POLITICS OF CITIZENSHIP AND MIGRATION

THE GLOBAL
MARKET FOR
INVESTOR
CITIZENSHIP

Jelena Džankic
Politics of Citizenship and Migration

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Willem Maas
Department of Political Science
York University
Toronto, ON, Canada

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George Mason University
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 Jelena Džankić

The Global Market

for Investor
Citizenship
Jelena Džankić
European University Institute, RSCAS
San Domenico di Fiesole, Italy

ISSN 2520-8896 ISSN 2520-890X  (electronic)

Politics of Citizenship and Migration
ISBN 978-3-030-17631-0 ISBN 978-3-030-17632-7  (eBook)
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To Mum and Dad
 Preface

One of my all-time favourite quotes comes from Neil Gaiman’s 1993

Fables and Reflections ‘Sometimes you wake up. Sometimes the fall kills
you. And sometimes, when you fall, you fly’. And anyone who has ever
written a book, be it a research monograph or a novel, knows how much
dedication, sacrifice and determination is required to put thoughts into
words and give them the shape and the meaning that will cut through
and resonate beyond those narrow cracks of our ‘own caverns’. Writing
this book has been all but easy, for it has come at a particular time in my
life, a time when no chink of light could reach the depths of the com-
forting walls of darkness. Yet it gave me a sense of purpose and the sense
of purpose gave me hope. And with hope there came persistence. In
turn, she brought along her two siblings—strength and joy—to help me
realise how much I love writing and how much I wanted this book to
come into being. So just like Edmond Dantès, I started to patiently build
the road that eventually brought me to light; a road that my friend Alex
wonderfully illustrated in one of his paintings.
For most academics or policymakers who will pick up this book, this
preface may sound a bit like a sob-story and probably way too personal.
We have been taught, at least implicitly, that there is no room for emo-
tions in our professional lives and that we should leave whatever baggage
we carry at home. That is not always easy, as there is no switch-off but-
ton for our thoughts and feelings. Isolation and the lack of social skills
that come as extras to the kind of work that we do are hurdles to the
much-needed leeway that we need in our daily lives. And I have seen

vii
viii    Preface

many friends and colleagues succumb to the darkness of their own ‘cav-
erns’. Some have managed to get up, dust themselves off and go ahead;
others are still struggling, often in silence, often alone. And I hope they
find a bit of inspiration in this preface, with which I would like to tell
them that they are not forsaken.
And not being alone has been incredibly important for me while I was
trying to put down everything I know about the sale of passports. So,
this book would have never come into being had I not been surrounded
by the most wonderful people in the world. They are the kind of friends
who gather to make you smile when you’re at your worst; friends who
make sure that you have gotten up, got dressed and eaten well; friends
who stop their car in the middle of the road while it is raining cats and
dogs (and elephants and whales) to call you; friends who drag you to
the other end of the world to make you stop hurting; friends who call
you every day to check up on you; friends whose warm hands give you
the energy to move on while they expect the greatest joy of their lives;
friends who say nothing at all but who heal you with a hug. So my first
‘thank you’ goes to Ćiro, Bosiljka, Simonida, Soeren, Mateja, Tamara,
Lore, Višnja, Trajche, Paola, Irene, Federica, Duda, Irena, Žana, Majda
and Ješka who were always there for me and whom I am immensely
happy to have in my life.
The second ‘thank you’ goes to those people who have helped me
grow over the past few years, and people who have helped me to redis-
cover some of the creativity that I had lost while trying to find the right
direction in the murky academic waters. I am grateful to the incredibly
talented group of young people gathering at 8 pm each Wednesday on
the first floor of a building behind the Santa Maria Maggiore Church in
Florence for rediscovering my passion for reading and writing poetry. To
Alex, Giulia, and the ‘little rascals’ Marco & Marco for their friendship,
and all for making me realise how doing things together brings back the
much-needed laughter in our daily lives. I am also thankful to Christian,
who had supported me every single day, even unknowingly, in the last
months of writing this book. And to a pair of hostage-taking eyes whose
chocolate kernel has sweetened my ‘season of mists’.
But obviously, they are not the only ones that have stood beside me
in this adventure. Jo Shaw and Rainer Bauböck have been an incredi-
ble spring of support and encouragement over the years. It is thanks to
them that I have started to develop an interest in citizenship, and in par-
ticular, in investor citizenship. It is thanks to them that you won’t find
 Preface    ix

this volume in Lucien’s unusual collection of books that were never writ-
ten or that have remained unfinished. And I don’t think I’ll ever be able
to thank them enough for constantly pushing me to give my best. The
GLOBALCIT team and friends from the RSCAS and the EUI, includ-
ing Ingo, Jean-Thomas, Liav, Lorenzo, Maarten and Sam have also been
there for me at different times and in different ways during this process.
I have also learnt a lot from the wonderful Milieu Ltd team (Ana, Emma
and Vanessa). I have taken part, as an expert consultant for Milieu Law
and Policy Consulting, in the project Factual Analysis of Member States’
Investor Schemes granting citizenship or residence to third-country nation-
als investing in the said Member State, which provided a fact-finding basis
for the European Commission’s Report and Staff Working Document
on Investor Citizenship and Residence Schemes in the European Union,
published in 2019. In 2014, I also provided independent expertise to
the European Commission on investor residence and citizenship pro-
grammes in the European Union. Views expressed in this book are
those of my own and do not reflect position or policy of any company,
organisation or institution. Lastly, I am really grateful to Anca Pusca and
Katelyn Zingg from Palgrave, who have constantly motivated me to keep
working on this project, and to Gill Pavey who has done amazing edito-
rial work on the manuscript.
A very final, yet infinite, thank you goes to my Mum and Dad whose
endless love and support have made my academic road less bumpy.

Florence, Italy Jelena Džankić

Spring 2019
 Contents

1 Introduction 1
Citizenship in the Age of Globalisation 4
The Global Market for Investor Citizenship: A Novelty? 9
A Brief Note on Methodology 13
Road Map of the Book 16
References 20

2 Citizenship and Money: Historical Snapshots 25

Citizenship in Ancient Greece: Of Possessions, Duty and Merit 27
Ancient Rome 31
The Middle Ages: Loyalty to the City 35
Renaissance and Reformation: From Citizens to Subjects 38
Citizenship, Revolutions and the Rise of Nations 41
The Two Worlds of Citizenship 44
Citizenship and Postcolonialism: Roots of the Contemporary
Sale of Passports 47
Citizenship, Property and Resilient States 49
Conclusion 51
References 52

3 To Sell or Not to Sell: The Ethics of ius pecuniae 57

The Sale of Citizenship and the Different Citizenship Traditions 59
The Pros of ius pecuniae 66
The Dark Side of Investor Citizenship 72

xi
xii    Contents

Conclusion 83
References 84

4 A Classification of Investment-Based Citizenship

Programmes 91
Understanding the Purposes of ius pecuniae Policies 93
Discretionary Attribution of Citizenship to Investors 97
Investor Citizenship Programmes 99
Path-to-Citizenship Programmes: Facilitated and Ordinary
Residence 120
Conclusion 131
References 132

5 ‘Long-Distance Citizens’: Strategies and Interests

of States, Companies and Individuals in the Global
Race for Wealth 137
Citizenship and Global Inequalities 140
A Growing Industry: Multilayered Networks in the Investor
Citizenship Market 147
The ‘Demand Side’ of the Long-Distance Citizenship Industry 157
Conclusion 163
References 165

6 Ius pecuniae in a Multilevel System: The European

Experience 171
Complexities of Citizenship in Nested Polities 172
Mapping Investment-Based Citizenship and Residence
Schemes in the EU 179
Investor Citizenship Programmes in the EU 189
Investor Residence Programmes in the EU 199
Conclusion 208
References 209

7 Conclusion 213
Contributions to Comparative Citizenship Studies
and Avenues for Future Research 218
References 222

Index 223
 List of Tables

Table 1.1 Summary: citizenship attribution 8

Table 3.1 Constituting the dimensions of citizenship 60
Table 4.1 Purposes and characteristics of investor citizenship: a typology 96
Table 4.2 Global overview of legislation related to the naturalisation
of investors 102
Table 4.3 Recent ius pecuniae programmes: a comparison 110
Table 4.4 Global overview of legislation related to the residence
for investors 121
Table 5.1 Real growth per top income group 142
Table 6.1 Activation of EU citizenship rights 177
Table 6.2 Discretionary naturalisation on grounds of national interest
in the EU Member States 182
Table 6.3 Citizenship by investment in Bulgaria 191
Table 6.4 Citizenship by investment in Cyprus (September 2016) 195
Table 6.5 Citizenship by investment in Malta (main applicant only) 197
Table 6.6 Investor residence programmes in the EU 200

xiii
 CHAPTER 1

Introduction

In early 2010, media reports in my native Montenegro announced the

arrival, on a private plane from Dubai, of a new citizen. His name was
Thaksin Shinawatra and he was the prime minister of Thailand until
2006, when he was ousted from power by a coup. Ever since, Shinawatra
has been on the run, avoiding the two-year prison sentence for corrup-
tion and abuse of power in his country (MacDonald 2010). As Interpol
had not circulated the Thai arrest warrant against Shinawatra before
he was granted a Montenegrin passport, his criminal record check
appeared clear. Thanks to a promise of a multimillion investment in
the Montenegrin economy, Shinawatra found a safe haven in the small
Balkan state, which was under no obligation under international law to
extradite its new citizen to Thai authorities. A year later, Montenegro
adopted a plan to open up a programme for the sale of passports, based
on legally defined investment amounts rather than the state’s discretion.
This project was halted following the European Union’s (EU) Member
States’ reminder of the precariousness of the country’s recent removal
from the Schengen ‘black list’ and the abolition of tourist visas. The
Montenegrin investor citizenship scheme was held in abeyance until
October 2018, when the government announced the launch of a new
programme. The halting of the scheme did not mean, however, that
in the meantime a wealthy investor could not obtain the Montenegrin
citizenship. An investor could benefit from the state’s prerogative to

© The Author(s) 2019 1

J. Džankić, The Global Market for Investor
Citizenship, Politics of Citizenship and Migration,
https://doi.org/10.1007/978-3-030-17632-7_1
2  J. DŽANKIĆ

naturalise individuals who offer an exceptional contribution to the coun-

try of less than a million inhabitants—just as Thaksin Shinawatra did.
Meanwhile, between 2009 and 2013 Austrian politics were deeply
shaken by two instances of the exchange of passports for investment, also
enabled through legal provisions granting the state the power to natu-
ralise those who have made ‘extraordinary achievements in the interest
of the republic’ (Austrian Nationality Act, Article 10(6)). In 2011, the
Provincial Court of Klagenfurt sentenced the head of the Carinthian
Freedom Party (FPK) and deputy governor of Carinthia Uwe Scheuch
to six months in prison and another twelve months on suspension for
accepting a gift as a public official (The Economist 2013). Scheuch was
prosecuted after the leak of a taped conversation of him offering Austrian
citizenship to a Russian billionaire as ‘part of the game’. To receive
Austrian citizenship, the Russian was required to invest €5 million in the
province of Carinthia and make a donation to Alliance for the Future of
Austria (BZÖ), a splinter group of the Austrian Freedom Party (FPÖ)
to which the FPK was allied and for which Scheuch served as provin-
cial chair. After several rounds of appeal, the Regional Court of Graz
sentenced Scheuch to a suspended seven-month sentence and a fine of
€7500 (Kärnten-News 2012). He has since resigned from all political
functions.
This story was nothing like that of Frank Stronach, a Canadian-
Austrian billionaire for whom the above-mentioned legal provision was
a way of buying into the country’s politics. Stronach, who was born in
Austria, immigrated to Canada at the age of 22 and made his fortune
there. He acquired Canadian citizenship, which resulted in the auto-
matic loss of his Austrian nationality. Upon establishing the European
headquarters of his auto parts company in Austria, Stronach was able
to regain his citizenship on the grounds of ‘extraordinary achievements
in the interest of the republic’. He subsequently started recruiting for-
mer politicians through his company. This enabled him to buy political
influence and establish, in 2012, a political party—Team Stronach. In
the 2013 Austrian parliamentary elections, Team Stronach won 11 seats
becoming the fifth largest party in the country’s parliament. Due to the
drop in public support, the party established by this investor citizen dis-
solved after the 2017 legislative elections.
The sale of passports has not been unknown in the rest of the world
and in fact has been a common practice in the Caribbean islands of
St Kitts and Nevis and the Commonwealth of Dominica for decades.
 1 INTRODUCTION  3

Due to adverse climate conditions, and the fall in the price of sugar,
these countries sought economic salvation in the business of selling pass-
ports. Since 2008, a similar practice has been ongoing in the Union of
the Comoros. This small volcanic archipelago in the Indian Ocean has
been troubled by a history of coups, and political and economic insta-
bility ever since its independence from France in 1975. A fragile econ-
omy coupled with political instability pushed the government of the
Union of the Comoros towards arranging the sale of passports with
the United Arab Emirates (UAE) and Kuwait, both of which have large
stateless populations (‘Bidoons’). Once they acquired the Comorian
passport, the Bidoons ceased to be stateless, but were explicitly barred
from entering their new country. The use of the Comorian passport
by UAE and Kuwait to manipulate a statelessness problem has raised a
number of human rights concerns. The media described it as a ‘barbaric
and inhuman operation that resembles the displacement of Palestinians,
Armenians and the Falash Mura, among others. This is not only a plan
against human rights and humanity, but also a case of human trafficking’
(Kareem 2014). It has also raised concerns over the Arab influence on
the Comorian politics.
Yet, not all the sales of passports have been used for buying political
influence. In August 2017, the British media covered the story of Amar
Al-Sadi, who has escaped the war atrocities in Yemen and is now a citi-
zen of Malta (Tulett 2017). Unlike other Yemeni families who fled the
war as refugees or remained in conflict areas, Al-Sadi was able to apply
to Malta’s Individual Investor Programme (IIP), and now also bene-
fits from the rights of EU citizenship. This programme, established in
2014, opened the possibility for wealthy investors to acquire the citizen-
ship of the small Mediterranean island in exchange for slightly over €1
million, deposited in three parts: direct investment, property investment
and donation (Identity Malta 2017).1 Following the intervention of the
European Commission and concerns expressed by several EU Member
States over the sale of Maltese and thus EU citizenship, the IIP benefi-
ciaries are required to attest to a genuine connection with Malta. This is
done through a one-year ‘effective residence’ condition, which does not
entail continuous physical presence, but rather membership in sports,

1 Details of this programme will be discussed in Chapter 6.

4  J. DŽANKIĆ

medical or other associations in Malta (Dalli 2015) and by taking an oath

of allegiance to the country.
These are but a few examples of the recent wave of ‘passports for sale’
programmes, which have sparked vigorous academic and public debates
on whether citizenship has become a good that can be bought and sold.
Yet the possibility of obtaining membership in exchange for money dates
back as far as ancient Rome and has persisted, in some form, through-
out centuries. So, why do so many find the idea of selling citizenship
intuitively disquieting? Why some countries resort to the sale of citizen-
ship and others do not? How is it done in practice and who takes part in
this global market for citizenship? Responding to these questions, this
book explores how states remodel the rules for joining their community
in response to growing economic interconnectedness. It highlights the
discrepancies between citizenship policies aimed at immigrant integra-
tion and defence of the cultural elements of nationhood (e.g. integra-
tion tests, oath of loyalty, language knowledge, residence) and those such
as the sale of passports, which create ‘long-distance citizens’. The book
further examines the interests and strategies of not only states, but also
of companies and individuals as participants in the nascent ‘citizenship
industry’. The imminent transformation of citizenship through globali-
sation is illustrated by an analysis of the sale of citizenship in the EU,
where the value of Maltese and Cypriot passports in the global citizen-
ship market is notched up by the much higher value of EU citizenship.

Citizenship in the Age of Globalisation

Citizenship as the link between individuals and the polity has evolved
and transformed constantly throughout human history (Aristotle 1941;
Shafir 1998; Kymlicka and Norman 1994; Marshall 1965; Rousseau
1913; Brubaker 1996; Joppke 2007). When thinking about the notion
of citizenship today, we commonly refer to its different dimensions—
status (legal), rights (political) and identity (symbolic/ideational)
(Joppke 2007, 31–48; Bellamy 2004). Each of these three dimensions
has changed over time, and their current meaning and interplay deter-
mine what kind of policies states adopt to signal whom they want as their
citizens.
The status of citizenship has always been intimately related to the
boundaries of the community, and the questions of inclusion and exclu-
sion. As these boundaries became increasingly flexible over different
 1 INTRODUCTION  5

historical periods, the status of citizenship has lost its significance for
distinguishing categories of citizens within the state. Rather, it now
draws dividing lines between citizens and non-citizens within the state,
and between citizens of one state and those of others. Equally, rights
associated with citizenship have progressively expanded with the trans-
formation of the state to include, in addition to equality under the law,
universal suffrage and rights related to social protection. Yet the degree
to which a citizen can enjoy these rights varies from one state to another
(e.g. social rights in the United States differ from those in Sweden, or
in Australia; voting and candidacy ages differ across countries and levels
of election). With the increase in information flows, the amplification of
travel and migration, they also come to signal different life opportunities
for those belonging to different territorial units. Finally, emotional rela-
tionship that individuals have towards their polity of membership mir-
rors ‘the nature and quality of relations among presumed members of
an assumed society’ (Bosniak 2000, 2). Globalisation has detached these
symbolic and ideational elements of citizenship from the status and rights
thus facilitating the instrumental uses of citizenship (Joppke 2010).
Hence understanding the multidimensionality and the fluidity of the
notion of citizenship is essential for comprehending the contents and
the objectives of this book. Looking at the global market for citizenship,
this book will primarily focus on the status of citizenship, or the people’s
legal relationship with the state. However, as the status of citizenship is
intimately related to the rights and duties individuals have in a polity and
their attachment to and solidarity towards their fellow citizens, the book
will touch upon the interplay among these different dimensions of cit-
izenship. In particular, their coupling and decoupling in the process of
status attribution will be of particular relevance for understanding the
regulation and practice of the sale of passports around the globe.

Attribution of Citizenship Status

Scholars have defined citizenship as ‘both as a nodal point that draws
together notions of belonging, access, rights and obligations, and as an
institution around which concepts such as the nation and political com-
munity are articulated’ (Diez and Squire 2008, 566). While acknowledg-
ing the centrality of belonging and rights to the concept, this research
conceives of it through legal status (nationality in international law).
As such, citizenship is a mechanism through which states differentiate
6  J. DŽANKIĆ

between members and non-members, convey their national identity and

distribute rights and duties (Brubaker 1992). Being the most important
articulation of the state’s identity and its link with the population, citi-
zenship remains at the core of national sovereignty, despite the evolution
of international humanitarian law ensuring the respect of basic human
rights in nationality legislation. This means that each state is, in theory,
free to select the conditions under which one can become its citizen at
birth, or after birth; or who can lose its citizenship by renouncing it, or
having it withdrawn by the state authorities. Consequently, each state
responds differently to instances of political or economic crisis, thus
adjusting various aspects of its citizenship policies.
In the context of states faced with multilayered pressures, challenges
and systemic shocks to the global political structures, frameworks based
on national citizenship have insufficient explanatory power. Brubaker’s
(1992) differentiation between the German (ethnic) citizenship model
wherein membership is conceived through kinship and the French (civic)
model conceiving it through territorial belonging explores how citizen-
ship has been determined originally. However, it cannot account for the
politics of citizenship reform. In other words, understanding changes to
the contemporary regulation of membership requires analytical frame-
works that step away from such clear-cut dichotomies and consider
specific policy responses to broader European and global transforma-
tive processes (Aleinikoff and Klusmeyer 2002; Joppke 1999; Vink and
Bauböck 2013).
Recent comparative literature emphasises the significance of ideo-
logical policy preferences of left-wing and right-wing parties that adopt
national legislation (Howard 2009) and the sociopolitical and institu-
tional contexts in which citizenship reform is implemented (Aleinikoff
and Klussmeyer 2002; Ette 2003; Hansen and Weil 2001; Joppke 2005).
Similar to national models, this stream of scholarly work only tangen-
tially acknowledges external actors, structures and processes that are
articulated in domestic policy choices and that have the power to mould
and reshape citizenship policies as much as the domestic political envi-
ronment does. And as a result of these multiple and multilayered factors
shaping the definition of ‘who is in, and who is out’, citizenship is not
uniform in form and content. Whom countries decide to recognise as
their members differs across countries and changes across time (Howard
2009; Heater 2004).
 1 INTRODUCTION  7

Individuals can access citizenship either at birth (which happens auto-

matically), or after birth (by various forms of registration or naturalisa-
tion). The two modes of acquisition of citizenship at birth—through
territorial attachments (ius soli) or descent (ius sanguinis)—have received
considerable attention in the work of both legal scholars and politi-
cal scientists (Brubaker 1992; Joppke 1999; Vink and de Groot 2010).
Rogers Brubaker (1992) differentiated between two models of conceiv-
ing citizenship—the German (ethnic) and the French (civic). In the for-
mer model, membership is largely conceived through kinship ties, and
in the latter through territory. While extensively used in the studies of
citizenship, Brubaker’s model has faced extensive criticism as most of the
contemporary citizenship laws contain a mixture of ‘civic’ and ‘ethnic’
elements. In his later work, even Brubaker (1999) has questioned the
conceptual consistency and usefulness of these models. While territory
and kinship still play a role in the construction of citizenship, such clear-
cut dichotomies are becoming increasingly insufficient for understanding
changes to the contemporary regulation of membership (Aleinikoff and
Klusmeyer 2002; Joppke 1999; Vink and Bauböck 2013).
For this reason, citizenship studies are moving towards a perspective
that disaggregates national membership policies and studies changes
to their constituent elements (Helbling 2013; Joppke 1999; Leibich
2007; Vink and Bauböck 2013). Unpacking citizenship policies in this
way has revealed the plethora of ways for acquiring of citizenship after
birth. These corrective mechanisms are based on some kind of functional
grounds established by states for permitting, or in some cases facilitat-
ing, access to citizenship by non-citizens. Ayelet Shachar (2011, 1) has
referred to these grounds by developing the notion of ius nexi as ‘an
auxiliary path for inclusion in the polity that could operate alongside the
established principles of citizenship acquisition: by birth on the territory
(ius soli) or birth to a citizen parent (ius sanguinis)’. The notion of ius
nexi can therefore explain the links established between individuals and
states after birth. Table 1.1 summarises the key mechanisms of citizen-
ship attribution at and after birth.
In the attribution of citizenship after birth, we can differentiate
between the functional grounds for naturalisation created through a link
with a person who is a current citizen via marriage, adoption or other
kinds of familial links; a link with the state through residence, cultural
affinity, or special achievements that are of national interest to the state;
8  J. DŽANKIĆ

Table 1.1  Summary: citizenship attribution

Citizenship policy is composed of elements that regulate:
(1) Attribution of citizenship at birth (ius sanguinis, ius soli)
(2) Attribution of citizenship after birth, where we can identify three broad categories of
functional grounds for acquisition and loss of citizenship:
(A) Link with a citizen (e.g. (B) Link with a country (C) Links created as a result
descent, familial link); (e.g. residence, special of international norms and
achievements, cultural processes (e.g. humanitarian
affinity) reasons)

and links with the state established by international norms and processes,
such as the grant of citizenship to refugees or the stateless. Each of these
grounds carries its own conditions for naturalisation (e.g. residence,
language, socialisation, absence of criminal record, oath of allegiance),
aimed at attesting to the ius nexi.
Against this context, one of the functional grounds for facilitated
naturalisation, the one that has recently gained salience in the public
sphere, is the granting of preferential treatment to investors in the pro-
cess of acquisition of citizenship (ius pecuniae).2 Ius pecuniae is one of
the principles of citizenship attribution that stands in contradiction to ius
nexi, because it enables the grant of citizenship to investors without a
(prior) link to the country.3 This practice has amplified with the spread
of the global economic crisis. In attempting to secure injections of capi-
tal into their struggling economies, some countries have resorted to the
‘right of wealth’. In doing so, they have adopted mechanisms that allow
them to grant the status of a resident and, eventually, that of a citizen
to rich individuals. These mechanisms are based on the state’s prerog-
ative to decide on naturalisation, which is why most ius pecuniae poli-
cies around the world take place through discretionary naturalisation on
grounds of national interest. In such cases, as in the examples of Austria
2 Term coined by Joachim Stern (2012). Some authors, including Kälin (2016) and

Surak (2018) refer to investor citizenship as ius doni (the law of gift). While acknowledg-
ing terminological differences, this book will retain references to ius pecuniae (the law
of money), because unlike the notion of the ‘money’ that of a ‘gift’ does not entail an
exchange or expectation of anything in return. Investor citizenship is premised on the legit-
imate expectation of receiving membership upon financial disbursement.
3 Another such a principle would be the ius talenti (Jansen et al. 2018), or nationality

attribution for the expected (as opposed to achieved) contribution in the fields of sports, art
and culture.
 1 INTRODUCTION  9

and Montenegro above, the pecuniary contribution that an individual

makes to the state is equalised with national interest, which gives states
the possibility to waive some, if not all, naturalisation conditions. Other
countries, such as Malta, have introduced programmes with clearly stip-
ulated conditions that an investor needs to meet in order to obtain citi-
zenship or a ‘path to citizenship’ (residence) initially and a prospect for
naturalisation. The ensemble of these policies and programmes, along
with intermediaries facilitating their implementation (e.g. non-state
agents performing due diligence checks; managing property and invest-
ment), and their beneficiaries constitute the global market for investor
citizenship.

The Global Market for Investor Citizenship:

A Novelty?
In the age of global interconnectedness, the development of worldwide
markets for different kinds of goods and services is neither novel nor sur-
prising. As the above snapshot of the various programmes indicates, the
sale of passports has proliferated around the world in recent years to the
extent that we can nowadays speak about a global market for citizenship.
In this market, characterised by the race to attract wealth, some states
offer the rights attached to their citizenship in exchange for a one-off
disbursement. The practice, however, of admitting the wealthy to be
members of a polity, and attributing higher degree of citizenship rights
on grounds of affluence, is not a product of globalisation.
The ‘sale’ and ‘purchase’ of citizenship has deep historical roots, which
show that money could either ‘open’ or ‘close’ the doors to member-
ship; it was not unfamiliar in ancient times. The affluent Latini (sub-
jects of the Roman Empire, but not its citizens) who had served in the
army and bought a house in Rome could be granted full citizenship
rights. The most famous anecdote related to this practice is the one of
the Roman centurion who apprehended Saint Paul the Apostle in ad 60
and stated: ‘It cost me a large amount of money to become a Roman
citizen’.4 Similar exchanges existed in the feudal times, where the link

4 Holy Bible. New International Version. 1978. Acts 22: 27–8. Colorado Springs, CO:

Biblica.
10  J. DŽANKIĆ

between money and membership often served as a mechanism for exclud-

ing certain groups from the polity, while granting additional rights and
privileges to the wealthy. The most obvious example of this tendency has
been the development and distribution of the key rights of citizenship
such as the franchise. For instance, from 1848 to 1918 individuals’ elec-
toral rights in Prussia were weighted according to their direct tax revenue
(Dreiklassenwahlrecht). The population was divided into three classes and
the votes of the highest class (constituting less than 5% of the overall pop-
ulation) counted 17.5 times more than the votes of the lowest class (con-
stituting over 80% of the population) (Windthorst 1902). Therefore, even
if in different forms, money has always been central to the conception of
membership, as it represented the functional grounds for admission to the
polity and, by extension, to the rights attached to membership.
This historical continuity of the link between money and member-
ship, however, has not remained unchanged and unchallenged by the
forces of globalisation. Its constant evolution enabled the flourishing,
in recent years, of a market for citizenship with a worldwide coverage.
The origins of this contemporary market can be traced back to the early
1980s, when the first wave of membership policies targeting the wealthy
emerged. In 1982, the government of Australia introduced its Business
Migration Programme (BMP) granting residence rights, or a path to cit-
izenship, on the basis of investment. Between 1986 and 1993, the USA,
the UK, New Zealand, Canada, Uruguay and Panama adopted similar
programmes (Stevens 2016). The Caribbean islands of St Kitts and Nevis
and the Commonwealth of Dominica, and the African volcanic archi-
pelago of Cape Verde developed ‘passport-for-cash’ programmes, while
many European countries, such as Austria and Ireland, used the state’s
discretion to naturalise investors on grounds of ‘associations’, ‘achieve-
ments’ or ‘exceptional contribution’ (Džankić 2012). The second wave
of these policies appeared in the aftermath of the 2007–2009 global
financial crisis, in some form of ‘passport-for-cash’ programmes adopted
by the island nations off the coast of Africa (Comoros, Mauritius),
North America (Turks and Caicos, Antigua and Barbuda, St Lucia)
and in Oceania (Fiji, Vanuatu). They proliferated in the EU during
the peak of the Eurocrisis. Between 2011 and 2013, Bulgaria, France,
Greece, Hungary,5 Ireland, Latvia, Spain, Portugal and the Netherlands

5 As will be explained in Chapter 6, the Hungarian programme was discontinued in 2017.
 1 INTRODUCTION  11

introduced residence-for-investment programmes. In 2013, the cri-

sis-struck Cyprus revised its investment-based citizenship, and Malta
entered the global market for citizenship through its much-debated IIP.
Owing to the intensity of the second wave of ‘passport-for-cash’ pro-
grammes, the global market for citizenship is expanding fast. It informs
the core of this book, which claims that the nature of the relationship
between citizenship and money has been transformed in the context of
globalisation, resulting in a proliferation of policies that enable the sale of
passports. This process is an outcome of the decoupling of the different
dimensions of the traditional notion of citizenship at different levels.
First, the internal dimension of citizenship is becoming decoupled
from the external one. The internal dimension of citizenship is related
to individuals coming together as members of a democratic commu-
nity, pledging loyalty to it, exercising the rights given to them and duties
imposed upon them by virtue of such membership. The combination of
these different elements related to the internal dimension of citizenship
gives democratic legitimacy and continuity to the polity. The external
dimension of citizenship foresees two types of promise vis-à-vis com-
munal members: (1) a promise of recognition of the state’s passport by
other countries; and (2) a promise of the right to return and diplomatic
protection to citizens abroad. The separation of these two dimensions
in the global market for citizenship is relevant for the attribution of the
pecuniary value to citizenship. Bauböck (2014, 19) has compared these
two dimensions of citizenship to the two faces of the Roman god Janus,
which ‘belong to the same head, but sometimes the stories that they
tell become dangerously disconnected’. This disconnection is mirrored
in the fact that in the sale of passports, the internal dimension of citi-
zenship becomes of a lesser significance, compared to the external one.
While there are a range of different factors and indicators that have been
used to rank passports worldwide (QNI 2017; Passport Index 2018), in
the global market for citizenship, the ‘price’ of passports is correlated to
what this travel document can offer to its holder externally (e.g. freedom
of movement; consular protection; non-extradition of citizens).
Second, the different internal dimensions of citizenship are being
decoupled among themselves, which facilitates ius pecuniae. Internally,
citizenship is composed of the status (legal dimension of citizenship),
rights and duties (political dimension of citizenship) and identity (emo-
tional/ascription dimension). Status has traditionally been related to the
conception of identity or loyalty to the polity, and as such it gives rise
12  J. DŽANKIĆ

to the rights and obligations that individuals have towards their commu-
nity of membership. Attaining such status has been preconditioned by
birth or by meeting a set of conditions that would assure an individu-
al’s integration, loyalty and contribution. Exercising the political dimen-
sion of citizenship has had the same premise. As citizenship has become
increasingly detached from the territorial conception of the state and
entrenched in broader global developments, the links between these
dimensions are withering away (Bosniak 2000; Sassen 2002; Rubenstein
and Adler 2000). The possession of the status of citizenship is no longer
the requirement for exercising many of the citizenship rights, as evi-
denced by the situation of permanent migrants who enjoy the inter-
nal rights of citizenship almost equivalent to those of resident citizens
(except for, in many cases, voting at the national level). The attribution
of such a status after birth is facilitated in many countries through pol-
icies, such as the sale of passports or extraterritorial ethnic kinship pol-
icies, which create external citizens. Such citizens enjoy the external
dimension of citizenship, and in some cases are also able to cast votes,
i.e. decide on the future and destiny of the democratic polity. Apart from
the presumed connection that served for the attribution of status, they
are not required to pledge loyalty to the state, for instance by renounc-
ing their citizenship of origin. Peter Spiro (2008) and Christian Joppke
(2010) have referred to these processes as the lightening and denational-
isation of citizenship.
These multiple and overlapping processes of decoupling of different
citizenship dimensions have indeed resonated in the global citizenship
market. Money and property have always been relevant in the history of
citizenship, and as we have seen above, there have been many cases of
the purchase of communal membership. Yet, these ancient forms of sell-
ing citizenship were driven by the interests of particular polities to attract
wealthy citizens and improve their income. Today, local exchanges of this
sort have become transformed into a global market where states compete
with each other for investors, and investors choose the most attractive
citizenship. The dynamics that operate within this fast-growing market
raise a number of normative questions about the benefits and harm of
investment-based citizenship. They also point to the resilience of sov-
ereignty in modern times by juxtaposing the arguments on the cultural
defence of nations to those on the decline of citizenship through glo-
balisation (Orgad 2015; Spiro 2008). States are increasingly demanding
loyalty and integration from ordinary migrants through integration tests,
 1 INTRODUCTION  13

oath of loyalty, language knowledge and residence. However, they simul-

taneously adopt policies, such as the sale of passports, which are accessi-
ble to select individuals, and which instrumentalise citizenship. Through
such policies states create ‘long-distance citizens’, or individuals who
use the benefits of the status of membership remotely, but do not create
social ties with their destination country. Presumably, this instrumental-
isation of citizenship has been enabled by the decoupling of its differ-
ent dimensions, that is, the ‘lightening’ of citizenship (Joppke 2010).
Having become ‘light’, citizenship can be sold as it no longer carries the
weight and value it has when rights were exclusively tied to the status
of citizenship. Notwithstanding, this explanation offers merely a general
disposition, and does not fully explain the rise in the sale of passports.
History shows that some forms of ius pecuniae also existed in polities
where citizenship was ‘heavier’, such as ancient Rome or the medie-
val city states. In the present day, we do not see it in countries such as
Sweden, where the status and rights of citizenship are rather detached.
As a consequence, the contemporary practices of ius pecuniae also need
to take into account how the interests and strategies that states, com-
panies and individuals play out within the global market for citizenship
and how they then help to articulate different conceptions of communal
membership around the world.

