The debate over citizenship by investment programmes
The company Kleindienst Group announced that investors who purchase certain properties in the UAE project “The Heart of Europe” will become eligible for Moldovan citizenship. More specifically, to qualify for the program, an investor needs to purchase a property valued at more than AED 5 million (about EUR 1,2 million). The Moldovan passport which he/she will get in return will allow him/her to travel without a visa in the entire Schengen area and many other countries.
The Heart of Europe is a megaresort situated four kilometres from the Dubai coastline. It is valued at USD 5 billion and comprises six man-made islands styled in a European theme. The Hearth of Europe will be able to accommodate 16,000 tourists. Although the project has not been completed yet, many of the properties located there have already been sold.
Citizenship by investment programmes, such as the programme described above, raise controversies among businesses and politicians. Below, we will examine the arguments in favour and against such programmes.
Arguments in favour
Investors (especially from developing countries) often look for more freedom to travel as well as a safe country where they can relocate for tax purposes or other reasons (e.g., political instability in their home countries). Realizing those needs, many jurisdictions created programmes that allow investors to get passports if they make certain investments in those jurisdictions. In addition to meeting the needs of investors, such programmes benefit the economies of the jurisdictions organizing them. In this regard, Vrinda Grupta, the managing partner of Vazir Group, noted: “The Caribbean countries, especially, have ended up benefitting from these schemes. The economy of St. Kitts, for example, has really benefited because of citizenship-by-ownership and visa-free access.”
Arguments against
Critics of citizenship by investment programmes argue that such programmes (i) may pose a risk to the security of the countries organizing them and (ii) may lead to societal issues.
The security risks posed by citizenship by investment programmes relate to the possibility that criminals (e.g., individuals involved in money laundering) may “purchase” second citizenship in order to protect their assets or avoid justice. In this context, Sven Giegold, a member of the European Parliament, pointed out that “Visas and naturalisation in Europe should depend on integration and residence, not on one’s wallet.”
Pertaining to the societal issues caused by citizenship by investment programmes, many people and political groups in the countries organizing such programmes may find it socially unfair that individuals who have never lived in the countries concerned can become their citizens. This, in turn, may lead to social protests and a raise of right-wing populist parties.
