industry, especially the Citizenship by Investment Program, really comes down to the desire on the part of people to purchase an option to be left alone. It’s really not any more complicated than that.
We think of the passport as normal because no one alive recalls a time when they didn’t exist. Actually, the passport as a norm is a modern invention of World War I as a means of controlling people and their movements and binding people in a forced relationship to the state. They were unknown by most of the world – and would never have been tolerated – just one generation earlier. Such travel documents signifying the permission granted by the king had previously been associated with despots and caliphates.
The emergence of a universal passport was part of a complete suite of policies that emerged in those years, the purpose of which was to build a state-managed world. They fit alongside compulsory schooling, central banking, labor regulations, and income taxes as evidence that the noose was being tightened around the civilian population. The military model of wartime became the new normal for everyone.
Move Only with Permission
In recent years, the ability to travel and exit has become ever more difficult. The US is introducing exit scans when leaving the country, a program that is ready to go in every respect and is only missing universal application due to a shortage of machines and human resources. Getting a visa to visit the US or any foreign country is a more iffy proposition now than ever before. The US can deny any American travel rights for any reason.
It’s not at all surprising that with the highly politicized environment of the US, with ever more controls, more people are looking for new ways to live a peaceful life. It only takes one visit to a paradise like St. Kitts to get the mind turning toward dreams of a new start, a life of peace and quiet. I completely get it. I was only in St. Kitts for three days and now I understand completely.
What does it take to do gain a second passport to a place like this? A few years ago, the price was $200,000 plus all the fees associated with due diligence that is necessary to establish that you are not running from the law. Now the price is lower. You can buy in with a contribution of $150,000 or purchase a stake in real estate worth $200,000, in addition to other fees. There are people and companies all over the island who are ready to walk you through the process. Here is a brochure. And, no, you don’t have actually to live on the island to enjoy citizenship.
Does this mean giving up US citizenship? You certainly don’t have to. There are upsides and downsides to becoming an expatriate. The dream of not having to pay taxes sounds great, but there are large fees, huge compliance issues, and outright taxes associated with giving up US citizenship. Then you might have a problem getting a visa to get back in, even to visit extended family. Some 4,000-plus people do it in any case, partially because holding US citizenship is now a liability for many kinds of business relationships abroad. Many banks around the world shut the door on anyone with US citizenship.
But you don’t have to be motivated by the ambition of renouncing your forced attachment to a particular nation. The Citizenship by Investment industry is booming because it serves as a hedge against unknowns in a world of state control, and provides a possible guarantee of safety, security, and a peaceful life. There is nothing particularly radical or strange about that. The only tragedy is that the privilege of enjoying that peace of mind is today available only to the well-to-do.