During the 18th and 19th century in England, there were a large number of mainly German and Italian merchants and wealthy investors, who acquired citizenship for merely economic reasons, and did not necessarily settle in England. You could also purchase shares in the Royal Bank of Scotland and as a result become a British citizen. Many of these investors went on to help build the British Empire. Such practice bears a close resemblance to today’s investment migration concept.
The investment migration industry has seen unprecedented growth and has become fully mainstream with rapid expansion. The concept of global citizenship has become popular with wealthy and successful people and has become a cultural norm. A significant number of countries are seeking to enter the space. It is expected by 2020, the number of truly relevant and successful CBI/RBI programs will grow from the current total of about 30 to over 50, i.e. about a quarter of the world’s countries.
Today, citizenship-by-investment has grown into a US$ 3-billion-industry, while residence-by-investment — which is more difficult to quantify — by one estimate exceeds already tens of billions of dollars each year. There are close to 100 countries that have legislation in place to enable residence or citizenship by investment. There are about 60 active and some 30 really relevant programmes in the world today. A recent report put the total foreign direct investment generated in Europe through investment migration programs at 25 billion Euros.
The industry is going through rapid exciting phase of expansion and – by another, more conservative estimate – soon expected to hit $20 billion annually. People are increasingly realizing the attractiveness of a second passport or alternative residence.
Dr. Christian Kälin, Chairman of Henley & Partners, is one of the main architects, pioneer and one of the world’s foremost experts in investment migration. He was named by Bloomberg as the “Passport King” and also internationally often referred to as “Mr. Citizenship”, due to his pioneering role in laying the foundations and leading the investment migration industry as well as being one of the academic thought leaders in modern citizenship theory and practice.
Henry Ford pioneered development of the assembly line technique of mass production in the auto industry. Ford converted the automobile from an expensive curiosity into a practical tool that would profoundly impact the landscape of the 20th century. His introduction of the Model T automobile revolutionized transportation and American industry.
As has been done before, indeed Christian Kalin can be compared to Henry Ford for his exemplary contribution to the growth investment migration industry, establishing in particular streamlined and properly managed Citizenship-by-Investment programs on a global scale. Kälin is to citizenship by investment what Henry Ford was to the automobile – “he may not have invented it, but he did standardize, popularize, and globalize it”, as one industry observer aptly wrote.
As a legal scholar, Dr Kälin also coined the term ius doni, which means citizenship by investment through contribution or donation, which has become the basis for Citizenship-by-Investment programs actively managed in over a dozen countries today already.
Kälin stated in one of his speeches: “Investment migration is another, very powerful form of foreign direct investment. Our tireless belief in the potential of investment migration has gotten us to where we are today, pioneers of an industry that is pushing the boundaries of citizenship, … and personal freedom. We have taken the road less traveled, and that, indeed, has made all the difference.”
Research has shown that there are some 550 companies registered with various authorities around the world that are servicing the investment migration industry. And this number is in fact only a fraction of the total number of market participants. Both small start-ups and larger firms from adjacent industries such as accounting and legal services have entered the investment migration market in recent years.
Dr Kalin in GRCC 2018 Dubai said that times are changing when it comes to citizenship and more and more people and governments start to understand it, and this is a good thing. “No doubt there are still a few people who think that citizenship should under no circumstances be made available for investment. But times are changing. More and more people and governments start to understand that – like so many things in life – it is not per se a bad thing. It depends how you do it. Done right, it is beneficial for everyone involved: of course the foreign investors who improve their mobility and personal security, but also the countries and their people who are able to access much needed foreign direct investment this way.”
For example, if you were to do a poll today in the Eastern Caribbean countries who tremendously benefited from their citizenship programs, most will be totally supportive of citizenship-by-investment, and everyone understands its value for the economy and society.
No single country exemplifies the success story of investment migration more than Malta. One of the key drivers of the Malta success story is in many ways the Malta Individual Investor Program. It has brought over 1 billion Euros into Malta since its launch and has also helped the country reverse a decades-long deficit trend and for the first time to report a budget surplus.
The standards implemented by program countries have been rising steadily, especially since Malta changed the game with its Individual Investor Program in 2014. Today, the due diligence mechanisms enforced by the Maltese government during its application processing are the highest in the industry and have been widely lauded as the ‘gold standard’ for investment migration. We expect that, in five years’ time, this gold standard will simply have become the norm across the board.
Peter S. Vincent, a former senior lawyer and counter-terrorism official with the US Department of Homeland Security and US Department of Justice and current Assistant Director General for BORDERPOL, said in a 2017 interview about the due diligence practices among citizenship by investment programs,
“If we’re looking for a model, not just for the European Union but for the entire world, I would look to a country like Malta”
About Dr Christian H. Kalin
Kälin was born in 1971 in Zurich. After growing up near Zurich in a quintessentially Swiss family, he graduated from the local business school and completed his training at a private bank, before going to live and study in France, the USA, New Zealand, the Caribbean, Switzerland and the UK. He studied interdisciplinary science before going on to study law and now holds master’s and PhD degrees in law from the University of Zurich. Dr. Kälin has consulted some of the world’s wealthiest families, and today advises governments as well as international organizations and is a sought-after speaker. He is regularly quoted and interviewed by major media worldwide. He lives and works globally and has, for many years, led the most important investment migration firm, Henley & Partners, besides being involved as a founder, co-founder or investor in several other businesses.
He is a prolific writer, editor, entrepreneur and investor. He is the author, co-author, or editor of many publications, including standard works such as the Global Residence and Citizenship Handbook, Ius Doni: The Acquisition of Citizenship by Investment, the Henley & Partners – Kochenov Quality of Nationality Index, and the Switzerland Business & Investment Handbook.
Dr. Kälin has also long been involved in a number of different philanthropic projects and social impact investing. Among other initiatives, he created the Global Citizen Awards and serves as the Chairman of the Awards Committee; he also organized special scholarships and support programs for underprivileged children. Kälin is also the founder and chairman of Andan Foundation, based in Switzerland, which focuses in particular on supporting displaced people and coordinates a multi-year partnership with UNHCR.