A Brief Note on Methodology

Back in 2010, when I first started researching the topic of investor cit-
izenship, there was hardly any academic literature on the topic. Due
to the concurrent leak of the controversies surrounding these pro-
grammes in Montenegro and Austria, there was however increased inter-
est by journalists in covering such stories. Looking into these two cases,
I became aware of the whole industry behind the sale of passports, includ-
ing companies that facilitated the exchange between money and member-
ship. Through the websites of these companies, I managed to draw up a
preliminary list of countries operating programmes that sold citizenship
and residence permits (with a prospect for obtaining citizenship). I then
sought the legislation that enabled such exchanges, and examined it in the
context in which it was adopted, including the historical, sociopolitical,
economic and geographic circumstances of each country.
To put this into the words of a political scientist, this book is based on
qualitative interdisciplinary methodology, which draws on insights from
14  J. DŽANKIĆ

sociolegal studies, history, political science and economics. It blends

together years of desk-based research and exploration of the nuances of
the concept of citizenship, with fieldwork in the form of interviews and
participant observation. That is, the exploration of the roots, growth and
transformation of the global market for investor citizenship has benefit-
ted from both primary and secondary literature.
Chapters 2 and 3, which build the historical and normative pillars
for understanding of the sale of citizenship around the world, are pre-
dominantly based on secondary literature. To introduce readers to the
topic, they contain an analysis of the most relevant theoretical and his-
torical sources from the growing area of citizenship studies. Clearly, a
detailed analysis of this vast academic field exceeds the objectives of this
book. Hence there will certainly be theoretical, historical and empiri-
cal works that have made a difference in citizenship studies but that are
not included in this research. This has not been done to undermine the
general relevance of such work, or by careless omission, but rather due
to the need to limit the scope of analysis to the relationship between
money/property and membership in this book. In addition to this, sec-
ondary literature has also been used to support the empirical part of the
book, and to also serve as a mechanism of comparison and control for
the analysis in Chapters 4–6.
Furthermore, this book also relies on a range of primary materials and
sources that I have collected since 2010 (legal texts, policy statements,
newspaper articles, statistical data and semistructured elite interviews).
Gathering such materials was, at times, far from easy or straightforward.
While legal core legal texts, policy statements and newspaper articles
have been made available in the public domain, obtaining internal pol-
icy documents and statistical data, and conducting interviews has been a
major effort. Comprehending this difficulty is key to understanding the
analysis in this book. In many countries, the grant of citizenship to inves-
tors is a highly discretionary policy. As we will see in Chapters 4 and 5,
procedurally it involves the highest authorities of the state who have the
power to decide on what constitutes an exceptional (economic) contri-
bution to their country. There is normally no scrutiny over the process;
decisions are based on internal procedures and are commonly not subject
to judiciary review; with a few exceptions, names and numbers of appli-
cants (if available) are frequently added to those of all other naturalised
individuals. Even in countries where investor citizenship programmes
with detailed criteria exist, obtaining statistical information, any details
 1 INTRODUCTION  15

on internal procedures or information on the number or origins of appli-

cants required direct contact with national authorities, policy community
or the private sector.
Interviews were also used as a primary source in this research and they
allowed me to further my knowledge on the topic. To prepare this book,
I have spoken with eight international policymakers, national authori-
ties, political analysts, lobbyists and journalists. The limited number of
interviews undertaken for this research is due to three main reasons.
First, for the purposes of this research, interviews have a role of comple-
menting other primary and secondary data or providing illustration of
the argument; they are not the foundation of the analysis since this is
not a sociological or anthropological study. Second, as the examples from
the beginning of this introduction show, the sale of passports is a rather
controversial topic. Hence while ‘snowballing’ has been largely used to
access informants, in some cases interviewees were unable or unwilling
to discuss issues of the state’s discretion or details of investment-based
citizenship programmes. In a few cases, Chatham House rules have been
applied. In other words, the responsiveness of contacted interviewees to
official interviews has been low and the choice of interviewees has been
affected by the political sensitivity of the topic. However, interviews
were conducted in 2017 and 2018, and all of the interviewees have been
engaged in designing, implementing or analysing the sale of passports.
They all have been well acquainted with the policies, processes and con-
texts that enabled the development of the global market for investor cit-
izenship. Third, covering the topic of investment-based citizenship by
fieldwork in all countries implementing such programmes would have
taken me to destinations from the Caribbean islands to the Americas, to
South East Asia, to Africa. Doubtless, such fieldwork would have defi-
nitely enriched both the research for this book and myself privately and
professionally. Yet, due to time and budget constraints it has been largely
limited to Europe, with insights about programmes in other continents
received through email or via Skype.
Indeed, coordinating the work of the European Union Democracy
Observatory on Citizenship (EUDO Citizenship) and its successor
the Global Citizenship Observatory (GLOBALCIT) at the European
University Institute since 2015 has facilitated my access to the network
of contacts that has vastly benefitted this research. I am grateful to the
individual country experts who have directed me towards media sources,
16  J. DŽANKIĆ

legislation, individuals, public or private institutes, which were indispen-

sable for completing this book.
Last but not least, with this book I hope to entice further research
and exploration of the global market for investor citizenship. As the
ongoing transformation of the states and markets reshapes the notion of
membership, this book is likely to be the tip of the iceberg of a growing
research field.

Road Map of the Book

This introductory chapter has as its objective to chart the topic of the
global market for investor citizenship and lay the pillars for the explo-
ration of the various layers of the relationship between membership in a
political community, and money. The subsequent chapters are organised
in such a manner as to provide a normative analysis, as well as conceptual
and analytical tools for understanding the historical roots and contempo-
rary practice of the sale of citizenship. By doing so, the book will cover
four thematic aspects of the practice of facilitating wealth-based migra-
tion at a global level. First, the book systematically explores the transfor-
mation of the ways in which money and property have been engrained in
the concept of citizenship. Second, it provides a rich empirical study of
policies that states adopt in the global race for wealth. Third, it explores
strategies and interests of the various actors that take part in the global
market for citizenship. Fourth, the book’s focus on the transforma-
tion of citizenship highlights the resilience of sovereignty, a theme that
is particularly important for analysing relationships among states in the
increasingly globalised world. By combining these four thematic areas,
the book seeks to offer an explanation as to how, when and why coun-
tries adopted particular investment-based programmes and looks at the
politics of citizenship policy in explaining the content of legal provisions.
Chapter 2, entitled ‘Citizenship and money: historical snapshots’
looks at the centrality of money and property in the regulation and prac-
tices of citizenship since ancient times. As much as we intuitively think
of citizenship nowadays as a relationship of equality, historically this has
rarely been the case. Drawing boundaries between different groups of
people is at the core of the concept so that equality can at best operate
within and not across different groups and, very often, pecuniary condi-
tions have been the functional grounds for exclusion of certain groups
from membership in a community or from a bundle of rights attached
 1 INTRODUCTION  17

to it. Chapter 2, therefore, starts with a discussion of how the posses-

sion of property has been central to the status of citizenship in ancient
Greece. It then explores practices that existed during Roman times, such
as the possibility for rich peregrines (non-citizen subjects of the Roman
Empire) to buy their way into Roman citizenship. Looking at the evo-
lution and transformation of the link between citizenship and money in
feudal times during various stages of capitalism, and in socialist societies,
the chapter highlights that wealth and status have been intimately related
not only to the attribution of status, but also to enjoying the key rights
of citizenship (e.g. voting rights) (Heater 2004; Marshall 1950; Turner
1994). The final section of the chapter looks at how globalisation since
the late twentieth century has created an entirely new environment for a
market in citizenship.
Chapter 3 entitled ‘To sell or not to sell: the ethics of ius pecuniae’
discusses the normative attitudes towards the global market for citizen-
ship. It highlights that the different conceptions of citizenship influence
ethical stances towards ius pecuniae, and explores arguments for and
against investor citizenship that are rooted in liberal, communitarian and
republican citizenship traditions. For stances emanating from the lib-
eral tradition, which emphasises the individual as the holder of citizen-
ship rights, the sale of citizenship would be least contentious. This is the
case because many liberals argue that globalisation has contributed to the
general decline (or ‘lightening’) of citizenship, thus enabling individuals
to instrumentalise political membership in the pursuit of their personal
goals. Arguments that originate from the republican or communitarian
traditions are less permissive of the sale of political membership. The
republican tradition, which sees an individual as an active participant in
political processes and citizenship as the basis for democracy, would be
far less favourable to the idea of a global citizenship market. For com-
munitarians, rights and responsibilities, and loyalty to the community
of members, are two streams of the lifeblood of citizenship. Hence,
citizens are expected to be responsible to both the community of the
state (obey laws) and towards the community of members (contribute
to the collective well-being). Such arguments are thus commonly used
to object to the outright sale of citizenship, even though some strands
of communitarianism but might be permissive of it, especially if leaning
towards nationalism (i.e. investment would increase the wealth of the
nation). Exploring the nature of membership through different norma-
tive lenses helps us to understand the contemporary claims as to why
18  J. DŽANKIĆ

countries should or should not take part in the global market for investor
citizenship.
Chapter 4, ‘A classification of investment-based citizenship pro-
grammes’, explores the different policies that countries adopt to compete
in the global citizenship market. Some states practise ius pecuniae on the
grounds of the historical prerogative of the state to define its member-
ship. In such cases, the state’s discretion to decide on its national inter-
est paves the way for either fully discretionary naturalisation of investors
or the more detailed investment-based citizenship programmes. Others
view ius pecuniae in the context of their general approach to immigra-
tion, and offer the investors the possibility for becoming citizens if they
migrate and integrate in the country. Chapter 4 develops a typology for
classifying the contemporary investment-based citizenship programmes.
The typology differentiates between programmes that facilitate natu-
ralisation for investors by offering them a ‘path to citizenship’ (e.g. the
UK, the USA, Canada, Belgium, Australia, Singapore), and policies that
fully or partly waive other regular naturalisation criteria (e.g. Antigua
and Barbuda, Cyprus, Commonwealth of Dominica, Malta, St Kitts and
Nevis). The classification is followed by a comparative analysis, which
highlights the distinct features of the plethora of ius pecuniae policies
around the world. It excludes EU countries from detailed analysis; these
are analysed in Chapter 6.
Chapter 5 entitled ‘Long-distance citizens: strategies and interests
of states, companies and individuals in the global race for wealth’ anal-
yses the key actors in the global market for citizenship. States formally
adopt and implement ius pecuniae policies; these policies are developed
and managed by private companies as intermediaries; wealthy individuals
are their primary target and beneficiaries. The chapter first looks at the
global race for wealth, arguing that global mobility of people and capi-
tal offers a structure of opportunity for states to develop policies target-
ing the affluent individuals (Shachar and Hirschl 2014; Shachar 2017).
These policies match the interests of the wealthy from the developing
world to acquire citizenships that will enhance their mobility, while artic-
ulating the economic interest of destination states. Second, the chapter
analyses how private companies engage in standard-setting and building
a global regulatory framework for investment-based citizenship. This
strategy enables them to establish networks of subsidiaries and man-
age various aspects of investment-based programmes on behalf of states
(e.g. due diligence, insurance, criminal record checks), thus developing
 1 INTRODUCTION  19

a ‘citizenship industry’. Third, the chapter examines the profile of ben-

eficiaries of ius pecuniae and identifies patterns of interests that such
individuals might have in obtaining status on grounds of investment.
Finally, it reflects on the problematic aspects of such a market for cit-
izenship (e.g. corruption), and their manifestations in domestic poli-
tics and international relations. An example of the latter would be the
Caribbean island of the Commonwealth of Dominica, which has been in
a political crisis since February 2017. The country’s opposition demands
the resignation of the prime minister and his cabinet, claiming that they
engaged in corruption through construction scams linked to Chinese
and Iranian beneficiaries of the Dominican Citizenship by Investment
(CBI) Programme. In addition to local corruption, the opposition raised
concerns over the rise of Chinese and Iranian influence in the Caribbean
and the potential of this trend to disrupt the country’s relationships with
the United States.
The forms of investment-based citizenship in the EU are the sub-
ject of the sixth chapter of the book, entitled ‘Ius pecuniae in a multi-
level system: the European experience’. The case study of the EU has
been selected due to the particular nature of EU citizenship, which is
additional to and dependent on national membership. In naturalising
investors, Member States exercise their prerogative in deciding on mem-
bership. Yet, by doing so they create new citizens who can access an
array of rights enforceable in twenty-eight Western democracies. Chapter
6 discusses investor citizenship in the EU context by exploring the dif-
ferent mechanisms that European countries employ to reach out to the
wealthy. It does so by also taking into account: (a) the unique features
of EU citizenship; (b) the role of European institutions; (c) the limits
of EU law; and (d) characteristics of states and national identities articu-
lated in citizenship policies.
Chapter 7 concludes the book with a discussion of whether the mar-
ketisation of citizenship is an irresistible global trend, or whether it is
likely to wither away when faced with rising nationalism and antiglobalist
populism. The previous six chapters contain a systematic analysis of the
history, theory and policy of investment-based citizenship. However, the
book is also a study of the resilience of sovereignty in the context of glo-
balisation because states have the prerogative of deciding who they want
as members of their political community, and they develop rules for nat-
uralisation accordingly. Yet citizenship policies are not merely an inward
reflection of a state’s approach to immigrants; they also mirror the state’s
20  J. DŽANKIĆ

strategies and objectives in the international context, against which

national rules have been developed. The conclusion thus traces what the
trend towards a global market for citizenship can teach us about how
policies evolve to meet the growing demands of increasingly interrelated
political systems and transnational economies. It hints at the possibil-
ity for a counter-trend to this market, whereby nationalist and populist
backlashes against globalisation could lead to a clampdown on the sale
of citizenship. The chapter concludes that investment-based citizenship
echoes just how pliable the state’s conception of membership is in the
contemporary world.

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 CHAPTER 2

Citizenship and Money:
Historical Snapshots

When we think of citizenship today, we commonly see it through the

lenses of equality and ‘the right to have rights’ (Arendt 1951, 294).
While indeed the status of citizenship has always been a guarantee
of some core rights, these rights have seldom been distributed equally
within and across states. Likewise, historically, citizenship has been a
tool for exclusion of particular categories of individuals, such as women,
minorities or the poor, from participating in communal decision-making.
In the Athenian polis, citizenship was restricted to free men who pos-
sessed property. In ancient Rome, several statuses were used to denote
various categories of legal rights individuals could hold: the cives Romani
enjoyed full protection under Roman law, rights to property (ius com-
ercii) and marriage (ius conubii), the Latini could enjoy the former
but not the latter, while the rights of groups such as the Foederati were
granted in exchange for military and other services to the state. In medi-
eval times, the notion of citizenship denoted subjecthood, submission
to the ruler. The attribution of rights was tightly coupled with commu-
nal duties, above all with taxation. The first concepts of ‘sovereignty’
emerged during feudalism, and were upheld by hierarchy and eventually
the absolute monarch, sustained in that position by a conflation of the
monarch and God. With the revolutions that ended the age of absolut-
ism, the link between the ruler and the subjects eventually transmuted to
the sovereignty of the people.

© The Author(s) 2019 25

J. Džankić, The Global Market for Investor
Citizenship, Politics of Citizenship and Migration,
https://doi.org/10.1007/978-3-030-17632-7_2
26  J. DŽANKIĆ

The modern processes of nation and state-building after the French

revolution hinted at citizenship as a signifier of equality. Yet, the war
atrocities of the first half of the twentieth century have shown otherwise.
Only after the Second World War have we come to think of citizenship
as the pledge that our statutory rights are the same as those of every-
one sharing our common citizenship. Again, in reality, women remained
excluded from the electoral franchise in many former British colo-
nies until the late 1950s; in Switzerland, which is nowadays seen as the
epitome of democracy, until 1974; while in Saudi Arabia they received
the right to vote and be elected (in municipal elections) only in 2015.
Today, even if we think of all citizens within a state as equal, citizenship
also provides a justification for why our rights differ at an international
level (Shachar 2009). Had I been born 100 kilometres to the west, in
the neighbouring Croatia, I would by now have been able to make use
of the rights of EU citizenship and move freely across twenty-eight
states. Had I been born 100 kilometres to the east, in the neighbouring
Kosovo, my passport would not be recognised as a valid travel document
in over fifty countries.
There are three lessons to be learnt from history. First, citizenship
has had different meanings during different historical times. Hence
the understanding of its relationship with money and property is
premised on the function that citizenship is performed in a particular
context. Second, the notion of citizenship mirrors communal values
that a particular polity embraces. For example, citizenship in ancient
Sparta reflected the value attributed to military virtues. The notion of
citizenship in the medieval Italian cities echoed the values engrained
in Christianity, but also identity and loyalty. Third, since ancient
times, the notion of citizenship has been a marker of boundaries and
a determinant of hierarchies within and between societies. These
hierarchies and boundaries have frequently been related not only to
gender and place of birth, but also to material possessions. The lat-
ter frequently had the potential to shift the boundaries of inclusion
and exclusion and recompose the structure of societal relations. This
chapter proceeds to map continuities and discontinuities in the rela-
tionship between money and membership throughout history, and
aims to show how citizenship is being reshaped as a result of increas-
ing globalisation.
 2  CITIZENSHIP AND MONEY: HISTORICAL SNAPSHOTS  27

Citizenship in Ancient Greece: Of Possessions,

Duty and Merit
The notion of citizenship originates in the context of the polis (city state)
in ancient Greece as a mechanism of defining membership and institut-
ing a system of obligations and privileges attached to such a member-
ship. The nature of different citizenships across the ancient Greek polis
emerged out of a particular context in which small communities, each
with its defining linguistic traits, customs or mores, competed for scarce
resources in the archipelago. This competition for resources was a com-
mon cause of wars, and citizenship thus became a mechanism for ensur-
ing loyalty and service to the city state in the case of conflict. Individuals
at the service of the state would receive rewards in the form of rights and
privileges in the community. Participation in warfare was restricted to
males and thus excluded women from citizenship. Citizenship arose from
the necessity to protect the polis and thus participation in its governance
was a prerogative of those who took part in safeguarding it, or contribut-
ing to its expansion. And this relationship evolved to include property as
the core of communal membership.

Sparta
While Athens has commonly been taken as representative of citizen-
ship in ancient Greece, the intimate relationship between the duties to
protect the community, to be at its service, the ability to take part in
its functioning—as well as property as a key element thereof—was most
manifest in the case of Sparta. The Spartan society is nowadays consid-
ered to be a paradigm of military dictatorship and as such is commonly
excluded from scholarly analyses of the development of the contempo-
rary understanding of citizenship. Yet, the example of Sparta is illus-
trative of how duty and value have been translated into property and
linked to communal decision-making. Rather than being a bounded
city state, Sparta was a conglomerate of agricultural communities, which
sought mechanisms for self-preservation (Cartledge 2013). Originally,
all Spartan men were deemed equal and completely devoted to public
service, whereby dying in defence of the polis was considered the great-
est honour and the greatest act of citizenship. To cultivate this honour,
Spartan boys would be taken from their families and would enter military
28  J. DŽANKIĆ

service, where they would be rigorously trained to defend their ­society.

Spartan men remained in the army until the age of thirty, and only
­thereafter were they allowed to marry. During the period when Sparta
sought self-preservation from external enemies, the relationship between
property and citizenship was scarce, because leading a good life assumed
a focus on communal commitment that required constant enhance-
ment of physical strength. Spartan expansionism in the ninth century
bc, ­
followed by the capture and distribution of new lands increased
­communal inequalities and created hierarchies of citizenship (Riesenberg
1992, 8–9).
To deal with these increasing hierarchies, the Spartan ruler Lycurgus
reformed the society on the basis of three key values: asceticism, physical
fitness and equality. Plutarch (2009 [75 bc], web resource) writes that
Lycurgus had the objective of eliminating

from the state arrogance and envy, luxury and crime, and those yet
more inveterate diseases of want and superfluity, he obtained of them to
renounce their properties, and to consent to a new division of the land,
and that they should live all together on an equal footing; merit to be their
only road to eminence, and the disgrace of evil, and credit of worthy acts,
their one measure of difference between man and man.

Citizens of Sparta thus became Homoioi (equals), through a process that

entailed redistribution of land holdings and wealth. The newly acquired
lands of Laconia were divided into 30,000 equal shares distributed
among Spartans, while those inhabiting the Laconian lands (Helots) were
considered attached to the land (Plutarch 2009 [75 bc], web resource).
Within Lycurgus’s distribution, Helots did not become slaves to those
who received the respective land allocation, but remained ‘property’ of
the city state.
Importantly, Lycurgus’s reforms instituted iron coins that had lit-
tle value outside Sparta so that ‘the rich had no advantage here over
the poor, as their wealth and abundance had no road to come abroad
by’ and ordained that citizens should ‘all eat in common, of the same
bread and same meat, and of kinds that were specified’ (Plutarch 2009
[75 bc], web resource). Spartans despised ‘the frivolous devotion of
time and attention to the mechanical arts and to moneymaking’ and led
lives that would be of benefit to the community and not for individual
gain (Plutarch 2009 [75 bc], web resource). As in such a society, private
material goods no longer conveyed communal privileges, the status of a
 2  CITIZENSHIP AND MONEY: HISTORICAL SNAPSHOTS  29

Spartan citizen was only obtainable through complete devotion to the

community and its values expressed through fitness for military service.
Admission of foreigners was regarded as unwelcome, because it would
disrupt the character of the Spartan society. The latter, along with the
fact that private property had no communal value, precluded the acquisi-
tion of membership on the basis of wealth and possessions in Sparta.

Athens
Ancient Athens is often taken as the cradle of citizenship and democ-
racy, and as a society it is commonly juxtaposed to totalitarian Sparta.1
The early societal relationships in ancient Athens were based on privi-
leges of birthright and wealth (Riesenberg 1992, 12). Yet in the absence
of significant political decisions to be taken, there was no clear system
of governance until the seventh century bc. The development of trade,
commerce and the evolution of agricultural production in the Attica pen-
insula where the Athenian polis was located, all contributed to the dif-
ferentiation of social structures. The gap between the rich and the poor
widened continuously, leading to indebtedness of small landowners and
peasants. Such a situation increased hostilities inside the polity, mak-
ing it vulnerable to attacks by rival city states. Deciding on who would
bear arms and take part in communal decision-making was key to its
self-preservation.
Aristotle (1885 [350 bce]) writes that the first conception of citizen-
ship in ancient Athens was developed as a response to societal needs for
protection in times of internal turmoil. While similar situations led to the
rise of tyrannical rule elsewhere, Solon’s reforms, which encompassed
the cancellation of debts and redistribution of property, appeased the
hostilities between the rich and the poor in Athens. The same reforms
institutionalised a relationship between citizenship and property as the
Solonian constitution divided the citizens into four classes on the basis of
possessions (measured in gallons of cereals), and established the rules for
political participation of each of them. The most affluent class (pentako-
siomedimnoi) were eligible to serve as generals or military governors; the
second class (hippeis) would serve in the cavalry; the third class (zeugitai)
would be able to serve in the infantry; the lowest class (thetes) would be

1 Aristotle criticised the Spartan way of life believing it to be conducive to unidimension-

ality of character and limited contribution to communal life (Forest 1968).

30  J. DŽANKIĆ

auxiliaries in the armed forces. Thus in ancient Athens, not only were
the core communal honours and privilege attached to wealth, but also
an individual’s likelihood of dying in warfare was directly proportional to
his social class.
Solon’s reforms were to be maintained for ten years after they had
been instituted, but the social stratification led to the r­e-emergence of
old hostilities and eventually to the ascent of tyranny under Peisistratus
and his son Hippias (Robinson 1945). In the sixth century bc,
Cleisthenes overthrew Hippias and reorganised the governance of the
Athenian state. He modernised citizenship and devolved political power,
which had been originally granted to four tribes, to ten new territorial
units (deme). In this way, the notion of local residence, which was also
recorded for the first time within the deme, became the basis of citizen-
ship. The involvement in the community was restricted to male citizens
(arms-bearers) who would be presented to and recorded in the deme
once eighteen years old. Only these citizens—adult, male, born in the
deme to a registered father—would have the right to participate in com-
munal decision-making in Athens (court, assembly, council, military,
etc.). Privileges of birthright citizenship were further strengthened by
Pericle’s law in 451–450 bc.
As the Athenian polis expanded, the difference between citizens and
metics increased. The latter were foreign craftsmen and former slaves
subject to duties of citizenship, such as military service and taxation, but
were denied benefits and privileges of citizenship, including participation
in governance. Until the Peloponnesian War (431–404 bc), metics could
not become citizens of Athens, but thereafter those who took up arms
to defend the Athenian democracy could achieve special recognition and
thus be rewarded with the status of citizenship. Citizenship awarded on
the grounds of exceptional service is a common practice born in ancient
Athens that exists to this day. Apart from its use for admitting talented
artists, sportspeople and the like, it is nowadays frequently used to nat-
uralise investors, whose economic contribution is seen as an equivalent
of exceptional service to the state.2 Yet, in the Athenian society, wealth
alone did not suffice for a metic to be granted the status of a citizen, but
would need to be complemented with another kind of contribution to
communal values. This is corroborated in Aristotle’s Republic, through

2 See examples and details in Chapter 4.

 2  CITIZENSHIP AND MONEY: HISTORICAL SNAPSHOTS  31

the mention of Cephalus, a wealthy, educated metic who was neverthe-

less not a full citizen of Athens. His son, the orator Lysias, had been
proposed for the grant of citizenship due to his assistance to Athenian
exiles during the Thirty Tyrants’ (pro-Spartan) rule in 404 bc, but in
the absence of a fully constituted city council the motion was rejected
(Loening 1981).3 The practice continued until it was subsumed by trea-
ties on the rights of equal citizenship (isopoliteia) among Greek city
states during the absolutist rule that characterised the Hellenic period
(323–331 bc). This period also marked a shift from citizens to subjects
that persisted in many societies for the centuries to come.

Ancient Rome
The conceptions of citizenship in ancient Rome have undergone numer-
ous changes and are thus far more complex than the ones that had
existed in the Greek city states. The rise of mercantilism, the develop-
ment of trade, territorial expansion and the shift to monotheism with the
advent of Christianity all caused a profound transformation of communal
values in Roman society. And since citizenship is a reflection of those val-
ues, its link with wealth and property becomes a function of the purposes
that membership served at the time. Moreover, Romans for the first time
understood the notion of bureaucracy. This in turn has influenced the
development of different forms of citizenship transmission, as a mecha-
nism for keeping records of the different categories of people.
Hence, even if ancient Rome brought about major developments of
the legal and administrative aspects of citizenship, its core remained the
regulation of inclusion and exclusion. To that end, a number of ways
developed in Roman society through which an individual could become
a citizen. In addition to performing exceptional service to the state, per-
sons could become admitted on the grounds of parentage, wealth and
eventually through mass naturalisations. Similar to ancient Athens, citi-
zenship remained inextricable from military duty and governance, both
closely related to property. An individual’s affluence determined which
citizenship category he (only males could be citizens) would belong to,

3 Although there is some historical ambiguity on whether this happened or not, some

sources indicate that Lysias may have obtained Athenian citizenship later on, in 401 bc,
when the decree IG II was adopted conferring isopoliteia to metics on the grounds of merit
(Loening 1981).
32  J. DŽANKIĆ

which rights he would enjoy, and what rank he would occupy in the mili-
tary. In some rare cases, it would also allow foreigners to become Roman
citizens.
The development of Roman law was tightly coupled with the hier-
archies of citizenship, and certain rights and privileges were reserved
only for those who were considered cives Romani, while other groups,
including the Latini or peregrines did not have access to the full array
of rights granted to Roman citizens (Abati 2013). These rights included
in the most narrow sense, the right to vote (ius suffragiorum) and stand
for office (ius honorum), the right to conclude contracts and hold prop-
erty (ius commercii), the right to marry and pass on citizenship through
bloodline (ius conubii), the rights to sue, have a legal trial and have the
right to appeal. With the Roman expansion, a special set of legal norms
applicable to all individuals was developed to regulate the relationships
between Roman citizens and foreigners (ius gentium), along with the
right to relocate and preserve the rights and privileges of Roman citizen-
ship (ius migrationis).
Before the ad 212 Constitutio Antoniniana, which granted citizenship
rights across the Roman Empire,4 the full array of these rights was availa-
ble only to one part of the cives Romani (Benario 1954). Roman citizens
who had property and marriage rights were denoted as non optimo iure,
and if they could be bearers of ius suffragiorum and ius honorum, their
status would be cives Romani optimo iure. The wealthy Roman citizens
(patricians) enjoyed the rights of suffrage, while the commoners (plebe-
ians) were originally barred from holding office or voting in the Roman
Republic.5 In addition to the cives Romani, the Latini were a class of
citizens that could benefit from limited rights under Roman law. They
had the rights of ius commercii and ius migrationis, but not that of the
ius connubii because the latter entailed the passage of Roman citizenship
through bloodline. Latini included convicted cives Romani who were
stripped of their rights, freed slaves or groups who migrated to Latin

4 The Roman Republic fell in 27 bc and was substituted by the Roman Empire, which

lasted until the abdication of the last Emperor, Romulus Augustus, in 476 ad.
5 Plebeians have progressively been granted suffrage in ancient Rome. Between 494 and

287 bc, a period referred to as the Conflict of the Orders, the plebeians sought politi-
cal equality with the patricians. Over two centuries, they won rights such as the right to
hold office or priesthood, establishment of plebeian offices, or intermarriage (with the
patricians).
 2  CITIZENSHIP AND MONEY: HISTORICAL SNAPSHOTS  33

colonies. Finally, categories such as the provincials (provinciales) from

conquered territories, or peregrines (peregrini), the free non-citizen sub-
jects of ancient Rome could only benefit from the rights of ius gentium
(Nicholas and Metzger 2008).
Rome’s political institutions changed throughout centuries of the
Republic and the Empire to accommodate the needs of the growing
population and changing social relationships. Riesenberg (1992) further
claims that these constantly evolving political institutions and the expan-
sion of citizenship rights across different groups enabled the longevity of
ancient Rome.

It might be said that the relative success of these institutions over many
centuries made possible Rome’s military victories, for they allowed new
political classes to vote and play a role in determining state polices and to
serve in the legions – in effect, to feel part of and benefit from member-
ship in the political community. Rome’s leaders managed to accomplish all
this by channelling the activity of new citizens within existing forms, which
depended both upon a hierarchy of distinctions based upon property and
on the traditional organisation of society on a tribal basis. (Riesenberg
1992, 61)

The expansion of Roman citizenship was, therefore, a tool for underpin-

ning the state, or, in contemporary terms, of state-building. It worked
both externally—by the gradual admission of populations that came
under the Roman rule throughout centuries (mass grants of citizenship
as a form of foreign policy) and internally—by the grant of rights to cit-
izenship to groups or individuals from different social strata, thereby
including them in different mechanisms of governance (individual or
small-scale grants of citizenship).
Territorial and commercial growth of ancient Rome was key to
extending the rights of citizenship that were originally reserved only
to Roman citizens (Talamanca 1991). Far from being an act of altru-
ism, the extension of citizenship to conquered populations had the key
objective of ensuring sufficient military personnel for further expan-
sions of ancient Rome. Examples of such mass grant of citizenship
were the Lex Plautia Papiria of 89 bc, which granted Roman citizen-
ship to Italic peoples south of the Po River and the Lex Roscia of 49
bc that conferred full rights of Roman citizenship to Cisalpine Gauls.
34  J. DŽANKIĆ

The Constitutio Antoniniana, as the ad 212 Edict of Caracalla is often

referred to, conferred the status of citizenship to all subjects of the
Roman Empire.
Prior to ad 212, individual Latini could be granted citizenship
for special services, again based on the necessities of the Roman state.
These services were divided into four categories, whereby the admis-
sion into Roman citizenship would be possible for the Latini who
had (1) served in the Roman legions for multiple years; (2) invested a
large amount of personal funds to build a house in Rome; (3) brought
profit to Rome over several years; and (4) ground grain in Rome for
multiple years (Abati 2013). The grant of citizenship was done either
through a legislative act by the assembly (during the times of the Roman
Republic) or through a judicial act adopted on the grounds of exist-
ing laws or the sovereign’s approval (during the years of the Roman
Empire). Interestingly, the codification of merit in ancient Rome, unlike
in Athens, took into account not only the non-citizen’s contribution
through military service, but also commercial activities that flourished at
the time.
The story of the centurion who arrested St Paul has been widely cited
in the growing field of the study of the sale of citizenship to show that
this practice was not uncommon throughout history (Burchell 2016;
Džankić 2014; Samek and Shulz 2017). Yet the mechanisms for the
acquisition of citizenship described above imply that the centurion orig-
inated from the Latini population, which supplied soldiers for Roman
military operations while enjoying limited citizenship rights. Being
wealthy, in addition to the required service, the centurion was able to
either bring profit to or to build a house in Rome, which in turn made
him eligible for the status of civis Romanus. In this sense, the legal mech-
anisms that enabled the admission of the wealthy Latini into Roman
citizenship resonate with some of the policies used nowadays for natu-
ralising investors, such as the purchase of property or investment in state
bonds. The similarity between ancient Roman times and nowadays is
that wealth has indeed been an entry point to the status of citizenship,
or a way of trading up. However, the key difference is that while nowa-
days it provides additional privileges through membership across differ-
ent states, during Roman times it enabled selected affluent subjects to
become full citizens in a polity of which they were members but in which
they had limited rights.
 2  CITIZENSHIP AND MONEY: HISTORICAL SNAPSHOTS  35

The Middle Ages: Loyalty to the City

The Middle Ages brought about a new conception of citizenship, very
much marked by the changing nature of polities, and the growth of
Christianity in Europe. The submission to God was an important ele-
ment of the perception of civic virtue during medieval times. The church
instigated the creation, development and celebration of mores and cul-
tural rites. The centrality of religious power thus created an institutional
framework for the expression of communal values, in which ‘dramatised
social/moral imperatives’ (Moore and Myerhoff 1977, 3) substituted for
the materialistic civilisation of ancient Rome.
Christian ideas of the meaning of citizenship featured prominently
in the writings of Augustine of Hippo, a Christian theologian and phi-
losopher who lived in the early fifth century. Writing only a few dec-
ades before the fall of the Western Roman Empire in 476, Augustine’s
conception of citizenship entailed the creation of a community for
­
those who stepped away from paganism (Kim 2000), for the sake of
­self-realisation with the Christian ‘brotherhood’. Loyalty to the ‘brother-
hood’ and thus to the church was ensured through baptism, which com-
pensated the visions of destruction and earthly fear with the promise of
a heavenly reward. Rather than being endogenous to the fifth century,
these ideas were rooted in the writings of St Paul, in particular in his
second epistle to Ephesians, where he addressed the Gentiles by saying:
‘Now therefore ye are no more strangers and foreigners, but fellow cit-
izens with the saints, and of the household of God’.6 St Paul’s ideas of
the ‘citizenship of heaven’ that would provide salvation, taken up and
adapted by theologians in the coming centuries, drove the idea of what a
good citizen should be during medieval times.
The equalisation of the value of citizenship with loyalty and submis-
sion to God was coupled with the rise of monasticism in the fifth and
the sixth centuries and the increased intimacy between religion and poli-
tics. Cities flourished around churches, which created communities based
on the religious bond (Boudreau 2018). The erected city walls further
protected these communities and helped their identities to develop.
In Western Europe, citizenship thus developed under the umbrella
of Christianity. While there are few records of how citizenship was

6 Holy Bible. New International Version. 1978. Ephesians 2:19. Colorado Springs, CO:

Biblica.
36  J. DŽANKIĆ

regulated in medieval cities until the twelfth century, the centralisation

of religion and rejection of earthly pleasures for the sake of heavenly sal-
vation toned down the mercantilism that existed during ancient Rome.
Moving further to the East from Western Europe, to the Ottoman
Empire, we can also see the rise of religion as the core of societal organ-
isation.7 In other words, in the early Middle Ages, property probably
remained a significant marker of hierarchies of membership, but the
access point to the community of citizens was religion.
By the twelfth century, as cities expanded in size and purpose, they
required a transformation of the notion of citizenship for it to include
and describe the increasingly complex social realities. The growth of cit-
ies triggered increasing inequalities of wealth. The growth of agriculture
and manufacture, the development of trade and markets for the respec-
tive goods were the key causes for the amplifying gap between the rich
and the poor (Finley 1977). Italian city states, commonly studied to
describe such medieval communities, drew inspiration for defining citi-
zenship from the Roman Republic (Alsayyad and Roy 2006). The vocab-
ulary of citizenship relied on the provisions contained in the Corpus Iuris
Civilis, while the notion itself, inherited from ancient times, was adapted
to suit the needs of new bounded collectivities in the Middle Ages.
Riesenberg (1992, 109) notes that this process was ‘intricately connected
to every aspect of Europe’s social, economic and political revival and
constitutes a return to patterns of order and reflection unknown since
Rome, as well as to a level of material civilisation based on unprece-
dented wealth and a relatively wide distribution of property’.
In this context, the different citizenship statuses, which were deter-
mined by birth and social class as was the case also in ancient Rome,
functioned as markers of social capacity and political power. Legislative
developments thus emerged from the flourishing economic activities and
the necessity to establish structured relationships not only between cities
and their inhabitants but also among citizens themselves.
Utmost allegiance and submission to the city as the sovereign came to
epitomise the core of this relationship. Even if property and possessions

7 Throughout the Middle Ages the Ottoman society was divided in askeri (upper class,

administrators and governors), rajah (lower class) and kul (slaves). Religious conversion

was frequently used for the reduction of taxes or advancement in the societal hierarchy. For
example, a converted slave could advance to become a janissar, a member of elite infantry
in the military.
 2  CITIZENSHIP AND MONEY: HISTORICAL SNAPSHOTS  37

remained in the private domain, due to the nature of citizenship at the

time they were subjected to the sovereign. The best example of this was
the renunciation of property by the Venetians following the Battle of
Chioggia in 1380. The battle resulted in the Genoese takeover of the
maritime city of Chioggia from Venice, making the city vulnerable to
future attacks from Genoa. To show loyalty to their city and help raise
its military capacity for defence, Venetians ‘ran to enrol in the military;
all of them offered to the homeland, their gold, silver, jewels, anything
of value they possessed, and as noted by Sanuto, even hairclips and
any silver ornament women wore on their clothes’ (Romanin 1855,
279–280).8
While being a good citizen could require the utmost sacrifice of pos-
sessions for the defence of the city, with the development of commercial
activities possessions became increasingly important for establishment in
the city, especially for foreign merchants. Magnette (2005, 43) notes the
case of Opizo of Piacenza, a ship owner who in 1143 swore allegiance
to the city of Genoa, in return of the right to invest one hundred lira and
trade on the sea under the same conditions as a Genoese citizen. Similar
arrangements also existed in other Italian states, including Arezzo,
Florence, Mantua and others.
Merchants who merely swore allegiance to the city, however, were not
considered full citizens in any of these cities. In the Italian medieval cities
there was a difference between various categories of inhabitants, includ-
ing civis (full citizens with rights to trade and various kinds of tax privi-
leges), incolatus (the one who has moved to a new town, both physically
and transferred all of his possessions thereto, but has not yet received the
full citizen status), habitator (resident, commonly a person who rented
and did not own land) and subditus (servant, dependent). The very exist-
ence of these categories mirrors the significance of not only property, but
also of allegiance to the city and the physical move to it.
This dynamic persisted in the coming centuries, when medieval cities
were faced with mounting commercial pressures and started developing
mechanisms that could bring them new sources of capital. Around the
fourteenth century, cities ‘willingly rewarded new investors’ (Riesenberg
1992, 148), by facilitating their transition from the status of incolatus
to a civis with full citizenship rights. However, at that time there was no

8 Author’s translation from Italian.

38  J. DŽANKIĆ

single policy that cities adopted as a reward for such investors. Rather, as
attested by the Florentine legislation that lists the names of naturalised
individuals and the conditions they met, the amount of economic con-
tribution to the city varied from one individual to another. Equally, the
residence requirements would be adjusted to reflect the terms of invest-
ment into Florence (commonly house construction) and tailored to each
person’s situation. That is, the greater the economic contribution to the
city, the more the residence condition would be reduced. The required
maximum length of residence of twenty years could be reduced to three,
but relocation of property and the physical move to the city would
remain, as they reflected the commitment to city values (Archivio Storico
della citta di Firenze 1451). Similar mechanisms of attracting wealth into
cities in the late medieval period became prominent across the flour-
ishing Italian cities, but also spread in the rest of Western Europe with
the development of guilds across the territories of present-day England,
France, Germany, the Netherlands, etc. (Prak 2018).

