The 2020 CBI Index: Overview of the methodology

The CBI Index is a rating system designed to measure the performance and appeal of global citizenship by investment (CBI) programmes across a diverse range of indicators. Its purpose is to provide a rigorous and systematic mechanism for appraising programmes, to facilitate the decision-making process for individuals considering them, and to bring value to the CBI industry.

The CBI Index assesses all countries with operational CBI programmes, which, in 2020, include the following 14 nations: Antigua and Barbuda, Austria, Bulgaria, Cambodia, Cyprus, Dominica, Grenada, Jordan, Malta, Montenegro, St Kitts and Nevis, St Lucia, Turkey, and Vanuatu. After delays to commencing the processing of applications, Montenegro becomes the fourteenth and latest addition to the CBI Index. 

The primary methodological objective for the CBI Index is to isolate factors — or ‘pillars’ — that satisfactorily measure programme features and jurisdictional desirability. Having featured seven pillars since its inception in 2017, the 2020 CBI Index has introduced two new pillars: ‘Family’ and ‘Certainty of Product’. The nine pillars that constitute this year’s CBI Index, therefore, include:

Freedom of Movement

Standard of Living

Minimum Investment Outlay

Mandatory Travel or Residence

Citizenship Timeline

Ease of Processing

Due Diligence

Family

Certainty of Product 

Arriving at an appropriate rating for the nine pillars involved a complex combination of benchmarking, statistical analysis, and comparative investigation.

Each of the nine pillars is scored out of a maximum of 10 points, calculated on an averaging basis from the scores of composite indicators and sub-indicators. The maximum score attainable by a programme is 90, with all final scores also expressed in terms of a percentage of the total points available. For example, a perfect 90-point score would be expressed as 100 per cent.

It should be noted that, owing to the vast number of statistics, indicators, and sub-indicators available for analysis, no single approach exists for the rating of CBI programmes. In framing the CBI Index, however, reliance was placed on official sources and publications from institutions of the highest international standing, as well as on the specialised input of industry experts, whose contributions and responses were used to obtain and interpret both qualitative and quantitative data used in the construction of the CBI Index.

It should further be noted that, whenever possible, points were awarded based on evidence from official sources and the letter of the law. Because announcements of changes to CBI programmes are often made many weeks and months in advance of their actual implementation, the CBI Index limits its evaluations to changes confirmed by governments themselves and associated legal facts.

Finally, the 2020 CBI Index does not consider temporary changes resulting from the Covid-19 crisis, except when a programme’s ability to respond and adapt to present needs is measured as Part of the Certainty of Product Pillar.

Pillar 1: Freedom of Movement

Freedom of movement within and between countries is of paramount importance to any individual seeking second citizenship. This holds true whether the individual wishes to travel for work purposes, to visit family, or for leisure.

In the 2020 CBI Index, the Freedom of Movement Pillar measures the relative strength of each country’s citizenship on the basis of three equally weighted factors: the number of destinations to which a country’s passport allows travel without restriction, the number of prime business hubs to which it provides access, and the degree to which a given citizenship provides settlement rights in other nations.

It is assumed, for the purposes of this pillar, that the passport used for travel is an ordinary passport, and not a diplomatic or service passport.

Emphasis was placed on the total number of countries and territories that may be visited without applying for a visa. This includes both visa-free and visa-on-arrival destinations, as neither requires persons to receive a visa in advance of travel. Government and other official sources, including data from the United Nations World Tourism Organisation, were used to obtain up-to-date information on visa requirements for holders of each of the 14 passports under evaluation.

As business travel is a prime consideration for prospective global citizens, a passport’s ability to provide access to the world’s leading economic and financial centres was also evaluated. The World Bank’s Ease of Doing Business Index, Forbes’ Best Countries for Business, the World Economic Forum’s Global Competitiveness Report, and other authoritative sources were used to arrive at a list of the top centres for international business.

For both of these indicators, points were awarded on a descending scale, with the highest score received by the country with visa-free or visa-on-arrival entry to the highest number of foreign countries or territories.

While the freedom to access a high number of jurisdictions is of critical importance to the citizenship investor, many also look at second citizenship as a gateway to ensuring long-term security and stability for themselves and their families. The addition of a settlement rights measure reflects this, making CBI countries that are part of broad free-movement regimes more attractive. 

In order to assess settlement rights, value was placed both on the number of jurisdictions accessible within a given free-movement regime and on the nature of the rights afforded to the citizen, with distinctions drawn for rights that are conditional on a citizen undertaking work.

The European Union, the CARICOM Single Market and Economy, and the Association of Southeast Asian Nations free-movement regimes were also assessed against the total average United Nations Human Development Index score of the free-movement bloc under evaluation.

Pillar 2: Standard of Living

The Standard of Living Pillar is a measure of the quality of life offered by the 14 CBI jurisdictions under assessment. This pillar is vital to those who yearn to relocate and to secure a prosperous and fulfilling lifestyle. Similarly, it is key to those wanting to take advantage of local business opportunities or needing to transfer and safeguard their assets.

