The CBI Index: key findings - Caribbean continues to dominate

In providing both the overall programme ranking and the rankings by each of the seven pillars, the CBI Index affords readers the opportunity to either perform an overall review of the programmes, or complete an analysis of the pillar that is of greatest consequence to their individual requirements.

The following key findings emerge from the 2018 CBI Index ranking:

Pillar 1: Freedom of Movement

The countries that scored the highest in freedom of movement were the four European nations included in the CBI Index: Austria and Malta, with a score of 10, and Cyprus and Bulgaria, with a score of 9. Austria and Malta are members of the Schengen Area, which, for the most part, operates under a common visa policy.

The Caribbean followed Europe, having access to numerous key financial centres and having worked extensively to forge closer ties with other nations to increase the number of destinations to which their citizens can travel visa-free. Despite its recent loss of visa-free travel to Canada, Antigua and Barbuda remained the region’s top scorer. However, this year it was equalled by St Kitts and Nevis, whose work on expanding visa-free travel has been substantial.

Vanuatu ranked in tenth place, but above Cambodia and citizenship by investment newcomers Turkey and Jordan, largely due to its passport granting access to the Schengen countries. Cambodia and Jordan in particular, received low scores both because of their poor overall ability to offer citizens visa-free travel, and because they lack the adequate travel treaties to ensure their citizens can easily access today’s prime business centres.

Pillar 2: Standard of Living

Standard of living saw Austria and Malta top the rankings. With the exception of GDP growth and expected years of schooling, Austria obtained a perfect score in all sub-indicators, owing to its highly developed public services, business infrastructure, and economic stability. Among European nations, only Malta scored better than Austria in terms of GDP growth, coming in first together with Cambodia and EU-hopeful Turkey on what is one of the most important indicators to gauge investment returns. 

As Hurricane Maria, one of the Caribbean's worst natural disasters on record, devastated Dominica’s agricultural and fishing sectors, this economic setback was reflected in the country’s poor GDP growth.

The life expectancy sub-indicator revealed that, but for Austria, the longest lives can be enjoyed on the Mediterranean Sea. Close behind in second was Dominica – a lush island known for its abundant nature, vivacious atmosphere, and reliance on clean energy sources. 

Expected years of schooling, another sub-indicator for a country’s standard of living, saw Austria and Grenada obtain the top – but not perfect – scores. Living in a country with more than 30 public and private universities, it should come as no shock that young Austrian men and women remain in education for long periods of time. Less well-known is Grenada’s devotion to education, which has also led to it receiving international praise for its St George’s University – a leading medical and veterinary school. 

Overall, Grenada placed best out of the Caribbean, followed by Antigua and Barbuda. Turkey bisected the five Caribbean jurisdictions, receiving a score of seven and thereby outperforming Dominica, St Kitts and Nevis, and St Lucia. Island nation Vanuatu equalled Dominica, St Kitts and Nevis, and St Lucia, as did Jordan, a Middle Eastern country currently in the throes of rapid, government-initiated economic development. Cambodia received the lowest score, a result of, among other things, its relatively low level of political and civil rights; a characteristic it shares with both Jordan and Turkey.

As for the 2017 CBI Index, Cambodia was among the highest-ranking nations under the relative safety sub-indicator, which measures intentional homicide rate. The country matched Europe and Vanuatu, the latter of which is known to be one of the least dangerous destinations in Oceania. Jordan, a new entry in the 2018 CBI Index, was also among the nations with the lowest intentional homicide rates.

Pillar 3: Minimum Investment Outlay

Offering citizenship to successful single applicants for $100,000, Dominica and St Lucia scored highest for the minimum investment outlay pillar. Both Dominica and St Lucia have been accepting contributions of $100,0000 for some time (St Lucia from the beginning of 2017), and were among a handful of Caribbean nations that did not lower their threshold requirements for single applicants in the wake of the September 2017 hurricane season. Although, as of November 1, 2017, Antigua and Barbuda nominally requires a $100,000 contribution for a single applicant, a substantial $25,000 government fee must also be added.

Outside of the Caribbean countries, Vanuatu and Cambodia were close runners-up, the former offering citizenship to single applicants for an investment of less than or equal to $200,000 and the latter doing so for less than or equal to $300,000.

With their substantially higher investment requirements, the European countries achieved lower scores. Bulgaria, Cyprus, and Malta extend citizenship for BGN1m ($590,000), €2m ($2.32m), and €880,000 respectively. Austria, whose requirements for citizenship are estimated to extend to several millions of euros, received the lowest ranking.