Renaissance and Reformation:
From Citizens to Subjects
The concept of citizenship during the Renaissance and Reformation was
substantially different from that in the Middle Ages. Participation in the
life of the city had lost its relevance with the rise of monarchies and sub-
mission to individual sovereigns rather than to cities. From the sixteenth
century, for almost three hundred years, citizens became subjects with lit-
tle voice in the political life of their communities. According to Bodin
(1986, 114), in such a system ‘every citizen is a subject, his freedom
being somewhat diminished by the majesty of the one to whom he owes
obedience; but not every subject is a citizen, as we have said of the slave’.
The centralisation of power that ensued transformed the value of cit-
izenship from the core contribution to the community to service to the
sovereign. Riesenberg (1992, 208) notes that ‘residence continued to be
important, but what mattered the most was not the will or the intention
of the citizen, but that of the ruler, confirmed to him from above’. In
this sense, it is no wonder that the early Renaissance with its shift of indi-
viduals’ submission to the community towards submission to the lord
has also introduced the focus on ‘men’, ‘people’ or ‘subjects’ instead of
on citizens (Trexsler 1991; Wells 1995).
 2  CITIZENSHIP AND MONEY: HISTORICAL SNAPSHOTS  39

The Renaissance and Reformation periods also gave rise to two visions
of citizenship: the one based on civic republican institutions, and cel-
ebrated in the works of Machiavelli and Rousseau; and the other, an
­extension of medieval mercantilism, based on an individual’s interest in
the acquisition of property and its relationship with the establishment of
the community, as evidenced in the works of Hobbes and Locke. This
second vision of citizenship has drawn largely on the Renaissance com-
mitment to success and the acquisition of wealth, where the possession of
property also entailed a social qualification.9
Yet such strivings were not in the service of an individual’s communal
commitment or active contribution to the polity. Rather, they were based
on the demands by the sovereign since it was ‘obedience and service that
brought from the monarch somewhat new forms of traditional rewards: pat-
ents and monopolies, as well as titles, proximity, vast estates and the exercise
of political power through bureaucratic position’ (Riesenberg 1992, 218).
In this context, Tanasoca (2016) writes about the relevance of honours dur-
ing this period, yet these were reserved for the inventors, poets, ­explorers,
geographers and scientists, who lent their services to the courts. Both in
Renaissance England and France during the ancien régime such honours
also served to distinguish individuals with political potentiality, and active
contribution to society from mere subjects at the service of the sovereign.
The central idea of citizenship during the Renaissance and
Reformation was the preservation of political stability, whereby ‘citi-
zens reveal the virtue of civility when they accept the community as a
moral entity and the right of a government to exert authority to sus-
tain its cohesion’ (Heater 2004, 179). This shift is nicely exemplified by
the transformation of republican Florence into the Duchy of Florence
(1530–1569) and later on the Duchy of Tuscany (1569–1859). The
new state structure included a four-man council headed by the duke; a
senate composed of forty-eight men chosen; and the Council of Two
Hundred as a petition court. The attribution of citizenship was the pre-
rogative of the Council of Two Hundred. In the process of citizenship

9 In (English) common law citizenship was a prerequisite for the possession and inher-
itance of property. This differentiation between aliens and subjects became most apparent in
Calvin’s Case (1608). The case dealt with the question of whether children born in Scotland
after the Union of the Crowns in 1603 could be considered English subjects and thus hold
and transmit property. This right had been given, in 1606, to the colonists of Virginia by a
charter, which subsequently became the roots of the American ius soli (Price 1997).
40  J. DŽANKIĆ

acquisition, there was a pronounced link with property, since ‘the first
fundamental step for obtaining political rights was to receive from the
Council of Two Hundred an inscription in the city registry. A fundamen-
tal requirement for the acquisition of the status of a “Florentine”, in fact,
was the insertion in the tax roll’ (Baggiani 2004, web; also Prak 2018).
Similar to the times of the medieval republic, the amount of wealth
could reduce the residence requirement for becoming a Florentine but
could not generate automatic acquisition of citizenship. Interestingly,
the Law of 31 July of 1750 [Deputazione sopra la nobiltà e cittadinanza]
established a separate institution composed of five nobleman and a Royal
Attorney to control the regular (per giustizia) and exceptional (per gra-
zia) admission into citizenship and nobility.10 The requirement for
admission was the possession of property with a tax return of at least ten
golden florins,11 again reflecting the intimacy between property and the
conception of citizenship during this period.
Two further dynamics marked the nature of citizenship in the late
Renaissance and Reformation period. First, the makeup of societies had
changed dramatically when compared to the Middle Ages. Population
shifts from rural to urban areas became more frequent and rulers com-
monly supported such growth by adopting legislation that would facil-
itate trade, and exchanges in goods and services. In turn, societies
became a centripetal, and marked by increasing attraction to urban cen-
tres, the accumulation of wealth and power by sovereigns and the rise
of different modes of taxation (Cox 2013). This reinforced the links
between possessions and the status of citizenship up until the rise of
nationalism in the eighteenth and nineteenth centuries.12 Second, the
Renaissance brought about the age of exploration and the expansion
of traditional European monarchies to other continents. While the eco-
nomic, political and military power of the European centres has been

10 Author’s translation. Deputazione sopra la nobiltà e cittadinanza, 31 July 1750,

Archivio di Stato di Firenze Inventario 1951, filze 225. http://guidagenerale.maas.ccr.it/

document.aspx?uri=/repertori/SP059600.
11 It would be difficult to translate the value of florins in contemporary currencies. For

the sake of comparison, Filippo Brunelleschi, the architect of the Florence cathedral was
paid 100 florins per year; and almost 2000 litres of wine could be purchased for 10 florins.
12 A notable exception were the short-lived revolutionary periods (e.g. France in

1789), or fully fledged revolutions that instituted republicanism (American Revolution

1775–1783).
 2  CITIZENSHIP AND MONEY: HISTORICAL SNAPSHOTS  41

moved across the different areas of the globe, it carried with it the notion
of ‘subjecthood’ and not that of citizenship.13 Similar to the first trait of
citizenship, the link with property, that of ‘subjecthood’ was profoundly
transformed by upheavals and the rise of nationalism. Over the next two
centuries, they changed the outlook of the globe on multiple occasions,
and with it, the nature and the conception of citizenship.

Citizenship, Revolutions and the Rise of Nations

The notion of citizenship underwent major changes between the late
eighteenth and mid-twentieth centuries.14 These two centuries were
marked by reactions against absolutism and the related tension between
attempts to ‘imagine’ communities of equals (Anderson 1991) and build
states to bind them. The 1648 Peace of Westphalia (that ended the
European wars of religion) sorted religious communities into sovereign
states and laid the pillars for the development of the modern interna-
tional system. It did not transform subjects to citizens, but it upheld the
system of subjecthood.
As a result, the most pronounced reactions to the age of absolut-
ism came about in the late eighteenth century in the form of French
and American revolutions. The 1789 French Declaration of the Rights
of Man and of the Citizen clearly articulated this shift from ‘subjects’ to
‘citizens’. It established institutions of representative democracy, con-
ferred freedom and property rights on ‘all men’ and representation for
citizens who were liable to pay taxes. The American Revolution, ending
the British colonial rule in the United States, resulted in The American
Declaration of Independence (1776), The Constitution (1789) and the
Bill of Rights (1789). These documents prevented the abuse of rights by
the state over the people and granted participation rights to citizens. In
both cases, nonetheless, divisions between ‘insiders’ (citizens) and ‘out-
siders’ (aliens or slaves) remained. The subsequent processes of nation-
and state-building reflected a series of important developments related to

13 The effects of Renaissance expansionism are present to this day, in the form of special

statuses, granted for example to commonwealth citizens, or special rights (yet not full citi-
zenship) granted to citizens of the French and Dutch overseas territories.
14 This historical period has been characterised by revolutions, unifications, the rise and

fall of empires, and doing justice to all of these processes in this short book would not be
possible.
42  J. DŽANKIĆ

the evolution of the link between citizenship and property in the context
of equality, status and the related communal rights.
The proliferation of national movements in Western Europe in the
eighteenth and nineteenth centuries was another outcome of the com-
bination of dissatisfaction with intracommunity inequalities and attempts
to acquire and maintain power in territorial units. Through national
bonds, based on a perceived similarity of moral, cultural and/or linguis-
tic traits (Gellner 1994), a community of people could think of them-
selves as equals. This was possible as nations became ‘communities
of character’ held together by the belief in the congruence of identity
markers, such as language, history, culture and territory (Moore 2001).
These elements set the parameters for inclusion in and exclusion from a
particular national identity.15 In the romanticised idea of nations in the
nineteenth century, the obvious differences between peasants and kings
would disappear, because the imagined national bond did not imply dif-
ferences in terms of wealth, property and power. At the same time, strug-
gles for national liberation and unification sought to materialise these
newly imagined bonds in ‘bordered power-containers’ (Giddens 1985,
21), i.e. territorial units. And while material differences between kings
and peasants may be conjured away within an imagined community, this
is impossible in a community with a designated institutional framework
and distribution of decision-making power.
In his 1992 seminal work Citizenship and Nationhood in France and
Germany, Rogers Brubaker differentiated not between states themselves,
but between the conceptions of nationhood and the ways in which these
conceptions materialised themselves as citizenship. The French citizen-
ship model mirrored and articulated territorial attachments—citizens
were submitted to law, to the sovereign, to sense (Magnette 2005,
66–67). The German model was rooted in the submission to the com-
munity of sentiment, and the dominance of kinship attachments such
as language, customs, culture, collective sense of the past and belief in
a common future. The construction of citizenship in both cases implies
that property was no longer the central determinant of the boundaries

15 The analysis here by no means considers the nation as a fixed relationship based on

blood and culture. Nations are fluid, changeable and malleable. The national bond, how-
ever, is imagined as being composed of ephemeral commonalities even if the latter are
changed and reinvented in light of new sociopolitical circumstances.
 2  CITIZENSHIP AND MONEY: HISTORICAL SNAPSHOTS  43

of status. However, it remained tightly coupled with citizenship in three

respects.
First, the new (national) communities of membership had implications
for inheritance laws. No longer did one need to possess property to be
a communal member: rather, citizenship became essential for inheriting
property. Brubaker (1992) notes that there was a pronounced differ-
ence between citizens who possessed qualité de français and foreigners
(aubaine). Although there were no formal criteria as to what ‘qual-
ité de français’ would entail, ‘[w]hen this was contested in the course
of an inheritance-related dispute, the parlements (which were not legis-
lative but rather the supreme judicial bodies) were called upon to set-
tle the issue. In doing so, they did not define the criteria of citizenship
in general terms, but determined citizenship status in particular cases’
(Brubaker 1992, 37–38).
Second, as nation states evolved, money and property continued to
play a key role in creating societal hierarchies and stratifying them from
within. That is, wealth became crucial for the evolution and distribu-
tion of the core rights of citizenship, including electoral rights. In the
Introduction to this book, we have already mentioned the example of
the weighted voting in the late nineteenth-century Prussia. A similar
example of how money was used to create internal citizenship hierarchies
is the US ‘poll tax’ (capitation). The poll tax was a levy that all citizens
were required to pay to be registered as voters in the late nineteenth and
early twentieth century. The poll tax was in a way a product of the 1866
Civil Rights Act and the subsequent Thirteenth (abolition of slavery),
Fourteenth (citizenship) and Fifteenth (voting rights) Amendments to
the US Constitution. These constitutional amendments ensued in the
aftermath of the American Civil War to regulate the status of African-
Americans, who had previously been considered property and deprived
of any civil rights (Finkelman 2012).16 In the context of the abolition
of slavery, the inclusion of the people of colour into citizenship, as well

16 The history of slavery in the United States and its relationship with property and cit-

izenship is exceptionally complex. Prior to the abolition, which took place at different
times in different states, slaves were deprived of civil rights despite being taxed (Finkelman
2012). Even after the Thirteenth, Fourteenth and Fifteenth Amendments to the US
Constitution, a number of US federal states adopted legislation that did not explicitly apply
to certain ethnic and racial communities or social classes, but had adverse effects on the
marginalised or the poor, and effectively excluded them from political processes.
44  J. DŽANKIĆ

as the Fifteenth Amendment, which gave voting rights to all US citizens

regardless of ‘race, color, or previous condition of servitude’, taxation
was used to de facto disenfranchise the economically vulnerable groups
and African-Americans (Kousser 1974). The Twenty-fourth Amendment
of the Constitution of the United States, ratified only in 1964, has pro-
hibited the poll tax as a condition for voting rights.
Third, as nation states developed their rules for accommodating
increasing economic migration caused by new discoveries, industrial
revolutions, etc., possession of property became linked to immigration.
The newcomers were asked to show that they would be able to sustain
themselves in their new homelands and that they would not pose an eco-
nomic burden on their destination state. With the development of citi-
zenship laws, these requirements were gradually translated in economic
conditions for naturalisation (income thresholds, adequate dwelling,
etc.). For example, in the late nineteenth century, the United States had
a pecuniary criterion related to immigrants landing at Ellis Island. Upon
arrival, immigrants seeking domicile in the United States had to demon-
strate that they were not ‘liable to become a public charge’ (Ellis Island
Website 2018). In order to prove this, immigrants were required to
show that they could financially sustain themselves and their dependents.
While initially the determination of sufficient funds was a discretionary
power of the immigration authorities, in 1909, for a few months,17 the
immigrants had to show that they had a railway ticket to their final des-
tination in the United States and at least $25, equivalent to a month’s
salary at the time. Due to the failure to comply with these pecuniary
requirements, many immigrants were sent back to their countries of ori-
gin. Their admission was not determined exclusively on the grounds of
wealth. However, along with other criteria, evidence that an individual
had enough money to sustain himself or herself was key to entering the
United States.

The Two Worlds of Citizenship

The development of the international human rights system reconstituted
the notion of citizenship as ‘a simultaneous and interconnected strug-
gle for membership or identity or both with the intention of ensuring

17 Policy suspended after a few months due to pressure from immigrant aid societies.
 2  CITIZENSHIP AND MONEY: HISTORICAL SNAPSHOTS  45

access to rights that are distributed by the state (and occasionally local
and international institutions)’ (Shafir 1998, 23–24). Citizenship became
associated with the idea of internal equality, and the role of property and
money in the distribution of rights within the communities of member-
ship (states) largely faded away. That is, by claiming and possessing the
status of membership in polity individuals would be (at least in theory)
considered as equal in terms of communal decision-making. The grad-
ual development of universal suffrage and the inclusion of women in the
franchise are indicators of this trend of associating citizenship with inter-
nal equality of membership. At the same time, international borders and
the very nature of global affairs during the Cold War have highlighted
how uneven the landscape of these presumed internal equalities among
the world’s countries was. All the citizens of the United States were
equal, and so were the citizens of the Union of Soviet Socialist Republics
(USSR). Yet this equality meant different things in these two contexts.
Summing up the history of social relations from antiquity to their
times, Marx and Engels (1848, 14) in the Communist Manifesto high-
lighted how ‘we find almost everywhere a complicated arrangement
of society into various orders, a manifold gradation of social rank. In
ancient Rome we have patricians, knights, plebeians, slaves; in the
Middle Ages, feudal lords, vassals, guild-masters, journeymen, appren-
tices, serfs; in almost all of these classes, again, subordinate gradations’.
Striving to reduce the internal differences among people and abolish
societal hierarchies, communist ideology was based on the ‘abolition
of private property’ (Marx and Engels 1848, 22). Private property was
considered to have been conceived by capital, which in itself contained
power to modify social relations. Thus taking away capital’s potential to
generate private property would equally abolish its power in stratifying
societies. In communist ideology, therefore, similar to the Spartan times
discussed earlier, the disconnection between possessions and communal
membership would eradicate internal inequalities.
In practice, the constitution of socialist states across the globe
merged the communist ideology with the Comintern’s approach to
­self-determination, which envisaged the spread of communist principles
through ‘autonomisation’ of nations that joined socialist federations
(Garushiants 1999, 31–47). Communist states, therefore, had national
boundaries within which ‘socialist regimes created a special nexus among
state, property, and national identity’ (Verdery 1998, 298). Citizenship
policies in the socialist countries were (and still are, where they exist)
46  J. DŽANKIĆ

well tailored to support national identities and cement them as ideologi-

cally based communities. The conceived national identity would coincide
with the boundaries of the state (either a homogenous one like in North
Korea, or a compound one like in Yugoslavia, Czechoslovakia or the
USSR). As a consequence, the status of citizenship was normally passed
through birthright, while foreigners needed to comply with residence,
linguistic and other obligations, including, in most communist states,
the renunciation of the citizenship of origin. Naturally, given that private
property was abolished and economies were planned, naturalisation on
the grounds of wealth was not possible. Hence the notion of citizenship
in communist countries was designed in such a way as to underpin the
marriage between ethno-national and ideological elements of the system.
The external face of citizenship of the communist countries was rather
different. Travel outside the ‘Eastern’ or ‘Communist’ bloc countries was
difficult, not the least because of external travel restrictions in the form
of visas,18 but also due to internal policies that were not favourable to
individuals’ exposure to open market economies.
In the western hemisphere, in which countries largely embraced the
open market capitalist economy, the notion of citizenship had a slightly
different shade. While in the twentieth century capitalist states’ posses-
sion of private property did not have a formal impact on the exercise of
basic rights and freedoms, it remained tightly coupled with citizenship
in spite of the promise of equal rights for citizens independently of class
differences (FitzGerald and Cook-Martín 2014). Liberal states with free
market economies have very frequently retained economic qualifications
for naturalisation. Although citizens enjoy formally equal rights without
property distinctions, access to citizenship itself has rarely been free of
property qualifications in this sense. Economic conditions for naturali-
sation such as income, health insurance and accommodation have been
devised so that the newly naturalised person does not pose a burden on
the state. In cases of ordinary migrants, who live in foreign countries
and seek to gain the status of citizenship through economic activity, the
economic conditions for naturalisation have a function similar to the his-
torical role of property: creation of boundaries within the state. That is,
states have the obligation to treat their citizens equally, but not those

18 An exception was the Yugoslav passport, which was ‘one of the most convenient in the

world, as it was one of the few with which a person could travel freely through both the
East and West’ during the cold war (van Dijk et al. 2008, 898).
 2  CITIZENSHIP AND MONEY: HISTORICAL SNAPSHOTS  47

who are not (yet) their citizens. Hence an individual who is unable to
meet the economic conditions for naturalisation (Stadlmair 2018) will
be excluded from the status of citizenship and the rights attached to it.
By contrast, in the case of the high net worth individuals and the sale
of passports, property becomes an enabling factor for the acquisition of
another citizenship status and the associated rights.

Citizenship and Postcolonialism:
Roots of the Contemporary Sale of Passports
The contemporary sale of passports has emerged in the small Pacific and
Caribbean islands, which gained independence from the United States or
the UK during the period of decolonisation in the decades following the
Second World War. Due to their small size or unfavourable geographic
locations, the newly established postcolonial nations were also faced
with adverse economic conditions that undermined their sustainability as
sovereign states. This was the first enabling factor for the sales of pass-
ports that took place in the Marshall Islands, Nauru, Samoa, Tonga and
Vanuatu in the 1980s and the 1990s.19 In most of these cases, passports
were sold without formal legislation, and granted very limited rights to
their holders. An example of this would be the Tongan Protected Person
Passport (TPPP), sold between 1982 and 1996. The TPPP could be
obtained by leasing land on an uninhabited Tongan island and signing
an oath of allegiance to the island. Importantly, the holders of TPPP did
not have the right to enter or stay in Tonga with the TPPP, or any of the
related citizenship rights. Rather, the passport could be used as a travel
document in countries recognising the TPPP (van Fossen 2007). The
lack of experience with the conception of citizenship under colonial rule
(e.g. the notion of ‘citizenship’ was first introduced in the 1981 British
Nationality Act), the idea of allegiance of subjects to the ‘sovereign’ (or
the centre of rule) and the structure of common law legal traditions
were further enabling factors for the contemporary sales of citizenship.
And in fact, two former British colonies, St Kitts and Nevis and the
Commonwealth of Dominica, were the first to adopt structured and reg-
ulated investor citizenship programmes.20
19 SeeChapter 4 for details.
20 Thisrefers to legislation that explicitly regulates the exchange of the status of citizen-
ship and money. See above for informal programmes.
48  J. DŽANKIĆ

St Kitts and Nevis, a federation of two islands in the West Indies, runs
the oldest programme for granting citizenship on the grounds of invest-
ment. The programme was launched in 1984, one year after the islands
gained independence. The investor citizenship in this country was heav-
ily influenced by the economic downfall that the federation experienced
at the time of independence. Against the backdrop of economic scarcity,
the sale of citizenship was considered a mechanism for raising revenue to
sustain the newly established state.
The second oldest investor citizenship programme was introduced in
1993 in the Commonwealth of Dominica. It is based on an economic
rationale very similar to the one of St Kitts and Nevis. Dominica gained
independence from the UK in 1978 and since then, the country’s econ-
omy has been based on agriculture, which employs around 40% of the
island’s population (UNDP 2009). As a result of adverse weather con-
ditions, including frequent hurricanes and the volcanic terrain in
Dominica, coupled by the decrease in the world price of bananas, which
are the country’s primary crop, the country’s economic performance has
been on a downward slope (US Department of State 2010). The unsus-
tainability of the country’s economy following independence has thus
pushed the country towards alternative mechanisms for raising revenue,
including the sale of passports.
The creation of new postcolonial states with scarce resources, func-
tioning in the open market system, gave rise to the first programmes
explicitly designed to enable exchange between money and citizenship.
Further to this, the mobility of human and economic capital resulted
in additional programmes, which rather than offering citizenship sought
to directly attract wealthy migrants. In the years between 1982 and
1992, Australia, the USA, the UK, New Zealand, Canada, Uruguay
and Panama, adopted such programmes (Stevens 2016). Yet rather than
focusing only on the economic contribution as an entry point in citi-
zenship, as was the case in St Kitts and Nevis, and the Commonwealth
of Dominica, these countries sought to offer a ‘path to citizenship’ to
those willing to relocate and bring their wealth along. Changes in the
global outlook that followed the fall of the Berlin Wall in 1989, marked
by the simultaneous rise of ‘new’ nations claiming their own states
and the loss of regulatory power of states due to globalisation, recon-
stituted once again the meaning of citizenship. Its external dimension
(and travel documents as evidence of this dimension) became highly
 2  CITIZENSHIP AND MONEY: HISTORICAL SNAPSHOTS  49

relevant in the context of global mobility, creating conditions favourable

for a greater number of states to use the sale of passports to boost their
economies.

Citizenship, Property and Resilient States

Since the late 1980s, we have witnessed the concurrent processes of
building new states through post-communist national reawakening
movements. Paradoxically, national borders seem to be recreated to mark
states and territories whose significance in governing affairs within or
outside their ‘fence’ is ever decreasing. Writing in the wake of the fall
of communism, Katherine Verdery (1998, 292) sought to understand
how the notion of citizenship would be reconstituted ‘as collective prop-
erty is dismantled under the press of global forces’. The dismantling of
collective property and the subsequent processes of denationalisation,
restitution and privatisation in turn occurred within the states them-
selves, but unfolded in a transnational framework. The latter consisted
not only of established capitalist economies, but also of powerful eco-
nomic agents such as the World Bank and the International Monetary
Fund. State-building was therefore inextricable from the notion of pri-
vate (as opposed to collective) property, which profoundly transformed
‘the nature of the state’s relation to its subjects’ (Verdery 1998, 292) by
depriving its institutions of the direct management of property and the
revenue it generated. In such a context, money and property remained
central to the notion of citizenship.
As opposed to the historical examples outlined earlier in this chapter,
property was not a qualifier of internal inequality of citizenship status in
democratic and transitional countries. Citizens of modern states should
all have equal rights and opportunities within their respective commu-
nities.21 For example, the fact that I am a woman and that I own no
property should not influence my voting rights or the power of my vote
in the state of which I am a citizen. The state should treat me equally
to everyone else possessing the same status. However, we have to bear

21 Legally, modern democratic states should not discriminate against different social strata

in the process of attribution of the rights of citizenship. However, marginalised commu-

nities are frequently faced with economic barriers preventing them in the exercise of their
rights (Sardelić 2017).
50  J. DŽANKIĆ

in mind that individuals are citizens of states that are not equal among
themselves and that offer them different rights and opportunities exter-
nally. A French citizen is likely to have different life opportunities from
a North Korean, Russian or Canadian one, precisely because of the
opportunities that their citizenship of origin offers them in the broader
context.
Since the primary attribution of the status of citizenship is done
through the institution of birthright citizenship in all countries in the
world except the Vatican City State (GLOBALCIT 2017), which citizen-
ship one will possess is a matter of luck. The transmission of the status
of citizenship through birthright (regardless of whether it is through ius
sanguinis or ius soli), is thus somewhat reminiscent of the ‘ancient prop-
erty regimes that shaped rigid and tightly regulated estate-transmission
rules’ (Shachar 2009, 2). Being inherited in a similar way as property, the
status of citizenship becomes ‘a valuable entitlement that is transmitted,
by law, to a restricted group of recipients under conditions that perpetu-
ate the transfer of this precious entitlement to “their body,” specifically,
their heirs. This inheritance carries with it an immensely valuable bundle
of rights, benefits, and opportunities’ (Shachar 2009, 5). Moreover, citi-
zenship as a status of public membership in a political community implies
equality among members. This characteristic of citizenship—the fact that
it nowadays differentiates more between communities and not within
them—has led to its instrumental uses both by states and by individuals.
Just as the lack thereof has historically been a barrier for recognition and
the internal exercise of citizenship rights, through the sale of citizenship,
possessions have nowadays become an access point for privileged groups
to rights beyond the borders of their native state.
States use citizenship policies as a mechanism for constituting and
managing their membership. In particular, the nation-building pro-
cesses that mushroomed in Europe and Asia after the fall of communism
revived the idea that citizenship policies could and should define the
boundaries between ‘us’ and ‘them’, in a process that eventually had as
its objective to ensure the dominance or ownership of one ethnic com-
munity over the institutional structures of new states. As has commonly
been argued in academic literature, however, state borders do not nec-
essarily coincide with the imagined national communities (Agarin and
Karolewski 2015; Dumbrava 2014; Džankić 2015; Maatsch 2011),
which results in the extension of citizenship to ethnic kin. Hungarian,
Romanian, Italian or Spanish policies of preferential access to citizenship
 2  CITIZENSHIP AND MONEY: HISTORICAL SNAPSHOTS  51

for their co-ethnics are among the many examples of how states use cit-
izenship policy for their instrumental purposes (e.g. extending their
influence in their diaspora’s host states or soliciting votes in domestic
elections). In a similar vein, the sale of citizenship programmes, accord-
ing to some scholars (Kochenov 2018; Spiro 2016), are tools used by
states for attracting wealth. As has been the case in the Caribbean
islands,22 these programmes commonly emerge in states weakened
by adverse economic conditions, states that are not competitive in the
global market (commonly due to their small size or geographical posi-
tion) and states that have an experience of colonialism or submission to
a foreign power. Paradoxically, in such states, the exchange between the
status of citizenship and money, which is considered the outcome of glo-
balisation and a way to weaken the notion of citizenship, is used to rein-
force the state itself.

Conclusion
The meaning and underpinnings of citizenship have changed across
countries and over time, and so has its relationship with money and pos-
sessions. Yet as any social relationship, citizenship entails a dynamic of
inclusion and exclusion; that is, a dynamic of differentiation. Historically,
this differentiation marked the internal hierarchies of membership,
whereby those holding the status of citizenship had a major say in com-
munal governance. Being a citizen in the Athenian polis had a different
weight to being a metic; a Roman citizen had more rights under Roman
law than a Foderatus; being a citizen of Florence or Venice, as opposed
to an incolatus, granted privileges in the exercise of communal rule,
but also in trade. The possession of property, along with the privileges
of birth, was central to sorting individuals into different sociopolitical
strata. In exceptional circumstances, affluent individuals could buy into a
better tier of the community, but that was not the only condition. They
had to create social ties and show loyalty to the community through resi-
dence, military service or another exceptional contribution.
The creation of the state-based Westphalian order, and the state and
nation-building processes that ensued, had a profound transformative
effect on the meaning and values of citizenship. As Brubaker (1989)

22 See Chapter 4 for details.

52  J. DŽANKIĆ

observed, within this system, the new role of citizenship was to sort
individuals into states. This new role of citizenship became increas-
ingly pronounced with the evolution of the internal equality of rights
after the Second World War. Despite the different nuances of the link
between possessions and membership in the communist and the capital-
ist worlds, citizenship served the core purpose of consolidating national
and state boundaries. However, the global outlook has changed dramat-
ically over the last fifty years, not the least due to the fall of communism
and the reconstitution of communal boundaries, but also as a result of
increased global interconnectedness. The clash between these two pro-
cesses—the attempts of states to assert their role in global governance
and the increased agency in global affairs of individual and transnational
actors—has eventually resulted in instrumental uses of citizenship. Just as
the desire of states to project power onto peoples and territories beyond
their borders generated extraterritorial citizenship policies (Dumbrava
2014), the struggles of new and economically weak states to ensure their
survival yielded the sale of passports. Yet are these policies a cure for the
colossal economic inequalities that cut into and across societies, a howl
of resilient states, or a symptom of the change in nature and values of
citizenship?

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 CHAPTER 3

To Sell or Not to Sell:

The Ethics of ius pecuniae

The previous chapter has shown that the link between money and mem-
bership has had an exclusionary character throughout history. On top
of that, citizenship as a social relationship has historically been asso-
ciated with internal hierarchies that determined one’s role in decision-
making; or rather, more recently, inequalities that exist among individu-
als in terms of political rights, life opportunities, etc., that are a result of
being citizens of different countries. In other words, even though citi-
zenship as an ideal is often intuitively associated with equality, the past
and the present practice of this notion reveals that this is not quite the
case. Yet most concepts denoting any kind of sociopolitical relationship
or attachment (e.g., community, nation, group) suffer from the same
problem—as inclusive as they may have been conceived to be, they do
not represent universal equality. The status of citizenship means that
we are equal before the authorities of the state of which we are mem-
bers. It confers upon us the rights and duties that we have towards the
state in the view of ensuring the community’s future. It instils a sense
of belonging that may range from being a part of a nation, or a group
of individuals who, through their day-to-day activities, contribute to the
maintenance of communal bonds.
These different aspects of the concept of citizenship are crucial for
understanding arguments for and against the sale of passports. The pro-
ponents of the sale of citizenship argue that access to communal mem-
bership on the grounds of wealth is generally in line with the fading away

© The Author(s) 2019 57

J. Džankić, The Global Market for Investor
Citizenship, Politics of Citizenship and Migration,
https://doi.org/10.1007/978-3-030-17632-7_3
58  J. DŽANKIĆ

of the traditional notion of citizenship amid amplified global intercon-

nectedness (Kochenov 2018a, b; Joppke 2010). Their argument is that
the sale of citizenship eliminates the arbitrariness inherent in the ‘birth-
right lottery’ and could thus help to significantly increase individuals’ life
opportunities. Opponents of such a view (Shachar 2018) maintain that
the sale of citizenship disrupts communal equality, and could result in
increasing rather than reducing global inequalities. Through investor cit-
izenship, the wealthiest from the poorer countries transfer their assets to
other states, leaving their countries of origin possibly worse off in terms
of resources.
The major citizenship traditions—liberal, republican and
communitarian—are internally too incoherent to provide specific answers
on whether communal membership should be put up for sale or not. Yet,
taken as broad umbrellas, they offer arguments that can be described
as libertarian (maximising individual autonomy and freedom); liberal
egalitarian (combining equality, personal freedom and responsibility);
utilitarian (justifying the authority of the government on the basis of
utility); republican (upholding civic virtue, traditionally; more recently—
non-domination), and nationalist (emphasising either self-determination
or shared national bonds). Using a broad brush to chart the way these
arguments can respond to the states’ policies on the sale of citizenship,
we can discern that libertarianism and utilitarianism can more consist-
ently defend investor citizenship, while liberal egalitarianism and repub-
licanism should be mostly opposed. The nationalist argument could be
used to either defend or oppose ius pecuniae depending on whether the
emphasis is placed on self-determination and collective benefit for the
nation, or on the shared national identity among citizens.
In practice, however, the conferral of citizenship is still the sole pre-
rogative of sovereign states. Hence the key question that the invest-
ment-based programmes raise is whether the economic benefits of
investment override the normative concerns about making naturalisa-
tion easier on the grounds of wealth. These can be summarised in three
points. First, in deciding to naturalise investors, states can either max-
imise economic utility and grant citizenship to investors by waiving all
other naturalisation requirements, or uphold genuine ties with the pol-
ity as the core of citizenship by retaining them. While the legal doc-
trine of ‘genuine link’ remains contested as a condition of citizenship
as postulated by international (or EU) law, it resonates in a number of
documents, including the 1997 European Convention on Nationality
 3  TO SELL OR NOT TO SELL: THE ETHICS OF IUS PECUNIAE  59

(Dumbrava 2018). For this reason, we can think about genuine connec-
tions in normative terms in respect of a choice about what states ‘ought’
to do in view of the different theories of citizenship as a bond. Second,
while investment may produce benefits for the state and its citizens, its
being the sole grounds for naturalisation has the potential to trespass the
‘sphere boundary of money’ (Walzer 1983) because this type of natu-
ralisation equalises investment with reputational gains (Tanasoca 2018).
Third, the naturalisation of wealthy individuals merely on the grounds of
their investment raises concerns over whether the state can maintain the
principle of equality between (a) members of the polity and naturalised
investors and (b) naturalised investors and other applicants subject to
ordinary naturalisation. Understanding these questions in the context of
investment-based naturalisation helps us to unveil many significant, yet
unexplored, facets of citizenship.
Proceeding in this direction, this chapter offers some pointers on
how to approach the notion of ius pecuniae and the emergence of the
global market for investor citizenship. It first briefly explores the argu-
ments rooted in the three mainstream citizenship traditions and charts
the background for the arguments for and against the sale of citizenship
that ensue in the following part of the chapter.

