Since the 2000s, very rich people have had the privilege of buying residency or citizenship in an increasing number of nations. That ‘get out’ pass may be expiring—as many governments shut down their golden visa/passport programs. It’s especially bad news for the Indian elite who have been leaving the country in hordes.
Researched by: Nirmal Bhansali
What’s a golden visa again? Is this what Akki had?
Dear old Akshay Kumar had a golden passport (which he has since given up due to relentless Twitter heckling). He essentially bought Canadian citizenship by making a required amount of investment. That’s different from a golden visa—which typically buys you at least the right to live or work in a country—and is a pathway to becoming a permanent resident. There are more than 80 countries that offer such visas and passports.
How they work: You have to make a required amount of investment. The kind varies from one country to another. For example: To get temporary residency in the US, you have to make a minimum investment of $800,000 in a new company that creates at least 10 full-time jobs. After two years, you can apply for permanent residency.
In Spain, you could get residency with a lower minimum of approximately $527,000 in real estate—but not any more (more on that later). Caribbean countries are even more generous. They offer golden passports in exchange for real estate investment—and at a much cheaper price. In Saint Lucia, passports sell for $100,000—but other nations such as Dominica, Grenada, St. Kitts etc recently hiked their asking price to $200,000.
Why they do it: Selling immigration is lucrative. The EU countries have earned over €21.4 billion by doling out passports and visas to 130,000 people. They are golden for both parties involved:
For the countries selling citizenship and residence, these schemes can make a big difference to their GDP. For Greece and Portugal, for example, they bring in the equivalent of 10 to 15% of foreign direct investment (FDI). For Cyprus, the programme has accounted for nearly 5% of GDP in recent years.
Or take Spain which has issued almost 5,000 golden visas between 2013 and 2022,, Just the Russians invested more than €3.4 billion.
Meet the buyers: The top buyers come from China—followed by the Middle East and then Russia. The most favoured destination is the US. In 2022, the wait time for Chinese applicants in the US was 15 years.
The Indian exodus: Indians constitute nearly 10% of the global pool of applicants for golden visas and passports. Since the end of the pandemic, the number of Indians rushing for the doors has spiked. In 2022, over 225,000 Indians gave up their citizenship—the highest ever since 2011. Many of them are high net worth individuals—with personal wealth over $1 million. FYI: There were only 347,000 such Indians in 2021.
And why do people buy them—to escape abroad?
Escape, yes, but also mobility, flexibility and opportunity.
Mobility: It’s all about passport privilege. If you have an Indian passport, you can travel visa-free to only 62 countries. Land a Malta citizenship, all of the EU is your playground. This passport is especially golden for that reason:
Within the countries willing to offer dual citizenship by investment, just a handful dominate the market, often the programs that would grant freer movement around Europe. Malta [is]... one of the most expensive, requiring investments, charitable donations, and property purchases totaling well over 1 million euros… “The gold standard is to try to have unfettered access to the EU and Schengen countries,” says Michael Kosnitzky, a family office attorney
That it also buys you visa-free travel to 190 countries is a bonus.
Another bonus: Give up your Indian citizenship and you can have passports galore. Unlike India, these countries allow dual, even triple passports. That’s also why high net worth Americans obtain second, even third citizenships:
To the wealthy, that unfettered access is well worth the money. They don’t have to plan their escapes; golden passports allow them to jet around the world at the drop of a hat, and to be treated as citizens, not just visitors.
Former Google CEO Eric Schmidt became a Cypriot citizen so he could travel to the European Union amid Covid lockdowns.
PS: This is also why Indians heart the Malta, Greek and Portuguese programs—which are among the top five preferred residencies. The others are the U.S. EB-5 visa and the Australian Global Talent Independent Visa.