Interestingly, the new citizenship by investment programmes of Jordan and Turkey have pitched their investment requirements very much in line with Europe. Turkey requires a minimum real estate investment of $1m, while Jordan requires a $1m investment in small and medium-sized enterprises, resulting in their being ranked together with Malta.

Pillar 4: Mandatory Travel or Residence

In the Caribbean, Dominica, Grenada, St Lucia, and St Kitts and Nevis all achieved full scores under this pillar, as none of them require applicants to travel to, or reside within, their territory at any time prior to or after receiving citizenship. Indeed, these four jurisdictions rely on their stringent due diligence procedures to obviate any need to meet the applicant in person. It is important to mention however that these countries are famed for being welcoming, and applicants are invited to spend time visiting the countries whenever possible. Also achieving a maximum score under this pillar were new CBI Index entries Turkey and Jordan, with accredited agents facilitating the application process remotely for interested investors.

A high score was given to Austria, Cambodia, and Vanuatu, each of which only requires one trip for purposes of signing the relevant oath of allegiance. In Cambodia, the applicant must also obtain good behaviour, health, and police certificates. Vanuatu provides some flexibility to the applicant, who may choose to either travel to Vanuatu or to Hong Kong. Antigua and Barbuda, Bulgaria, and Cyprus also received creditable scores.

Significantly below all other countries came Malta, whose more complex physical residence requirements placed it towards the bottom of the scoring scale. Malta’s ‘genuine link’ test only provides some flexibility to how an individual can demonstrate residence on the island.

Pillar 5: Citizenship Timeline

With average processing times of under two months, Dominica and Vanuatu both received a perfect score under the timeline pillar. While on the surface a low citizenship timeline may suggest a lack of applicant background checks and other controls, it should be noted that Dominica in particular also scores highly in terms of due diligence, indicating that efficiency can be achieved without compromising quality. Jordan and Turkey also score highly, with minimum processing time for applications at two and three months respectively.

High marks were awarded to Cambodia, St Kitts and Nevis, and St Lucia. Several Caribbean nations fell in the rankings relative to 2017 due to administrative delays following the hurricane season. St Kitts and Nevis, whose temporary Hurricane Relief Fund (HRF) option proved highly successful, is currently contending with high volumes of applications submitted before the HRF’s closure. In its ranking however, consideration was also given to the Federation being able to offer a secure timeframe for applicants willing to pay the premium fee associated with the Accelerated Application Process (AAP). Cyprus, which previously administered applications in three months, recently announced that, moving forward, applicants should expect turnaround times of at least six months. 

Malta and Austria each received very low scores due to their protracted processing procedures, although it was Bulgaria that scored the lowest, as citizenship of this nation can only be obtained within three to five years, depending on whether the applicant chooses the more expensive fast-track route.

Pillar 6: Ease of Processing

As for 2017, the Caribbean showcased the most streamlined and clear procedures for economic citizenship. This reflects two important points regarding the region. Firstly, the requirements imposed on applicants in the Caribbean each follow the same model, and secondly, these nations have all committed to making their procedures transparent.

Small distinctions were however drawn between Dominica and St Kitts and Nevis on the one hand, and Antigua and Barbuda, Grenada, and St Lucia on the other. These distinctions were based on the certainty of the citizenship by investment product presented by the five nations in question, with the first two relying on longevity and international praise, as demonstrated by awards and accolades such as the ‘platinum standard’ for St Kitts and Nevis. By contrast, for example, St Lucia presents a programme that is subject to political tension, with the opposition criticising the opacity of fund usage and calling for a review of all applicants. In March 2018, St Lucia issued its Citizenship by Investment (Revocation) Order, 2018, thereby depriving six applicants of their economic citizenship. 

Vanuatu attained the same result as St Lucia, receiving equal points for all sub-indicators. Vanuatu therefore also performed less well than some of the other Caribbean nations because of the programme’s more insecure position when seeking to deliver on its promise of citizenship. The certainty of Vanuatu’s economic citizenship product is dented by the country frequently terminating and re-launching its citizenship by investment programmes. Moreover, the reputation and durability of the Vanuatu Contribution Programme are harmed by locals denouncing its use of a single agent and of its foreign-based marketing agent.