The Sale of Citizenship and the Different

Citizenship Traditions
The different citizenship traditions provide arguments as to why investor
citizenship can be morally acceptable or not. Even so, the republican, the
liberal or communitarian traditions cannot offer a fully-fledged and clear-
cut argument as to why granting the status of a citizen to someone who
is able and willing to pay for it is right or wrong. There are two reasons
for this normative conundrum. First, none of the citizenship traditions
is uniform. Scholars conceive of them in view of their perception of the
social contract and the position of the individual within broader, institu-
tionalised social relations. And even within a single citizenship tradition,
we can observe a number of different strands, each of which can offer
a slightly different perspective on what a community of citizens is and
what it should represent. Second, citizenship traditions revolve around
the question of how the demos is conceived and perpetuated. As high-
lighted by Honohan (2017, 85), ‘[t]he primary focus of both liberal and
60  J. DŽANKIĆ

republican theories of citizenship […] is on specifying its content rather

than providing criteria to establish its boundaries, although that content
has potential implications for inclusion and exclusion’. Yet what does this
differentiation between content and boundaries mean for understanding
the investor citizenship programmes?
When we think about the notion of citizenship in practical, but also in
scholarly terms, we often conceive of it through the so-called citizenship
triad (Bellamy 2004; Carens 1992; Joppke 2010). Most scholars explain
that citizenship contains three dimensions: (1) legal status; (2) rights and
obligations and (3) identities and practices. In turn, each of these dimen-
sions responds to a number of questions based on the position of the
individual and those based on the perspective of the state. Table 3.1 pro-
vides an overview of these questions, but is by no means exhaustive.
Answers to these questions reflect the content and boundaries of citi-
zenship, both as conceived by the state and experienced by the individ-
ual. However, we have to be aware that they vary across countries and

Table 3.1  Constituting the dimensions of citizenship

Dimension State perspective Individual perspective

Legal status Who has the status of Do I possess the status of

citizenship?
Who can, and under what
conditions, obtain the status of
citizenship?
Rights and obligations Who constitutes the demos?
Who has the right to make
decisions and under what
conditions?
What rights are conferred
upon citizens and what are the
limits of those rights?
What obligations do citizens
have vis-à-vis the state?
Identities and practices What kind of community
is constituted through
citizenship?
Do boundaries of citizenship
(legal and political) coincide
with the national and territo-
rial borders?
citizenship?
What conditions do I have to
meet to gain/maintain the
status of citizenship in a state?
Am I included in the demos?
If so, am I allowed or obliged
to take part in political pro-
cesses and what requirements
do I have to meet?
What are the boundaries of
the rights that I have in a
state?
What am I expected to do for
the state?
How do I feel as a part of
the community of citizens of
the state where I am legally
recognised?
 3  TO SELL OR NOT TO SELL: THE ETHICS OF IUS PECUNIAE  61

over time. For instance, having been born in Montenegro, which was
a part of the socialist Yugoslavia at the time, and subsequently a mem-
ber of two further multilevel states before gaining independence in
2006, my legal status of citizenship has changed four times as a conse-
quence of state disintegrations. Each change in status brought along a
change in the rights and obligations I had vis-à-vis the new polity, and
was very much related to mutable conceptions of national identity and
ethnic belonging. Importantly, each time the content of citizenship was
reconstituted to match new political realities, it was matched by a change
in its boundaries. New discursive resources have sought to justify those
boundaries as non-arbitrary and to explain how the rules of inclusion and
exclusion have been adjusted along the three dimensions. This is impor-
tant for understanding the plethora of arguments rooted in liberalism,
republicanism and communitarianism in relation to investor citizenship.
Conceiving of the content of citizenship in a particular way, each tradi-
tion charts its arguments for determining who can be a citizen in a polity
and under what conditions.

Arguments on the Content and Boundaries

of Citizenship Rooted in the Liberal Tradition
The liberal citizenship tradition is based on the idea that political com-
munities are voluntary associations, in which principal agency is vested
in individuals who are the primary rights bearers. The pillars of the
liberal citizenship tradition have been laid down in the 1789 French
Declaration of the Rights of Man and of the Citizen. Therein, the core
of the relationship between the state and the individual was contained
in the notion of individual rights. The French Declaration mirrored the
political philosophy of John Locke (1997) for whom the social contract
was meant to safeguard the natural liberties of human beings, including
their right to property, within civil society. The view that property rights
precede the social contract and are protected by it provides arguments
for a libertarian defence of citizenship for sale. Through the Lockean
lenses the content of citizenship is constructed to be analogous to prop-
erty, i.e. a status that individuals possess as a matter of right and can
freely alienate and trade with each other.
Even so, in the mainstream liberal view, citizenship is a public good,
attributed by states to individuals and not possessed by them as pri-
vate property. Based on the idea of a community construed through
62  J. DŽANKIĆ

voluntary association expressing the general will, the liberal citizenship

tradition does not view active participation or submission to author-
ity as constitutive of the communal bond. Rather, the rules governing
the community had already been agreed upon among its members, and
therefore disengaged citizens form a part of the political community as
much as the engaged ones do (Spinner 1994). Ziegler (2017, 96) argues
that ‘the stability and health of public institutions and the political cul-
ture of the political community depend on a political community having
a sufficient number of members who value their membership, and who
are consequently willing to take actions that exceed legal demands’. This
implies that in the absence of the obligation to participate in the commu-
nal self-rule, individual liberty and rights take the central role in mould-
ing the identity of members of the political community. In turn, status,
rights and attachments are loosely coupled in the liberal citizenship tra-
dition, thus providing the bulk of arguments favourable to the sale of
citizenship and other policies indicative of its ‘lightening’ (Joppke 2010).
The strong focus on the interplay between personal freedom and
rights in the liberal political thought has played a pivotal role in consti-
tuting the boundaries of membership. In practice, these core values of
liberalism can be manifested in different ways. This is possible because
liberalism is permissive of the decoupling between an individual’s sense
of identity and belonging, and the actual attachment to the political
community (Carens 2000). The separation of identity and attachment
has allowed for the development of different strands of liberal political
thought: liberal nationalism highlighting the resilience of the nation state
(Tamir 1995); liberalism asserting that citizenship as a common good
is inextricable not from the nation but from the state (Kostakopoulou
2007); transnationalist liberalism advocating a deterritorialised notion of
rights (Soysal 1994). While representing liberal thought that reflects dis-
tinct values, all of the aforementioned strands emphasise the centrality
of the individual in the relationship with the state. They provide argu-
ments for the permissiveness of belonging to multiple political commu-
nities. Further to this, liberal citizenship tradition would support the idea
of admission of new members who would offer some form of a major
contribution to the community’s well-being. This approach would view
citizenship as a ‘club good’ (Buchanan 1965; Walzer 1983). If states
are conceived as voluntary associations, they would rationally want to
admit new members based on their expected contributions to the club
goods the association provides internally to its members. If the notion
 3  TO SELL OR NOT TO SELL: THE ETHICS OF IUS PECUNIAE  63

of contribution is equalised with investment, or some form of economic

activity, the supporters of the sale of citizenship may find justification for
this practice in the liberal tradition. The difference between libertarian
and utilitarian versions of liberalism is that the former would start from
individual rights to sell and purchase citizenship (Webb 2014), whereas
the latter would consider citizenship as a club good that outsiders do not
have a right to acquire, but that states should sell to them if this is bene-
ficial for both current and newly admitted citizens. The attitude of main-
stream egalitarian and political liberals is likely to be less favourable to
the sale of citizenship. They would be inclined to oppose the practice on
grounds that citizenship would become internally less equal as a combi-
nation of status and set of rights and obligations if it could be bought by
wealth.

Arguments on the Content and Boundaries

of Citizenship Rooted in the Republican Tradition
The republican tradition is grounded in the Athenian concept of democ-
racy, further practised in the medieval Italian city states, the Dutch
Republic and a number of European countries in the eighteenth cen-
tury. As explained in Chapter 2, Athenian democracy was tightly coupled
with the notion of property, which allowed adult males ‘to participate in
authority, deliberative and judicial’ and to be considered a zoon politikon
(political animal) active in communal decision-making (Aristotle 2009
[350 bce]). This means that the political community was constituted
through clear boundaries of inclusion and exclusion, which reflected
political inequalities and privileges. Aristotle considered, in this sense,
that only those possessing special qualities of birth, wealth and sex could
be considered sufficiently independent to be able to participate in the
communal rule (Aristotle 2009 [350 bce]).
With the development of political thinking, exemplified by Niccolò
Machiavelli, Jean Jacques Rousseau, James Madison and others, the
idea of communal rule became more inclusive. Rousseau considered all
(male) individuals capable of self-rule, rather than limiting the exercise of
communal decision-making to a particular social group possessing cer-
tain characteristics. Participation in self-governance (Goldsmith 2008)
and non-domination by an arbitrary authority (Pettit 1996, 2014;
Skinner 1998, 2002) remained central to traditional and contemporary
64  J. DŽANKIĆ

renditions of the republican tradition of citizenship, respectively. That is,

they remained central to the content of citizenship.
For those looking at citizenship through the lenses of traditional
republicanism, the notion goes significantly beyond the legal status
and the rights and opportunities that come along with it. Citizenship
becomes a link of mutual obligations towards fellow citizens, joined
by strong emotional and psychological bonds, and united by a strong
interest in fostering the well-being and goals of the community (Miller
1999). Participation in communal self-rule becomes crucial for the sur-
vival of the community and thus shapes the sociopolitical identity of its
members. This tight coupling of status, participation and identity is pos-
sibly one of the sources of the republicans’ resistance to policies such as
the sale of passports that risk creating disengaged citizens.
The centrality of the idea of loyalty in republican thinking has defined
the legal boundaries of the demos. The classical republican idea under-
pinned the creation of national communities through which political
identity would be manifested (Rousseau 1978). Contemporary schol-
ars see national belonging as a mechanism for promoting civic obliga-
tions and a ‘partial replacement for the patriotic loyalty of the city-state’
(Miller 2000, 68). While national identity is a trigger for voluntary asso-
ciation and cooperation among citizens, similar loyalties and national
bonds may be established beyond the state’s borders. For this reason, the
republican tradition has commonly faced criticism for dismissing cultural
pluralism, which was seen as a potential threat to communal unity. As a
consequence, republicans are reluctant to accept multiplicity of loyalties
in the legal dimension of citizenship, despite recognising their plurality
in the identitarian one. Their further objection to the sale of passports
therefore emanates from their intolerance of dual nationality. It is under-
pinned by the republican idea of exclusive loyalty to a single political
community that shapes the lives of the individual and those attached to
them through communal bonds.
The contemporary republican argument understands political liberty
as an outcome of the relationship between an individual and the political
structure that exercises authority over him or her. Freedom is therefore
defined as independence from arbitrary authority and non-domination
(Pettit 2001; Skinner 2008). For realising independence and achieving
communal equality, contemporary republicans have developed a strong con-
ception of the common good—‘what is public is in the common interest,
 3  TO SELL OR NOT TO SELL: THE ETHICS OF IUS PECUNIAE  65

what is private is in the individual or sectional interest’ (Honohan 2017,

90). As a result, participation in political decision-making is intimately
related to achieving both individual freedom and institutional balance. Due
to such a tight coupling between individual freedom and participation in
communal decision-making, contemporary republican argument would not
be in favour of the idea of a global market for investor citizenship.

Arguments on the Content and Boundaries of Citizenship Rooted

in Communitarianism
Communitarianism represents an internal critique of mainstream lib-
eralism and republicanism. In communitarianism, the three facets of
membership—status, rights and identity—are neither as tightly coupled
as in republicanism, nor are they as disentangled as the liberal citizen-
ship tradition suggests. Communitarians view membership as a matter
of status, which does not only grant individuals rights within the com-
munity, but also provides them with a collectivity of shared meanings
within which they are able to exercise their autonomy and contribute
to self-governance. Describing the content of communitarianism and
its critique of liberalism, Walzer (1990, 9) noted that the community is
construed as the ‘home of coherence, connection and narrative capac-
ity’. The community offers a forum within which individuals can pur-
sue their objectives while simultaneously sharing and realising common
collective goals. This line of communitarianism would object to the sale
of citizenship drawing on the relationship between the common good
and the market in line with Sandel’s (2012) vision of ‘what money can’t
buy’. This argument could be used to object the sale of passports on two
grounds. First, the extension of market dynamics to communal member-
ship inherent in ius pecuniae may corrupt the core values of citizenship
as a participatory forum. Second, Sandel’s (2012) argument would also
highlight the issue of coercion. That is, the pressure that exists when
people sell in conditions of major inequality or economic need (e.g.,
peasant selling his or her kidney to feed his starving family), as has been
the case in severely economically disadvantaged Caribbean islands selling
citizenship.
However, communitarianism also places a strong emphasis on com-
munity membership and identity aspects—and often is more ­nationalist
for that reason. Such nationalist arguments could provide a defence of
66  J. DŽANKIĆ

citizenship for sale by placing an emphasis on the national self-determi-

nation of membership and the significance of national competition for
investments. This stream of communitarianism offers arguments that
states are entitled to open up ‘access points’, which would give the pros-
pect of eventually becoming citizens to individuals who have contributed
to the national political community. The final admission (naturalisation)
should represent an acknowledgement that the person has established
and developed sufficient links with the polity through residence, par-
ticipation and socialisation, as the anchors of the feeling of belonging.
Consequently, the nationalist—communitarian vision of citizenship may
be permissive towards investor migration as a means for strengthening
national autonomy in selecting membership.

The Pros of ius pecuniae

In the increasingly globalised world, citizenship has become a good
with which both states and investors seek to optimise their performance.
According to Ong (2005, 627), ‘nation-states seeking wealth-­ bearing
and entrepreneurial immigrants do not hesitate to adjust immigration
laws to favour elite migrant subjects, especially professionals and inves-
tors’. As a consequence, there are two key arguments that would support
policies of some states granting citizenship to investors, both drawing
inspiration from the liberal theory of citizenship. The first one views cit-
izenship as a ‘club good’, available to a bounded community of mem-
bers who contribute to the collective well-being. The sale of citizenship
would be permitted because the combined state revenue from the fee
paid by the investor and the investment itself enhances the economic
resources of the club. As the new member could further contribute to
the club after admission, this could yield major benefits for the ‘club’ and
all of its members. The second one has a rather different approach to cit-
izenship, whereby it is viewed exclusively as an arbitrarily attributed legal
status, which individuals mostly obtain by birth. In turn, as the condi-
tion of birth (place or descent) gives individuals different life opportuni-
ties due to global inequalities, the practice of investor citizenship would
enhance opportunities of those who had not obtained the ‘winning
ticket’ through the birthright attribution of citizenship. This perspective
is sometimes supported by scholars highlighting the decline and ‘lighten-
ing’ of the notion of citizenship (Joppke 2010; Spiro 2016).
 3  TO SELL OR NOT TO SELL: THE ETHICS OF IUS PECUNIAE  67

Citizenship as a Club Good:

Optimising Community’s Performance
The economic club good theory of citizenship (Buchanan 1965; Frey
and Eichberger 1999) offers an explanation as to why states would seek
to co-opt individuals who invest money in the polity. Buchanan’s (1965,
4) theory has an economic rationale in that membership in ‘clubs’,
as polities are viewed in this approach, should be based on a cost–
benefit analysis. That is, polities produce club goods for their members
and should therefore select for membership those individuals whose
contribution will optimise the production of club goods. According to
Buchanan (1965, 8), ‘[t]he bringing of additional members into the club
also serves to reduce the cost that the single person will face’.
Taken more broadly, this argument also explains the conditions for
naturalisation, whereby an individual is often required to comply with
certain pecuniary criteria, such as a minimum income, to be allowed to
become a citizen of a particular state. By contrast, those who are already
members of the polity are not required to meet such criteria. The expla-
nation of this asymmetry in the state’s behaviour towards its members
and those aspiring to that status is that only those people whose con-
tribution can help to decrease the shared costs of membership should
be naturalised. This view is also supported by Reich’s (1991, 18) ‘idea
that the citizens of a nation share responsibility for their economic
well-being’. As the operation of markets within the polity entails trans-
actions among individuals, companies, other states, etc., in order to
maximise their economic security and performance, states seek to ensure
that the naturalised individuals will pose no financial burden on their
economies.
The same rationale is used to explain why polities would facilitate
the naturalisation of investors. According to Frey (2000, 6), ‘the opti-
mal size of a club is reached when the marginal utility received corre-
sponds to the marginal cost induced by an additional member’. In fact,
the contribution to the country’s economy by the investor is dispropor-
tionately higher than the contributions of many of those who are already
citizens of a given state. Since the benefits of the investment (such as the
boost to the economy, opening of new jobs, etc.) vastly exceed the cost
of admitting the investing individual to the ‘club’, the addition of that
member would optimise or at least enhance the club’s economic per-
formance. Viewed through these lenses, citizenship is therefore not a
68  J. DŽANKIĆ

public good, but rather an exclusive set of rights and privileges attainable
through a significant contribution to the community from membership.
In this sense, in determining their citizenship, states act as ‘clubs’, and
thus have the prerogative to include or exclude prospective members
according to their interest (Walzer 1983). Such an approach would be
in line with the historical prerogative of sovereign states to decide whom
they want as their members. Hence the strongest challenge to the nat-
uralisation of investors in this regard has been put forward by Joseph
Carens (1987), who claimed that by seeing citizenship as a ‘club good’,
states act as enterprises rather than as public communities. In acting so,
they fail to acknowledge the boundary between the public and the pri-
vate spheres: ‘in the private sphere freedom of association prevails and
in the public sphere equal treatment does’ (Carens 1987, 269). Carens’s
view implies that in deciding on their membership criteria, states are
bound to treat all individuals equally.
At the same time, the conventional argument, also highlighted by
Carens (1987, 1992), is that states have the moral obligation to treat as
equals only those who are already their members. There is no obligation
for states to treat those who want to naturalise and those who are already
citizens equally. However, states do have an obligation to treat those
who apply for citizenship as equals in the sense of not discriminating in
morally arbitrary ways between them. Those who are non-members thus
need to comply with the same set of criteria in order to become citizens.
A departure from this logic, in contemporary citizenship legislation, is
made through different criteria for naturalisation for certain categories of
non-members, such as spouses of nationals, expatriates or recognised ref-
ugees. The reason for facilitating naturalisation in these cases is premised
on the assumption of their pre-existing ties with the aspired community
of membership (spouses, children, expatriates), or humanitarian argu-
ments and international legal obligations (refugees). These circumstances
enable states to waive some of the criteria for admission, for instance, by
reducing the residence requirement.
A similar logic operates in waiving all other criteria in cases of natural-
ising individuals on the grounds of national interest, or exceptional con-
tribution to the state. Equal treatment is overridden by the asymmetry of
gains for the community from an individual’s membership, as outlined
by Buchanan (1965). In countries that allow facilitated naturalisation on
grounds of exceptional contribution to the state, rewarding such achieve-
ments is recognition of merit rather than of money or class. Naturalising
 3  TO SELL OR NOT TO SELL: THE ETHICS OF IUS PECUNIAE  69

investors by waiving all other criteria, hence, equalises financial contribu-

tion with cultural, sports and educational achievements. Opponents of
the sale of citizenship emphasise that the latter are considered reputa-
tional gains ‘which are not available for purchase’ (Walzer 1983, 102).
The supporters of such a practice (Kochenov 2018b) however, maintain
that individuals who have accumulated substantial wealth have a particu-
lar talent, which merits reward, especially if it contributes to the prospec-
tive community of citizenship.

Investor Citizenship: A Panacea for the Unfair Birthright Lottery?

Pressures including globalisation, migration, security and economic con-
cerns have had a major impact on how states conceive of their member-
ship. These dynamics have been particularly relevant for the increasingly
uneven citizenship landscape around the world. Citizenship is primarily
attributed through a ‘birthright lottery’ (Shachar 2009), which implies
that we ‘inherit’ the status of citizenship from our parents (ius san-
guinis), or obtain it in relation to our place of birth (ius soli). Neither
of these are subject to our own volition and hence the citizenship we
acquire due to the fact of birth is non-voluntary. It is expected to ‘to
serve its crucial Westphalian function of sorting individuals into states’
(Bauböck 2019, 1019). Indeed, the very status of citizenship is linked to
sovereign states, and the proponents of investor citizenship programmes
argue that given the economic, political and social discrepancies among
states around the globe, citizenship perpetuates global inequality.
Kochenov (2018a, web) notes that the

main purpose of citizenship has been upgraded: from a neo-feudal mech-

anism of sexist and racist governance, it is turning into one of the core
instruments of preservation and justification of global inequality, hiding its
functionality behind the old façade of political self-determination, which
had been effective to brush away women and minorities before.

The core of his argument supporting the sale of citizenship, therefore, is

that this practice will eliminate some of the injustice inherent in the con-
cept itself.
To give an example, a person born in the Democratic Republic of
Congo (to Congolese parents) will—due to the mere fact of their birth
and the related status of citizenship—have fewer opportunities for
70  J. DŽANKIĆ

advancement and leading a happy life than a child born in Sweden (to
Swedish parents). The chances of survival of a Congolese child until the
age of five are significantly lower (World Bank Data 2016), as are edu-
cational, professional and travel opportunities. The possibility for this
Congolese child, once an adult, to purchase a second passport would,
therefore, eliminate some of the involuntarily ‘inherited’ inequality and
injustice contained in the birthright attribution of status. Such exam-
ples are sometimes invoked to advance the sale of citizenship as a rem-
edy for global inequalities. Kochenov, supports them with a reading of
Branko Milanović’s (2012) study of global inequality, which highlights
the existence of differences between countries and not only within them
(Kochenov 2018a).
A further enabling condition for the sale of citizenship would be the
overall ‘hollowing out of the national community’ and the status of
membership in the context of globalisation (Spiro 2016, 145). In other
words, the content of citizenship has changed significantly in compari-
son to earlier times, and it no longer represents communal bonds and
societal linkages as it used to. As noted by Spiro (2014, 9), ‘citizen-
ship-for-sale would have implicated serious symbolic societal costs by
breaking the social contract, understood not as an arm’s-length mar-
ket transaction but rather as the locus of morally-inflected rights and
responsibilities. In the old world, such programmes would have been
inconceivable’. Yet in the contemporary realities, the moral dimension
of citizenship is no longer ‘grounded in long-term relations of trust and
shared responsibility’ and where the bonds of membership are no longer
‘grounded in co-authorship, cross-subsidisation of risk, and even sacrifice
that might be expected in times of need’ (Shachar 2014). The sale of
passports can occur because it is a symptom of the decay of civic solidar-
ity and the fragmentation of the institution of citizenship (Spiro 2014).
Joppke’s (2010) argument on the ‘lightening of citizenship’ comple-
ments this line of reasoning.
While primarily attributed at birth, national citizenship may also be
‘earned’ by prospective citizens by meeting specific naturalisation con-
ditions, which differ on the grounds of the individual’s presupposed
connection with their new state. The process of naturalisation as ‘earn-
ing citizenship’ has so far been characterised by two tendencies. The first
one runs against Joppke’s (2010) and Spiro’s (2014) claims. The increas-
ing requirements for ‘civic’ integration (e.g. language, knowledge of the
country’s history, constitution, symbols of the state) ahead of permanent
 3  TO SELL OR NOT TO SELL: THE ETHICS OF IUS PECUNIAE  71

residence or naturalisation point to the attempts of re-nationalising cit-

izenship as ‘the last bastion of sovereignty’ (Brubaker 1996, 179). The
second tendency is precisely that of the lightening of citizenship and its
denationalisation (Spiro 2008; Joppke 2010), whereby ‘earning’ citizen-
ship is becoming increasingly detached from the territorial conception of
the state and entrenched in broader global developments (Bosniak 2000;
Sassen 2000; Rubenstein and Adler 2000).
Besides investor citizenship, this tendency is also mirrored in policies
that facilitate preferential access to citizenship on the grounds of ethnic
kinship, adopted by a number of post-communist countries (Dumbrava
2014), or the broader phenomenon of ancestry-based extraterritorial
access to citizenship (Harpaz 2019). Beneficiaries of such policies, similar
to investors, acquire a second passport as a mechanism of ensuring better
life opportunities but commonly do not reside in the destination coun-
try. However, there is a difference in the presumed content of citizenship
for the two aforementioned modes of citizenship acquisition. In the case
of ethnic citizenship, the status is indeed detached from the very terri-
tory of the state and has been developed as a mechanism for remedying
past historical wrongs (Maatsch 2011), or maintaining links with the cul-
turally similar population (Dumbrava 2014). Maatsch (2011, 42) notes
that ethnic citizenship policies can be ‘found in states having significant
diasporas abroad. The nature of ethnic tie is defined, in a more or less
precise way, in the legislation of a given state, usually referring to such
elements as common cultural, linguistic, historical or religious heritage’.
The acquisition of status is based on the presumed ties with the nation
and culture and not its territorial and constitutional manifestation, which
would be the state. The claim to status for ancestry-based extraterritorial
citizenship is established through descent-based relationship to the state
(i.e. link to person who was a national). In the case of investor citizen-
ship, the applicant is required to invest in the destination country either
through the purchase of state bonds or property. Hence, as Shachar
(2018) observed, paradoxically investor citizenship policies do manifest
a territorial dimension and a tendency towards re-nationalisation of citi-
zenship despite equally depicting its ‘hollowing out’ or ‘lightening’.
Yet the key question of whether the sale of citizenship can help reduce
global inequalities is a difficult one. Enabling individuals to possess the
status of citizenship (and the related rights) in another country than
the one they were born in can certainly amplify the opportunities they
will have in their lifetime. It will not be able to positively affect other
72  J. DŽANKIĆ

birthright attributes such as sex or any sort of racial traits per se. Even so,
it can enhance the lives of those able and willing to acquire another citi-
zenship by investment.
There are, however, two key shortcomings of the argument that
investor citizenship can be a compensatory mechanism for the exclusion
and injustice encapsulated in the notion of state membership. First, the
wealth necessary for the purchase of a second passport is available only
to a small number of high net worth individuals (especially in the devel-
oping countries). This means that the within-country class differences
remain a significant factor in enabling the sale of passports. To refer to
the example from the beginning of the section: a child of a Congolese
family wealthy enough (another involuntary birthright attribute) to pur-
chase the passport of Malta will have different life opportunities ab ini-
tio from a child born to a peasant Congolese woman and an unknown
father. In this sense, the opportunities that the wealthy child is granted on
the grounds of class inequalities within the country of birth are equally
contestable as the potential of these programmes to reduce inequali-
ties among countries. Second, the transfer of wealth from the develop-
ing to the developed countries could further amplify global inequalities
between countries. Presumably, individuals from developing countries
will seek better life opportunities and invest in the more developed
ones in exchange for status. A share of their assets would be moved to
the destination country, thus reducing the resources that are already
scarce in the less-developed areas of the world.

The Dark Side of Investor Citizenship

While there are some positive aspects to the sale of citizenship, many
people intuitively find this practice uncomfortable and wrong. Yet, it is
exceptionally difficult to construct a clear-cut argument explaining why
naturalisation of investors would be more disquieting than that of indi-
viduals who made a contribution to the state on the grounds of merit,
or simply because they had the right ancestry. Irving (2018) and Spiro
(2018) rightly note that there are no legal provisions in international
law that would prevent or question the exchange between money and
passports. The notions of ‘genuine links’ and abuse of rights comes
reasonably close to doing so. They would imply the existence of and a
consistent logic behind requirements such as social and personal ties,
the knowledge of the state’s language, customs or culture, which are
 3  TO SELL OR NOT TO SELL: THE ETHICS OF IUS PECUNIAE  73

waived in investor citizenship. However, only the state has the right to
decide on what constitutes such a link in each of the listed elements and
why, thus posing a challenge to genuine links and abuse of rights objec-
tions. A further criticism of the sale of passports is that it disrupts the
equality of communal membership implied in the notion of citizenship.
Even so, scholars have emphasised the historically exclusionary character
of citizenship as a challenge to the presumption of equality (Kochenov
2018b). The third line of objections to the sale of citizenship combines
normative and practical elements contained in programmes offering pass-
ports in exchange for money. The argument relates the levels of state
discretion in attributing the status of citizenship to corruption and con-
troversies that happen in practice. While explaining why the sale of citi-
zenship may be controversial if corruption occurs, this line of argument
is somewhat weaker in challenging the normatively contentious aspects
of the phenomenon, since there may be ways to prevent corruption from
occurring through proper regulation and oversight.

Does Investor Citizenship Create a ‘Genuine Link’

or Does It Amount to an Abuse of Rights?
One of the most common objections to investor citizenship pro-
grammes is that it violates the notion of genuine links and causes the
abuse of rights. The former notion first appeared in 1955 in the
Nottebohm (Liechtenstein v. Guatemala) decision of the International
Court of Justice (ICJ), concerning a German national who resided in
Guatemala for a number of years after the start of the Second World
War. Mr. Friedrich Nottebohm subsequently obtained the nationality
of Liechtenstein, a country with which he had only marginal contacts.
While the ruling of the ICJ affirmed that deciding on membership was a
prerogative of each sovereign state, it also defined nationality as ‘a legal
bond having as its basis a social fact of attachment, a genuine connec-
tion of existence, interests and sentiments, together with the existence
of reciprocal rights and duties’ (ICJ 1955, 1, 23). This ‘genuine connec-
tion’ was defined to mean that the individual concerned is ‘more closely
connected with the population of the State conferring nationality than
that of any other State’ (ICJ 1955, 1, 23).
The latter concept, that of the abuse of rights, emerged through the
revision of the theory of genuine links. Robert Sloane (2009, 31) has
criticised genuine links as outdated in the context of globalisation, due
74  J. DŽANKIĆ

to the increased migratory flows and the attachments that individu-

als develop with multiple polities. Drawing on the legal practice of the
ICJ in the area of nationality law, he noted that the notion of genuine
links should be abandoned and that ‘the international regulation of
nationality should be responsive to the function that nationality serves
in context’ (Sloane 2009, 31). Analysing the granting of citizenship to
investors in this context, we can see some problematic aspects of these
programmes, particularly in cases when all other requirements for nat-
uralisation are waived. This is less the case in programmes offering the
path to citizenship that grant ordinary residence rights to invest, while
all conditions for maintaining the status of resident and obtaining that
of a citizen are retained. Following Kiss (1992, 4), Sloane proposed that
the abuse of rights occurs when ‘a State exercising a right either in a
way which impedes the enjoyment by other States of their own rights
or for an end different from that for which the right was created, to the
injury of another State’. While the injury of another state may or may
not occur, and it usually is not implied by the rationale for the adoption
of the investor citizenship programmes, we may still argue that changing
the purpose of the right the state has in admitting new members is an
abuse of rights, because the logic behind the right has been altered.
Applying these two principles to the contemporary investment-based
migration, we can see a twofold dynamic. In principle, in admitting
new members states generally seek to ensure that there is a connection
between the individual and the polity. In practice, this means that, nor-
mally, naturalisation is based on a series of conditions. These conditions
commonly entail the individual’s physical link with the state (residence),
their knowledge of the sociocultural norms of the polity (language and
culture tests), moral standing (absence of criminal record), and finan-
cial subsistence (proof of income). Their function is to ensure that the
boundaries of membership reflect (and protect) its content.
However, states may use their prerogative to facilitate naturalisation
for some categories of applicants, based on family links, ethno-cultural
affinities, special achievements, etc. The rationale behind such facilitated
naturalisation is the presumption that such individuals already have cre-
ated some social ties with the polity. In the context of understanding
investor citizenship programmes, these approaches to naturalisation show
a discrepant dynamic. On the one hand, states seek to uphold the prin-
ciple of ‘genuine ties’ through naturalisation criteria. This implies that
nationals are assumed to have a close link to the respective state (Reich
 3  TO SELL OR NOT TO SELL: THE ETHICS OF IUS PECUNIAE  75

1991, 27, 1402). On the other hand, the state indeed has the right to
decide on its membership, but the sale of citizenship is problematic
because it affects the quality and legitimacy of the underlying citizenship
policy.
Against this background, the conferral of citizenship to investors while
waiving all other naturalisation criteria is indeed contentious, because the
naturalised individual may not claim to have established any links with
the state other than through the investment. In countries that facili-
tate naturalisation to foreign nationals on grounds of their exceptional
contribution to the country’s society, economy, sports or culture, citi-
zenship laws contain this tension. The global statistics regarding this pro-
vision are unavailable, but the data available at the Global Citizenship
Observatory (GLOBALCIT 2017) indicate that over two-thirds of the
countries worldwide have provisions for discretionary naturalisation
on grounds of special achievements. The degrees of states’ discretion
range from the powers of the authorities to waive all the ordinary nat-
uralisation conditions, to the alleviation of some (e.g. language knowl-
edge, or renunciation of dual citizenship) and retention of others (e.g.
residence, oath of allegiance). Exceptional naturalisation is used only
in a few cases annually, and sometimes the number is limited by law
(e.g. not more than ten people annually in Estonia, and not more than
five in the Dominican Republic) (Bauböck and Wallace-Goodman
2010, 2). However, the procedure in itself raises moral concerns for the
state’s actions. In principle, a state seeks to reward those individuals who
have de facto made a significant contribution to its economy. Genuine
links thus fade away in light of the state’s prerogative to decide upon its
national interest.
Equally, when states that implement investor citizenship programmes
through facilitated naturalisation, without clear criteria as to the amount,
nature and effects of investment refer to their ‘national interest’, we
can attempt to see whether this practice represents a potential abuse of
rights. The decision on what constitutes ‘national interest’ is at the dis-
cretion of the state’s authorities. If investment alone is considered to be
in the ‘national interest’ and drives the decision to grant naturalisation,
this begs the question of what national interests are in the first place.
As the end of the state’s prerogative to decide on its membership alters
the meaning of ‘national interest’ we may claim that this represents an
abuse of rights. However, the logic behind the state’s prerogative to
decide on its membership through discretion has remained unchanged
76  J. DŽANKIĆ

(i.e. the desire to attract the most competitive individuals in any given
field), abuse of rights can offer a small piece of the puzzle in explaining
our discomfort with exceptional naturalisation for investors.
The same reasoning can also be applied to states that have specific
investor citizenship programmes. The rationale behind the investor citi-
zenship programmes in the Caribbean islands is based on the geograph-
ical position of these states, their low level of GDP per capita, and the
lack of competitiveness on the global market. Their ‘national interest’ is
clearly defined in terms of the amount of investment and targeted indus-
tries. In this context, we can argue that given the consistency in the logic
and the ends behind these programmes, the abuse of rights on behalf of
the state in naturalising investors through such programmes is lower.
Here, it is also presumed that an individual who helps the state to ful-
fil its defined ‘national interest’ has established strong economic ties with
the new community of membership. However, since the investor is in
possession of the citizenship of St Kitts and Nevis, the Commonwealth
of Dominica, Antigua and Barbuda, Malta or Cyprus, but is not bound
to reside in these countries, their level of ‘genuine ties’ with these poli-
ties is lower than that of an ordinary citizen (or a transnational migrant).
This is supported by the assumption that physical presence in a country
drives individuals to establish social and personal ties, and thus to relate
to the polity as the locus of both their personal and professional activity.
In a nutshell, while both the contested notion of genuine ties and the
possible replacement criterion of abuse of rights can offer some explana-
tion as to why we intuitively find the sale of citizenship uncomfortable,
this explanation is merely one piece of the puzzle. Even if we consider
that the idea of ‘genuine ties’ implies not only a physical connection
of the individuals with the state envisaged through residence, but also
other links such as social and personal ties as well as the knowledge of
the state’s language, customs and culture, it is still the prerogative of the
state to decide on the grounds for admission and the logic behind its
conception of rights.

Are Some Animals More Equal Than Others?

Historically, citizenship presumed a series of internal hierarchies, and
not all the communal members had the same say in political deci-
sion-making. These hierarchies represented the real boundaries of citi-
zenship, and defined its content in terms of the roles which individuals
 3  TO SELL OR NOT TO SELL: THE ETHICS OF IUS PECUNIAE  77

belonging to different strata would assume. Nowadays, with the advent

of international human rights norms, liberal ideas about equality imply
that all the members of the polity should be treated with equal respect
and concern despite their social standing, wealth or class. Yet states have
no obligation to treat non-members in the same way as their citizens,
apart from general provisions requiring non-discrimination between cit-
izens and non-citizens on grounds of race, ethnicity and religion (1963
International Convention on the Elimination of All Forms of Racial
Discrimination (ICERD), Article 1).
While each state has the prerogative to decide on its membership,1
the process of granting a foreign national citizenship of a given state is
normally accompanied by the criteria mentioned in the previous section.
In classifying these criteria, we can distinguish between ordinary and
facilitated naturalisation. Ordinary naturalisation is commonly based on
multiannual residence in a country, complemented by the applicant’s ful-
filment of a series of conditions, such as language knowledge, socialisa-
tion or absence of criminal conviction. Facilitated naturalisation, whereby
some of the requirements are waived for the applicants, is based on
pre-existing ties that the applicants have with the polity or its members
(e.g. through marriage, adoption, public service) or for humanitarian
reasons. In such cases, the state applies a norm of adequate or propor-
tionate requirements. By contrast, investor citizenship programmes allow
facilitated naturalisation to a group of people only on grounds of their
wealth and social standing, while some or all of other conditions are
waived. This indicates that there is a tension between the contemporary
vision of citizenship and the naturalisation policies that the states actually
apply. As Laura Johnston (2013, 5) noted, ‘the act of exchanging a high-
er-value good (citizenship) for a lower value good (money) destroys the
value of citizenship and corrodes public trust in that institution in a way
that naturalisation on other bases does not’. This view was also endorsed
by Tanasoca (2018). Yet, as there are different ways of regulating inves-
tor citizenship the degree of this ethical issue of ius pecuniae varies across
countries.
Ethically problematic aspects of the sale of passports are emphasised
in cases of countries offering facilitated naturalisation to investors or
applying detailed investor citizenship programmes. In these countries,

1 In most countries around the world, naturalisation is a discretionary power of the state

and not an individual entitlement.

