Salvadorian President Nayib Bukele on Sunday said he will send Congress a proposal to grant citizenship to foreigners who invest in the Central American country, another step in the populist leader’s plan to bolster the country’s economy by attracting non-traditional capital.
"I'm sending 52 legal reforms to congress to remove red tape, reduce bureaucracy, create tax incentives, citizenship, in exchange for investments, new securities laws, stability contracts, etc.,"
Bukele said on Twitter.
Since September, El Salvador has attracted increasing international interest when it passed a law that made the cryptocurrency Bitcoin legal tender. Like the new package of El Salvador reforms, that law was first proposed by Bukele.
If the new citizenship legal reform is passed, El Salvador would become one of the few countries to offer a citizenship by investment programme, joining several other small countries, mainly in the Caribbean, according to the world’s leading government advisory and marketing firm CS Global Partners.
CBI Programmes usually require a vetted applicant to make a minimum monetary contribution to a government fund or purchase real estate in the country to obtain citizenship.
Greater crypto freedom with CBI
"An increasing number of crypto investors and tech entrepreneurs have started looking to second citizenship as a means of achieving greater freedom",
says Micha Emmett, the CEO of CS Global Partners. She added that this growing demographic has combined assets like cryptocurrency with additional citizenships to unlock financial autonomy and wealth diversity.
"As crypto gained more traction in the last few years, we've started seeing an increase in interest for second citizenship from the tech community. This demographic, technologically, is already global, so it makes sense that they want their assets to reflect this mindset,"
A second citizenship offers a level of safety and security that investors can rely on during political or economic turmoil. The onset of the COVID-19 pandemic has particularly triggered families to obtain second citizenship to better protect themselves and their financial assets whilst increasing their global mobility.
The dual-island nation of St Kitts and Nevis has been a popular destination amongst the wealthy, mainly because of its CBI Programme. This initiative provides a trusted route to second citizenship once an applicant invests in the nation. Established in 1984, St Kitts and Nevis’ programme is internationally recognised as a ‘Platinum Standard’ brand.
Despite being the smallest sovereign state in the Western Hemisphere, St Kitts and Nevis is one of the most technologically advanced nations in the region regarding its crypto-friendly approach to banking. The islands recently passed a bill simplifying the trade of virtual assets and are also currently running a digital currency pilot programme known as DCash. St Kitts and Nevis also does not impose income, inheritance, or capital gains tax, allowing citizens to breathe a little freer as they focus on the investments that matter to them.
More countries are considering the CBI route
El Salvador is not the only country tossing with the idea of citizenship by investment to boost its economy. Just last month, Pakistan’s Information Minister Fawad Chaudhry said that the Government would offer Pakistani nationality to foreign investors, particularly as a way to recruit heavy investments from the wealthy individuals of neighbouring China and Pakistan.
Jamaica’s Government is also being pushed to consider adopting a citizenship by investment programme with the funds gained through the process used for various development projects.
Julian Dixon, CEO and broker at Jamaica Sotheby’s International Realty, made the call in October 2021. She said funds gained from the project should be used to invest in the country’s infrastructure, real estate, job creation and business development.
"For a number of countries, especially in the Caribbean, there is no denying that CBI programmes offer a much-needed injection of foreign direct investment, often in a way that can make a significant developmental difference. These funds are channelled into reducing international aid and debt, developing the tourism sector, job growth as foreigners often employ locals when expanding offices or constructing properties, and sustainability initiatives,"
CS Global Partner’s Emmett commented.
Dixon particularly pointed out that St Kitts and Nevis, which pioneered the citizenship by investment programme close to four decades ago and has invested upwards of US$300 million from the programme in modernising its infrastructure. She said Jamaica could do the same.
A trusted product
St Kitts and Nevis offers a trusted product that has been acclaimed globally by independent studies like the annual CBI Index published by the Financial Times’ PWM magazine. With an influx of citizenship programmes on the market, St Kitts and Nevis continues to be a powerhouse within the industry with one of the longest-standing programmes in operation.
Those who become citizens gain a wealth of benefits, including increased global mobility to financial centres in Asia, Europe and Africa, alternative business prospects, and the ability to pass citizenship down, thus establishing a future legacy for one’s family. Additionally, St Kitts and Nevis does not impose any personal income, gift or inheritance tax and has a currency pegged to the US dollar, making it a financially lucrative destination for savvy investors.
The country’s CBI Unit, which processes all economic citizenship applications, usually issues approvals or denials within a period of three months. There are no interviews, language, education, or business requirements.
Travel to the island is not obligatory, and no minimum residence stays apply either before or after Citizenship is obtained. Due diligence procedures remain among the industry’s most robust, and the nation is strengthening them by focusing on enhancing fingerprinting and biometrics.
For those looking to hedge against future risks, combining the dual-island nation’s crypto-friendly policies and second citizenship provides investors with the ultimate insurance policy during times of unpredictability. St Kitts and Nevis remains the best destination for securing your future with a thriving financial services sector and a growing crypto hub.