How To Avoid Getting Cheated When Investing in a Second Passport

How To Avoid Getting Cheated When Investing in a Second Passport
May 18, 2017 - News Guide

Reproduced from an interview with PassPro COO in Al Arabiya English.

In February, CNN’s Spanish-language channel broadcasted its year-long investigation into Venezuela’s Vice-President as being among officials involved in passport fraud.

One document obtained by CNN linked VP Tareck El Aissami to 173 Venezuelan passports and ID’s that were issued to individuals from the Middle East, including people connected to the terrorist group Hezbollah.

The passport scandal involved the illegal sale of passports and visas to Syrians, Lebanese, Jordanians, Iranians and Iraqis by corrupt employees of the Venezuelan Embassy in Iraq. Venezuela does not allow individuals to legally acquire citizenship and a passport through investment.

Tareck El Aissami has been implicated in a scheme to sell Venezuelan passports to Arab citizens, including those with links to Hezbollah. (AFP)

There are only a few countries that allow people to invest in acquiring citizenship, including St. Kitts and Nevis, Dominica, Antigua and Barbuda, St. Lucia and Grenada as well as select countries in Europe such as Cyprus.

Al Arabiya interviewed Giselle Bru the COO of PassPro Immigration Services to discuss tips on avoiding being involved in citizenship scams and determining legitimate passport offers. Al Arabiya: What makes investing in a second citizenship in the Caribbean legal? Giselle Bru: What makes these programs legal is the presence of Constitutional Acts that prescribe how an individual can acquire citizenship through investment, and ensure the citizenship granted is for life – meaning no one can revoke citizenship even if government changes in the future.

For example, St Kitts and Nevis pioneered the Citizenship by Investment Program more than 30 years ago when it passed its Citizenship Act in 1984.

The Acts explain exactly how the applicant can invest in citizenship. Most of the Caribbean programs for instance require the investor to apply through an authorized agent and invest in government funds or approved real estate projects, business ventures or government bonds. The applicant also has to undergo a due diligence check and prove that he has clean a source of funds.

Al Arabiya: What are the tips to avoid second passport scams and determine how legitimate the offer is? Bru: When approached with an offer to obtain a legal second passport, first check that the country operates a citizenship by investment program. Always ask for a copy of the constitutional act that allows the country to grant citizenship via investment.

You should also make sure the agent you use is a government authorized representative – you can find the names of the licensed agents on the official Government Citizenship by Investment Unit websites.

Finally, there is a set procedure for applying which includes providing documentation such as birth certificate, police clearance, proof of residence, bank statements etc. This process takes between 3-6 months. No one can just acquire a passport. If the offer seems too good to be true, it probably is.

Al Arabiya: What are the important factors to keep in mind to ensure your investment in a second citizenship is truly future-proof? Bru: When investing in a second passport, your profile determines the best program to fit your needs. For instance, some programs are cheaper for families and you can include older children in the application. Some countries such as St Kitts and Nevis allow you to register your new born baby for free, others charge a small fee such as Dominica ($2000).

So if you do not have children yet but are planning to have a family your consultant can help you pick the right program to work for you in the future. The Antigua and Barbuda program allows you visa-free access to Canada while the Grenada program allows you to travel visa-free to China. So based on what your needs are, certain programs may work better for you than others.

Al Arabiya: Do you think we will see a new demand for residency investment in these countries instead of getting a passport? Bru: The profile and motivation of individuals who seek residency is slightly different from those who choose citizenship by investment. Most individuals who choose to invest in the Caribbean citizenship programs do not intend to live there. They want to enjoy the visa-free travel benefits while continuing to live their life in their current country of residence. Residency permits often have an expiry date attached while citizenship is for life. Many of the most popular citizenship programs also allow you to pass on your citizenship to your children and this is a benefit that residency programs do not offer. Al Arabiya: What are the best type investment of real estate when applying for citizenships through investments? Bru: When looking to invest in citizenship through real estate investment, always work with a consultant who knows the market and can give you sound advice. A good CIP agent will help check the contracts on your behalf, pick the best units that can be rented or sold after the holding period and negotiate the best price. Picking a good location is important but so is the team that builds and manages it. Badly maintained properties depreciate quickly. Many projects backed by a branded hotel will manage the property and rental of the units and some guarantee a fixed rate of rental returns during the initial period of investment so you should look for the best overall package. Al Arabiya: Some people rush into purchasing a foreign passport without calculating the risk of other expenses like taxes. What’s your advice to them? Bru: Countries have different approaches to taxing individuals on global and income sourced within the country and it is important to consider these when choosing a program to invest in. Most countries offering Citizenship by Investment Programs do not tax global income, but working with a knowledgeable advisor can help you take advantage of other generous tax breaks many of these countries provide. For instance, Cyprus that has a low corporate tax and many exemptions to encourage investment from rich individuals. Understanding how you want to use your asset can help you make the best choice to reap maximum benefits at minimum costs. Al Arabiya: In your opinion, where do you think it’s safer country to purchase a passport from? And why? Bru: Countries that have operated their programs over a long period have proved that they are a safe investment. Some of the Citizenship by Investment Programs of the Caribbean have been operating since the early 1980s and 90s and have invested a lot of time to make their programs more transparent and accountable. This has led to very positive results such as allowing visa-free access to the Schengen Zone which increases the value of these passports even further.

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