78  J. DŽANKIĆ

authorities have the discretion in deciding on ‘national interest’ and

‘exceptional achievements,’ thus singling out one social class over others.
This challenge to equality exists both in states allowing the facilitated nat-
uralisation to investors only through discretion, and in those implement-
ing detailed investor citizenship programmes. For instance, in St Kitts and
Nevis the residence requirement for ordinary naturalisation is fourteen
years, while naturalised investors are subject to no residence requirement.
The approaches taken in the Commonwealth of Dominica, Antigua
and Barbuda, and Vanuatu are similar. These three states have residence
requirements of five, seven and ten years, respectively, for ordinary nat-
uralisation. Equally contentious are merely formal residence conditions
applied by Cyprus and Malta. In these cases, there is also no obligation
for those who obtain citizenship by investment to live in the country.
Rather, the condition is met by registration of residence, entailing almost
no physical presence on the two countries’ soil (ORiip 2017, 31).
The inequality among non-members is somewhat less pronounced in
the path-to-citizenship programmes for investors. In such programmes,
investors are commonly bound to comply with other naturalisation criteria
including residence and language requirements. In countries where dual
citizenship is not allowed, such as Singapore, Hong Kong and Monaco,
these individuals are also required to relinquish their citizenship of origin.
In this regard, programmes requiring periods of extensive residence and
other conditions can be said to generally uphold the equality of access to
citizenship. Exceptions to this may occur in countries such as Romania,
or Spain and Portugal, where, respectively, the state authorities have the
right to reduce the residence requirement by a few years for naturalisation
of those individuals who have obtained residence rights on the grounds of
investment, or to allow investors to maintain residence while living else-
where.2 In these cases, even though investors are still subject to residence
and other criteria, the fact that the actual requirement for naturalisation is
facilitated only on financial grounds still disrupts the equality principle.
A further contested aspect of investor citizenship in relation to the
equality principle is wonderfully captured in a phrase from George
Orwell’s Animal Farm whereby ‘all animals are equal but some animals

2 Compared to ordinary naturalisation, the requirement for investor citizenship is reduced

from eight to four years of residence in Romania. Spain and Portugal foresee only minimum
physical presence (one to two weeks per year) in order for investors to maintain residence
rights.
 3  TO SELL OR NOT TO SELL: THE ETHICS OF IUS PECUNIAE  79

are more equal than others’ (1945, 112). Provisions stipulating the dis-
cretionary right of states to offer citizenship to foreign nationals often
waive the requirement for the person in question to relinquish their citi-
zenship of origin. This fact confirms the ‘special status’ of such individu-
als in the states in which they have been naturalised. In states that forbid
dual citizenship, the principle of equality is disrupted because extraor-
dinarily naturalised persons are able to retain their nationality of origin
unlike ordinary citizens. The latter would normally lose their citizenship
of origin should they seek to become naturalised in another country.3
The disruption of the equality of membership offers perhaps the
strongest argument as to why we intuitively red-flag investor citizenship
programmes: we consider them a potential threat to democracy, a chal-
lenge to equality, and a mechanism of commodifying citizenship (Stern
2012, 13). By transforming citizenship into a good with which both
states and investors seek to optimise their performance, investor pro-
grammes clearly infringe the liberal ideas of democracy. They shake our
understanding of membership in today’s states as ‘communities of char-
acter’ (Walzer 1983; Carens 1987), in which we presume that an individ-
ual cannot be granted privilege merely on the grounds of wealth, which
has historically been the case with citizenship. In other words, the very
distortion in the history of citizenship, whereby both membership and
rights were related to property and thus generated an unequal treatment
of individuals by the state, re-emerges in the context of investor schemes.
Hence our intuitive concerns about the sale of citizenship emanate from
our perception of equality in modern democracies, which we believe to
have transcended the idea that the distribution of rights is inextricable
from that of wealth and social class.

When Boundaries Collide: Discretion vs. Money

The processes of acquisition and loss of citizenship are regulated by laws.
These laws ensure transparency in the procedures that regulate the for-
mal belonging to the state. They also define the boundaries of citizenship

3 As in the case of the disruption of the equality principle in the process of naturalisa-

tion, equality within the polity is sustained to varying degrees in different types of invest-
ment-based naturalisation. Path-to-citizenship programmes for investors generally uphold
the equality principle as they require the applicant to renounce their citizenship of origin if
that is required by the country’s nationality legislation.
80  J. DŽANKIĆ

in different countries. The content of citizenship is determined by leg-

islation that envisages rights and duties conferred upon communal
members. As has already been explained, each state has the discretion
to decide on whom it wants as its members and under what conditions.
Aside from the vague notion of genuine links, there are no formal legal
obligations for states to limit their discretionary power in conferring cit-
izenship to investors on grounds of ‘national interest’. The latter is often
conceived broadly and left to the discretion of the authorities. In order
to be granted citizenship outside the regular procedure an individual
should contribute to the state’s ‘national interest’ through ‘exceptional
achievements.’ The exceptional achievements is an umbrella concept,
bringing together accomplishments in various spheres of human activity,
including economy, culture, science and sport.
That is, there is no clear legal line between pecuniary contribution
and other achievements. As a consequence, the reputational gains, which
are a matter of talent or merit are equalised with money, that is, with
wealth and social standing. The question of whether a pecuniary contri-
bution can be equivalent to merit and talent is a complex one and could
help to understand why we are uncomfortable with the idea of selling
citizenship. This issue is manifested to different degrees in the institu-
tional arrangements regulating naturalisation of investors. In particular,
in discretionary naturalisation and in detailed investor citizenship pro-
grammes, the conferral of the status of citizenship is based on the state’s
discretion to define ‘national interest’.
A number of examples can illustrate how this discretion is articulated
in practice. For instance, Article 10(6) of the Austrian Nationality Act
(FLG I 37/2006), stipulates that the requirements of residence and
single citizenship are not applicable if ‘the Federal Government con-
firms that the granting of nationality is in the particular interests of the
Republic by reason of the alien’s actual or expected outstanding achieve-
ments’. The corresponding article of the Italian citizenship legislation
(OG 112/1983, Article 9(2)) notes that

[b]y decree of the President of the Republic, having heard the Council of
State and following a decision by the Council of Ministers, upon a pro-
posal of the Minister for the Interior, in consultation with the Ministry for
Foreign Affairs, citizenship may be granted to aliens where they have ren-
dered an outstanding service to Italy, or where an exceptional interest of
the State exists.
 3  TO SELL OR NOT TO SELL: THE ETHICS OF IUS PECUNIAE  81

Also, pursuant to Articles 18–20 of the citizenship law of the Dominican

Republic (Law 169–14), the president may waive all naturalisation
requirements for a person who has rendered eminent services to the
country or to humanity. In each of these illustrative cases ‘outstanding
achievements’, ‘outstanding service’, ‘exceptional interest’ or ‘eminent
services’ may equally refer to talents, which are not available for purchase
(e.g. sports, music, art), and to investment, which involves a monetary
exchange.
In the detailed investor citizenship programmes, such as those in St
Kitts and Nevis, the Commonwealth of Dominica, Antigua and Barbuda,
Vanuatu, Cyprus or Malta, the definition of ‘national interest’ is encap-
sulated in the legal provisions on the nature and effects of the economic
contribution to the state. This means that legislation has been adopted to
separate naturalisations based on money from those based on merit and
talent.
The related possibility of acquiring the status of citizenship through
the state’s discretionary powers has raised concerns over whether these
programmes leave scope for the violation of the sphere boundary of
money and the unlocking of ‘blocked exchanges’ (Walzer 1983, 100–
103). The ‘blocked exchanges’ can be illustrated by a number of cases
of tax evasion, money laundering and corruption related to investor
citizenship.
For instance, the (former) US and UK citizens naturalised in
St Kitts and Nevis and the Commonwealth of Dominica pay considerably
lower taxes in the Caribbean states. A report by the US Department of
Treasury (2014) has alerted readers to the potential abuse of the inves-
tor citizenship programmes for money laundering and financial crimes.
In 2017, Malta’s IIP caused early elections because the chief of staff of
the country’s prime minister was accused of taking bribes from some
applicants of the country’s investor citizenship programme. The situa-
tion was aggravated by the allegations of abuse of power, since his wife
was the owner of a company that facilitated IIP services (Attard and
Lindsay 2017, web). The controversial case, related to corruption and
money laundering through investor citizenship in Malta, was followed
by the assassination of Daphne Caruana Galizia, a Maltese investigative
journalist, and a whistle-blower in the Panama Papers affair with regard
to Malta in October 2017. Caruana Galizia was critical of the country’s
investor citizenship. Her final investigations linked the top officials from
82  J. DŽANKIĆ

Malta with the sale of Maltese passports and payments from the govern-
ment of Azerbaijan (The Guardian, 16 October 2017). International
policy analysts have thus highlighted the problematic aspects of the
country’s investor citizenship programme and particularly the potential
for abuse of power and money laundering (Dobrovolskaya et al. 2017;
Committee on Civil Liberties, Justice and Home Affairs 2017).
In relation to this, Johnston (2013) has highlighted that the discre-
tion of authorities in determining the aptness of an individual for natu-
ralisation may result in institutional corruption. Recently, The Guardian
reported on an agreement between Alexander Nix, the founder of
Cambridge Analytica, and Christian Kälin, the chairman of Henley
and Partners, one of the intermediary companies engaged in the sale
of passports (Garside and Osbourne 2018). According to this report,
Cambridge Analytica was ‘to influence the outcome of elections in places
where Henley wanted to do business’, including St Kitts and Nevis, and
Malta (Garside and Osbourne 2018).
Hence it is likely that the bulk of our discomfort with investor citizen-
ship emanates from the collision of two types of state practices—those
of discretion in attributing citizenship and those of charging substantial
sums of money for a good that ought not to be for sale. In this case, the
normative tension is a direct product of the discretion that the author-
ities have in deciding on whether or not to grant citizenship by invest-
ment. Looking at the notion of the sphere boundary of money in the
context of ‘merit’ helps us to understand that certain achievements are
not available for purchase, and that programmes based on pecuniary
contribution as grounds for naturalisation have the potential to generate
corruption.
The different mechanisms of attributing citizenship to investors may
generate different forms of corruption. As illustrated by the case of
Austria in the Introduction to this book, one such mechanism would
be when state authorities have the discretion to grant or withhold citi-
zenship for investors. Corruption occurs when such authorities receive
payments and donations for approving the discretionary attribution of
citizenship to investors. A second mechanism that has the potential to
generate corruption occurs when payments are collected by lower level
authorities, so that these can charge additional fees informally or sell
passports (Tanasoca 2018; van Fossen 2007). Practices in Tonga, Nauru,
Belize, etc., described in the previous chapter best reflect this. The third
one is when intermediaries benefit from matching investors with states
 3  TO SELL OR NOT TO SELL: THE ETHICS OF IUS PECUNIAE  83

(the Caribbean case) or can influence state policy so that it promotes

their business interest (e.g., Malta). The latter mechanism exists inde-
pendently and has the potential to generate corruption in both discre-
tionary and non-discretionary programmes.

Conclusion
With the amplification of transnational, supranational and subnational
political spaces, examining how membership is understood, constructed
and practised is a major normative and empirical challenge. This chal-
lenge has been enhanced by to the growing trend of states using citi-
zenship policies to attract the rich to become their citizens through the
sale of passports. The expanding global market for investor citizenship
indicates that such policies are attractive and desirable not only for their
beneficiaries, but also for states as the recipients of funds. At the same
time, many of us find this practice unfair and disquieting. Yet, finding a
clear-cut answer as to why selling citizenship is right or wrong is a daunt-
ing task.
The three citizenship traditions—liberal, republican and communitar-
ian—provide us with different answers because each views communities
of membership and their purpose through its own lens. That is, the dis-
parate arguments in favour or against the sale of citizenship are rooted in
the divergent conceptions of the content and boundaries of membership.
Some strands of the liberal citizenship tradition resonate in arguments
of scholars defending investor citizenship by focusing on the demise of
the state and the hollowing out of citizenship. The republican vision of
citizenship as a strong communal bond entailing rights and responsibili-
ties is engrained in most objections to these programmes. The commu-
nitarian emphasis on the creation of liaisons provides a midway ground.
Understanding the conception of communities through these different
citizenship traditions is crucial to understanding the strengths and weak-
nesses of the proponents and opponents of the sale of passports.
The major arguments supporting the sale of citizenship draw, in fact,
on the different strands of the liberal tradition. One such argument is
based on the economic theory of ‘club goods’, applied to citizenship.
If we view citizenship as an exclusive club, then its membership should
be accessible to those whose contributions lower the costs of club goods
for current members of the club. The defence of the sale of passports
also draws on the conceptions of citizenship as an ‘empty box with loose
84  J. DŽANKIĆ

edges’, or a relic of historical injustices nowadays articulated as nation

states. In this context, the investor citizenship market is believed to rec-
tify inequalities contained in the birthright attribution of membership.
Yet the strands of political theory that emphasise the nature of the
communal bond warn of the potentially detrimental effects the sale of
passports may have on the country’s institutions. Concepts such as gen-
uine links and abuse of rights are commonly invoked to emphasise the
rationale behind naturalisation requirements and their underlying logic.
Further to this, if we see citizenship as a relationship of equality, the
grant of privileges on grounds of wealth seems unjust. That is, it appears
as a transaction that should never happen because membership privileges
are a matter of communal consent and should not be for sale.
The final and the most obvious objection to investor citizenship—that
it has the potential to generate corruption—is grounded in the practice
of this global phenomenon and seems slightly less convincing on the
normative side. From Cyprus to Malta, from St Kitts and Nevis to the
Commonwealth of Dominica and to Austria, we have witnessed cases
of bribery, money laundering, corruption of public officials—all related
to different modalities of the sale of passports. These cases indicate that
potential corruption of public officials is a potential corruption of demo-
cratic institutions. As such it is a major threat to democracy.

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 CHAPTER 4

A Classification of Investment-Based
Citizenship Programmes

In the earlier chapters of this book, we have explored the nuances of ius
pecuniae throughout history. We have also examined the normative argu-
ments that can justify or object to the sale of passports. Yet the different
legal instruments that states employ to regulate the exchange between
money and status define the contours of the global market for inves-
tor citizenship. This means that the sale of citizenship, whichever form
it takes, has a very practical policy manifestation, which functions inde-
pendently of any historical or normative considerations over this phe-
nomenon. The different models through which investor citizenship is
regulated thus enable us to classify and analyse purposes, objectives and
outcomes of the underlying programmes.
The regulation of investor citizenship is eventually a matter of a state’s
citizenship policy. States may use their historical prerogative to decide
on membership to practise ius pecuniae. In most such cases, the legal
grounds for naturalisation are provisions that enable the state authori-
ties to waive some or all ordinary conditions for naturalisation because
an individual has offered ‘exceptional services’ to the state or has made
a major contribution to its culture, art, economy or sports, or other-
wise expressed national interest. The application of these legal arti-
cles is not limited to investors, and they are more frequently used to
admit famous sportspeople, actors, musicians, etc. For example, Serbia
and Russia have used this kind of provisions to naturalise the American
action-film actor Steven Seagal (Reuters 2016, web); Latvia naturalised

© The Author(s) 2019 91

J. Džankić, The Global Market for Investor
Citizenship, Politics of Citizenship and Migration,
https://doi.org/10.1007/978-3-030-17632-7_4
92  J. DŽANKIĆ

the ballet dancer Mikhail Baryshnikov (Radio Free Europe 2017); and
the ice skaters Tanith Belbin and Maxim Zavozin became US citizens
through the state’s discretion to naturalise talented individuals who con-
tribute to its national interest (Shachar 2011).
Since the state has the authority to define the boundaries of its
national interest in citizenship matters, the above provisions in citizen-
ship legislation serve as the grounds for the development of detailed
programmes targeting investors. These programmes commonly take the
shape of subsidiary legislation adopted under citizenship acts. Contrary
to the fully discretionary provisions, detailed investor citizenship pro-
grammes exist in only a few countries around the world, including
St Kitts and Nevis, the Commonwealth of Dominica, Antigua and
Barbuda, Vanuatu, Cyprus and Malta. Through these programmes states
define the exact amount and type of pecuniary contribution, as well as
additional criteria that need to be met to obtain citizenship by investment.
Furthermore, investor citizenship can eventually be obtained through
programmes that open up a ‘path to citizenship’ via residence rights.
In such cases, the programme is related to the state’s internal affairs
and general approach to immigration. Rather than granting citizen-
ship by investment immediately, the residence programmes offer inves-
tors the possibility of becoming citizens if they migrate and integrate
into the country. In some cases, the ‘path to citizenship’ programmes
serve merely as the basis for obtaining residence rights and investors are
treated as ordinary migrants in terms of rights and obligations. In other
instances, states develop special incentives, such as lower taxes, or facil-
itated entry and stay regulation, enabling investors to gain a privileged
status over other migrants. These programmes are on the rise around
the world. As will be discussed in this and the subsequent chapters, they
are occasionally ‘hidden’ investor citizenship schemes and as such they
underpin the rise of the industry of selling passports.
Against this backdrop, the subsequent sections present a typology for
classifying the contemporary investment-based citizenship programmes
on the basis of purpose of policy that has been used to regulate them.
The typology differentiates between policies that fully or partly waive
other regular naturalisation criteria and programmes that facilitate nat-
uralisation for investors by offering them a path to citizenship. The
classification is followed by a comparative analysis, which highlights the
distinct features of the plethora of ius pecuniae policies around the world.
 4  A CLASSIFICATION OF INVESTMENT-BASED CITIZENSHIP PROGRAMMES  93

Understanding the Purposes of ius pecuniae Policies

States admit foreign residents for many different reasons: labour mar-
ket needs, family reunification, refugee protection, study, and retirement
and lifestyle migrants. All of these reasons for granting the leave to enter
to foreign nationals are then regulated by specific policies, prescrib-
ing the conditions of entry and stay of the different kinds of migrants.
Conditions that migrants are subject to often include certification of the
grounds for stay, financial conditions, as well as requirements related to
the maintenance of public security in the destination state (e.g. absence
of a criminal record). The conditions for maintaining a particular status,
be it temporary or permanent residence permits, or citizenship, articu-
late the interests of the receiving state in admitting individual migrants.
Therefore, policies that target migrants have their purpose, and this
allows us to classify them.
The rise of investment-based migration, especially in recent years, has
been mirrored in the emergence of different programmes in wealth-seek-
ing countries, targeting individuals who are willing to give away part of
their fortune in exchange for status. In addition to the discretionary con-
ferral of citizenship, these programmes can be divided into two groups
on the grounds of the purpose and consequences of policy both for the
state and for the investor: (1) investor citizenship programmes, or pro-
grammes leading to the status of a full citizen on the grounds of invest-
ment; and (2) investor residence programmes (IRPs), or programmes
leading to residence rights (thus a path to citizenship by investment).
The first category can be further differentiated through grounds for nat-
uralisation into discretionary citizenship acquisition based on national
interest and specific investor programmes regulated in detail through
separate legal acts. The key purposes and characteristics of the three types
of programmes—(1) discretionary acquisition of citizenship; (2) detailed
investor citizenship schemes; (3) IRPs—are detailed in Table 4.1.
As indicated in Table 4.1, the three types of ius pecuniae policies artic-
ulate different interests of states and follow seemingly different policy
logic. However, the classification is not clear-cut as sometimes the lines
between discretionary citizenship, investor citizenship, facilitated and
ordinary residence may be blurred. Some aspects of one programme
might closely resemble another. Policy can be formulated through less
conflictual schemes (discretionary citizenship, ordinary investor resi-
dence) in contexts where structured programmes (investor citizenship,
94  J. DŽANKIĆ

facilitated investor residence), would cause political contention.

Notwithstanding this, the purpose of such programmes might effec-
tively be to create routes for investors to become citizens or permanent
residents.
For example, discretionary provisions (economic contribution) over-
lap with investor citizenship if they do not include a residence require-
ment or requirement to renounce a previous nationality. The key
objective of such a provision is an immediate economic rather than
reputational gain, which would arise if the discretion were used for a
contribution to sports, culture or art. Given that these provisions are
widely spread and not contested domestically or externally, they may
also be used for naturalising investors, because investment is equalised
with ‘national interest’ and ‘money making’ is considered a talent or an
achievement.
At the same time, a state’s discretion in regulating citizenship serves
as legal grounds for developing detailed investor citizenship schemes,
which are based on this discretion but ostensibly offer more transparency
in regulating admission on the grounds of investment (Oršolić Dalessio
2015). Such programmes exist in Turkey and a few small island states
which, when faced with economic difficulties, sought to develop offshore
financial services or aid a particular industry segment. Examples include
St Kitts and Nevis (decline in the sugar industry), Commonwealth of
Dominica (decline in agriculture), St Lucia (decline in tourism), Vanuatu
(agriculture in an unstable climate), Cyprus (financial crisis) and Malta
(property market). In the Pacific and Caribbean islands, the shift from
discretionary provisions to fully fledged programmes is likely to be
related to the international pressures for increased transparency of these
programmes, which emerged after media reports that these countries’
passports were used for avoidance of extradition (The Economist 2006)
or tax evasion (Reuters 2012). In Cyprus and Malta, the original pro-
grammes involved a broad margin of state’s discretion and EU mem-
bership ‘increased the value’ (and the price) of their passports.1 While
adopting minimum modifications to their programmes under pressure

1 The relationship between the citizenships of Cyprus and Malta to European citizen-

ship explains the difference in the required investment amounts between these two states
and the Caribbean and Pacific islands. While the latter require at most $400,000, the
investment in Cyprus ranges from €2 million to €5 million and in Malta it is fixed at €1.15
million.
 4  A CLASSIFICATION OF INVESTMENT-BASED CITIZENSHIP PROGRAMMES  95

from the EU, both Malta and Cyprus retained their investor citizen-
ship schemes due to the exclusive competence of states in regulating
membership.
The residence and citizenship categories described in Table 4.1 may
overlap in practice, too. For example, a holder of a residence permit may,
after a certain period of time (commonly five to seven years) be eligi-
ble for the status of a permanent resident or citizen. Hence they create
a path to citizenship, which is largely facilitated if residence conditions
for extending the permit and for naturalisation are eased for investors.
In Portugal, for example, separate subsidiary legislation establishes the
criteria for the conferral and maintenance of residence rights for investors
(Order no. 1661-A/2013 of the Ministry of Foreign Affairs and of the
Ministry of Internal Affairs [Portugal]). For all other types of residence,
the continuation of the status foresees no absences from the country’s
soil longer than six consecutive months or eight interpolated months
during the period of validity of the permit (one or two years) and the
permanent residence permit is cancelled if an individual is absent from
the country for 24 consecutive months or, in a period of three years, 30
interpolated months (Act 23/2007, the ‘Aliens Act’ providing for the
legal framework of entry, permanence, exit and removal of foreigners
into and out of the territory, as amended by Act 29/2012). To maintain
their status, investors are required to be physically present in Portugal for
one week each year. After six years of legal residence, applicants are eli-
gible for Portuguese citizenship, implying that the de facto requirement
for physical presence in the country prior to naturalisation could amount
to mere six weeks.
Investor citizenship and residence programmes hold a particular place
in the universe of citizenship immigration policies—they are available to a
comparatively small group of high net worth individuals (Kälin 2016). As
they do not entail mass migration, the states’ general approach to policy-
making and historical experiences and factors that normally shape policy
choices (Richardson et al. 1982; Brubaker 1992; Hansen 2002) will have
a limited influence on programmes targeting wealthy migrants. This dif-
ferentiates the states’ approach to investors from that to other types of
migrants, such as workers, family members, refugees and asylum seekers.
Hence an understanding of investor citizenship needs to combine insights
from citizenship and immigration studies so as to integrate ‘theoretically
and empirically meaningful components which are associated with differ-
ent issues and patterns of benefits and costs’ (Freeman 2006, 227).
96  J. DŽANKIĆ
Table 4.1  Purposes and characteristics of investor citizenship: a typology
Programme
Discretionary (single
provision in citizenship
legislation)
Investor citizenship (specific
subsidiary legislation)
Investor residence (single
provision in aliens laws
and/or specific subsidiary
legislation)
Policy purpose
Conferral of citizenship
status through the state’s
prerogative to decide on
national interest
Conferral of citizenship
status on the grounds
of a specified economic
contribution
Conferral of resident status • E  conomic contribution
on the grounds of a specified
or discretionary economic
contribution
Characteristics
•N ational interest and
individual achievement
articulated in economic
terms (amounts specified
or unspecified)
•R equires proposal/
endorsement by the rele-
vant Ministry
• Dual citizenship tolerated
•E xistent in most countries
in the world
•R arely used and/or num-
bers limited by law
• Economic contribution
(specified amount) is the
basis for the conferral of
citizenship
• Waiver of most conditions
for ordinary naturalisation
(e.g. residence, language
knowledge, civic tests)
• Dual citizenship tolerated
• Exists in only a few coun-
tries in the world
• Used by a growing num-
ber of investors (cap on
applications exists only in
Malta)
(specified or discretionary
amount) is the basis for
the conferral of residence
rights
•C  onditions for maintain-
ing residence rights apply
(ordinary tax regime)/
or waiver of most con-
ditions for maintaining
residence rights (special
tax regime)
•E  xists in many countries
in the world
 4  A CLASSIFICATION OF INVESTMENT-BASED CITIZENSHIP PROGRAMMES  97

Discretionary Attribution of Citizenship to Investors

Investors may obtain citizenship through the discretionary provisions.
This type of naturalisation is considered to be a reward for services ren-
dered to the state in different domains including art, culture, sports, but
also the economy and business. The procedures involved may differ from
the ones applied in cases of other prospective citizens. This differentia-
tion is based on the fact that the individuals who received citizenship in
such a way are ‘outstanding’ in a particular field and a number of ordi-
nary naturalisation conditions do not apply.
Speaking of promising Olympians, Nobel Prize winners, gifted scien-
tists or artists, Shachar (2011, 525) considered the use of the state’s dis-
cretion to naturalise to be a part of the global race for talent, which ‘has
infiltrated and transformed the realm of citizenship’. This transformation
has at its core, not a direct link between one individual and one state,
but rather broader global dynamics in which states compete against each
other for limited human and material resources. In other words, rather
than referring only to the race for talent, we can speak about a global
race for resources.
Applying the state’s discretion to naturalise investors combines two
elements of the global race for resources: (1) competition for people
who possess particular attributes that are transferable across social, polit-
ical and geographic boundaries; and (2) competition for commodities
and funds that can bolster the country’s place in the global market
economy. The merger of these two elements in crafting the grounds for
naturalisation of investors is indeed a part of the global rise of a calcu-
lated approach to citizenship (Shachar 2011; Schachar and Hirschl 2014;
Spiro 2012). Through this calculated approach to citizenship, discretion-
ary naturalisation of investors aims to match state interests in reputation
and expected economic gains with individual interests in state support in
developing and promoting their economic activity. As a consequence of
the broad margin of the state’s discretion and the expected reputational
and economic gains for the state, these policies are generally uncontro-
versial in content and widespread.2
The GLOBALCIT (2017) data on the global modes of citizenship
acquisition indicates that out of the 175 countries around the world

2 While the content of policy is straightforward, its implementation has caused controver-

sies and scandals in a number of countries (Džankić 2012, for the example of Austria).
98  J. DŽANKIĆ

included the database, 115 have provisions in their citizenship laws ena-
bling states to apply their discretion in naturalising persons with special
achievements in the country. In most cases, the stretch of this discre-
tion remains defined broadly, which does not preclude the naturalisation
of investors, whose contribution can fall under the wider definition of
state interest. In twelve countries including Albania, Austria, Bulgaria,
France, Germany, Kosovo, Macedonia, Montenegro, Slovakia, Slovenia,
Tajikistan and Venezuela, these special achievements are articulated spe-
cifically as ‘economic’, ‘trade’ or ‘commercial’ contributions. Further to
these, Romania and Turkey have separate provisions in their citizenship
laws that target investors. In all of these countries, there is a seemingly
open policy targeting those who combine the two elements sought after
by resource-seeking states.
Further to this, most countries that have clauses for discretion-
ary naturalisation on the grounds of special achievements can also
waive some or all conditions that would normally apply to those will-
ing to become their citizens. For example, 94 out of the 115 countries
applying discretionary naturalisation have the possibility to completely
waive the residence condition for this kind of naturalisation. In 23
states, including Algeria, Austria,3 Belarus, Belgium, Bolivia, Brazil,
Burundi, the Czech Republic, Djibouti, France, Germany, Guatemala,
Hungary, Kyrgyzstan, Lithuania, Mexico, Senegal, Seychelles, Somalia,
Sri Lanka, Turkmenistan and Vietnam, some form of residence con-
dition is retained, although it may be partly waived. In Brazil, France,
Guatemala and Mexico the required residence is two years, in Germany
three, Djibouti and Senegal five years; Austria six years (GLOBALCIT
2017). Countries such as Belgium, the Czech Republic, Hungary and
Turkmenistan retain some form of required residence, even though its
duration is not specified in their citizenship legislation. The remain-
ing states have the discretion to reduce the compulsory residence peri-
ods for this kind of naturalisation. Most states, except for Haiti and
Ukraine, also tolerate dual citizenship for this kind of naturalisation,
and only require security-related naturalisation conditions to be met
(e.g. clean criminal record, no threat to public health or safety). Such
policies mirror a deliberately instrumental ‘approach to citizenship in

3 In Austria, residence can be either reduced or fully waived, depending on which legal

provision is applied. See Chapter 6 for further details.

 4  A CLASSIFICATION OF INVESTMENT-BASED CITIZENSHIP PROGRAMMES  99

which a premium is placed on individuals with extraordinary ability or

talent, detaching it from the conventional genuine-ties interpretations’
(Shachar 2011, 529).
Discretionary provisions that can be applied for naturalising ­investors
have faced criticism for causing a shift in the content and bound-
aries of citizenship, voiding it of the sense of loyalty, identity, belong-
ing and commitment to the future of the community (Shachar
and Bauböck 2014). Yet, as we have seen in Chapter 2, the history of
citizenship indicates that even the predecessors of modern states have
had mechanisms for rewarding those with exceptional talents or achieve-
ments. The difference however is precisely in the ways these policies are
applied. While historically they were considered a ‘prize’ bestowed on an
individual who has already rendered an exceptional service to the com-
munity and will continue to do so,4 they nowadays serve a more practical
purpose. They enable states to remain competitors in the global market
by facilitating the hunt for human and material resources. If the state’s
broad discretion is used to attract and retain skilled migrants, this takes
the form of luring talent and human capital to boost the state’s stand-
ing compared to international competitors. If, however, the discretion to
naturalise is used to attract only financial resources through a preferential
admission of investors,5 it points to a calculated use of the institution of
citizenship. This was the case with some of the examples of states apply-
ing discretion to enable the exchange between money and citizenship,
which we mentioned in the introduction to this book: the naturalisation
of the Russian billionaire in Austria, and Montenegro’s admission of
Thaksin Shinawatra in 2010. States running detailed investor citizenship
programmes are at the extreme end of the global race for resources.

Investor Citizenship Programmes

As highlighted before, sometimes the links between the discretion-
ary naturalisation of investors and investor citizenship programmes are
blurred. This is particularly the case in countries that have some kind of

4 As explained in Chapter 2, these provisions were mainly used for those who joined the

army of the new community, or otherwise defended it in times of war.

5 This would apply to those countries that use the discretionary provisions to exchange

citizenship for a one-off investment, without requiring the individual to establish any addi-
tional links, at present or in the future, with the state in which they have become a citizen.
100  J. DŽANKIĆ

a mechanism for naturalising investors in their citizenship legislation, but

do not have subsidiary regulation that lays down the details of how such
provisions would be implemented. In countries that have legal mecha-
nisms to enable them to naturalise investors, we can distinguish between
those that do not specify industries and amounts of contribution
required for citizenship, and those that do. In the former group of coun-
tries, these provisions fall under the more general scope of discretion-
ary attribution of citizenship on the grounds of national interest while
containing an explicit reference to ‘economic’ interest. In the latter, they
lean towards investor citizenship programmes, but they are based on a
single legal provision (not accompanied by detailed subsidiary legislation
specifying conditions) and normally involve a high degree of discretion.
This discretion can best be seen in cases such as Romania or Singapore
where the respective governments can halve the required residence peri-
ods, but all other naturalisation conditions are retained. Table 4.2 pre-
sents variations in the ways the acquisition of citizenship for investors is
regulated around the world, which exists on top of the state’s discretion
presented in the previous section.
Table 4.2 indicates that specific policies targeting investors can be
articulated as:

1. discretionary waiver of (some or most) naturalisation conditions

for an ‘economic’ or ‘commercial’ contribution (amounts not stip-
ulated in law and could also be decided on an ad hoc basis);
2. discretionary waiver of (some) naturalisation conditions for clearly
specified investment amounts; and
3. investor citizenship programmes, where the core legal provision is
accompanied by detailed subsidiary legislation or elaborate legal
provisions.

