The future of CBI

With its widespread lockdowns and travel bans, 2020 has ushered in unprecedented economic downturns and uncertainty. Yet, towards the end of Q1, the immigrant investor industry had already  produced record applications — and record yields. This has resulted in many countries hastening their adoption of citizenship by investment (CBI). 

Egypt has been toying with the idea of CBI since 2018. In September 2018, its parliament passed a law granting citizenship after a five-year period of continued residence to foreign nationals who deposit E£7m (US$438,000) in one of the country’s state-owned banks. Before this, Egyptian law only allowed for citizenship after 10 years of legal residence. 

In December 2019, Egypt moved closer to the launch of a bona fide CBI programme when its government approved a draft decision establishing conditions for the grant of citizenship to foreign nationals in exchange for investments or donations. The government reportedly outlined four specific routes to citizenship: the acquisition of state-owned property, the acquisition of a stake in an investment project, the making of a direct deposit with the Central Bank of Egypt to be returned after five years, or the making of a non-refundable contribution. 

In 2018, Mauritius also looked set to instate a CBI programme. In his 2018/19 budget address, prime  minister Pravind Jugnauth of Mauritius proposed a scheme that would allow foreign nationals to obtain citizenship in exchange for a non-refundable contribution of US$1m to the Mauritius Sovereign Fund. 

Elsewhere, in east Africa, noise was made in November 2019 about the possibility of a Kenyan programme with a minimum investment threshold of approximately US$200,000. 

For years, Vanuatu has reaped the benefits of being the sole provider of CBI in Oceania, attracting a number of nationals from nearby countries, as well as China and south-east Asia. However, this may soon change. In March, the government of the Solomon Islands confirmed plans to establish its own CBI programme, with parliament expected to scrutinise provisions by the end of the month. In parallel, government advisory groups have been involved to provide guidance on adherence to industry best practices. 

Other Pacific island nations that have often been slated as potential CBI providers include Micronesia, Palau, and Tuvalu.  

Following plummeting tourism numbers as a result of Covid-19, the Maldives proposed in May 2020 that it should introduce CBI. No official plans to implement a formal programme have been revealed, although there is speculation that any such programme would be linked to the country’s famous luxury resorts. 

Launched in 2018, Moldova’s short-lived CBI programme came under immediate fire for its lack of transparency and inadequate due diligence. In June 2019, newly-elected members of parliament voted to abrogate the programme in its first reading, but were stalled by contractual obligations with the programme’s concessionaire. In July 2019, after the successful completion of only two applications, the Moldovan parliament placed a moratorium on further applications, which was extended twice until 1 September 2020. However, after the European Union made the second tranche of its €100m (US$116m) macro-financial assistance payment conditional on, among other terms, Moldova repealing CBI provisions, its parliament repealed the programme in its second reading, in June 2020, with an overwhelming majority of votes. The repeal takes effect upon expiry of the moratorium on 1 September 2020. 

Elsewhere in Europe, at the tail end of 2019, Albania’s prime minister recognised what he called “the enormous potential” of economic citizenship, strongly indicating that a CBI programme may be on the horizon for his country.