Malta and Cyprus each scored below the Caribbean and Vanuatu. Their lower scores can be attributed, at least in part, to their rules on the mandatory purchase or rental of real estate – property transactions that inevitably come with hefty paperwork. With its requirement to acquire a bond portfolio, Bulgaria also failed to rank well. It is important to note that applicants must also demonstrate the completion of purchases in Jordan and Turkey, but that real estate purchases in the Caribbean are optional.

Cyprus received a lower score than Malta because it lacks a dedicated citizenship by investment unit. Lack of official and dedicated government channels for their citizenship by investment programmes, including accessible websites, put Austria, Bulgaria, Cambodia, Jordan, and Turkey at a disadvantage. Austria and Cambodia were further penalised by their enforcement of certain tests (such as Cambodia’s requirement that the applicant learn Khmer) or compulsory interviews.

Pillar 7: Due Diligence

Antigua and Barbuda, Dominica, Malta, and St Kitts and Nevis scored equally to take first place, owing to their unique data collection and due diligence features. Grenada and Bulgaria also scored well, thanks, among other things, to their thorough questioning of applicant information.

Due diligence was a major driver behind a recent decision by the Cypriot Council of Ministers to make changes to its Cyprus Investment Programme, and to begin utilising specialized due diligence foreign firms.

Vanuatu also improved its due diligence score, as it now excludes certain nationalities on grounds of national security. Turkey both bans certain nationalities and obtains biometric evidence from its applicants – two elements that worked in its favour. 

Both Austria and Cambodia received low scores under this pillar. Despite its high investment threshold, Austria falls short of many other nations with respect to the level of due diligence it performs on its applicants, especially when exploring the source of the applicant’s funds, using independent agencies to assess applicants, and evaluating criminal records.

The lowest due diligence score was given to Jordan. Still in its infancy, the Jordanian programme appears not to have the robust due diligence provisions seen in the more established Caribbean and European programmes, and this ought to undoubtedly remain a particular area of focus for Jordan, should it seek to elevate its profile in the citizenship by investment industry.

Final Scores: The Best Programmes in the 2018 CBI Index

The 2018 CBI Index saw continuity in its overall results, as the Caribbean was once again the most successful region with respect to the performance of its citizenship by investment programmes. Dominica remained the world’s best economic citizenship option, coupling low investment thresholds with efficiency, speed, and the certainty of permanency. St Kitts and Nevis, a strong contender, improved its visa-free travel options and lowered its entry thresholds via the introduction of the Sustainable Growth Fund, but must contend with the flipside of its enormous success with the Hurricane Relief Fund and work towards improving its processing times. Grenada and Antigua and Barbuda performed well, but also suffered from a slowing down of the application review process.

Vanuatu, which in 2017 received the same overall score as St Lucia, this year came in only one point behind it, however its new programme’s low prices, straightforward application process, and fast turnaround times earned it a solid score in 2018.

Cyprus was, once again, the most successful nation in Europe. As compared to Malta, which came just below Cyprus, it has attractive travel and residence requirements and a speedier citizenship timeline. Its score was also enhanced from 2017 as a result of its improved due diligence. Malta, in eighth position, shared the highest scores for freedom of movement and standard of living with Austria. Importantly for its long-term success, it counted a perfect score in due diligence – a distinction that was also attained by Antigua and Barbuda, Dominica, and St Kitts and Nevis. However, Malta suffered from low scores in other pillars as a result of its comparatively high investment requirements, travel and residence requirements, processing times, and the reputational damage suffered as a result of its programme being singled out for investigations by global anti-corruption groups.

In ninth position was Turkey, the higher performer of the two new Middle Eastern programmes, with Jordan down in eleventh position (together with Austria). Turkey has made a solid start in the industry, however, relatively high investment outlays, unexciting travel options, and an unproven track record in due diligence are but three factors that prevented a higher score. High minimum investment outlays also weighed on Jordan’s score, which further suffers from poor freedom of mobility, a lack of transparency with regards to its application procedures, and lenient due diligence requirements.

Bulgaria equalled Turkey in the 2018 CBI Index, and continues to be outperformed as a result of its lengthy and expensive citizenship routes. In 2018, as for in 2017, the path to Austrian economic citizenship remains one of the least-trodden. Cambodia received the CBI Index’s lowest possible score in freedom of movement, a measurement it shares with Jordan. Citizenship timeline, travel and residence requirements, and investment threshold remained its strongest points, although it seems likely that the Cambodian programme will become more expensive in the near future.