Most of the countries referring to the possibility for investors to obtain

citizenship have opted for retaining the state’s discretion over what con-
stitutes an ‘economic’ interest. As a consequence, such policies resemble
those on a more general national interest, described in the previous sec-
tion. From among the countries listed in Table 4.2, seven apply discre-
tionary conferral of citizenship for clearly specified investment amounts.
In Africa, such provisions exist in the Seychelles and Mauritius. For an
investment of $1 million, and after residence on the archipelago of
 4  A CLASSIFICATION OF INVESTMENT-BASED CITIZENSHIP PROGRAMMES  101

11 years, an individual may be eligible for Seychellois citizenship if

they pass the language test and have not been sentenced to an impris-
onment of over one year (Law on Citizenship of Seychelles, Article 5c).
Interestingly, the East African state has no constitutional provision for
residence-based naturalisation that is not supported by a familial and cul-
tural link. Hence investment-based citizenship is one of the few channels
through which foreigners may become citizens of the Seychelles, without
establishing familial links. In contrast to the Seychelles, the investment of
$0.5 million enables the government of Mauritius to waive the five years
(out of the last seven) residence condition, while other requirements
including the knowledge of the English language, absence of conviction
and the renunciation of other citizenship still apply. Across the Asian
continent, an investment of 1,250,000,000 Riels (circa $310,000) in
Cambodia or a donation of 1,000,000,000 (circa $250,000) for rebuild-
ing the country’s economy may result in a waiver of the seven-year res-
idence requirement (Law on Nationality (1996), Articles 10, 11, 12).
As mentioned above, Singapore may reduce its ‘10 out of 12 years’
residence condition to ‘5 out of 6 years’ for a minimum investment of
$250,000, while retaining other naturalisation conditions (Constitution
of Singapore, Article 123(1)c; GLOBALCIT 2017). Brazil is the only
state in the Americas that has a legal provision targeting investors. For
an investment of R$150,000 ($75,000), the country may reduce the
required permanent residence period from four to three years, while
retaining other conditions such as legal capacity, knowledge of the
Portuguese language (applicant’s conditions are taken into account),
source of income or occupation sufficient for self-support and their fam-
ily, good behaviour, no convictions in Brazil or abroad for committing a
crime that carries a prison sentence of one year or more, and good health
(Constitution of Brazil 12(2)a; Foreigners Act (EDE), Article 113(5)). In
the EU, Romania facilitates citizenship acquisition for a specified amount
of investment. For an investment of €1 million, foreigners who meet the
ordinary naturalisation conditions may be eligible for the country’s citi-
zenship after four instead of eight years. According to Romanian authori-
ties, the provision has been used only once, to facilitate the naturalisation
of an investor who had already been resident in the country for seven
years.6

6 Personal correspondence with representative of Romanian Ministry of Interior, June 2018.

102  J. DŽANKIĆ

Table 4.2  Global overview of legislation related to the naturalisation of

investorsa

Country Legal reference Procedure Conditions

Albania Law No. 8389 of Naturalisation Person is someone whose
5 August 1998 on (discretionary) acquisition of citizenship
Albanian Citizenship would be in special eco-
(as amended by Law nomic interest of Albania.
No. 8442 of 21 January Other conditions: no dan-
1999), Article 9(7) ger to security and defence
of Albania
Antigua and Antigua and Barbuda Investor citizenship Person has invested specified
Barbuda Citizenship by programme amounts in property or state
Investment Regulations development fund
2014, as amended
by Antigua and
Barbuda Citizenship
by Investment
(Amendment) Act 2016
Argentina Law 346 on Citizenship Naturalisation Person has established a new
(as amended by Ley (discretionary) industry or introduced a
26.774 of 31/10/12), useful invention. Other nat-
Article 2(2)(3) uralisation conditions, except
for residence,
apply
Austria Federal Law on Naturalisation Person has been resident in
Austrian Nationality (discretionary) Austria for 6 years and acqui-
1985, Article 11a(4)(4) sition of citizenship is in the
economic interest of the
country. Other naturalisation
conditions
apply
Belize Belize Nationality Law Naturalisation Person has, as an ‘economic
of 12 July 1984, Article (discretionary) citizen’, made a substan-
12(a) tial contribution to the
economy and/or well-being
of Belize, or has rendered
distinguished services to the
country. Other conditions
include good character and
sound mind
(continued)
 4  A CLASSIFICATION OF INVESTMENT-BASED CITIZENSHIP PROGRAMMES  103

Table 4.2  (continued)

Country Legal reference Procedure Conditions

Brazil Constitution of Brazil Naturalisation Person owns property in
12(2)a; Foreigners Act (discretionary) Brazil, or as a businessman has
(EDE), Article 113(5), invested at least the amount
Regulation no. 84, of R$150,000 (approximately
Article 2 US$40,000), and has been
permanently resident in the
country for at least 3 years
immediately prior to the
application and continues to
do so. Other naturalisation
conditions apply
Bulgaria Law on Bulgarian Naturalisation Person has special achieve-
Citizenship, Article 16 (discretionary) ments in the economic
sphere. Exemption from
other naturalisation
conditions
Bulgaria Law on Bulgarian Investor citizenship Person invested Лв 1 million,
Citizenship, Article programme or an amount otherwise
14(a) specified in the Investment
Promotion Act. Other condi-
tions: 1 year of permanent res-
idence and no conviction for
major crimes under Bulgarian
law
Burkina Code for Persons and Naturalisation Person is an industrialist or
Faso the Family, Article (discretionary) business person, who has
170(4) important investments or who
brings funds, according to the
laws in force
Cambodia Law on Nationality Naturalisation Person has invested an
(1996), Articles 10, (discretionary) amount of 1,250,000,000
11, 12 Riels in Cambodia and is
resident in Cambodia; Person
has donated an amount of
1,000,000,000 Riels for the
restoration and rebuilding
of the Cambodian econ-
omy. Other conditions for
naturalisation apply, except for
the requirement of residing in
Cambodia and having resided
there for 7 years
(continued)
104  J. DŽANKIĆ

Table 4.2  (continued)

Country Legal reference Procedure Conditions

Cape Verde Nationality Law Naturalisation Person has realised or
(1990), Article (discretionary) offers guarantees that will
12(3)–(4) make investments that will
unequivocally increase the
opportunities for employ-
ment and contribute to the
development of the country.
Naturalisation under this
provision does not grant
political rights, including
to vote or be elected or to
exercise public functions on
a permanent basis
Central Law No. 1961.212 stat- Naturalisation Person has made important
African ing the Central African (discretionary) property investments. Other
Republic Code of Nationality (as conditions for naturalisation
amended by Decree no. apply but the residence
84-022 amending the period can be waived
Central African Code
of Nationality), Article
28(3)
Comoros Law relating to eco- Investor citizenship Person is an ‘economic part-
nomic citizenship of the programme ner’ of Comoros, investing a
Union of the Comoros minimum sum to be fixed by
the budget law each year
Cyprus CYP 111, Schedule 3 Investor citizenship Person invested €5 million,
Article 2(f) programme or lost €3 million in Laiki
Bank due to bailout meas-
ures. Other conditions:
clean criminal record, not
on the list of persons whose
property has been frozen by
the EU, own property (min.
€500,000)
Dominica Nationality Law, Article Naturalisation Person is someone whose
8(2)c (discretionary) acquisition of citizenship
would be in the special eco-
nomic interest of Dominica.
Other conditions—only oath
of loyalty

(continued)
 4  A CLASSIFICATION OF INVESTMENT-BASED CITIZENSHIP PROGRAMMES  105

Table 4.2  (continued)

Country Legal reference Procedure Conditions

Dominica Commonwealth of Investor citizenship Person is someone whose
Dominica Citizenship programme acquisition of citizenship
by Investment would be in the special eco-
Regulations, 2014 nomic interest of Dominica.
Other conditions—only oath
of loyalty
Dominican Constitution of the Naturalisation Person has been resident in
Republic Dominican Republic, (discretionary) the DR for at least 6 months
Article 18(7); uninterrupted, and has
Nationality Law, founded urban or rural
Article 1c industries or owns property
in the country. No residence
requirement if person owns
more than 30 hectares of
land in the country, but
permission must be granted
to establish domicile in the
country
Grenada Act No. 15 of 2013, or Investor citizenship Person has invested specified
the Grenada Citizenship programme amounts in property or a
by Investment Act state development fund
Guinea Law No. 3/2.011 Naturalisation Person has rendered impor-
regulating nationality (discretionary) tant services to Guinea such
of Equatorial Guinea, as artistic, literary or scientific
Article 6 talents, the introduction of
useful industries or inven-
tions, or creation of industrial
or agricultural businesses.
Other conditions for natural-
isation apply, but residence
period is reduced to 2 years
Kyrgyzstan Law on Kyrgiz Naturalisation Person has invested in highly
Citizenship, Article 13 (discretionary) prioritised sectors of the
economy of the country and
has been resident for 3 years.
Other naturalisation condi-
tions apply
Macedonia Law on Macedonian Naturalisation Person invested signifi-
Citizenship, Article 11 (discretionary) cant capital in Macedonia.
Naturalisation conditions
waived, but person must not
pose threat to security or
defence of the country
(continued)
106  J. DŽANKIĆ

Table 4.2  (continued)

Country Legal reference Procedure Conditions

Malta MAL 10(9)b, Legal Investor citizenship Person invested a combined
Notice 48/2014 programme amount of €800,000 and
owns property valued at
€350,000 (or rents property
at €16,000 p/a). Other
conditions include 1 year
effective residence in Malta,
proof of moral standing,
clean criminal record, health
certificate and insurance and
oath of allegiance
Mauritius Mauritius Citizenship Naturalisation Person has invested at least
Act, Article 9(3) (discretionary) US$500,000 in Mauritius.
Other conditions for naturali-
sation apply but the residence
period may be waived
Mexico Nationality Act 1998 Naturalisation Person has been resident in
as amended in 2015, (discretionary) Mexico for 2 years (require-
Article 20(1)d ment can be waived) and
has provided outstanding
services/products to Mexico
or employed entrepreneurial
activities in the country
Nicaragua Nicaragua Nationality Naturalisation Person has been permanently
Law, Article 9 (discretionary) resident in Nicaragua for
2 years, and has established
an industry or exercises an
activity that contributes
to the economic, social or
cultural development of the
country. Applicant required
to renounce citizenship of
another country
Pakistan Pakistan Nationality Investor citizenship Commonwealth citizens who
Law Article 20, and programme transfer Rs. 5 million worth of
secondary legislation foreign exchange to Pakistan
may apply for citizenship.
After confirmation from the
State Bank of Pakistan of
the transaction of the said
amount, an immigrant visa is
issued. A Pakistan Citizenship
Certificate is granted upon
arrival in the country
(continued)
 4  A CLASSIFICATION OF INVESTMENT-BASED CITIZENSHIP PROGRAMMES  107

Table 4.2  (continued)

Country Legal reference Procedure Conditions

Philippines Commonwealth Act no. Naturalisation Person has been contin-
473, 3(2) (discretionary) uously resident in the
Philippines for 5 years and
established a new indus-
try or introduced a useful
invention in the Philippines.
Other naturalisation condi-
tions apply
Romania Law on Romanian Naturalisation Person has invested €1 million
Citizenship, Article (discretionary) or more in Romania and is
8(2)d born in and resident there or
has been resident in Romania
for 4 years. Other conditions:
see A06
Russia Federal Law on the Naturalisation Person conducts an economic
Citizenship of the (discretionary); activity in Russia for at least
Russian Federation, 3 years and the activity
Article 14(2)g; 14(2) generates revenue in the
h; 14(2)i amount of 10 million Rubles;
person holds 10% of shares
of a Russian company (in
Russia) whose assets are at
least 100 million Rubles, with
mandatory insurance payment
of 6 million Rubles per year;
person worked in the Russian
Federation for at least 3 years,
and their job is on the list of
designated professions. Other
naturalisation conditions
apply, but residency may be
waived
Saint Kitts Law on Nationality Naturalisation Person is someone whose
and Nevis (discretionary) acquisition of citizenship
would be in the special eco-
nomic interest of St Kitts
St Kitts and Section 3(5) of the Investor citizenship Person has invested specified
Nevis 1984 Citizenship Act of programme amounts in property or a
St Kitts and Nevis and state development fund
subsidiary legislation
Saint Lucia St Lucia Citizenship by Investor citizenship Person has invested specified
Investment Programme programme amounts in property or a
state development fund
(continued)
108  J. DŽANKIĆ

Table 4.2  (continued)

Country Legal reference Procedure Conditions

Saint Law on Nationality, Naturalisation Person has made an impor-
Vincent Article 9a (discretionary) tant contribution to the
and the cultural or economic growth
Grenadines of St Vincent for at least
5 years. Other conditions
include good behaviour,
knowledge of English and of
duties of a citizen
Seychelles Law on Nationality, Naturalisation Person has invested the
Article 5C (discretionary) equivalent of $1 million and
has supported themselves for
11 years in the Seychelles.
Other conditions: pass
language test, and not sen-
tenced to more than 1 year
imprisonment
Singapore Constitution of Naturalisation Person is an industrial-
Singapore, Article (discretionary) ist investing a minimum
123(1)c amount of $250,000 in
Singapore. Other conditions
for naturalisation apply but
the ‘10 out of 12 years’
requirement may be waived
if the person resided in
Singapore for 5 out of
6 years, or at the discretion
of the Government
Slovakia Law on Slovakian Naturalisation Person is someone of special
Citizenship, Article (discretionary) benefit to Slovakia in the
7(2)(b) area of economics. Other
naturalisation conditions,
except residence require-
ment apply
Slovenia Law on Slovenian Naturalisation Person is an adult whose
Citizenship, Article 13 (discretionary) acquisition of citizenship is
beneficial for the country
for economic reasons. Other
conditions for naturalisation
apply except renunciation
requirement and knowledge
of Slovenian language
(continued)
 4  A CLASSIFICATION OF INVESTMENT-BASED CITIZENSHIP PROGRAMMES  109

Table 4.2  (continued)

Country Legal reference Procedure Conditions

Sri Lanka Law on Nationality, Registration Person has been granted a
Article 13A(1)(a)i, (discretionary) 5-year visa or endorsement
15, 18 under the Immigrants and
Emigrants Act, has been reg-
istered in a Resident Guest
Scheme for foreign investors,
and has made a substantial
contribution to the eco-
nomic development of the
country. Other conditions:
intent to continue to ordi-
narily reside in Sri Lanka,
renunciation of citizenship
of another country, and oath
of allegiance. A maximum of
200 persons may be regis-
tered through discretionary
procedures in any year, and
1000 in aggregate
Turkey Turkish Citizenship Investor citizenship Person has invested specified
Law, Article 12 and programme amounts in property, a
subsidiary legislation Turkish bank or state bonds
Vanuatu Vanuatu Capital Investor citizenship Person has invested specified
Investment programme amounts in a state develop-
Immigration Plan ment fund
(CIIP)
aOwn elaboration on the basis of GLOBALCIT (2017). Global Database on Modes of Acquisition

of Citizenship, version 1.0. San Domenico di Fiesole: Global Citizenship Observatory/Robert

Schuman Centre for Advanced Studies/European University Institute. http://globalcit.eu/
acquisition-citizenship/

In addition to these programmes, Table 4.3 identifies countries in

which the attribution of citizenship to investors is detailed in subsidi-
ary legislation. The pure investor citizenship therefore exists in only a
handful of countries, including St Kitts and Nevis, the Commonwealth
of Dominica, Antigua and Barbuda, Grenada, Vanuatu, the Comoros,
Pakistan, Turkey, Bulgaria, Malta and Cyprus. The following sec-
tions explore these programmes in more detail, with the exception of
Bulgaria, Malta and Cyprus, analysed in Chapter 6 due to the specifi-
cities of EU citizenship; and Pakistan, where only Commonwealth citi-
zens are eligible to apply.
Table 4.3 Recent ius pecuniae programmes: a comparisona
Country Property
Antigua and Barbuda Minimum $400,000 investment
in a pre-approved property project
(to be held for at least 5 years)
Grenada Minimum $350,000 investment
in a pre-approved property project
(to be held for at least 5 years)
St Lucia Minimum $300,000 investment
in a pre-approved property project
(to be held for at least 5 years)
Vanuatu N/A
Turkey Minimum $250,000 investment
in property (to be held for at least
3 years)
aOwn elaboration on the basis of legislation regulating investor citizenship programmes. The Union of the Comoros is excluded from this overview
because amounts differ from year to year
Donation
One-off, non-refundable dona-
tion of $200,000 to National
Development Fund (further fees
for additional dependents)
One-off, non-refundable dona-
tion of $150,000 ($200,000 with
spouse; further fees for addi-
tional dependents) to National
Transformation Fund
One-off, non-refundable dona-
tion of $100,000 to the Saint
Lucia National Economic Fund
($165,000 with spouse; further
fees for additional dependents)
One-off, non-refundable dona-
tion of $130,000 ($150,000 with
spouse; further fees for additional
dependents; additional $70,000 for
due diligence and fees) to Vanuatu
Development Support Programme
N/A
Investment
Minimum investment of $1.5 mil-
lion into an eligible business (sole
investor) or in a business totalling
110  J. DŽANKIĆ
$5 million (joint investment, each
investor at least $400,000)
N/A
Minimum investment of $3.5 mil-
lion into an eligible business (sole
investor) or in a business totalling
$6 million (joint investment, each
investor at least $1 million); invest-
ment of $500,000 in government
bonds (to be held for 5 years)
N/A
Minimum capital investment
of $500,000; or $500,000 in a
Turkish bank or bonds (to be held
for at least 3 years)
 4  A CLASSIFICATION OF INVESTMENT-BASED CITIZENSHIP PROGRAMMES  111

Long Established ius pecuniae Programmes: St Kitts and Nevis

and the Commonwealth of Dominica
Investor citizenship has been a long established practice in two
Caribbean islands—St Kitts and Nevis and the Commonwealth of
Dominica, which have developed cash-for-passport programmes target-
ing specific branches of economic activity. These programmes emerged in
the 1980s and the 1990s as a result of the geographical position of these
two states, their low level of GDP per capita and their lack of competi-
tiveness in the global market for goods and services.

• St Kitts and Nevis

St Kitts and Nevis, a federation of two islands in the West Indies, runs the
oldest programme for granting citizenship on the grounds of investment.
The programme was established by the adoption of the Constitution and
Citizenship Act in 1984, one year after the islands were granted inde-
pendence from the UK. Chapter VIII of the Constitution of St Kitts
and Nevis regulates in detail the modes for the acquisition and loss of
citizenship before and after independence (Articles 90–95). The ordi-
nary naturalisation procedure is rather restrictive and subject to a four-
teen years residence requirement (Article 92). Yet, Section 3(5) of the
1984 Citizenship Act of St Kitts and Nevis stipulates that ‘any person can
apply for naturalisation and may be eligible for citizenship on payment
of prescribed fees, if the Cabinet is satisfied that such person has invested
substantially in St Kitts and Nevis’. The investor citizenship option thus
created was heavily grounded on the economic downfall that the islands
faced at the time of independence. The weak economic performance of St
Kitts and Nevis in the following two decades, the lack of competitiveness
in the global agricultural market, the falling prices of sugar which was the
island’s main industry, and the devastating effect of hurricanes on the
country’s GDP, are all problems that eventually sparked the two strands
for acquiring the citizenship of these West Indies islands: the property
option, and the Sustainable Growth Fund (SGF), which since 2015
replaced the Sugar Industry Diversification Foundation (SIDF 2011)
option in a programme redesigned by CS Global. In addition to investing
in property, the applicant is liable to pay a number of other governmental
and due diligence fees for themselves and any dependents.
The property option allows the prospective applicants to purchase
property in St Kitts and Nevis, and thus become eligible for facilitated
112  J. DŽANKIĆ

naturalisation on the grounds of investment. The programme envisages

a minimum investment of $200,000 in property, which cannot be resold
for seven years. Should the investment exceed $400,000, the applicant is
allowed to resell the property after five years. The property needs to be
selected from a list pre-approved by the federation’s government. The
current list of property includes tourist resorts, harbour developments
and golf course terrains (Government of St Kitts and Nevis 2018, web-
site). Until 2012, property purchased in St Kitts and Nevis for the pur-
pose of facilitated naturalisation did not qualify any further buyers for
investor citizenship, but the federation’s legislation has changed since.
The previous provisions, intended to prevent the abuse of the property
for naturalisation purposes, no longer apply and once resold after five to
seven years, the property may qualify subsequent buyers for citizenship.
This implies that the same property may be recycled for the purposes of
the country’s investor citizenship programme multiple times.
The second option for investors to qualify for citizenship of St Kitts
and Nevis is through a single non-refundable contribution to the SGF
of $150,000 for the main applicant, an additional $25,000 for the
spouse, and $10,000 for any additional dependent. According to the
Saint Christopher and Nevis Citizenship by Investment Amendment
(No. 2) Regulations (Regulation 6B), the contributions are disbursed in
the SGF, which can be used for enhancing the country’s education sys-
tem; for mitigating the effects of climate change, such as preparation for
hurricanes and droughts; supporting economic growth in sectors such
as agriculture, fisheries and financial development; improving the overall
infrastructure of the country by constructing ports of entry and medical
facilities; advancing the country’s tourism; and preserving its culture and
heritage. The more generic SGF substituted the country’s SIDF, which
was the option used for almost a decade—from 2006 to 2015—with the
objective of ‘conducting research into the development of industries to
replace the sugar industry; funding the development of these alternative
industries and providing further support to secure the sustainability of
such industries’ (SIDF 2011).7
7 The SIDF option was the result of the closure of St Kitts and Nevis’s sugar industry a

year before, following the pressures on the country’s government by the European Union
(EU) and the World Trade Organisation (WTO). The fall of the sugar industry, which
accounted for 93% of the country’s agricultural production (Mitchell 2005), was induced
by high production costs and the non-competitiveness of the Caribbean sugar cane on the
global market.
 4  A CLASSIFICATION OF INVESTMENT-BASED CITIZENSHIP PROGRAMMES  113

However, naturalisation by investment does not confer all of the citi-

zenship rights to those who have acquired the citizenship of St Kitts and
Nevis but have opted not to reside there. The 2007 amendments to the
National Assembly Election Act stipulate that suffrage is granted to those
citizens of St Kitts and Nevis who have been ordinarily resident in one
of the islands for a ‘continuous period of at least twelve months imme-
diately before the registration date’ (Article 42). The federation operates
a re-registration system, which indeed confirms the primacy of residence
over citizenship when determining suffrage. As a consequence, citizen-
ship by investment in St Kitts and Nevis offers the individual the full
benefits associated with the external dimension of citizenship (passport),
but for rights the individual may be entitled within the country, ordinary
residence is required and the purchase of the passport does not suffice.

• Commonwealth of Dominica

The second oldest investor citizenship programme is one of the Common­

wealth of Dominica, and is based on an economic rationale very similar
to the one of St Kitts and Nevis. Dominica gained independence from
the UK in 1978, and since then the country’s economy has been based
on agriculture, which employs around 40% of the island’s population
(Mitchell 2005). As a result of adverse weather conditions, including fre-
quent hurricanes and the volcanic terrain in Dominica, coupled by the
decrease in the world prices of bananas, which are the country’s primary
crop, the country’s economic performance has been on a downward slope
(US Department of State 2010). The desire to attract investors in order
to bolster the country’s economy has resulted in the establishment of the
investor citizenship programme, which has been running in Dominica
since 1993. The 1993 amendments to the country’s Naturalisation and
Citizenship Act provided the legal grounds for the investor citizenship
programme. The new rules stipulated that the government may have dis-
cretionary powers in waiving the five-year residence requirement that is in
place in the ordinary naturalisation procedure. Pursuant to Article 8(2),
‘The Minister may, in such cases as he thinks fit – (c) waive the residence
requirement in special circumstances.’
CS Global, the company that reworked the investor citizenship
of St Kitts and Nevis, redesigned the Commonwealth of Dominica pro-
gramme in 2014 (the latest amendments date back to 2016). Having
been developed by the same intermediary company, the Commonwealth
of Dominica Citizenship by Investment Regulations 2014 offer two
114  J. DŽANKIĆ

options for the acquisition of citizenship and are a slightly less expen-
sive carbon copy of the St Kitts and Nevis programme. To qualify for the
property option, the applicant needs to purchase a pre-approved property
with a minimum value of $200,000 and cover the additional government,
application and due diligence fees. The second option is the one-off
non-refundable donation of $100,000 for the main applicant ($175,000
for applicant and spouse; $200,000 for main applicant and up to three
qualifying dependents; $25,000 for any additional dependents thereafter)
into the Economic Diversification Fund (EDF). According to the website
of the Government of the Commonwealth of Dominica (2018, web), the
fund is used for ‘(1) the building of schools, (2) hospital renovations, (3)
the building of a national sports stadium, and (4) the promotion of the
offshore sector. With respect to private sector projects, the Government’s
focus is on tourism, information technology and agriculture.’
Similar to St Kitts and Nevis, Dominica does not require the investors
who have obtained citizenship to physically reside on the island. Equally,
admission into Dominican citizenship qualifies the person for certain
rights of membership, but suffrage and taxation are based on residence.
In particular, the House of Assembly (Elections) Act includes an oath for
the prospective electors, who declare that they had resided in Dominica
for twelve months prior to being registered as electors, that they are
domiciled in Dominica, and that they have resided for at least six months
in the constituency where they are registered (Section 37). Therefore, in
both cases of investor citizenship in the West Indies, the investor receives
the status of citizenship, and can use the external benefits of membership
that are not dependent on residence (e.g. free travel). Benefits and duties
of citizenship that are internal remain dependent on residence.
Yet the two oldest investor citizenship programmes in the Caribbean
are far from uncontroversial. Over several months in 2017, the pub-
lic of the Commonwealth of Dominica protested against the country’s
Prime Minister Roosevelt Skerrit over corruption linked to the sale of
passports (The Dominican, 11 February 2017). Media have reported
that a number of individuals charged in their home countries, includ-
ing Italy, Nigeria, China and Malaysia, have obtained the passports of
the West Indies island through the investor citizenship programme (The
Dominican, 11 February 2017). Protests over corruption in the sale
of passports subsided in late 2017, when the country was faced with a
 4  A CLASSIFICATION OF INVESTMENT-BASED CITIZENSHIP PROGRAMMES  115

devastating hurricane. As will be discussed in the following chapter, the

demand for Caribbean citizenship has fluctuated significnatly in the last
few years.

The More Recent ius pecuniae Programmes: Antigua and Barbuda,

Grenada, St Lucia, Vanuatu and Turkey
Following the programmes in St Kitts and Nevis and the Commonwealth
of Dominica, quite a few Caribbean and Pacific islands opened up ‘proto’
investor citizenship programmes in the 2000s. The programmes in Belize,
the Marshall Islands and Nauru were however discontinued amid cor-
ruption scandals and often amounted to informal sales of passports (van
Fossen 2007). With the boom of programmes for facilitating access to
citizenship and residence to investors after the global financial crisis, sev-
eral other islands, including Antigua and Barbuda, Grenada, St Lucia
and Vanuatu opened up specific investor citizenship schemes, and were
followed by Turkey, which started its current programme in 2017. The
most recent wave of investor citizenship programmes has been developed
through intermediary transnational companies, which facilitate the devel-
opment and implementation of investor citizenship.8 As a consequence,
they are structured in a rather similar way and there are commonly two or
three options an investor has for obtaining the passport of the destination
country through monetary disbursement and without significant periods
of mandatory residence: donation into a development fund, property pur-
chase, or investment into a project or state bonds. Table 4.3 offers a com-
parison of these programmes as they were in September 2018.
With the exception of Vanuatu, all the investor citizenship pro-
grammes described above foresee the conferral of citizenship to individ-
uals purchasing property at a minimum value, an investment option that
also exists in older programmes. The Citizenship by Investment Program
(CIP) of Antigua and Barbuda started in 2013, with the adoption of the
Citizenship by Investment Act 2013, further detailed in the Citizenship by
Investment Regulations 2014 and the subsequent amendments. The prop-
erty option envisages the conferral of citizenship in exchange for a mini-
mum investment of $400,000 in a property project, previously approved

8 See Chapter 5 for further details.

116  J. DŽANKIĆ

by the country’s government. The investor is bound to maintain the prop-

erty for at least five years, after which it may be resold. In a similar fash-
ion, the Act No. 15 of 2013, or the Grenada Citizenship by Investment
Act, offers the option of purchasing property valued at a minimum of
$350,000, $50,000 more than the required investment in a pre-approved
property in St Lucia. Unlike all of the island states listed above, purchasing
property of at least $250,000 anywhere on the Turkish territory qualifies
the investor for obtaining citizenship under the 2018 Regulation on the
Implementation of the Turkish Citizenship Law. In 2018, due to a cur-
rency and debt crisis, Turkey has reduced the required investment in prop-
erty from $1 million to a quarter of this amount. This reveals how the
state of a country’s economy is reflected on the price tags on its passport.
From among those listed above, being designated as an upper-middle
income country (IMF World Economic Outlook Database, April 2018),
Turkey is the only one whose citizenship legislation does not contain
provisions for investor citizenship through a donation to a state devel-
opment fund. By contrast, the option of donating into a state-run devel-
opment fund is one of the options for obtaining citizenship of Antigua
and Barbuda, Grenada, St Lucia and Vanuatu. The amount of donation
for the main applicant ranges from $100,000 in St Lucia, to $130,000 in
Vanuatu, $150,000 in Grenada, and $200,000 in Antigua and Barbuda.
The amounts of donation are subject to further government, due dili-
gence fees and additional amounts for spouses and dependents. Similar
to the cases of St Kitts and Nevis and the Commonwealth of Dominica,
these funds are planned for supporting the development of projects
in the domains of education, tourism, climate change or healthcare.
Henderson (2018, web) notes that the option of a donation to the state
development fund is the most convenient one for investors not the least
because it is the fastest, but also because the prices of the pre-approved
property are significantly higher than their market value. Hence a resale
would likely yield a loss comparable to the donation option.
Alternative investment routes exist in Antigua and Barbuda and
St Lucia from among the island states, whereby applicants are required
to invest individually or jointly into eligible businesses. St Lucia also
allows citizenship by investment of $0.5 million in government bonds
tenable for at least five years. In Turkey, citizenship may be obtained for
capital investments of over $0.5 million, or investments in Turkish banks
or bonds, to be maintained for a minimum of three years. Again, similar
to the property option, the investment requirements have been adjusted
 4  A CLASSIFICATION OF INVESTMENT-BASED CITIZENSHIP PROGRAMMES  117

(lowered from $2 and $3 million to $0.5 million) to match the general

state of the country’s economy.9
Investors are not bound to reside or spend significant periods of
time in the destination states, and many of them have developed spe-
cial tax rules applicable to investors (Henderson 2018, web). In most
cases, agents licensed by the respective states handle individual appli-
cations. These agents commonly include the intermediary who devel-
oped the programme, as well as other companies that have the approval
of the state to submit the application on the behalf of the investor. The
received applications then undergo a security screening, commonly con-
ducted by the secret services or an external contractor for the states’
security agency. Commonly, the investor’s physical presence is required
only for taking biometric data and the oath of allegiance, but in cases
such as Antigua and Barbuda this process can be handled by consulates
and embassies. As most of the internal rights of citizenship are tied to
residence, the beneficiaries of ius pecuniae who do not relocate to their
destination state profit chiefly from the privileges associated with the
external dimension of the citizenship status, such as visa-free movement
and diplomatic protection.

The Curious Case of the Comoros Economic Citizenship

In November 2008, the Union of the Comoros, a small volcanic archi-
pelago off the coast of East Africa, adopted a law on economic citizen-
ship regulating the sale of the country’s passports permitted already
through the 2001 citizenship legislation. The 2008 law establishes that
the country may grant economic citizenship through presidential decree
(Article 8), on the basis of ‘investment of a minimum amount fixed by
the Annual Law on Budget for the fiscal year when the applicant pre-
sented their application and during the period established on the basis of
the programme for economic investment of the Union if the Comoros’
(Article 1). This implies that while there is specific legislation enabling
one of the world’s poorest states to sell its citizenship (IMF World
Economic Outlook Database 2018), amounts are determined at the
state’s discretion through specific yearly plans.
The degree of discretion, in fact, contained in the island’s legislation
enabled the mass naturalisation of the Bidoons from the United Arab

9 Interview with Turkish Ministry of Interior representative, June 2018.

118  J. DŽANKIĆ

Emirates in late 2008 and to Kuwait in 2014. Hundreds of thousands of

residents of the oil-rich Gulf states are in fact stateless, as they are believed
to have entered these countries illegally (Abrahamian 2015). While being
constantly criticised by the international human rights organisations, both
the UAE and Kuwait have been reluctant to accept the Bidoons into their
citizenry, depriving them of some of the basic rights, including education,
property and healthcare. The 2011 Human Rights Watch (web) report
on statelessness in the Gulf states emphasised that:

International human rights law requires governments to provide certain

civil documentation for all residents, whether legal or illegal, including a
child’s right to registration upon birth, and the right to marry and found a
family. The Kuwaiti government should ensure the Bidoons’ right to civil
documentation, including birth certificates, marriage registration, death
certificates and travel documents.

Shortly thereafter, Kuwait announced that 34,000 of its Bidoons would

be eligible for obtaining the economic citizenship of the Comoros and
this would enable them to regularise their status (as foreign residents)
in Kuwait. On the basis of the 2008 Law on economic citizenship, the
governments arranged a mass issuance of the Comorian passports to the
Kuwaiti Bidoons in exchange for a few hundred thousand million US
dollars. The arrangement was similar to the one the government of the
Comoros struck several years earlier with the UAE, whereby an invest-
ment of $200 million in the Comorian infrastructure would provide
passports for 4000 Bidoon families.
The Comorian practice of the wholesale issue of passports has been
widely criticised on several interlinked grounds, even though there are
no international legal norms that would prevent it. Spiro (2014, web)
highlights that in the case of the Bidoons, Comoros is not expected to
bring into question the ICJ’s ‘genuine links’ principle as it is unlikely to
‘have much interest in expending diplomatic resources on behalf of citi-
zens with whom it has no organic social connection’. While the Comoros
may lack the interest to extend such resources, the country is bound to
acknowledge the external dimension of citizenship and accept any cases
of deportation.10 Abrahamian (2014) notes the case of the Bidoon
10 The 2008 law on economic citizenship, however, limits the domestic dimension of cit-

izenship rights preventing the beneficiaries of the programme from serving in the army,
entering public service or voting (Article 11).
 4  A CLASSIFICATION OF INVESTMENT-BASED CITIZENSHIP PROGRAMMES  119

activist Ahmed Abdelkhaleq who was deported from the UAE on his
Comorian passport. This illustrative case points to at least two of the
problematic aspects of the sale of Comorian passports. First, while any
attempts to resolve the problem of statelessness are commendable from
the perspective of international human rights, the mass purchase of pass-
ports resembles the much-criticised historical practice of population
exchanges. Second, the decoupling of the internal and external dimen-
sions of citizenship hollows out the meaning of the links to a particu-
lar country. In particular, it places the beneficiaries of this programme
in a precarious and vulnerable position. While the Bidoons’ s­tatelessness
problem may have been resolved through the purchase of Comoros cit-
izenship, neither the Gulf states nor the East African island hold any
accountability towards these individuals. Being foreign citizens in the
UAE or Kuwait, they remain vulnerable to deportation. At the same
time, Comoros has no obligation to offer diplomatic protection to those
who had never set foot on its soil and might as well invoke the ‘genuine
links’ principle to avoid doing so (Spiro 2014).
Further to this, as had been the case in many other countries prac-
tising the sale of passports, the one in the Comoros, a country where
45.6% of the population lives in poverty with as much as half of its
population unemployed (African Development Bank 2012), has led to
corruption scandals. In 2016, Ahmed Abdallah Mohamed Sambi and
Ikililou Dhoinine, two of the country’s presidents were suspected of
embezzling public funds amounting to almost $1 billion or 80% of the
country’s GDP. A parliamentary report of the Union of the Comoros
notes that the passports were traded on the black market and that ‘par-
allel mafia networks […] sold them under the cover of economic citi-
zenship’ (The Citizen 2018, web). It also noted that the then president
of the Comoros, Ahmed Abdallah Sambi, received a compensation of
$105 million for agreeing to the sale of passports to the UAE Bidoons,
and that his successor Ikililou Dhoinine was offered a similar gratuity for
the agreement with Kuwait. As of July 2018, the two former presidents
are under house arrest over the sale of passports. The programme was
suspended in 2016 after the presidential elections, which brought Azali
Assoumani to power in the Comoros (The Citizen 2018, web). Even
though the practice of the sale of citizenship has been halted, the 2008
law on economic citizenship remains in force.
120  J. DŽANKIĆ

Path-to-Citizenship Programmes:
Facilitated and Ordinary Residence
The typology presented earlier in this chapter distinguishes between the
facilitated and ordinary residence for investor, as broader categories of ius
pecuniae. While being distinct categories, these legal provisions share an
important commonality vis-à-vis the possibility for the investor to even-
tually obtain citizenship. Unlike many of the citizenship programmes, the
investor residence ones foresee mandatory physical residence or at least a
‘waiting period’, comparable to the time required from other categories
of migrants prior to naturalisation. The difference between the two resi-
dence types is grounded in the national definitions of the notion of ‘resi-
dence’, which at the global level has a wide spectrum of meanings. Hence
the distinction between ‘ordinary’ and ‘facilitated’ residence for investors
should not be understood as a dichotomy, but rather as a continuum. In
the former category the pecuniary contribution grants the investor merely
the access to residence rights applicable to other types of migrants. Such
programmes require the investor to relocate to the said country thus mak-
ing it the focal point of their business activity. Obligatory residence yields
both tax revenue and benefits for the recipient country through the mul-
tiplier effect of the investment on the state’s economy (e.g. creation of
jobs, consumption of goods). In the latter, the pecuniary contribution
gives the investor residence rights, but also other privileges that do not
apply to other types of migrants. These would include special tax rules,
lower requirements for physical presence for maintaining the resident sta-
tus, or facilitated access to citizenship. Hence they do not entail the same
amount of commitment to the destination country as the former cate-
gory, even though both are considered a path for obtaining citizenship.
As they are less politically contentious than investor citizenship, provi-
sions for investor residence are rather common. The broadest umbrella of
such programmes would also include provisions for immigration catego-
ries such as entrepreneurial activities, start-ups, self-employed persons and
pensioners. These exist in the absolute majority of the world’s countries.
Normally the grounds for obtaining status is not the financial contribu-
tion per se but an activity (in the case of entrepreneurs) or a prolonged
contribution (in the case of pensioners). Table 4.4, however, presents only
those programmes that are based on a direct exchange between a financial
disbursement (in the form of capital investment or property purchase) and
status. The objective of such a table is to flesh out the types of residence
programmes and help us to understand the broad array of provisions that
are used for facilitating the exchange between money and membership.
Table 4.4  Global overview of legislation related to the residence for investorsa
Country Programme Investment Type of residence Duration and Citizenship
extension

Australia Business Innovation Invest between $1.1 Temporary residence Temporary, may 4 years of residence
and Investment Visa million and $3.7 million (40 days per year or be converted into (permanent residence last
for 4 years; $11.3 million spouse in Australia permanent after 12 months), civics, intention
for 1 year for 180 days for con- 2 years to settle, good character
version to permanent
residence)
Bahamas Immigrant Investor Invest minimum Permanent residence Permanent 6 out of 9 years and
Residency $500,000 in property (no physical stay 12 months prior to the
specified) application, renounce other
citizenship, good charac-
ter, full capacity, language,
civics, intent to reside, oath
of allegiance. Waivers of
conditions possible (Minister’s
discretion)
Bahrain Investor Residence Invest $35,000 in prop- Temporary residence 2 years, renewable 25 years of residence, lan-
Permit erty estate (in pre-ap- (no physical stay guage, good character, own
proved areas); invest specified) real estate.
$265,000 in company
shares
Barbados Special Entry and Invest $2 million in Under 60 years of Under 60 years of 5 out of 7 years and
Residence Permit for target industry and have age temporary (no age 5 years, renew- 12 months immediately prior
Investors net worth of at least $5 physical presence able; over 60 years to the application, good
million specified); over permanent character, full capacity, intent
60 years permanent to settle, oath of allegiance.
4  A CLASSIFICATION OF INVESTMENT-BASED CITIZENSHIP PROGRAMMES 

Waivers of conditions possible

(Minister’s discretion)
121

(continued)
Table 4.4  (continued)

Country Programme Investment Type of residence Duration and Citizenship

extension
Botswana Investor Residence Invest $100,000 in a Permanent residence Permanent 10 out of last 12 years
pre-approved sector (no physical stay (continuous year before
122  J. DŽANKIĆ

specified) application), good character,

language
Brazil Brazil Investor Visa Invest $45,000 (approval Permanent residence Permanent 4 years of residence immedi-
Program of authorities required) (no physical stay ately prior to the application,
and create new jobs in specified) legal capacity, language,
Brazil; property pur- subsistence, good character,
chase at a minimum of no convictions (1 year of
$125,000 incarceration), good health
Canada Immigrant Investor Investment of US$1.5 Permanent residence Permanent 4 out 6 years of residence
Venture Capital Pilot million and net worth (must live in Canada immediately preceding
Programme; Quebec at least US$7.6 million 2 out of 5 years) the application and annual
Investor Programme (further conditions for physical presence of 183 days,
origins of wealth, invest- tax return, language, civics,
ment must be long-term, intent to settle, no extradition
annual quotas apply); in order against the applicant,
Quebec US$608,000, no security threat, ceremony
net worth US$1.2 and oath
million and 2 years of
management experience
(further investment
conditions and annual
quotas apply)

(continued)
Table 4.4  (continued)

