In April 2018, the Hungarian company Ajax Software LLC presented the world with a new crypto currency – Citizenshipcoin. It is designed specifically for the investment immigration industry (CBI / RBI / EB5 programs) and is the first of its kind in the market. According to the developers, the use of the new digital currency will allow investors to instantly settle for participation in passport programs anywhere in the world.
Migronis‘s partner , Alexander Zakharov, considered various possibilities for obtaining a second citizenship for a crypto currency. Alexander is a leading expert in the field of tax planning, a columnist for Forbes and the author of the books “The European Union’s tax law: current directives of the EU in the field of direct taxation” and “The EU tax law: actual problems of the functioning of a unified system.”
Citizenshipcoin: Does the project have a future?
To date, digital currencies are not used in the field of investment immigration due to anonymity. According to the idea of the authors, it is citizenscoin (CTZ) that can in the long run occupy a free niche. The creators assure that using the new crypto currency will allow to conduct financial transactions without intermediaries in the form of banks.
It is expected that payments will be faster, cheaper and more efficient. Developers predict that in the foreseeable future, consulting companies, citizenship specialists, development and legal companies, as well as authorities of countries that have the opportunity to obtain a passport for investment, may prefer this crypto currency as the main settlement instrument.
However, given the fact that the level of mistrust of digital currencies is growing, and more fake projects are appearing on the network, it is easy to assume that CTZ authors are facing a lot of difficulties in the way of promoting their coins. Those wishing to issue the second citizenship are required to prove the legality of the funds they use for the investment. If we talk about bitcoins, then it’s difficult to do. Moreover, the government is involved in the financial operation, which currently relies only on banks that are guarantors of the legality of the operation.
The introduction of a new instrument for settlements can not yet be interpreted as something revolutionary in the industry. It is important to understand and take into account the specifics of the market. In the Caribbean, the introduction of any innovations drags on for years, Europe is also not ready for such radical innovations.
Vanuatu’s citizenship for bitcoins: was the viral news genuine?
In October 2017, the readiness to sell passports for bitcoins was announced in the Republic of Vanuatu. This information edition of The Vanuatu Independent was reported by Jeffrey Bond, the head of the Vanuatu Information Center. Relevant information has appeared in many world media.
A week later, the information was disproved. Samuel Garay, acting Secretary General of the Office of Citizenship of Vanuatu, said that payments are still made exclusively in US dollars.
The current situation was interpreted by many as a profitable marketing move aimed at increasing investor interest in the passport program of the Pacific state. And this gave its results: among crypt owners, the demand for second passports is growing.
Meanwhile, on April 27, 2018, James Harris, VIC Managing Director, informed the Investment Migration Insider that Vanuatu had established a system for accepting bitcoins as payment for a Caribbean passport. He said that several applications for issuing a second citizenship for bitcoins had already been successfully processed in his department.
According to James Harris, a special system timeframe has been developed. The foreign investor and the Vanuatu authorities are contacted in real time. The applicant is informed of the cost of the passport in digital currency and gives two hours for the transfer of funds to the specified wallet. The procedure for conversion into US dollars is made after the successful completion of the transaction.
Attempts to launch citizenship programs for bitcoins in the Caribbean
The fact that the idea of using crypto currency to pay for a second passport is not new, according to information messages from other countries. In 2014, the network reported that the authorities of Saint Kitts and Nevis are ready to accept digital money from the participants of the passport program. Soon the website of the Government of the Caribbean country published a refutation of this information.
The prerequisite for the release of relevant information was a series of events. In 2014, Arthur Porter was detained for holding illegal financial transactions in Canada, who at the time of his arrest stated that he was a citizen of St. Kitts and presented a Caribbean passport. Shortly thereafter, the US Treasury Intelligence Department issued a statement that persons who had registered the economic citizenship of St. Kitts were carrying out illegal financial transactions. Also on the network often appeared fake pages with the proposal to issue citizenship of Saint Kitts and Nevis in exchange for bitcoins.
At the same time, the authorities of Antigua and Barbuda are working to legalize operations with the crypto currency within the jurisdiction. Stedra Benjamin, the country’s attorney general, is working on a bill that would allow the digital currency to be paid for a second passport.
The corresponding decision was made during a government meeting with Calvin Ayre, who represents the interests of the local Association for Recreation and Tourism. He noted that the growing convergence of bitcoins can be used to attract foreign investment in the jurisdiction’s economy.
In particular, in May 2018 on Antigua reported on the possible introduction of a new option to participate in the passport program. Investors will be offered to invest $ 150,000 in the construction of a new university in Antigua. According to the information provided on the Coingeek website program participants who choose this option will be able to pay for the passport in Bitcoin Cash (BCH).
On the official website of Antigua and Barbuda, there is no confirmation of this information. Representatives of local media expressed concern that the crypto currency, which was put into operation only in August 2017, was able to win such support from the authorities and expressed doubts about the possible implementation of this scheme.
The second passport and the change of tax residency – the ability to freely dispose of its crypto-currency asset
The issue of citizenship in exchange for a crypto currency is relevant for residents of countries in which strict currency restrictions apply. It is brewing for the Russians too.
The use of digital money in Russia is not regulated by federal legislation. For this reason, many crypto currency holders use foreign accounts for financial transactions. The difficulty lies in the fact that Russian citizens are limited in using accounts abroad. Conducting an illegal currency transaction fraught with the imposition of an administrative fine, the amount of which can reach 100% of its amount.
For example, earlier you bought bitcoins for an impressive amount, and now you transfer profits from their sale to an account opened in a foreign bank. In this case, the fine can be imposed not only on the income received, but also on the entire crypto-currency asset.
Registration of the second citizenship and change of the tax residence permit to carry out tax planning, personally manage the available assets and significantly save on paying taxes on income derived from the implementation of the crypto currency.
Is it now possible to buy citizenship for bitcoins or other crypto currency?
To explain why bitcoins and other types of digital currency do not use investment immigration in the industry is not difficult. A number of leading states have banned transactions using crypto currency, because digital money can be used in illegal schemes and for money laundering.
However, it is possible to obtain citizenship for a crypto currency, but not by direct transfer of the investment amount to government accounts. Thus, experts of the company Migronis reported that since January 2017, more than 30 crypto-investors have received the second citizenship for bitcoins.
Source: Forklog (translated from russian using google translate)
