Until recently, the term Economic Citizenship could mean several things including measuring a person’s standing as a citizen by their economic worth, or living like Jason Bourne and changing citizenships like socks. However since the advent of the new millennium, Economic Citizenship has been synonymous with the practice of gaining a second citizenship and passport for economic reasons.
What Is Economic Citizenship?
The term “Economic Citizenship” was first used in the early 20th century. For a long time it seemed an almost meaningless phrase that sounded deeper and more thought out than it actually was. Early stabs at its meaning included
“The right or ability to participate fully in a country’s economic life.”
“The role in which one’s economic standing can influence his or her rights as a citizen.”
“The unequal representation of different socioeconomic classes within a country.”
Oh dear, they all sound like lines from a long lost and thoroughly depressing George Orwell novel.
The term “Economic Citizen” began to be used in the mid-1980s, when St. Kitts and Nevis was targeting the first customers for their revolutionary and game-changing Citizenship by Investment (CBI) program they had launched in 1984. As the St. Kitts sales person would say, if you were an economic citizen, you were a person more than happy to take on a second citizenship for economic benefit.
Initially a few dozen, then hundreds and finally as the years rolled on thousands of wealthy bankers, entrepreneurs, business people, world leaders and generals all decided that they wanted to be economic citizens and flocked to the Caribbean in search of second citizenship and offshore banking paradise.
Today’s super-slick CBI programs owe it all to a handful of Caribbean politicians who needed to come up with an idea of how to make money after the British had granted them independence in 1983. When people get desperate, they get very creative!
The Birth Of CBI
Whoever actually came up with the idea and name citizenship by investment was a genius. At that time there was no suggestion of any real estate in return for an investment. The money the investor paid was a charitable donation to the pension fund for retired sugarcane workers. Sugarcane was at that time the island’s no.1 source on income.
But what was in it for the Economic Citizen? Mainly, offshore banking. Back then, it helped the individual with major money issues – as in where could they stash it before the tax man took it – if they could become citizens of a Caribbean country. In the mid-1980s there were only a handful of Caribbean banks, but more and more islands began to follow suite. Today St. Kitts and Nevis have 18 banks, while Panama have 78, and the Cayman islands have 158 banks.
When we look back at the first St. Kitts & Nevis CBI program they released in the 1980s, it clearly was years ahead of its time. But the idea of selling citizenship could easily be manipulated to seem wrong, almost criminal, or so the US would like you to believe.
The Second Coming Of CBI
The St. Kitts CBI program did good business for a few years despite huge pressure from the US and other Caribbean countries to shut it down. There was nothing wrong with the product, it was the market that was limited. After the initial glut of businessmen from the US had received their St. Kitts citizenships, potential customers became more dubious of characters. After a couple of Russian gangsters slipped through the vetting process only to be arrested in the US carrying St. Kitts and Nevis passports, the islands had no choice but to reign in their program.
However, just as St. Kitts and Nevis were there at the very start of the economic citizenship story, they were also crucial to Chapter Two, when the world finally caught up with the idea of CBI.
New Generation Of Entrepreneurs
In 2004 St. Kitts and Nevis was bankrupt, its capital city was in ruins, its people destitute. A Swiss banker who was aware of their backstory and believed in the concept of citizenship by investment and economic citizenship encouraged them to try again. Through skilful marketing, the banker began to get St. Kitts wealthy clients from the Middle East, Asia, Africa, Eastern Europe and Latin America. This was a new breed of young, ambitious entrepreneurs who were only too keen to gain citizenship to a Caribbean nation, and a passport that was far more powerful than the one in their pocket.
Initially, the fact that St. Kitts citizenship gave them access to the best banks on the planet was not the selling point, it was ownership of a passport with visa-free access to 150 countries – almost 100 more than their previous passport – that really got them excited. Plus the nice seafront apartment they’d purchased as their “financial investment” was the ideal holiday home.
This time around, St. Kitts and Nevis got everything exactly right. So much so that the island is now massively in the black with numerous revenue streams including tourism and banking, but it was citizenship by investment that got the islands back on their feet.
Economic Citizenship In 2020
The one huge difference between 1984 and 2004 was the demography of the business people seeking economic citizenship. Whereas in 1984 they were almost exclusively American, middle aged and white, today they hail from all corners of the globe, can be in their 20s or 70s, are black, brown, yellow and white, all with one thing in common, the knowledge that obtaining second citizenship is a very big deal in business.
The EU Market Explodes
In the 1980s, 1990s and 2000s, the economic citizenship market was dominated by those Caribbean islands such as Grenada, Dominica, Saint Lucia, Antigua and Barbuda, and leading the way, the reborn program of St. Kitts and Nevis.
However around a decade ago, the demand for EU citizenship and incredibly powerful passports became such that countries within the European Union began taking the plunge. Officially, Austria, Cyprus and Malta all put together programs that were priced in the millions. Unofficially, other EU countries were prepared to grant their citizenship and passport to the right candidate for significantly less.
The Next-Gen Of Geniuses
Where once there was a misconception that citizenship by investment would spread organized crime and terrorism, the reality is without the chance of second citizenship and a passport granting them freedom of movement, some of the brightest entrepreneurial minds of this new century might be lost to us.
Just imagine if the next Steve Jobs is sitting in an office in Iran, with a head full of ideas that will change everything, but he’s scared that once he shares them, he will be declared a heretic and never be seen again. Wouldn’t you grant this guy economic citizenship?
Citizenship By Investment Programs
|Austria Citizenship Program||€250,000|
|Belgium Citizenship Program||€200,000|
|Bulgaria Citizenship Program||€65,000|
|Croatia Citizenship Program||€175,000|
|Czech Republic Citizenship Program||€200,000|
|France Citizenship Program||€200,000|
|Hungary Citizenship Program||€200,000|
|Italy Citizenship Program||€190,000|
|Mexico Citizenship Program||€120,000|
|Holland Citizenship Program||€175,000|
|Poland Citizenship Program||€175,000|
|Slovakia Citizenship Program||€52,000|
|Slovenia Citizenship Program||€50,000|
|Spain Citizenship Program||€200,000|
|Turkey Citizenship Program||€75,000|