Country Programme Investment Type of residence Duration and Citizenship

extension
Costa Rica Investor Visa $50,000 in a pre-ap- Temporary (annual Temporary, may 7 years of continuous
proved project physical presence of be converted into residence, good character,
minimum 6 months) permanent after subsistence, language, lean
2 years criminal record, knowledge
of Spanish (oral, written and
passive), culture, intention
to settle, oath of loyalty, not
being a citizen of a country
with which Costa Rica is at
war
Dominican Lump Sum Investor $200,000 in the Permanent residence Permanent 2 years of uninterrupted
Republic Dominican Republic (no physical stay residence, 18 years of age or
specified) emancipated (marriage)
Ecuador Investor Permit $30,000 in a pre-ap- Permanent residence Permanent 3 years of residence, full
proved project (maximum 90 days capacity, good character,
abroad each year in subsistence, language, culture
the first 2 years of and constitution, no criminal
residency) record, no threat to public
order
Gambia Residential Permit B Discretionary, govern- Temporary residence 1 year, renewable 15 years of ordinary residence,
mental approval required (no physical stay good character, intention to
specified) settle, subsistence, renuncia-
tion of other citizenship

(continued)
4  A CLASSIFICATION OF INVESTMENT-BASED CITIZENSHIP PROGRAMMES 
123
Table 4.4  (continued)

Country Programme Investment Type of residence Duration and Citizenship

extension
Honduras Investor Residence Invest $50,000 in Temporary residence 1 year, renewable 3 years of continuous
pre-approved activity in (no physical stay residence, full capacity,
124  J. DŽANKIĆ

Honduras specified) subsistence, good behaviour,

clean criminal record, history
and culture, renunciation of
another citizenship, oath of
loyalty
Indonesia Indonesian Discretionary, govern- Permanent residence Permanent 5 years continuous or 10
Immigration Law, mental approval required (no physical stay intermittent residence,
Article 54 specified) 18 years or married, good
health, language, constitution,
no major crime, subsistence,
oath of allegiance, renuncia-
tion of another citizenship
Malaysia MM2H $123,000 investment Temporary residence 10 years, renew- 10 out of 12 years of contin-
in Malaysia and $2500 (no physical stay able indefinitely uous residence prior to the
monthly income specified) thereafter application, good character,
language, intent to settle and
oath of allegiance
Mauritius Permanent Resident Invest $500,000 in Permanent residence Permanent 5 years of continuous resi-
Scheme (PRS) pre-approved activity in (no physical stay dence in the last 7 years (and
Mauritius specified) year before application), good
character, language, sociali-
sation, renunciation of other
citizenship
(continued)
Table 4.4  (continued)

Country Programme Investment Type of residence Duration and Citizenship

extension
Monaco Monaco Residence Investment of $1.1 Temporary (annual 1 year, extended 10 years of continuous resi-
Programme million (half deposited physical presence of annually in the first dence, good character, familial
in a Monaco bank and minimum 90 days) 3 years; valid for ties, integration
the other half invested in 3 years in years 4
property) and 5 of residence,
and for 10 years
beyond that
New Zealand Investor Resident Investment of US$6.45 Temporary (annual 3 years, renewable, Physical presence of a min-
Permit million in a pre-approved physical presence of may be converted imum of 1350 days in the
project; for business 44 days in the last into permanent 5 years immediately preceding
people with over 3 years 2 years of the permit) residence the date of application and
of experience investment for at least 240 days in each
of US$2.62 million and of those 5 years full capacity,
further conditions good character, citizenship
test, language, intention to
settle
Nicaragua Foreign Investor Invest $30,000 in a Temporary residence 5 years, renewable 4 years of continuous resi-
Permit project approved by the (no physical stay dence after being granted a
government specified) permanent resident permit
and renunciation of other
citizenship
Palau Elite Resident Visa Purchase or lease prop- Temporary residence 5 years, renewable Not available
erty for $250,000 (no physical stay
specified)
(continued)
4  A CLASSIFICATION OF INVESTMENT-BASED CITIZENSHIP PROGRAMMES 
125
Table 4.4  (continued)

Country Programme Investment Type of residence Duration and Citizenship

extension
Panama Person of Means Visa Investment of $300,000 Permanent residence Permanent 5 years of continuous resi-
in property or a (no physical stay dence, language and culture,
126  J. DŽANKIĆ

Panamanian bank specified) renunciation of other citizen-

ship, no security threat and
oath of loyalty
Peru Independent Investor Invest $30,000 in Peru Temporary residence 1 year, renewable 2 years of residence, full
Visa (no physical stay capacity, subsistence, clean
specified) criminal record, good
character
Philippines Special Investor’s Invest $75,000 in the Permanent residence Permanent 10 years of residence, 21 years
Resident Visa (SIRV) Philippines (no physical stay of age, language, subsistence,
specified) good character, history and
culture
Qatar Investor Residence Unspecified investment Permanent residence Permanent 25 years of residence, profi-
in property in Qatar (no physical stay cient in Arabic, subsistence,
(prior investor visa specified) good character, physical
required) health
Seychelles Immigration Decree Invest $1,000,000 (prior Permanent residence Permanent 11 years of residence, means
2013 1 year of residence of (no physical stay of subsistence, no public
5 years of business asso- specified) threat
ciation with Seychelles
required)

(continued)
Table 4.4  (continued)

Country Programme Investment Type of residence Duration and Citizenship

extension
Singapore Global Investor Investment of $1.8 mil- Permanent residence Permanent 10 out of 12 years of resi-
Programme lion in in Global Investor (no physical stay dence prior to the application,
Programme Fund specified) language, good character,
renunciation of citizenship of
another country, and oath of
allegiance. May also be eligi-
ble for discretionary reduction
of residence
South Africa Investment Act 2002, Investment of $325,000 Temporary residence Length unspeci- 5 years of legal residence and
Article 15 in new or existing (no physical stay fied, certification settled status, language, good
business (certain types specified) required after character, adequate knowl-
excluded) 2 years edge of responsibilities and
privileges of citizenship
South Korea Residence Visa Investment of $500,000 Temporary residence Temporary, may 5 years of residence, language
Programme in Korea; 3 years and with investment only; be converted into and customs, good character,
employment of five permanent residence permanent after subsistence, and renunciation
nationals or approval with employment and 3 years; permanent of citizenship of a foreign
of Justice Minister for MoJ approval (no with MoJ approval country (unless unreasonable
permanent residence physical stay specified) to request)
Sri Lanka Resident Guest Investment of $250,000 Temporary residence 5 years, renewable Beneficiaries of RGS eligible
Scheme in an approved bank (no physical stay for discretionary naturalisation
specified, but continu- on the grounds of national
ous residence for the interest (capped at 200
purpose of citizenship persons per year). Residence-
requires physical based naturalisation not
4  A CLASSIFICATION OF INVESTMENT-BASED CITIZENSHIP PROGRAMMES 

presence) available
(continued)
127
Table 4.4  (continued)

Country Programme Investment Type of residence Duration and Citizenship

extension
Switzerland Swiss Federal Act on Discretionary, govern- Temporary residence, 5 years, but per- 12 years of residence (3 of
Foreigners (LEtr) mental approval required continuous physical manent residence these in the 5 years preceding
128  J. DŽANKIĆ

(varies among cantons) presence required may be granted the application), no criminal
(not more than thereafter record, customs and tradition
6 months in a year knowledge, good character,
abroad) oath of allegiance and cere-
mony in some cantons
Thailand Investor Residence $280,000 in stocks, real Temporary residence, 1 year, but per- 5 years of domicile in
Permit estate, bonds (kept for continuous physical manent residence Thailand, language, full
3 years) presence required may be granted capacity, good behaviour,
(not more than after 3 years (no subsistence
6 months in a year physical stay speci-
abroad) fied for permanent
residence)
Ukraine Law on Immigration, Investment of $100,000 Permanent residence Permanent; if 5 years of uninterrupted
Article 4 in Ukrainian economy (no physical stay temporary, can be residence, possession of
specified, residence converted into a permit, language, respect for
outside Ukraine permanent permit Ukraine laws, legal means of
permitted); as of after 2 years subsistence, no convictions for
late 2017 investors grave crimes, renounce other
seeking to go through citizenship
a faster procedure can
apply for a temporary
permit
(continued)
Table 4.4  (continued)

Country Programme Investment Type of residence Duration and Citizenship

United Arab UAE Residency and Investment in UAE
Emirates Visa Programme (‘free zone’) or owner-
(Investors) ship of UAE company;
or property purchase at
a minimum of $270,000
and monthly income of
$2700
United States EB-5 Visa Programme Investment of $500,000
of America in a pre-defined Regional
Centre and the creation
of 10 jobs
Uruguay Law 16.340, 23 Purchase of property
December 1992 estate or government
bonds in the amount of
$100,000 and monthly
income between $500
and $1500
Vietnam Dau Tu (Investment) Discretionary, govern-
Temporary Residence mental approval required
Card
extension
Temporary residence 10 years, renewable 30 years of continuous
(no physical stay residence, Arabic language,
specified, but continu- income and good character
ous residence for the
purpose of citizenship
requires physical
presence)
Temporary residence, 2 years (con- 5 years of continuous resi-
continuous physical ditional Green dence, basic English language,
presence required Card), after knowledge of US constitu-
(not more than which permanent tion, history, government,
6 months in a year residence can be well disposed to the good
abroad) granted order and happiness of the
United States, and oath of
loyalty
Permanent facilitated Permanent 3 years of habitual residence,
residence (no physical good behaviour, have family
stay specified), but in Uruguay (if not, 5 years’
prior temporary resi- residence is required), work or
dence required capital/property in Uruguay
Temporary residence 5 years, renewable 5 years of residence, language,
(no physical stay socialisation, culture, financial
specified) sustainability, Vietnamese
name, renounce other
4  A CLASSIFICATION OF INVESTMENT-BASED CITIZENSHIP PROGRAMMES 

citizenship

aOwn elaboration on the basis of preliminary data from Džankić (2012) and GLOBALCIT (2017). Includes only sovereign states. Excludes EU countries,
129

analysed separately in Chapter 6

130  J. DŽANKIĆ

As Table 4.4 illustrates, there is a wide variety of residence pro-

grammes targeting investors around the world. These differ not only
in terms of the amount of investment required, but also in terms of the
type and duration of investment, requirements for physical presence in
view of maintaining the resident status and eventually obtaining citizen-
ship. As a result, it is far more difficult to classify these ‘path to citizen-
ship’ programmes than the ones that result in the outright conferral of
the passport to the investor. Apart from the discretionary amounts and
types of financial disbursement existing in Gambia, Indonesia, Vietnam
and Switzerland, countries require capital investment, purchase of bonds
or property in the range of $100,000 as in the Ukraine to $11.3 million
as is the case in Australia.
Furthermore, the types of permit can be temporary with extension
requirements every one to two years, to temporary with the facilitated
conversion into permanent residence after a few years, to permanent
residence ab initio. Bahrain, Gambia, Honduras, Malaysia, Monaco,
Nicaragua, Palau, Peru, South Africa, Switzerland, Sri Lanka, UAE
and Vietnam offer temporary resident status renewable after a number
of years. The conversion into permanent residence in all of these cases
differs, in line with the national legislation. Exceptionally, Australia,
Costa Rica, New Zealand, Thailand and the USA reduce the number
of years for the investor to gain permanent resident status compared
to work migrants. Such conversions are subject to additional condi-
tions, including residence or the investment’s effects on the respective
economies. The latter is the case in the Bahamas, Botswana, Brazil,
Canada, Dominican Republic, Ecuador, Indonesia, Mauritius, Panama,
Philippines, Qatar, Seychelles, Singapore, the Ukraine and Uruguay.
In most of the countries that offer permanent residence to inves-
tors there are no legal requirements for physical presence in terms of
maintaining the residence status. Canada would be an exception with
the requirement for the investor to be present on the country’s soil
for two out of five years. Yet in most cases, to obtain citizenship, the
countries’ legislation foresees multiannual continuous residence. The
definition of ‘continuous residence’, however, may still vary in the
national legislation. This implies that while some countries expect
investors to establish meaningful links with the destination country
through mandatory residence and socialisation if they seek to become
its nationals, others may seek ‘long-distance residents’ or even citizens,
whose economic contribution would suffice for maintaining status.
 4  A CLASSIFICATION OF INVESTMENT-BASED CITIZENSHIP PROGRAMMES  131

Conclusion
States legitimately pursue their national interest through citizenship and
migration policies, even though some of their choices may be criticised
from the global justice perspective (Bauböck 2009; Brock 2009; Miller
2008). Admitting individuals on the grounds of economic investment
has been on the increase around the world. Yet the mechanisms through
which states opt to regulate the exchange between money and member-
ship differ across countries, even if we can recognise the persistence of
three standard policy tools over time. The basic mechanism for attribut-
ing investor citizenship is the discretion of the state to naturalise on the
grounds of national interest or exceptional contribution. As explained in
Chapter 2, provisions of this kind have existed since ancient times, and still
do in a number of countries around the world. These broad discretionary
provisions can be used for a wide range of naturalisations that are consid-
ered to contribute to the state’s prestige. Some notable examples include
talented sportspeople such as Merlene Ottey, a Jamaica-born Slovenian
track and field sprinter; artists such as the American actress Angelia Jolie
who was granted a Cambodian passport for her humanitarian work; or sci-
entists like the Russian-born nuclear physicist Yuri Oganessian naturalised
in Armenia. Even so, national interest can equally be articulated as ‘eco-
nomic’, hence enabling states to extend their citizenship to investors.
Precisely the fact that states have this kind of a prerogative in decid-
ing on who they want as their citizens has enabled some states to opt
for specific subsidiary legislation in which exact amounts and types of
financial disbursement are required prior to naturalisation. While the
investment migration industry and scholarship close to it (Surak 2018;
Kochenov 2018) emphasise the growing trend of countries adopt-
ing investor citizenship, this mechanism stricto sensu exists in a hand-
ful of countries in the world. Except for Turkey, all of these countries
are post-colonial islands, with populations of under a million inhabit-
ants, adverse climate conditions and commonly underdeveloped and
small economies. Their investor citizenship programmes follow similar
patterns in that they offer the applicant the possibility to choose from
among a capital investment, investment in state bonds, property or a
donation (with a possible combination thereof) in exchange for the
country’s passport. In these cases, investors are not granted rights that
are associated with the internal dimension of citizenship (e.g. voting
or social rights) but rather only those related to its external dimension
132  J. DŽANKIĆ

(e.g. free travel,11 consular protection). This was also the case in the
mass sale of Comoros citizenship to the Bidoon populations of the UAE
and Kuwait. This legal and financial transaction that formally complied
with international law (Spiro 2018) has been deemed controversial from
a number of human rights aspects (Abrahamian 2015).
The final mechanism for attributing investor citizenship is perhaps the
most widely used one: IRPs as a ‘path to citizenship’. These programmes
enable their beneficiaries to obtain residence in the first instance, and
possibly citizenship, should they meet residence and other naturali-
sation conditions. Such policies are widespread since they are less con-
troversial and integrated in states’ general approaches to immigration.
Nonetheless, as we have seen, IRPs differ significantly on four grounds:
(1) amounts of investment, which can range between a few thousand to
several million US dollars; (2) type and duration of the residence permit
granted, from temporary residence of a year to settlement; (3) conditions
for maintaining status in terms of material (financial disbursement) and
substantive (physical presence) conditions; and (4) interaction between
these permits and citizenship. Interestingly, in many of the analysed
cases, states would enable the beneficiaries to receive and even maintain
the resident status with limited physical presence. Yet, while in some
countries the permit holder would need to have physically been in the
country for predetermined periods to obtain citizenship, others do not
have such requirements. This discrepancy eventually helps to understand
whether the key rationale behind a particular programme has been only
financial disbursement, or indeed attracting human alongside financial
capital. In this sense, the interplay between these different mechanisms
for regulating investor citizenship reflects a variety of interests and strate-
gies of multiple actors, explored in the following chapter.

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 CHAPTER 5

‘Long-Distance Citizens’: Strategies

and Interests of States, Companies
and Individuals in the Global Race
for Wealth

Human history has been marked by continuous competition for what-

ever has, at different points in time, fallen under the umbrella of ‘wealth’.1
Territories with their natural or human resources have been claimed and
fought for by various entities or jurisdictions, and the world that we live
in today is a reflection of the consequences of these competitions. Today’s
international system is divided into territories and populations that are une-
qual in terms of wealth and resources. Competitions and exchanges still
exist. As a result of globalisation, they have amplified not only in terms of
taking place in each corner of the world but also in terms of whom they
involve. In addition to states and individuals, multinational and transna-
tional corporations have emerged as powerful actors in the global race for
wealth. Indeed, while colonial traders such as Hudson’s Bay Company or
the East India Company that began commerce in the seventeenth century
were predecessors to these companies, transnational corporations (TNCs)
and multinational corporations (MNCs) have become powerful forces
only over the last five to six decades (World Bank 1987). They operate in
almost all segments of the global race for wealth—from the provision of
goods such as food (e.g. Nestlé), furniture (e.g. IKEA), clothes (e.g. Zara),
­pharmaceutical products (e.g. Bayer) to services ranging from insurance

1 For the purposes of this book, ‘wealth’ is defined as the sum of financial assets and
other property, minus any debts, owned by an individual, a company, state or international
organisation.

© The Author(s) 2019 137

J. Džankić, The Global Market for Investor
Citizenship, Politics of Citizenship and Migration,
https://doi.org/10.1007/978-3-030-17632-7_5
138  J. DŽANKIĆ

(e.g. Allianz, Cigna), to freight (e.g. Mach 1, DHL), hairdressing (e.g.

Tony and Guy) or research (e.g. RAND International). Very often, these
corporations operate multiple branches or subsidiary firms that feed raw
products or complementary services to the main company.
This general introduction is important for understanding how the
global race for wealth affects the continuous transformation of citizen-
ship and enables the development of different kinds of ius pecuniae pol-
icies. Wealth and resources are distributed unevenly not only among
countries but also within them (Milanović 2007), and individuals
seek opportunities for making the best use of their skills and fortunes.
Economic migrants leave their countries of origin and settle in other
regions or countries that can offer them better chances for prospering.
While some of them obtain employment in existing companies, others
move with the objective of setting up their own enterprises in new envi-
ronments. The latter commonly benefit from immigration policies that
states introduce for facilitating the entry and stay of ‘entrepreneurial
migrants’, whose resources and activities are seen as potentially beneficial
for states in the long run. Entrepreneurial migrants naturalise through
ordinary routes, subject to multiannual residence, language knowledge,
socialisation and other related conditions.
Yet individuals are not the sole competitors in the global race for wealth.
Sovereign states, TNCs and MNCs are all driven by the aspiration to
accumulate wealth or transfer it from one world’s region to another. The
outcome of this trend are policies enabling such accumulation or transfer
or wealth. As we have seen in the previous chapter, a number of (small)
states have opened up possibilities for investors to obtain their passports in
exchange for a financial disbursement. These policies constitute the ‘sup-
ply’ side of the global market for investor citizenship. They are commonly
not designed to attract the wealthy investor to relocate to the new desti-
nation country, but rather to use the benefits associated with its passport.
That is, such policies create ‘long-distance citizens’. Obviously, for func-
tioning, each market also needs the ‘demand’ side, or individuals whose
mobility and life opportunities have been conditioned by their birthright
citizenship. A growing number of companies then flourish within this mar-
ket, providing a range of services to states and such individuals.
The key particularity of this market is that it is accessible to a very lim-
ited section of the world’s population who meet the following criteria: (a)
belong to the top echelons of the global wealth pyramid, which includes
individuals whose net worth exceeds several million US dollars (Credit
 5  ‘LONG-DISTANCE CITIZENS’: STRATEGIES AND INTERESTS …  139

Suisse 2017); (b) belong to the section of high net worth individuals who
would benefit from the possession of another passport. The first condi-
tion excludes the major share of the world’s millionaires, whose wealth
has just passed the threshold for obtaining the status. Rather, the first
condition only applies to the several million of the world’s most affluent
individuals, whose multimillion assets would enable them to participate
in the global market for investor citizenship. The second condition poses
further restrictions on the number of beneficiaries of these programmes,
as the acquisition of another passport would need to offer them better
life opportunities or enhance their lifestyle or consumption patterns. This
second condition would apply to those high net worth individuals who
are citizens of the developing nations, countries in transition, or in the
state of conflict whose passports bear with them significant limitations in
terms of travel, or which are not safe places to reside. According to the
Credit Suisse Global Wealth Report (2017, 24), these individuals would
include around a quarter of the world’s multimillionaires.
The above characteristics of the global market for investor citizen-
ship indicate that investment-based passports follow the logic of ‘luxury
goods’, available to a limited number of consumers through a limited
number of providers. Broadly framing the sale of passports in terms of
industry of luxury goods can help us to better understand the interests
and strategies of states, companies and individuals who take part in this
market. To unpack these issues, the chapter first looks at some trends in
global inequality of wealth and explores the linkages between citizen-
ship-related inequalities. It then examines the global race for wealth,
arguing that global mobility of people and capital offers a structure of
opportunity for states to develop policies targeting the wealthy (Shachar
and Hirschl 2014; Shachar et al. 2017). Third, the chapter analyses the
role of the non-state actors, such as TNCs and MNCs offering services
to states and individuals, in the global regulatory framework for invest-
ment-based citizenship. It looks at how the private sector branches out
into different clusters that have come to establish a ‘citizenship indus-
try’, such as firms implementing some aspects of citizenship policies on
the behalf of states (e.g. due diligence, insurance, criminal record checks)
or managing applications on the behalf of clients (e.g. legal advice, real
estate purchase, tax advisory). The final section of the chapter looks at
the beneficiaries of ius pecuniae in the attempt to identify patterns of eco-
nomic, social and symbolic interests that individuals may have in obtain-
ing status on the grounds of investment.
140  J. DŽANKIĆ

Citizenship and Global Inequalities

In 2011, Branko Milanović, one of the key scholars of global inequality, dis-
cussed the degree to which income inequalities depend on circumstances
beyond an individual’s control. In his seminal The Haves and the Have-Nots:
A Brief and Idiosyncratic History of Global Inequality, Milanović (2011)
noted that the world we live in is extremely unequal and that this inequal-
ity is rooted in cross-country income differences. Milanović’s (2011, 142)
argument was that ‘[o]ne’s income thus crucially depends on citizenship,
which in turn means (in a world of rather low international migration) place
of birth. All people born in rich countries thus receive a location premium
or a location rent; all those born in poor countries get a location penalty’.
In brief, the fact of birth and the subsequent allocation of citizenship have
a major impact on an individual’s opportunities. In 2015, Milanović fine-
tuned his argument to take into account the differences between ‘citizen-
ship’ and ‘residence’, claiming that income inequalities will depend on the
latter rather than the former (Milanović 2015). In a world where less than
4% of the global population is mobile, Milanović (2015, 458) discerns
that the cross-country inequalities in wealth need to be combined with
income discrepancies within countries because ‘[t]hose for whom national
inequalities are important are either those at the bottom who gain from
lower inequality or those at the very top who gain from higher inequality’.
International migration from a less to a more egalitarian society amplifies
opportunities for those at the lowest percentiles of wealth, while affecting
adversely those in the wealthiest percentiles, and vice versa. Thinking about
investor citizenship, a policy targeting the world’s most affluent individu-
als in line with Milanović’s arguments would imply that the beneficiaries of
these programmes would have best wealth-enhancing opportunities not in
the wealthiest, but in the most unequal societies.2
To understand the global income and wealth disparities in this con-
text, we need to explore the variation of inequality within and across the
different regions of the world. Most of the nations’ wealth is held by a

2 Milanović’s argument does not entail predictions about migration. However, we can

infer that for the wealthy from egalitarian states, moving to less egalitarian ones may prove
detrimental as their opportunities for economic growth may be constrained by structural
limitations and captured states. Equally, the wealthy from less egalitarian societies the move
to the more egalitarian one would not be able to benefit from sources and networks that
they have used to accumulate wealth. This view supports the argument about the sale of
passports that operates as a ‘luxury market’ and creates ‘long-distance citizens’.
 5  ‘LONG-DISTANCE CITIZENS’: STRATEGIES AND INTERESTS …  141

small percentage of individuals. The Credit Suisse Global Wealth Report

(2017) highlights that 88% of global assets are owned by the top 10%
wealthiest individuals, while the half of the world’s poorest population
owns less than 1% of global wealth. According to Alvaredo et al. (2018),
there was significant variation in the income distribution of the ­highest
decile in various regions, whereby the top 10% of earners in Europe
hold 37% of nations’ income, those in China and Russia 41 and 46%,
respectively, 47% in the United States and Canada, and 61% in Brazil and
the Middle East. These differences are even more staggering if we look
at the regional income inequalities of the top 1% of the globe’s wealthiest
individuals. While in Europe and China the income share of the wealth-
iest deciles amounts to 12 and 13%, respectively, in sub-Saharan Africa,
North America and Russia it is 20% and it reaches 26 and 27% in the
Middle East and Brazil (Alvaredo et al. 2018, 44). This indicates that
wealth inequality and equally income inequality are lowest in Europe,
are growing in China and Russia, and are persistently high in the Middle
East and Brazil.
In conjunction with Milanović’s (2015) argument that prosperity for
the top wealth holders increases in more unequal societies, an economic
logic would indicate a propensity of European high net worth individuals
to relocate to North America, Russia, the Middle East and Brazil. As the
actual trend is for the investors from the developing countries to acquire
passports of the more developed nations, we can draw two conclusions.
First, enhanced income opportunities are not the primary motivation of
the wealthy from the developing countries to move to the more devel-
oped countries. If the optimisation of income should be their objective
the acquisition of a passport of a country with a higher income inequality
would not necessarily lead to migration. This supports the assumption,
yet from the ‘individual’ side, that the sale of passports creates ‘long-dis-
tance citizens’. Second, income opportunities are not the principal con-
cern in the acquisition of additional passports by the affluent individuals,
but rather concerns that facilitate the consumption of goods and services
that the respective status offers. For example, a wealthy Russian busi-
nessman who acquires a passport of Malta, Turkey or even St Kitts and
Nevis, is unlikely to permanently relocate to these countries. Rather,
they will dominantly use the external dimension of the passport related
to visa-free travel and consular protection, or to access educational
or healthcare facilities without the need to obtain an entry clearance.
Presumably, the beneficiaries of investor citizenship programmes could in
142  J. DŽANKIĆ

any case afford such education and healthcare, in which case the posses-
sion of another passport does not enable but facilitates the consumption
of such services.
The second condition that aided the rise of the global market for
investor citizenship has been the dynamic of the growth of wealth
around the world since the 1980s. This dynamic has two characteristics.
First, the trend of income and wealth growth of the world’s top wealthi-
est percentiles has been major compared to that of other income groups.
Looking at the data on income distribution in different parts of the
world between 1988 and 2008, Lakner and Milanović (2016) concluded
that individuals who were in the top half of wealth-bearers, especially in
Asian economies (India and China), and the high net worth individuals
in North America and Europe had highest rates of growth. Data pro-
duced by Alvaredo et al. (2018) for the period between 1980 and 2016
indicate that the higher an individual is on the income curve, the greater
income growth will they have experienced. In particular, they note that
the income of the highest percentile of global earners has grown twice as
much as that of the bottom half (Alvaredo et al. 2018). In other words,
the income gap between the ultra rich and the rest has grown substan-
tially over the last few decades. Second, it is important to emphasise
that this growth in the wealth of the top earners has not been uniform
across the various regions in the world. WID.world (2017) data indi-
cate the discrepancies in the levels of growth of the world’s wealthiest
(Table 5.1).
The growth of wealth of the Europe’s richest has been minor com-
pared to that in other global regions, and especially in emerging and
transitional economies. At the same time, growth rates increase with the
reduction of the wealth percentile. This global discrepancy has an impor-
tant socioeconomic background, and equally significant consequences.

Table 5.1  Real growth per top income groupa

Income/Region Europe (%) North America India (%) China (%) Russia (%)
(%) (%)

Top 1 72 206 857 1920 686

Top 0.1 76 320 1295 2421 2562
Top 0.01 87 452 2078 3112 8239
Top 0.001 120 629 3083 3752 25,269
aAdapted by this author from WID.world (2017)
 5  ‘LONG-DISTANCE CITIZENS’: STRATEGIES AND INTERESTS …  143

Income inequalities in India, China and Russia are the outcome of

the demise of stringent regulation and the fall of communism, which
resulted in market liberalisation (Lavigne 1996). Interestingly, the
more abrupt the economic transition, the greater has been the discrep-
ancy in the wealth growth of the richest. This process has been related
to privatisation, which brought along the decrease of public property
from around 70% in China and Russia in the 1980s to 30 and 20% in
2015 (Novokmet et al. 2017). The transfer of public into private prop-
erty, which in most cases has been facilitated for political and economic
elites, has generated a class of high net worth individuals in these regions
(Frydman et al. 1998). This is also reflected in the stark rise of the num-
ber of the top earners in these regions—millionaires in China and billion-
aires in Russia ‘despite its modest level of wealth per adult’ (Credit Suisse
2017, 55). The growing number of the high net worth individuals in
the emerging markets, in turn, has changed the consumption patterns of
this group thus becoming a further factor facilitating the rise of investor
citizenship.

From the ‘Passport Paradox’ to a Luxury Market

The sale of passports is one of the state policies that is inextricably related
to the ‘hollowing out’ or the ‘lightening’ of citizenship. Similar to other
contentious modes of citizenship acquisition, it points to the tension
between the instrumental function and instrumental use of citizenship.
This tension arises from the decoupling between citizenship as member-
ship in society—including status, rights and obligations—and identity
from the passport as formal evidence of belonging to a jurisdiction. It is
a consequence of the growing importance of mobility in the globalising
world, and the fact that different passports come with different freedoms
of travel and settlement (see Quality of Nationality Index 2017).
Indeed, citizenship has an instrumental function: it fills out the space
created by the link between the individual and the state, established
through citizenship status. The rights and duties of citizenship, through
which the state guarantees personal and material security to citizens cre-
ate associative ties that then translate into identity, participation and civic
solidarity. These ties are characterised by continuous interaction between
an individual and the state, whereby the individual contributes to the
state (taxation). The state redistributes taxes so that it can offer services
and provide security to its citizens. Citizens, in turn, give legitimacy to
144  J. DŽANKIĆ

the state by participating in elections and articulate and practise identities

by functioning across networks of societal ties.
This core instrumental function of citizenship is different from ‘instru-
mentalised citizenship’ or the instrumental use of the passport for access-
ing goods and services across a range of jurisdictions. This instrumental
role of the passport, which as a document does not per se create associ-
ative ties with the community, has deep historical roots. The first pass-
ports were born in the fifteenth century out of the need for the subjects
of the British crown to prove their identity while in foreign lands and
thus be granted protection should the need arise (Cane and Conaghan
2008; Torpey 2018). Passports became used as identification documents
for crossing international borders only during the First World War, when
countries across Europe sought to control immigration and emigration.
With the evolution of the governance of international travel, a passport
nowadays performs a double instrumental ‘enabling’ role: it is used as a
guarantee of the right to return and a facilitator of visa-free travel. While
in principle, this ‘enabling’ role of the passport is the same for all states,
the ‘passport paradox’ is created by differences among states in the inter-
national system in terms of development, stability and different layers of
‘opportunity’ they offer (see Quality of Nationality Index 2017).
As such, the ‘passport paradox’ is central to the global market in
investor citizenship. Passports, which are objectively not limited in sup-
ply, are then transferred from the public to the private domain. They
become a virtually ‘no-cost’ unlimited public resource, and ‘products’
that states can use in the global race for wealth. The analysis in Chapter 4
has indicated that the countries implementing specific investor citizenship
programmes apply a range of investment thresholds, in line with the per-
ceived ‘value’ of their passport in the context of global mobility. This per-
ceived ‘value’ is then attributed a financial value, which ranges from a few
hundreds of thousand US dollars to several million. Its outcome is ‘prod-
uct diversification’ in a market that is geared towards high net worth indi-
viduals. Within such a market, investor citizenship programmes that are
more expensive or capped offer a perception of uniqueness and rarity,
characteristic of markets for luxury goods (Wu et al. 2017).
The market for investor citizenship resembles a market for luxury
products as a result of two interrelated dynamics. First, the sale of pass-
ports, available to a small number of wealthy individuals can be thought
of as a market for the ‘extras of life’ (Danziger 2005). The defini-
tion of luxury encompasses goods or services that offer ‘indulgence or
 5  ‘LONG-DISTANCE CITIZENS’: STRATEGIES AND INTERESTS …  145

convenience that surpass the nonessential minimums’ (Wu et al. 2017,

494). In marketing studies, the term ‘luxury’ often refers to expensive
brands perceived to be of superior quality, rare or prestigious. Due to
their scarcity, luxury goods and services are available to a small number
of individuals. Their possession or consumption is a symbol of personal
and social statuses and identities. Second, most of the investor citizen-
ship programmes are geared towards individuals whose original passports
offer mobility limitations and who are located in developing countries.
This proliferation of ‘more useful’ passports or passports of opportu-
nity (Harpaz 2018) in the emerging markets follows the saturation of
economic elites in the respective countries. Passports that are perceived
as ‘more valuable’ thus enable the rise of luxury consumption patterns
comparable to those in the mature markets.
The variety of the contemporary luxury market encompasses conspic-
uous and inconspicuous consumption of luxury depending on the per-
sonal motivations and social roles that individuals perform (Catry 2003;
Truong 2010). Veblen (1899) defined conspicuous consumption as the
consumption of goods and services that communicate an individual’s
economic status within society. It has been based on the ‘observation
that people compare themselves to others in a multitude of ways, with
relative performance being important for subjective well-being’. Similar
to medieval Florence where different classes of citizens were bound by
sumptuary laws and could wear only those clothes and jewels that cor-
responded to their social standing, luxury brands such as Gucci, Prada,
Rolex and many others nowadays offer individuals the possibility to sig-
nal their social status. In other words, the brand is prominently displayed
in conspicuous consumption. The contrary of such a consumption
model happens when consumers prefer brands that use subtle designs,
and brand names are hidden, allowing only the connoisseurs to recog-
nise them (Berger and Ward 2010). This latter trend has been marked as
inconspicuous consumption, practised by luxury consumers who do not
seek public displays of their social status. In this context, luxury market
studies have indicated the difference between the new and established
elites. For the former, conspicuous consumption denotes ‘belonging’
to an upper class, a desire to emulate the lifestyles of the affluent, or to
establish their superiority in comparison to their reference group. For
the latter, inconspicuous consumption occurs because ‘[w]hen a person’s
superiority over lower status groups is taken for granted, it is not neces-
sary to signal to them’ (Eckhardt et al. 2014, 808).
146  J. DŽANKIĆ

Applying these dynamics to the global market for investor citizen-

ship we can first discern that a purchased passport, resulting in higher
mobility or business opportunities, goes far beyond meeting the essential
minimums. Indeed, a number of individuals benefitting from investor cit-
izenship programmes face mobility limitations in terms of entry and stay
visas due to their nationality of origin. Yet obtaining such visas (over an
individual’s lifetime) would cost less than a passport obtained through an
investor programme. By way of example: a ten-year visitor visa for the
UK costs £798 and it is among the most expensive visitor visas world-
wide. A Tier 2 work permit valid for over 3 years costs £1220 and the
applicant is eligible for an indefinite leave to remain (subject to other
conditions, such as physical presence in the country) that costs £2297.
Citizens of the micro federation of St Kitts and Nevis, whose passport can
be purchased for $150,000, enjoy visa-free stay in the UK for six months
(or three months if the entry is from Ireland). In this sense, for the pur-
pose of short-term entry and stay in the UK, the acquisition of the St
Kitts and Nevis passport as opposed to obtaining UK visitor or work visas
can be viewed as luxury consumption rather than a minimum need.
Further to this, a passport in itself is inconspicuous until the moment
of its ‘public’ use, for example to cross a border. However, the commer-
cialisation of the passport is a direct outcome of the dynamics of lux-
ury consumption in emerging markets. Studies of consumer behaviour in
India (Eng and Bogaert 2010), China (Wu et al. 2017; Jin et al. 2015),
Russia and Romania (Ochkovskaya 2015), and even East and West
Germany (Friehe and Mechtel 2014) point to an increase in conspicu-
ous consumption as a result of changing income distribution over the
past three decades. This initial dynamic is best seen in the former com-
munist societies, where ‘regimes severely limited people’s choice sets,
thereby restricting the possibilities to signal status through the selection
of the upscale product variety’ (Friehe and Mechtel 2014, 63); conspicu-
ous consumption has become ‘make up for the restricted choices’ experi-
enced during the Cold War period. In the initial years, when the income
inequalities had seen a sharp rise, conspicuous consumption was a stark
marker of status. It resulted in the mushrooming of a market of visibly
branded luxury goods and services in these regions. With ever increas-
ing income inequalities, the newly created wealthy classes matured lead-
ing to the ‘desire of consumers with high cultural capital to differentiate
themselves from over-the-top conspicuous consumption of the nou-
veau riche and the aspirational consumption of lower status consumers’
 5  ‘LONG-DISTANCE CITIZENS’: STRATEGIES AND INTERESTS …  147

(Eckhardt et al. 2014, 811). The outcome of this dynamic has been the
rise of inconspicuous consumption as the ‘new conspicuousness’. As
argued by Veblen (1899, 187), this kind of consumption emerges when
‘a sufficiently large wealthy class has developed, who have the leisure for
acquiring skill in interpreting the subtler signs of expenditure’. As a con-
sequence, communicating status is nowadays done through goods and
services that transcend the ability of traditional conspicuous consump-
tion. Hence, the emphasis is on ‘experiences’ rather than on branded
possessions.
This latest dynamic, coupled with the desire of people to emulate the
consumption patterns of the group they seek to belong to, has had an
impact on the global market for investor citizenship. Since the differ-
ences among the world’s most affluent individuals (top 0.1% or above)
are minor in terms of wealth, they are likely to have similar consumption
patterns and seek similar experiences. As a consequence, the global ‘elite’
may be in search not only of a greater mobility, but also may wish to
emulate identities of their counterparts from the mature markets. In the
words the chairman of one of the intermediary companies in the global
citizenship market: ‘If you have a yacht and two aeroplanes, the next
thing to get is a Maltese passport. It’s the latest status symbol. We’ve had
clients who simply like to collect a few’ (Pendeton and Dodge 2018). In
this way, the acquisition of a passport, an object inconspicuous in itself,
also becomes a marker of status and belonging to a group whose experi-
ences are seen as desirable.

