The end for citizenship by investment programs?

The Cyprus Citizenship by Investment program, which enabled wealthy foreign investors to obtain a Cypriot passport within months of making an investment of €2m in qualifying investments, was terminated on 1 November 2020. Following a recent inquiry led by a Cyprus Government-appointed board, it was revealed that more than half the Cypriot passports issued under this program were illegal as the applicants did not meet the requirements for Cypriot nationality. Some applicants have even had their Cypriot nationality revoked.

One of the few remaining citizenship by investment programs now available is from Malta, which recently launched its Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment program (MEIN). MEIN replaced the previous Malta Individual Investor Program. Under the MEIN program, foreign investors can obtain a Maltese passport after 12 months.

The EU has previously not condoned citizenship by investment schemes since it considers them to carry security risks as well as risks of money laundering and tax evasion. The EU Commission is of the view that applicants benefited from EU citizenship without having established genuine links to the EU country.

In contrast, the closest proxy we have in the UK, the UK Investor category, requires applicants to spend at least five years in the UK before being able to apply to naturalise as a British citizen. That later (naturalisation) application is subject to more stringent residence requirements than the Investor category itself: during the five years prior to applying for British citizenship, the applicant would need to spend a significant amount of time in the UK in order to demonstrate that they have established genuine links to the UK. Consequently, it is unlikely that the UK Government would suspend this category, even though we have seen a tightening of the Investor visa requirements over the years: for an investor to naturalise as a British citizen requires an investment of time as well as money.