For this pillar, a wide range of official indicators were considered to allow for an accurate assessment. Consequently, establishing an appropriate benchmark was of paramount importance, as a country’s score must be viewed both as an absolute value and as a relative value, within the context of the other CBI countries.

Reliance was placed on the United Nations Human Development Index for factors such as life expectancy, education, safety, and income.

Past performance is not always a guarantee of future results in the field of economic growth in a rapidly developing world. As such, a country’s latest annual GDP growth statistics were used to indicate present-day economic circumstances as well as growth potential — a particularly important indicator for investors. Data was sourced from the World Bank's Open Data Catalogue to ensure accuracy and consistency.

The Standard of Living Pillar also examines a country’s ability to promote freedom, and to protect the rights of individuals to act and to express themselves without undue constraints. Civil liberties and political rights within a jurisdiction were rated as part of this exercise, using sources such as Freedom House’s Freedom in the World Index.

Pillar 3: Minimum Investment Outlay

The Minimum Investment Outlay Pillar measures one of the most practical and foremost considerations of CBI: how much capital is required for the investor to become an eligible applicant for the programme of their choosing.

The cost of applying for CBI increases with the number of dependants — or qualifying family members — included in an application. In some jurisdictions this increase is proportional, while in others the cost only increases following the inclusion of multiple dependants. To remain consistent across all jurisdictions, it was assumed that one applicant was applying for citizenship alone (i.e., the application consisted of a single applicant).

Where a CBI programme offers multiple investment options, the most affordable was selected for evaluation. For example, Dominica offers a single applicant the choice between a direct contribution to the government and an investment in pre-approved real estate, with the latter being the more expensive alternative. The first option was therefore used to determine the minimum investment outlay for the Dominica CBI Programme.

This pillar considers pure investment requirements, exclusive of minor fees that may also apply. These may include application, processing, or due diligence fees that do not significantly alter the cost of a citizenship application. However, where countries had sizeable additional fees, such fees were taken into account.

The highest number of points was awarded to the country requiring the lowest minimum investment. 

Pillar 4: Mandatory Travel or Residence

The Mandatory Travel or Residence Pillar examines the travel or residence conditions imposed on applicants both before and after the granting of citizenship. Often busy with running a business or with international travel of their own, citizens of the world have little time on their hands to fulfil minimum stay requirements.

A careful examination of the laws, regulations, and policies pertaining to each CBI programme was undertaken. First, it was determined whether any such prerequisites applied. Second, post-citizenship requirements were examined, as well as the consequences of failing to fulfil those requirements. Third, the extent of the travel or residence requirements were analysed, with physical visits for the purposes of attending an interview, swearing an oath of allegiance, or giving biometric information all considered. 

It is important to note that physical, rather than nominal, requirements were taken into consideration.

In line with previous pillars, scrutiny focused on the main applicant rather than any dependants that may be included in the citizenship application.

As having year-round freedom to travel is a highly valued liberty, programmes that waived both residence and travel requirements achieved the best score, followed by those with minimal requirements. The lowest scores were attained by programmes with extensive requirements.

In the 2020 CBI Index, the scoring system under the Mandatory Travel or Residence Pillar was amended to better encompass changing industry requirements, with the subtotals for mandatory travel requirements and residence requirements combined to yield the total pillar score.

Pillar 5: Citizenship Timeline

The Citizenship Timeline Pillar looks at the average time taken for citizenship to be secured by the applicant.

The speed at which application forms and supporting documentation are processed, and the steps involved in approving an application, vary between programmes. Therefore, a thorough inspection of applicable laws, regulations, and policies was made to determine the official processing times mandated by each jurisdiction. 

Extensive reliance was also placed on the first-hand experience of applicants, agents, and other stakeholders, whose contributions proved to be an invaluable tool in ascertaining citizenship timelines.

One of the key merits of CBI programmes is their ability to provide a rapid route to second citizenship; as such, the highest number of points was awarded to the programmes with the shortest turnaround times.

It should be noted that, in determining processing times, Covid-19-related delays were not factored into the assessment by virtue of the fact that these delays, where felt, are expected to be temporary.

Additional merit was given to programmes offering fast-track processing options at an additional fee, as these provide an extra layer of certainty for the applicant who is urgently in need of second citizenship. 

Pillar 6: Ease of Processing

The Ease of Processing Pillar measures the end-to-end complexity of the CBI application process. In some jurisdictions, the application process can be a labour-intensive and painstaking task that is time-consuming for the applicant; in others, it is streamlined and the applicant receives clear directives on how to proceed. The overall effortlessness of the application process is a particularly important component and the promise of a smooth, hassle-free process can generate readiness to engage with a programme.

Multiple indicators were considered, commencing with entry qualifications such as previous business experience, a proven track record of achievement, or fluency in a language. Knowledge of local history or culture assessments and interview requirements were also weighed.

By its very nature as a naturalisation process, CBI involves a significant amount of paperwork, including both forms and supporting documents. Having the support of an official government website and of a dedicated CBI body to seek and obtain clarification was thus a factor in awarding points to a programme.

Extensive communication with advisors and legal experts is required where a jurisdiction mandates the purchase of real estate or other assets, and hefty paperwork must also be submitted as evidence of that purchase. Therefore, countries with compulsory purchasing requirements were deemed to burden the application process.

