It’s no secret that governments around the world are hard up for revenue. And to get it, they’ll do just about anything.
One popular option that governments employ is to grab the pension assets of their citizens. That’s what Argentina, Poland, and a number of other countries have done.
Another ploy is to seize their citizens’ assets because they’re supposedly associated with a crime. That’s one of the strategies favored in the good ol’ US.
But occasionally governments actually get it right. And when they do, I’ll be the first to give them credit.
In that category is a recent proposal from the UK's Migration Advisory Committee. It would auction off residence visas, with minimum bids starting at around £2.5 million – about $4 million. Currently, wealthy foreigners who wish to live in the UK can invest £1-10 million to accelerate the process.
Not everyone thinks the proposal is a good idea. One immigration consultant warned that the proposal would create an “eBay culture” for handing out visas. Another said that the proposal “sends the wrong message to the public.”
I beg to disagree.
As I’ve pointed out before, only 100 years ago or so, your great-grandparents could travel almost anywhere without a passport or visa. And they certainly didn't need a passport to leave their own country.
Today, governments are falling all over themselves to erect barriers to both enter – and leave – their respective countries. Without a passport, you can’t travel outside your country at all. Without the proper visa, you may find it impossible to visit, much less live, anywhere else.
In response to these developments, some governments have introduced policies that exchange the right to residence and eventual citizenship and passport in exchange for a sizeable investment or contribution.
Are you really shocked to learn that a market has developed to provide qualified applicants the documents needed to travel more freely? I’m not, and the UK is hardly alone in selling – and possibly auctioning off – the right to residence and/or eventual citizenship.
In just the last year:
- Spain, Ireland, and Portugal started programs in which a €500,000 property investment qualifies an applicant for residence and eventual citizenship.
- Hungary introduced an option to acquire Hungarian residence through a €250,000 loan to the government.
- Cyprus passed a law that offers numerous options for qualified applicants to acquire citizenship and passport. The least expensive option combines a minimum real estate purchase of €500,000, a donation of €500,000, and a (supposedly) refundable deposit of €2 million to the Cyprus government.
- Malta enacted a law giving qualified applicants the right to acquire immediate residence and citizenship within one year. You must make a €650,000 contribution, purchase real estate with a minimum value of €500,000, and invest €150,000 in Maltese government bonds or other approved securities.
- Antigua and Barbuda introduced an economic citizenship program in which you can acquire citizenship and passport in exchange for a minimum contribution of $200,000, or an investment starting at $400,000.
- Grenada started a program that gives qualified applicants citizenship and a passport in exchange for a $500,000 real estate investment. Alternatively, you can make a donation totaling $200,000, although choosing this option means waiting a year or longer before you qualify for citizenship.
- Australia introduced a “significant investor” option under which you make an AUS$5 million investment in exchange for permanent residence.
And let’s not forget the most popular immigration program for high-net-worth investors: the US EB-5 program. If you invest $500,000 in the US or create or preserve at least 10 US jobs and pass a background check, you qualify for a US green card. After five years, you qualify for US citizenship and passport.
So let’s cut the rhetoric about “sending the wrong message” or “creating an eBay culture” by auctioning off residence rights.
Personally, I think the new options for residence and citizenship that have arrived in the last year are far superior from a legal and ethical standpoint than the alternatives of seizing pension assets and confiscating assets without due process. Don’t you?