The 2018 CBI Index – a special report published by the Financial Times’ Professional Wealth Management magazine – have revealed that some countries offering second citizenship programmes are preparing for the cyber age by considering investment via cryptocurrency, and that a majority of these countries are utilising technology to improve their due diligence measures.

Cryptocurrency & CBI

2017 and 2018 saw the rise of cryptocurrency – virtual currencies that enable financial transactions between persons without the need for banks, or other centralised financial intermediaries. Crucially, cryptocurrencies allow secure transactions through advanced cryptography recorded on a blockchain ledger.

As with many new technologies, there has been hesitation in the industry as to whether to allow investment via cryptocurrency.

In October 2017, Vanuatu was widely publicised as the first citizenship by investment nation to accept bitcoin –the world’s most recognised cryptocurrency. Shortly after the media storm however, Vanuatu’s Citizenship Office denied the reports, stating that Vanuatu would only accept payments in US dollars.

However, in July of 2018, Antigua and Barbuda’s Lower House of Parliament passed an amendment to the Antigua and Barbuda Citizenship by Investment Act, enabling receipt of payments via cryptocurrency.

The response from governments with operational citizenship by investment programmes has been varied, but one thing is certain: accepting cryptocurrency payments is conditional upon retaining strong security and vetting procedures.

Increased Due Diligence & Security

As more countries enter the citizenship market, due diligence will be a defining element of differentiation between their programmes.

Within a citizenship by investment jurisdiction, a comprehensive background screening policy, applied both consistently and methodically, filters criminals and other morally questionable actors, as well as individuals who could otherwise become a liability or a financial burden to current citizens. Outside the jurisdiction, it provides certainty to other governments, which can trust economic citizens to have been fully vetted.

Overall, the trend among well-established citizenship by investment nations continues to be one of strengthening due diligence and international collaboration.

For example,

• The 2018 Caribbean Investment Summit, held from 16 to 19 May, was conducted under the theme ‘Unity in the Age of Division: Emerging Trends of CIPs in an Uncertain World,’ and focused intently on the issue of due diligence and partnerships among CBI jurisdictions.
• On 21 May 2018, Cyprus announced it would inaugurate an era of more enhanced due diligence, with application processing expected to last six months.
• On 22 May 2018, Malta held its first Citizenship by Investment Due Diligence Conference.

Further information

The CBI Index measures seven areas, or pillars: Due Diligence, Freedom of Movement, Standard of Living, Minimum Investment Outlay, Ease of Processing, Citizenship Timeline, and Mandatory Travel or Residence.

Independent researcher and architect of the CBI Index, James McKay, considers these the most critical elements of an investor’s decision-making process when choosing a second citizenship. McKay explains the relevance of the study for the investor immigration industry: “The CBI Index is rapidly becoming the leading tool for investors to accurately measure the performance and appeal of global citizenship by investment programmes.”

You can take a look at a visualisation of these seven pillars below.

For a detailed breakdown of the 2018 CBI Index results, please refer to the full report, available for free download at www.cbiindex.com

About the CBI INDEX

The CBI Index is the world’s only comprehensive study into the jurisdictions that offer citizenship by investment. The ranking system is designed to measure the performance and appeal of all active, government legislated, citizenship by investment programmes by using seven key indicators. Its purpose is to provide a rigorous and systematic mechanism for assessing citizenship programmes, and to facilitate the decision-making process for individuals considering them. The CBI Index is an independent special annual report, first published in 2017 by Professional Wealth Management – a publication from the Financial Times.

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