The popular saying “the world is a global village” has never been more true than now. More and more people are looking for access to the rest of the world. Away from their limitations and present environments.
Up steps the citizenship by investment (CBI) program. Allowing high net worth individuals (HNWI) a chance to a second passport and break limitations, enjoy tax advantages, and expand their businesses.
Due to the complexity of the programs, potential applicants usually enlist the help of residency attorneys to advise them on successfully utilizing the program.
Legal practitioners need to navigate a myriad of issues to help their clients achieve their goal of acquiring a second passport. Some of these include doing due diligence, staying updated with policy changes, and general international law.
The aim of this piece is to provide actionable best practices for legal practitioners advising on citizenship by investment programs. So that you can help your clients achieve their goals — a second passport.
Understanding The Citizenship by Investment Landscape
Before the rise of CBI programs around the world, citizenships were limited to a few options, like birth and naturalization.
However, countries quickly realized the opportunity available — offer citizenship to HNWI and boost your economy through their investments.
Some of these programs require the applicant to donate to an investment fund, invest in a government-approved enterprise like real estate and business, or start a private enterprise. With the general aim being to improve the economy.
More than 20 countries currently offer some form of citizenship by investment with the US’s EB-5 visa program, Antique and Berbuda, and St Kitts and Nevis citizenship programs among the most popular.
All these programs vary in terms of requirements, timeline, pathway to citizenship, and eligibility, which is why attorneys must understand the best practices and know how best to advise their clients.
Best Practices For Legal Practitioners
You’ve been hired to help your client decide on the best CBI program to invest in or to navigate the whole process. You can only help if you understand the landscape and what is obtainable. Thankfully, we’ve compiled the best practices for you as a legal professional.
Master the Regulatory Structure
Countries set laws that are peculiar to their needs and status, and this translates to citizenship by investment programs, too. As a legal practitioner, you must understand the laws governing these programs and how they differ in countries.
The CBI program in America is considerably different from those offered by the Caribbean countries. All these are what you should know to be able to help your client.
Eligibility differs in these locations with some outrightly banning citizens from certain countries, while others have more relaxed restrictions. You also want to know the investment threshold for these countries. Some go as low as $105,000 while others can get to $1.5 million and beyond.
Compliance is vital to avoid problems like a loss of investment, denial of citizenship, and even arrest.
Conduct Thorough Client Assessment
The Citizenship by Investment (CBI) departments in these countries will conduct a thorough assessment of your client. It is better you conduct that assessment before they do. Run a comprehensive check to determine if your client is eligible for the program.
Discussing with your client will help you understand their financial capacity, their goals, and the possible timelines. Do they want a strong second passport for their travels, do they prefer a strong economy to do business in, or maybe a country with an excellent standard of living?
Knowing all this will help you better advise them on the best program to choose.
Understand the Role of Technology in CBI
As a legal professional, it might sound absurd focusing on technology but not when it involves the CBI program. Countries have embraced technology in their process and so should you, if you truly want to help your clients.
Some countries have already begun to use emerging technologies, like the blockchain, to enhance the transparency of their process and improve security.
Countries like El Salvador even accept payments in cryptocurrency, showing you how fast regions are utilizing these new enhancements to improve their CBI processes.
There is also the rise in digital passports. Lawyers must understand the risks involved in using these technologies and how to protect their clients from breaches.
Effectively Navigate Investment Options
To guide your clients, you must know the different investment options available in the regions. Some of the most popular ones include donations, government bonds, and direct investment, whether in real estate or business.
Understanding the options, their viability, and risks will help. Donation is the easiest but means parting away with a huge amount of money. Investments, on the other hand, can bring a profit but typically require huge capital.
You need to be able to navigate these different options and with the knowledge of your client’s financial capacity and goals, you can guide them to the best choice.
If you want to know the best investment option for your client, you can do so by contacting the citizenship consultants at Global Residence Index.
Mitigate Risks
As a legal practitioner, one of your core functions is advising your clients to help them mitigate the risk of their investments and uphold ethical standards.
Make thorough research on investment options and help your client avoid investing in fraudulent schemes. Make sure each investment is complying with the regulations and use only verified developers for real estate.
You also should be able to help your client understand the tax implications, avoid cutting corners and using loopholes in the program that may put them in a bad light and affect their application.
Streamline the Application Process
It is your duty as a legal advisor for Citizenship by Investment (CBI) applicants to understand the application process and be able to streamline it. Know all the documents required for the process and help your client get them.
There will be documents for background checks and investment agreements. Helping your client also involves managing timelines and helping them understand the process time at each stage.
Stay Updated on Policy and Geopolitical Changes
Geopolitical changes often affect CBI policies, so you should always stay updated. It is not enough to know when these changes happen, you should be able to anticipate some of them. Especially those caused by geopolitical changes.
Helping your client involves monitoring changes in program requirements. Changes in global relations can easily affect some CBI programs as restrictions are being put and lifted.
Understand the Impact of COVID-19
COVID-19 saw a rise in the number of CBI applications as more people seek better environments and more freedom. There are many more changes that have happened since the pandemic including online interviews, and no need to visit the passport-issuing country, among others.
Some programs have made provisions for remote submissions and taking of legal oaths to streamline the process.
It is your duty to understand how COVID-19 has affected the CBI industry and what it means for your client.
Common Questions Lawyers Face About CBI
As a legal practitioner advising on CBI matters, you’ll be faced with a lot of questions, but some will tend to appear more than others. Here are some common questions you should expect from clients and their concise answers:
Which is the fastest CBI program?
Vanuatu is the fastest CBI program, as you can obtain your citizenship in only two months. St Kitts and Nevis’ Accelerated Application Process (AAP) also completes the program in 2 months.
What happens if the client’s background check raises red flags?
The application is typically denied or delayed. Where delayed, the client is asked to provide additional documents to clarify the discrepancies.
Which CBI program is the least expensive?
Dominica’s donation option is the least expensive among all the CBI programs at $100,000. With their real estate option requiring a minimum investment of $200,000.
Final Thoughts
As a legal advisor for clients seeking citizenship by investments, success means helping your clients get that second passport with minimal hitches. Before you can achieve this, you must understand the program and how each country varies.
Some of the best practices a legal professional must know about the CBI program is the regulator structure, policy changes, the effect of technology, and mitigating risks for your clients.
Your clients trust you to give them the best advice. You need to get all the necessary information to truly help them avoid legal pitfalls when seeking a second passport.