Opportunity: Golden visas and passports give you greater financial flexibility and opportunities. Indian businessmen will often take one to get access to a market. For example, a Dominica or Grenada passport will give you visa-free access to China. Swiss and Portuguese passports are good for any business in the EU or Middle East—and a Canadian residency opens the door to the US. According to one corporate lawyer in Mumbai:
[H]olding a golden passport enables the diversification of business pursuits and an extended reach. It permits investments, ownership, or operation of businesses in different nations, reducing risks tied to reliance on a single economy.
The hottest golden visa among Indians these days is the UAE 10-year residency—which offers tax breaks and an opportunity to protect your wealth from the depreciating rupee.
And, of course, escape: ‘Golden’ emigration is favoured by money laundering oligarchs, fleeing mobsters and terrorism financiers. Most infamously, an Al Jazeera investigation helped shut down Cyprus’ golden residency program. It looked at 2,500 people from 70 countries who paid to become Cypriot citizens for the low, low price of $2.5 million. At least 60 were fleeing criminal charges that included money laundering, extortion, embezzlement and more.
There’s also good old Mehul Choksi—who secured citizenship in Antigua even before the CBI began its investigation into his massive bank fraud. Of course, Antigua doesn’t have an extradition treaty with India.
And that’s why they’re shutting down golden visas?
Yes, but there are a number of other reasons—some more valid than others.
Criminal magnet: This is why the European Commission in 2022 called on EU governments to stop selling citizenship to investors. And the EU and US leaned on Caribbean countries to tighten their golden passport laws. Experts in global financial crimes say:
By design, the schemes were made to attract the wrong people. They are made to attract easy money and the wrong people. If you were a legitimate investor you would be willing to have a long term horizon, to spend a bit more time and do more strategic investment to get your residence or your passport. So why do you need a passport?
This is why the Cyprus program is history—and Malta is the only remaining EU country that offers golden passports.
A question of affordability: The Spanish government shut down its program saying the golden residencies—which required buying real estate—was making housing unaffordable for citizens. This is more of a lame excuse:
The program has been connected to only a small fraction of houses purchased in Spain and experts do not expect the move to significantly impact the housing market… “It’s a red herring. It’s not actually going to change housing prices very much,” said [researcher] Max Holleran... He called the change a “political maneuver with a smidgen of xenophobia.”
FYI: A housing crisis was also cited by Portugal and Ireland for nixing their golden visas.
All about national security: The return of the Cold War (or a cool-ish war) has also dampened enthusiasm for Russian and Chinese investment. The European Commission worried these programs would allow Russian or Belarusian nationals—who are subject to sanctions or support the war in Ukraine—“privileged access to the EU.” Australia cited corruption as the reason to shut its program—but it isn’t a coincidence that most applicants were Chinese citizens:
Australia’s recently-axed 888 visa scheme specifically targeted wealthy Chinese nationals (888 nomenclature is important in Chinese numerology) with 85% of successful applications (around 20,000 individuals) from Australia’s favourite “frenemy”.
A North-South divide: For poorer countries, these immigration programs are a financial lifeline. Take the example of the Pacific island nation Vanuatu:
Revenue generated from Vanuatu’s CBI scheme is significant. In 2020, despite Vanuatu’s simultaneous crises (of Cyclone Harold, a volcanic eruption, and Covid-19), the scheme provided 35% of total government revenue and contributed to a budget surplus. In 2022 the Vanuatu government reported that the CBI program contributed up to 50% of government revenue.
Yet the same Western countries that eagerly wooed Chinese and Russians are now condemning Vanuatu as “the most concerning route for potentially hostile state spies and criminals.” The UK has cancelled its visa waiver for Vanuatu citizens—and the EU has threatened to do the same.
The bottomline: Borders across the world are slowly closing. It may not be quite as easy to buy citizenship in the years to come.
Reading list
This 2023 Vox piece offers the best overview of golden passports. The Economist and Washington Post sum up the growing resistance toward them in Europe—while Bloomberg News looks at changes in the Caribbean. London School of Economics has some good data points. The Hindu is best on demand among Indians. BBC News is best on the corruption angle.
