August 19, 2015
Earlier today I had a great meeting with a government minister in Antigua, who’d phoned to update me on their economic citizenship program.
If you’re not familiar, an economic citizenship is a legal process backed by formal legislation whereby an investor can make a large donation or investment in a country in exchange for a passport.
Antigua’s is still quite new, and it’s well-priced.
After undergoing a strict due diligence process and providing a minimum donation of roughly $250,000, you can obtain an Antiguan passport— which provides visa-free travel to over 130 countries including most of Europe, Latin America, and more.
Now, $250,000 may not seem like pocket change…
… but for the right person—like a high income earner who is ready to renounce his/her citizenship, or a wealthy Chinese entrepreneur looking for easier travel options, the return on investment is substantial.
I am not encouraging you to go out and do this. Quite the contrary; I actually think economic citizenship programs aren’t worth the money for most people.
After all, there are easier ways to obtain a second passport– through naturalization, family heritage connections, etc.
If you have Polish or Irish grandparents, for example, you might already qualify for another passport.
And this is a great benefit. If you’ve ever looked around and felt like you can barely recognize the country that you’re living in, you want to have another option.
A second passport provides that option. It’s more freedom, more choice. And a fantastic insurance policy.
But the larger point I want to make here is just how many governments are starting to do this.
Malta. Cyprus. St. Kitts. Dominica. Etc. Each of these countries has experienced dire economic straits.
St. Kitts is actually one of the most indebted nations in the world. And their economic citizenship program is one of the tools keeping them afloat.
When nations go bankrupt, they’re forced to reengineer their thinking. They’re forced to start being more competitive and put ALL options on the table.
And I’m not just talking about economic citizenship.
In my travels around the world, I’m starting to see this more and more– financially strained governments introducing new programs to attract talented people, productive capital, and successful businesses.
The British government, for example, has been steadily reducing its corporate tax rates over the last few years in an effort to attract more businesses to their shores.
Indonesia recently launched a visa-free travel regime to attract more foreign tourists and compete with its neighbors in the region.
Vietnam just introduced a whole suite of new incentives for foreign investors, making it much easier to travel and invest in that beautiful country.
Even in Italy the government is taking a swing at reforming its Byzantine tax code to create a friendlier business environment.
Most governments are in this position because they have to be.
They need the money, so they have to get very creative to attract the right kind of people to their shores.
This is the bright side of economic crises: because once governments realize they’re going bankrupt and get serious about reversing the trend, they’re forced to get competitive and start treating investors and businesses like valued customers.
This is a new trend that’s emerging, and it’s really exciting to see. I think it’s only going to continue– more tax incentives, easier foreign investment rules, more economic citizenship programs.
(In fact, I’m sure we’ll soon see Greece come out with its own economic citizenship program as well.)
Yet while near every cash-strapped country on the planet is starting to recognize its fiscal realities and take action to do something about it, there’s one nation that obstinately refuses to become more competitive.
And that nation, of course, is the United States of America.
The Land of the Free has the most outdated tax code imaginable, with hundreds of thousands of pages of obtuse regulations, and a “Just Say No” attitude towards productive people and businesses.
And they don’t seem to care.
Talented people, productive capital, and successful businesses will go where they’re treated best. And prosperity will follow in their wake.
This is a huge trend. Countries all over the world are trying to roll out the red carpet to provide incentives and attract great people.
By looking at governments’ efforts now it’s easy to see where the countries are headed in the long-term, and where you want to be.