Programmes with fewer demands placed on the applicant, and with relatively straightforward procedures, achieved higher scores for this pillar. 

Unlike in previous editions, where the stability of each programme was assessed as part of this pillar, the 2020 CBI Index accounts for stability (and other indicators) in a new, standalone Certainty of Product Pillar.

Pillar 7: Due Diligence

The Due Diligence Pillar focuses on each nation’s commitment to ensuring that their programme remains transparent and effective at evaluating potential candidates for citizenship. It is, therefore, a measure of each programme’s integrity.

The CBI Index focuses on the ability of governments to obtain information on and from applicants, such as by the performance of internal and external due diligence checks. Indicators comprise police certificate requirements — including the number of nations from which a certificate must be provided — as well as requests for fingerprints or biometric data.

Emphasis was also placed on a country’s ability to gather evidence on the applicant’s source of funds, as this is a core step in denying citizenship to those profiting from, or involved in, the financing of illicit activity.

Increasingly, strict anti-terrorism and anti-money laundering legislation has prompted some governments to exclude persons of certain nationalities from their programmes, or to restrict funds transferred from certain jurisdictions, in order to ensure compliance with international sanctions. These trends are included among this pillar’s indicators.

The greater a country’s ability to perform background checks on applicants, the higher the score received.

Pillar 8: Family

The Family Pillar measures the extent to which investors can include immediate and extended family members in a primary application. 

The 2020 CBI Index recognises that the rise of increasingly complex family relationships is driving investors to seek programmes that allow for a more diverse range of family members to be included under a primary application. Indeed, while all CBI programmes provide for the inclusion of spouses and minor children, only some countries allow the addition of adult children and extended family.

Multiple family member categories were considered, with points being awarded for the ability to include adult children, parents, grandparents, and even siblings under the primary application. Additional merit was also given to programmes that allow for the inclusion of family members of the main applicant’s spouse.

Additionally, the degree of flexibility within each of these categories can differ radically from programme to programme. In the adult children category, for example, programmes that allow for the inclusion of children aged over 18 years with few restrictions achieved the most points. Those that require proof of a high degree of dependency — for example with a requirement that the child be in full-time education and fully supported by the main applicant — achieved fewer points.

As inclusivity has become an issue of global importance and increasingly relevant to the CBI industry, a point was awarded to those programmes that make provision for dependents living with a disability. 

Pillar 9: Certainty of Product

The Certainty of Product Pillar encompasses a range of factors that measure a programme’s certainty across five different dimensions: longevity, popularity and renown, stability, reputation, and adaptability. With the CBI industry continuing its rapid growth, it is more important than ever to provide investors with a means of differentiating a programme’s relative robustness. 

Longevity measures the age of a given programme. Popularity and renown evaluates the number of applications and naturalisations under each programme per year, as well as a programme’s eminence in the industry. 

As applicants and service providers prize continuity throughout the application process and beyond, the stability of each programme was also assessed. Here, importance was placed on whether any calls to end a particular programme had been made by authorities within or external to the CBI jurisdiction. 

Additionally, countries with no cap on the number of applications that can be processed over the life of the programme scored more highly than jurisdictions that imposed a yearly maximum or a fixed total over a given period. For example, Montenegro’s CBI programme is both time- and volume-limited, with the government planning to run the scheme until 2022 and limiting the total number of investors to 2,000. 

The reputation of a programme was determined by the amount of negative press or number of scandals it has been linked to, affecting investors’ broader perceptions of the countries in which they invest. Just as important, however, is evidence that programme funds are being utilised for social good. Points were awarded for a jurisdiction’s transparent use of CBI funds, for example for the development of domestic healthcare, education, tourism, and other infrastructure.

Lastly, adaptability reflects a programme’s ability to rapidly respond to, and sometimes even predict, the needs of applicants and the industry. More points were awarded to jurisdictions that have shown capacity to communicate with applicants, prospective applicants, and stakeholders — and to tweak their requirements accordingly. 

The researcher

The CBI Index was created by James McKay, an independent research consultant specialising in the end-to-end design and execution of data-driven research and analysis projects. Having read psychology and statistics at University College London, the founder of McKay Research provides strategic custom research and consulting solutions across a wide range of sectors, and actively works with some of the world’s biggest independent providers of market intelligence across several industries including investment, technology, and manufacturing.

Mr McKay, who used guidance from the OECD’s Handbook on Constructing Composite Indicators, employed a three-stage process to produce the latest version of the CBI Index. The first involved comprehensive primary and secondary research to chart all major developments in the world of economic citizenship over the past 12 months. The second comprised a detailed exploration of official macroeconomic and programme statistics to be used in evaluating CBI Index country performance. The third and final stage involved critically analysing and inputting all data collected throughout the research process, paying careful attention to maintaining the statistical continuity and integrity of the original index architecture. 

A major methodological update was performed for the 2020 edition of the CBI Index which saw the addition of two new pillars to reflect the direction of the industry. This expanded nine-pillar index architecture provides investors with an enhanced toolset with which to measure the performance and appeal of global CBI programmes.