A Growing Industry: Multilayered Networks

in the Investor Citizenship Market

The proliferation of investment-based citizenship programmes both

in Europe and worldwide has established a sui generis market, which
treats national membership as an industry. Similar to other markets,
the one for citizenship consists of a network of companies that act as
intermediaries between governments and individuals seeking to obtain a
passport on the grounds of investment. The dynamics of their interplay
with national governments, among themselves, and with the potential
beneficiaries of investor citizenship has three types of effects: (1) out-
sourcing of citizenship regulation and implementation through conces-
sions, treated as private contracts rather than as a matter of traditional
148  J. DŽANKIĆ

public policy; (2) the establishment of several layers of intermediar-

ies, ranging from international firms to local legal advisory companies
facilitating access to citizenship by investment through a variety of ser-
vices; (3) the marketing of national membership through rankings of
travel documents on the basis of their presumed ‘value’. The latter is
ever more pronounced in the case of EU Member States implement-
ing investor citizenship programmes, which present EU citizenship as
an ‘additional’ value.

Autochthonous and Concession-Based Programmes

The insight into the different investor citizenship schemes shows that
they could be developed and implemented by the states themselves
(as was the case in Turkey and the Pacific islands, old versions of the
schemes in St Kitts and Nevis, and the Commonwealth of Dominica),
or by the international intermediary companies, entrusted by the gov-
ernments to develop and implement the different aspects of these pro-
grammes (as is the case of the new schemes St Kitts and Nevis, Malta,
etc.).3 While the former have been the predecessors of the global market
for the sale of passports, nowadays we see an upsurge in the investor citi-
zenship programmes that the governments outsource to private interme-
diaries. The result of this is the strengthening of the market dynamics in
investor citizenship, due to the increase in non-state actors involved in
the different aspects of the new schemes.
Discussing the experience of the autochthonous programmes in the
Pacific islands, including Tonga, the Marshall Islands, Nauru, Belize,
Vanuatu, Samoa and Grenada, van Fossen (2018) maintained that these
isolate cases of investor citizenship were short-lived, mostly due to the
lack of transparency, fraud, corruption and scandals involving the highest
government officials. That is, not being ‘members of associations coor-
dinating economic citizenship’ or ‘cooperating with passport sales pro-
grammes in other countries’ curtailed the possibilities for these investor
citizenship schemes to prosper (van Fossen 2018, 286). In minute Pacific
islands, which lacked ‘support networks and access to peer evaluation of
their activities, additional opportunities and strategies for dealing with

3 Similar dynamics are at play with the ‘path-to-citizenship’ options, which are under

the broad umbrella of investment-based migration despite not being an outright exchange
between the passport and financial disbursement.
 5  ‘LONG-DISTANCE CITIZENS’: STRATEGIES AND INTERESTS …  149

metropolitan governments hindering their passport sales programmes’

(van Fossen 2018, 286), the sale of citizenship commonly amounted
to local politicians or diplomats handing out passports in exchange for
a financial disbursement. Their isolated political environments, coupled
with the remote geographical positions of these countries, resulted in vir-
tually no transparency and a high degree of corruption of public officials.
For instance, there was virtually no information on how many passports
had been issued in Vanuatu and no records of the funds received in the
Marshall Islands. Yet, the case that had gained international attention
was the sale of the Tonga passports, which was linked to the drug traffic
routes in the Pacific (Ensor and Wall 2016). Such scandals would reduce
the credibility of these countries’ passports and eventually lead to the ter-
mination of the programme. Justified by the claim that an internationally
designed and implemented programme would offer major transparency,4
some of the discontinued programmes have been relaunched through a
concession arrangement with an international intermediary.5
Concessions for investor citizenship programmes are arrangements
between governments and private companies, whereby the former ‘trans-
fers to the company the right to maintain, produce or provide a good or
service within the country for a limited period of time, but the govern-
ment retains ultimate ownership of the right’ (Miranda 2007). In the
global market for investor citizenship, the grant of status indeed remains
the prerogative of the government. However, intermediary companies
are given the concession to develop the programme and implement
some of its aspects (e.g. act as intermediaries between the government
and the beneficiary; perform ‘know your customer’ parts of due dil-
igence; offer marketing services). In such arrangements, the conces-
sionaire charges fees for their services, and is entitled to a percentage
of funds received by the programme. For example, the Public Service
Concession Contract between the Government of Malta and Henley and
Partners Holdings (2013, web) grants the right to this company to pro-
vide ‘certain functions relating to (a) the design and implementation of
the programme, (b) the processing and administration of applications
and (c) international promotion of the programme’ (Recital B). The
original concession contract foresaw exclusivity for Henley and Partners

4 Personal
interview with a representative of an international intermediary, May 2015.
5 Theprogramme in the Commonwealth of Dominica has been redesigned by an inter-
mediary company. See Chapter 4 for further details.
150  J. DŽANKIĆ

in implementing the programme, which implied that this company had

the right to outsource some services to local agents and companies.
However, due to the strong opposition in Malta and internationally
(Vella 2013), the exclusivity clause was removed, allowing local compa-
nies to present applications and promote the programme (Amendment
to the Public Service Contract between the Government of Malta and
Henley and Partners Holdings PLC 2014). The amendment altered
two further provisions envisaged in the original concession contract: it
withdrew the right of the intermediary to perform and charge for the
due diligence fees, and as a consequence changed the amount payable
by the government to the concessionaire for their services.6 In addition
to handling the programme in Malta, Henley and Partners has recently
won the concession for the investor citizenship scheme in Moldova
(Financial Post 2018). Similar arrangements exist between the com-
peting CS Global, and the governments of St Kitts and Nevis and the
Commonwealth of Dominica.
Van Fossen (2018) sees the management of investor citizenship pro-
grammes through the flourishing ‘citizenship industry’ more favourable
than the isolate cases. However, experience with concessions for services
related to the grant of citizenship through investment indicate the per-
sistence of problems with public procurement contracts in developing
and isolated nations. Miranda (2007) particularly emphasised the lack
of public scrutiny of the concession contracts, which adversely affects
the legitimacy of these programmes. As was the case in Malta, St Kitts
and Nevis, the Commonwealth of Dominica but also in Moldova and
Montenegro, which have recently announced the start of investor citi-
zenship, grants of concessions precluded open and inclusive debates with
the public. In some cases, terms of agreement had been decided between
the government officials and representatives of companies, while signed
agreements became enforceable with immediate effect. During this pro-
cess, there was scarcely any information disseminated to the public about
the tender requirements and the selection. Research has confirmed that
while there is almost always formal transparency as to the choice of the

6 The exact percentage that the concessionaire receives is stipulated in Article 6 of the

Amendment to the Public Service Contract between the Government of Malta and Henley
and Partners Holdings PLC. The full text of this provision is not publicly available. On top
of this, the concessionaire retains 4% of the €150,000 contribution per applicant (Article
1.1.6. of the original contract).
 5  ‘LONG-DISTANCE CITIZENS’: STRATEGIES AND INTERESTS …  151

concessionaire (e.g. points-based ranking),7 in a number of cases calls for

tender were published following multiple meetings between government
officials and the representatives of intermediary companies (Garside and
Osbourne 2018). As a consequence, concession arrangements have been
treated as ‘bilateral contracts between high-ranking national officials and
the concessionaire company’ (Miranda 2007, 515).
The lack of transparency in and public scrutiny of the grant of con-
cessions, and non-existent accountability have all become enabling con-
ditions for the corruption of public officials through investor citizenship
programmes. In the cases of isolates identified by van Fossen (2007),
cases of corruption were manifold in the process of granting citizen-
ship in exchange for investment. As indicated in the ‘part-of-the-game’
affair in Austria, discretionary conferral of citizenship on the grounds
of exceptional merit (even without a specific programme) could lead
to corruption of public officials. Yet, neither have the franchised inves-
tor citizenship programmes been immune to corruption. In 2017, Chief
of Staff of the Prime Minister of Malta Keith Schembri was faced with
allegations of corruption and money laundering through the country’s
Individual Investor Programme (Camilleri 2017). Equally, protests in the
Commonwealth of Dominica in 2017 have been linked to corruption of
the country’s Prime Minister Roosevelt Skerrit in relation to the inves-
tor citizenship scheme (The Dominican, 11 February 2017), which is a
further indicator of the potential problems of treating the franchise of a
public good as a commercial arrangement.

The ‘Citizenship Industry’: Diversified Services

and Multilayered Intermediaries
The mushrooming of investor citizenship and residence programmes
has triggered a stark increase in the number of companies involved in
mediating between governments and investors. The expanding ‘citizen-
ship industry’ has flourished through the diversification of services avail-
able through the intermediaries. These include two types of services:
(1) those provided to governments and (2) those targeting the benefi-
ciaries of investor citizenship schemes. The former include the drafting
of feasibility studies for investor citizenship; providing inputs in relevant
aspects of legislation; handling aspects of the programme such as due

7 Confidential interview, October 2018.

152  J. DŽANKIĆ

diligence or other checks; services mediating the issue of national doc-

uments; and the marketing of the programmes. The latter range from
advice on the application process, including financial aspects of the appli-
cation and other criteria, to personalised services, which depend on the
profile of the applicant (aimed at ensuring quick application processing),
to property purchase or lease-related services, and communication with
national authorities on behalf of the beneficiary.
In this context, we can identify three key types of intermediary
companies involved in the development, implementation and market-
ing of investor citizenship: (1) international firms offering a range of
cross-country services to both governments and beneficiaries (con-
cessionaires and agents); (2) national companies focusing on service
packages for beneficiaries in that country (agents); and (3) national or
international firms specialising in delivering a single service (due dili-
gence, security checks, real estate management) related to the acquisi-
tion of citizenship on the grounds of investment. While a comprehensive
overview of all companies involved in the investor citizenship market
is beyond the scope of this book, thousands of firms are engaged in
it, and in Malta alone 176 of them were approved agents in late 2018
(Individual Investor Programme 2018, web).
The first type of intermediary companies, such as Arton Capital, CS
Global and Henley and Partners, are those that promote and develop
investor citizenship programmes, while also offering a range of ser-
vices to governments and investors. As has been the case in Malta and
the Caribbean states, these companies commonly approach individual
national governments and assist them in drafting their investor citizen-
ship legislation in exchange for preferential status once such legislation
comes into force. This preferential status consists of being the key con-
cessionaire of the programme, and commonly having the exclusivity in
implementing some aspects of it. As noted previously, under the original
arrangement Henley and Partners was the sole concessionaire of the IIP,
in charge, inter alia, of handling all applications and including due dili-
gence. Following the domestic opposition and the objections from the
European Commission, the concessionaire’s exclusivity was taken away.
However, it still remained in close collaboration with the government
of Malta receiving significant leverage on the implementation of the IIP
(Vella 2013). In a similar vein, companies such as CS Global and Arton
capital have been involved as concessionaires in the investor citizenship
schemes in the Caribbean states, and in residence by investment in a
 5  ‘LONG-DISTANCE CITIZENS’: STRATEGIES AND INTERESTS …  153

range of European countries (including Hungary until April 2017, and

Bulgaria and Portugal to present day). In particular, in Caribbean islands
these multinational companies can exercise significant influence on the
respective investor citizenship programmes (Garside and Osbourne
2018; van Fossen 2018). Their role is comparable to the one originally
foreseen for the concessionaire in Malta. The enabling factor for such a
strong impact of these TNCs has been the lack of international pressure
comparable to that of the EU Member States and the European insti-
tutions, coupled by high percentages of GDP growth through revenues
from the sale of passports.
A subtype of TNCs, which also offers a range of intermediary ser-
vices to individuals but commonly does not hold franchises from
states to develop, implement and market the investor citizenship pro-
grammes include the major auditing and accounting companies, such
as PricewaterhouseCoopers (PwC), Deloitte, KPMG and BDO. For
instance, PwC approaches the clients highlighting the following:

Expertise – in-depth knowledge of the relevant legislation and procedures;

peace of mind – our team will help you address all issues; we provide a
tailored service ensuring all regulatory requirements are met; close col-
laboration – we undertake to guide you and provide complete support
throughout the process; project management and close follow up with
authorities. (PricewaterhouseCoopers 2014, web)

Similarly, Deloitte (2016, web) ‘brings world-class capabilities and

high-quality service to clients, delivering the insights they need to address
their most complex business challenges. Deloitte’s more than 210,000
professionals are committed to becoming the standard of excellence’,
while BDO’s (2016, web) ‘immigration team handles all aspects of immi-
gration matters including citizenship applications (both through the eco-
nomic citizenship programme and the conventional route), applications
for immigration permits, permanent residence permits, employment per-
mits and visas. The department advises both individual and corporate cli-
ents’. In their Cyprus programme webpages, KPMG (2017, web) also
state that they have ‘a fully dedicated immigration team that can provide
specialised assistance for obtaining the Cyprus citizenship and Permanent
Residence Permit offered to foreign investors. Our experienced team has
a 100% success record on all submitted Cyprus citizenship applications’.
These major multinational companies focus on providing a broad set of
154  J. DŽANKIĆ

services. Due to their resonance in the financial sector, such companies

are commonly successful in their approach to beneficiaries (and thus able
to capture a significant share of the investor citizenship market).
The second kind of intermediaries involved in this market are
smaller companies and legal advisory firms that operate at the national
level. They are normally engaged by the large multinationals to han-
dle some aspect of the process on behalf of the applicant. For instance,
one Cypriot legal firm claims that it can individually assist citizenship
applicants, but also asserts that it is ‘frequently engaged by some of the
world’s largest and most reputable international law firms, accounting
firms and family offices’ (Savva and Associates 2016, web). A number
of other intermediaries offer a similar range of services in Cyprus, while
over 150 approved companies can act as a link between investors and the
government’s citizenship agency.
Finally, the market for intermediaries in the investor citizenship pro-
grammes also includes companies specialising in particular services—due
diligence checks, real estate sales, etc. Their key task is to provide evidence
that the investor meets a specific criterion as stipulated in the laws. One
such example would be Thompson Reuters (2018, web), which special-
ises in enhanced due diligence ‘used by global organisations to mitigate
and protect against reputational damage during the on-boarding of high-
er-risk customers’. The agency offers services to governments (or conces-
sionaires if they handle due diligence) related to background checks of
applicants, including those on the origins of their funds, and produces an
economic citizenship report. Such reports are then commonly integrated
in the investor citizenship application. A further example would be Henley
Estates Ltd. (2018, web), a subsidiary of Henley and Partners handling
legal services related to the purchase and resale of real estate specifically
for investor citizenship, including transfer and property taxes, inheritance
regulation and tax residence related issues. Such a diversification of ser-
vices related to the management of investor citizenship is a further indica-
tor of the growth of the ‘citizenship industry’ with a global outreach.

Branding and Marketing of Passports:

Different Strategies of the ‘Supply’ Side
As a result of the expansion of the global market for investor citizenship,
for participants in the burgeoning of the ‘citizenship industry’ citizenship
and residence statuses have become commodities. Documents attesting
 5  ‘LONG-DISTANCE CITIZENS’: STRATEGIES AND INTERESTS …  155

such statuses are treated as ‘products’ offered by states. The acquisition

of such documents is related to a number of ‘services’ performed by the
intermediary companies. The ‘supply’ side of the global market for citi-
zenship therefore needs to be viewed as constructed of these two differ-
ent elements—states and intermediaries—that position themselves on the
market using different strategies.
States that provide the passports and residence cards as the ultimate
‘products’ of the global market for citizenship are the only ones who
have the jurisdiction to allocate such statuses. While in theory states can
offer an unlimited number of these statuses, within any single state an
individual may not simultaneously purchase and hold both citizenship
and foreign residence.  Resident statuses eventually become indefinite or
lead to citizenship. Citizenship status is permanent.8 When an individual
acquires citizenship of a given state, this person will no longer need or be
able to repurchase it. This status can also be passed on to future gener-
ations through birthright rules. Therefore, for each state implementing
the sale of passports, with each successful applicant, the pool of prospec-
tive buyers shrinks significantly in the medium-to-long run, unless the
number of new high net worth individuals in the developing countries
increases. Equally, any programme in a state whose passport offers sim-
ilar opportunities is in competition within the global citizenship market.
Intermediary companies, by contrast, offer a range of services to gov-
ernments and beneficiaries. Unlike states, these companies may provide
multiple services to a single investor (e.g. application handling, due dil-
igence, real estate purchase); services on different occasions to the same
private beneficiary in cases of acquisitions of multiple passports; services
to more than one state offering or planning to offer investor citizenship;
and continuous services in terms of restructuring the programme, etc.
The different market positions of states and intermediaries that take
part in this growing market have induced a ‘branding’ of citizenships
around the world, through which external companies allocate ‘values’ to
different passports. One such example is the Quality of Nationality Index
(2017), which provides rankings for passports of the sovereign states. Such
rankings of passports then enable a variety of marketing strategies that
states and companies employ in reaching out to potential beneficiaries.

8 An individual may lose their citizenship by withdrawal, ex lege or renounce it voluntar-

ily. In such cases, should they wish to regain it, re-acquisition of previous citizenship pro-
cedures would apply and there would be no need for investors to ‘repurchase’ citizenship.
156  J. DŽANKIĆ

For instance, the official website of the investor citizenship pro-

gramme of the Commonwealth of Dominica features a message from
the country’s Prime Minister Roosevelt Skerrit ‘We are a nation deeply
rooted in community values and a mindset of reciprocity. For this rea-
son we invite individuals and families from around the world to invest in
our country, and in exchange we promise to provide them with citizen-
ship of Dominica – a status that comes with a myriad of opportunities
that transcend borders’ (Commonwealth of Dominica CBI 2018, web).
The website also features some basic information about the country’s
demography, political system, economic indicators and infrastructure.
The actual marketing of the programme is done through CS Global, the
concessionaire, whose web pages highlight the advantages of possessing
the Dominican passport, including inalienability, generational transfer,
dual citizenship, visa-free travel and tax benefits (CS Global 2018). By
contrast, the official website of the investor citizenship in St Kitts and
Nevis (Government of St Kitts and Nevis—Citizenship by Investment
Program 2018) is more proactive towards beneficiaries, including a
free online calculator of what option would best suit a potential inves-
tor. Intermediaries, including the franchise-holding CS Global, through
which the investors are bound to submit applications (i.e. no direct sub-
missions to the government) highlight benefits of the programme in a
similar fashion to the case of Dominica. In Vanuatu, where the interme-
diary Harvey Law Group handles the receipt of the applications and due
diligence, but not the marketing aspects thereof, the core of the promo-
tion rests on the country’s authorities. They emphasise the value of the
country’s passport for visa-free travel, tax benefits and the speed of the
process (Vanuatu Information Centre 2018).
As opposed to investor citizenship in the small Caribbean islands, the
Pacific or even other countries such as Turkey where the authorities han-
dle the process, similar programmes in the EU are advertised specifically
as a pathway to EU-wide rights. The EU citizenship rights are explic-
itly used to increase the market value of Member States’ national mem-
bership. For instance, Auray Capital, one of the intermediaries in the
Cyprus investor citizenship scheme explicitly notes that ‘Cyprus offers a
path to citizenship in the European Union’ (Auray Capital 2015, web),
while smaller law firms advertise the same programme as ‘a straightfor-
ward route to EU citizenship’ (Antoniou 2015). By referring to the sale
of Cypriot citizenship as ‘EU citizenship by investment’ (NWI Visas
 5  ‘LONG-DISTANCE CITIZENS’: STRATEGIES AND INTERESTS …  157

2015, web) intermediaries effectively sell EU citizenship for the price of

national membership in the small European island.
Cyprus is not the only case where national membership is advertised
as a shortcut to the benefits of European citizenship. The Malta authori-
ties use the involvement of the European Commission and the European
Parliament in the revisions of IIP to support the claim that its scheme
is ‘the first citizenship programme in the European Union to be rec-
ognised by the European Commission’ (IIP 2015). The website of the
concessionaire in the Malta investor citizenship programme Henley and
Partners (2015, web), states that ‘EU citizenship gives the [beneficiary
the] right of establishment in all 28 EU countries’. A similar approach is
adopted by a national intermediary firm who emphasise that by acquiring
the citizenship of Malta, the individual will have ‘[r]ight to live, work,
study in any of the 28 EU countries, Norway, Iceland, Switzerland and
Liechtenstein’ (Chetcuti 2015, web); and by Malta Immigration (2015,
web) who stipulate that ‘[o]nce a candidate is awarded Malta citizenship,
which includes EU citizenship, they have the right of establishment in all
28 EU countries and Switzerland’.
On the ‘citizenship industry’ side, international conferences have also
become a forum for branding and marketing of passports in the global
investor citizenship market. Such events are commonly organised by
international law firms that act as agents and intermediaries, while speak-
ers include government officials from countries running investor citizen-
ship programmes, representatives of various subsidiary branches (real
estate, due diligence firms), as well as academic speakers (Henley Forum
2015; CS Global IRS 2016). Recent reports indicate that, unlike a dec-
ade ago when there were scarcely any such events, now there are an esti-
mated four conferences per week in Asia alone (Bullough 2018).

The ‘Demand Side’ of the

Long-Distance Citizenship Industry
Researching the ‘demand side’, or the profile of individuals benefitting
from investor citizenship worldwide has been almost impossible due to
stringent data protection rules and the high profile of the beneficiaries
of such programmes. Equally, national statistical agencies rarely provide
disaggregated statistics, which would allow a methodologically consistent
and robust analysis of the acquisition of citizenship on the grounds of
158  J. DŽANKIĆ

investment. As a consequence, the brief analysis in this book is based on

the media reports on the numbers and profiles of investors acquiring cit-
izenship and annual reports of governmental and international agencies
where available.
A further element of analysis in this section is the motivations of
investors to acquire another passport. In addition to luxury consump-
tion, which has previously been identified as one of the key drivers of
the sale of passports, membership in other countries is purchased for
different reasons—a ‘door to opportunities’, a route to more favoura-
ble taxation than in the country of origin or as a ‘safety card’. A report
of the Economist Intelligence Unit (2015) cites the reasons for wealthy
investors to strategise about their membership, noting that ‘80% of
wealthy migrants surveyed cite better business opportunities in the des-
tination country as an important factor in their choice of specific coun-
try. Seventy-seven percent value freedom to travel in the destination
country. A favourable tax and regulatory environment is the third most
important factor in choosing a specific destination country, mentioned
by 75%’ (Economist Intelligence Unit 2015, 3). Further motivations
include better quality of life, safe physical environment and better edu-
cational and professional opportunities for themselves and their families.
In spite of such general motivations for acquiring a foreign citizenship,
most of the beneficiaries of investor citizenship remain ‘long distance
citizens’ in their destination states. Only 21% of the surveyed high net
worth individuals expressed an explicit desire to relocate to the new des-
tination country, as opposed to 74% who were unsure about their deci-
sion (Economist Intelligence Unit 2015, 16). This choice is facilitated
by states’ policies regulating investor citizenship schemes, including the
absence of the requirement for extended periods of physical presence
prior to naturalisation, as is the case in Caribbean, European and Pacific
programmes.

General Trends
With the growing debates over the sale of passports, it would seem that
these programmes attract a high number of beneficiaries. However, as
discussed in the previous section, due to the high levels of investment
required (especially in cases of European programmes), there is a lim-
ited number of participants in the ‘demand’ side of the global investor
citizenship market. The Economist Intelligence Unit Report (2015)
 5  ‘LONG-DISTANCE CITIZENS’: STRATEGIES AND INTERESTS …  159

highlights that the growth of wealth in the Asia-Pacific region and the
Russian Federation gave rise to a high number of applicants from these
countries. Moreover, the numbers per country appear to fluctuate,
depending on whether the programme is implemented by the national
government alone, or whether it has been promoted through the ‘cit-
izenship industry’ channels (van Fossen 2018). In addition to the ear-
lier discussion on the decrease in such applications due to the satisfaction
of the needs of the ‘demand side’ and their descendents, the amplify-
ing supply of such passports and security concerns raised by a number
of schemes has had an effect on the programmes enabling the sale of
passports.
One such example has been the programme in St Kitts and Nevis,
which processed a total of 10,777 applications for investor passports
between 2005 and 2015 (Bullough 2018). However, the number of
beneficiaries suffered a sharp downfall between 2014, when 1976 appli-
cations were approved, and 2016 when the number of individuals inter-
ested in acquiring the country’s passports fell to around 150 (Dominica
News 2017). The stark downfall in the applicants for investor passports
of St Kitts and Nevis is likely to be attributable to two factors related to
the global investor citizenship market. First, the opening of new investor
citizenship programmes, especially the one in Malta that comes with the
benefits of an EU passport, has had an effect on the interest of potential
beneficiaries in the Caribbean investor citizenship programmes. Second,
after 2014 St Kitts and Nevis removed the information on its citizens’
place of birth from passports, leading to security concerns related to the
new citizens of the country. This policy development also had a further
repercussion in that the government of Canada abolished the visa-free
travel to the holders of the passport of St Kitts and Nevis ‘publicly telling
the world it could not endure a relationship that had become risky to its
national security interests’ (Dominica News 2017).
Details on the numbers and origins of beneficiaries of investor citi-
zenship programmes in other Caribbean states and the Pacific islands
are scarce. However, some information exists for the European coun-
tries engaged in investor citizenship—Bulgaria, Cyprus and Malta. The
Bulgarian investor citizenship scheme attracts far fewer investors than
those in Malta and Cyprus. Paskalev (2014, web) notes that in 2014 in
Bulgaria ‘there was not a single investor naturalised under the current
regime (requiring a minimum investment of €1 million), but there were
about ten pending applications from investors (mostly Russians) who
160  J. DŽANKIĆ

have invested less (a minimum of $250,000 before 2005 and a minimum

of $500,000 up to 2009) but on account of this have already received
permanent residence and have lived in the country for more than
5 years’. In 2017, there were 12 successful applications, and the major
share of applicants was again from the Russian Federation.9
In Malta, the annual reports of the Office of the Regulator of the
Immigrant Investor Programme (ORiip) indicate a large number of
applicants from the former Soviet republics, followed by applicants from
Asia and the Middle East. Interest from other European countries and
from Africa was considerably lower. Due to the frequent changes in
methodology of registering applications (ORiip 2017), it is difficult to
determine exactly how many investors applied and have been granted
the citizenship of Malta on the grounds of investment since the start
of the programme in February 2014 until the publication of the latest
ORiip annual report in June 2017. For example, the First Annual Report
(ORiip 2014, 22) notes that there had been 173 applications under the
IIP, the Second Annual Report (ORiip 2015, 6) and the Third Annual
Report (ORiip 2016, 3) lists 450 such applications. At the same time,
the Third Annual Report (ORiip 2016, 3) states that the total number of
applications since the inception of the programme was 723, as opposed
to the combined numbers from the three annual reports, whereby the
total reached would be 863 applications. Without accounting for this
difference (141 applications) the Fourth Annual Report (ORiip 2017)
lists that a total of 1101 individuals applied for the programme. Press has
reported that the beneficiaries of Malta’s immigrant investor programme
include the New Zealand billionaire Christopher Chandler who made
his fortune in Russia in the early 1990s; Alexey Marey, the former CEO
of Alfa-Bank Russia; Alexander Mechetin, the head of Russia’s major
spirits producer Beluga Group; and magnates of the media, such as
Dimitri Semenikhin or the oil and gas industry, such as Roman Trushev
(McMah 2018).
Similarly, the Cypriot programme, which according to media has pro-
vided passports to 1685 investors and further 1651 dependents between
2008 and 2018, has attracted considerable interest from Middle Eastern
and Russian investors. Examples cited in the press include the Russian
oligarch and aluminium magnate Oleg Deripaska; the former regional
governor in Ukraine and PrivatBank co-founder Igor Kolomoisky;

9 Personal correspondence with an international research team, May 2018.

 5  ‘LONG-DISTANCE CITIZENS’: STRATEGIES AND INTERESTS …  161

Leonid Lebedev, a former Russian parliamentarian and owner of the

oil and gas holding Sintez Group; as well as the Russian industrialist
Alexander Ponomarenko (Farolfi et al. 2018). Due to the favourable
investment climate and low income taxes, Russian investment in Cyprus
was considerable even before the 2012–2013 financial crisis. However,
with the levies imposed through the bailout numerous foreign inves-
tors lost significant shares of their deposits, which may have led to the
withdrawal of foreign funds from the country and further aggravated the
crisis. The government of Cyprus thus opened a special investor citizen-
ship route for those whose deposits have been affected by the levy.10 The
tailoring of the programme was corroborated by the Cypriot authorities
who, ahead of adopting the investor citizenship programme in 2013,
stated that ‘a number of measures to be adopted could on the one hand
mitigate to some extent the damage the Russian business community has
endured’ (Agence France-Presse 2013, web).
The large number of Russian oligarchs purchasing passports of Malta
and Cyprus has generated two types of concerns at the EU level. The
first one has been related to the origins of wealth and the potential for
money laundering through immigrant investor programmes (European
Commission 2019; Financial Times 2018). The second one is the possi-
ble influence of Russian politics in these European countries, due to the
ties of multiple beneficiaries of these programmes to the Russian presi-
dent Vladimir Putin (Farolfi et al. 2018). While neither of these concerns
has been confirmed at the time of writing of this book, the European
institutions monitor the investment-based citizenship and residence pro-
grammes in the EU.

Passports of Convenience: Enhanced Opportunities, Reduced Risks

The global market for passports is one of the symptoms of the trans-
formation of citizenship from a ‘thick bundle of identity, rights, duties
and political engagement that connects individuals to one particular
nation-state’ to a ‘status that comes with “duty free rights” and that can
be easily acquired, renounced and held simultaneously in several states’
(Bauböck 2019, 1015). From the viewpoint of an individual who has
not drawn a ‘winning ticket’ in the birthright lottery (Shachar 2009),
acquiring a second passport would entail a mechanism for rectifying

10 See details in Chapter 6.

162  J. DŽANKIĆ

the inequalities inherent in the very system used for sorting individuals
in different jurisdictions. That is, a mechanism for providing them with
enhanced opportunities and reduced risks.
The demand side of the global market for investor citizenship has
been sparked by these hierarchies of passports and the growing ine-
qualities of wealth in the developing and transitional countries. In an
interview, the chairman of Henley and Partners, one of the major inter-
mediary companies in the ‘citizenship industry’ noted the interest of
beneficiaries from Russia, the Commonwealth of Independent States, the
Middle East and China, highlighting that

people who come from first-world countries cannot even conceive of, or
understand, what it’s like to be a very wealthy person holding a passport
that means you can’t travel anywhere without a visa. We had one man in
here, a South African who was flying around the world. He’d just bought
a private jet. He said to me it was the best half a million dollars he’d ever
spent in his life. With a South African passport he couldn’t go anywhere.
(Bullough 2018)

One of the reasons why individuals from the developing countries would

invest money in a passport lies in the travel opportunities that they
provide. Further to using the passport as a multiple-country, multi-
ple-entry visa, the beneficiaries of investor citizenship are often on
the lookout for a tax regime more favourable than that in their coun-
try of origin. Websites, such as the one of Nomad Capitalist (2018), or
Banyan Publishing (2018; previously Sovereign Society) offer advice
to the wealthy individuals on ‘how to live completely tax-free’ and are
commonly related to the intermediary companies registered in offshore
territories (Abrahamian 2012). More favourable tax regimes have incen-
tivised some US citizens to subscribe to different jurisdictions and give
away their American passports (and thus liability to pay high income and
capital taxes).
The motivations of the Asian investors, however, for obtaining citi-
zenship by investment have been somewhat different, and ‘exit strategy’,
‘security card’ and ‘safety’ have been the most commonly cited reasons.
In an interview with Atossa Abrahamian (2012), an industry represent-
ative noted that ‘[u]ncertainty is a big ‘push’ factor … When North
Korea shoots missiles, we get a lot of South Koreans. When there’s
chaos in Cairo, we get lots of Egyptians on the phone’. The Economist
 5  ‘LONG-DISTANCE CITIZENS’: STRATEGIES AND INTERESTS …  163

Intelligence Unit (2015) reached similar conclusions by interviewing

several Asian beneficiaries of the Cypriot scheme. The country’s proxim-
ity to the Middle East, along with its membership in the EU, provides
the key appeal for applicants. One applicant of Jordanian origin who
had originally been interested in the citizenship of the Bahamas opted
for Cyprus due to ‘the accessibility of Cyprus by sea as well as by air in
case of emergency was a further important factor in the island’s favour’
(Economist Intelligence Unit 2015, 16). The interviewed beneficiary
stated that ‘[i]n case something happens, we can always take a boat and
go to Cyprus’ (Economist Intelligence Unit 2015, 16).
A further motivation that the wealthy may have in obtaining addi-
tional passports is also related to the ‘exit strategy’, yet at a per-
sonal level. As one beneficiary of the programme in St Kitts and Nevis
highlighted:

When (George W.) Bush was elected for the second time, I felt that the
country was going to be in such a downward spiral […] They were elim-
inating freedoms, restricting the bill of rights. It’s so hard to keep your-
self out of trouble. If the IRS thinks you’re doing something wrong and
audit you, they make your life a nightmare … they run you to the ground.
(Abrahamian 2012)

This implies that there may also be beneficiaries of investor schemes that
seek to avoid the legal consequences of some of their actions. While
such cases are empirically difficult to identify, the example of Thaksin
Shinavatra that you may remember from the introduction to this book
perfectly illustrates this kind of incentive to obtain a passport through
investment. It equally represents one of the ‘darker sides’ of the global
investor citizenship market.

Conclusion
The rise of the global market for the sale of passports seems to be an
inevitable symptom of the competition for resources that is taking
place across continents, among states, individuals and private corpo-
rations. This symptom of the global race for wealth has as its outcome
the creation of ‘long-distance citizens’, or individuals where the pass-
port performs an instrumental function not as much as in enabling but
in facilitating access of goods and services in different jurisdictions.
164  J. DŽANKIĆ

As a consequence, passports have paradoxically become a part of a luxury

market, whereby they are not used only to attest to a legal status but also
to symbolise a social one. Global inequalities have thus played a key role
in sustaining the growth of the investor citizenship market.
Looking into a range of questions related to the global market for the
sale of citizenship, this chapter first explored the conditions that enabled
the rise of the different components of the so-called citizenship industry.
Inequalities of wealth, not only among nations, but also within countries
seem to be important drivers of both the ‘supply’ and the ‘demand’ sides
of the market. States opening up investor citizenship programmes are
commonly small and/or economically weak. Yet due to their historical
relationship with colonial powers, their passports offer a good visa-free
access around the world. In such countries, immigrant investor pro-
grammes may contribute significantly to their GDPs, especially in cases
of countries that do not implement investor migration as isolates but
rather enter the market through franchising access to citizenship on the
basis of investment (van Fossen 2018). In both cases, however, investor
citizenship programmes bear risks of abuse due to the large amounts of
money involved, the lack of transparency and the potential for corrup-
tion of public officials.
Franchising mentioned in the management of investor citizenship
programmes represents not only the second element of the supply side
of the global market but also a bridge between governments and their
prospective long-distance citizens. Over the last decade, the number of
such intermediary companies has grown considerably, and they nowadays
offer a diversified range of services to governments and beneficiaries of
investment-based migration. They develop legislation, and implement
some aspects of the programme on behalf of governments (e.g. due dil-
igence, application processing, marketing); they provide services, such
as application handling or investment management for the beneficiaries
of these programmes. Having stakes in both sides of the global market
for investor citizenship, such companies, in fact, drive the global market
for investor citizenship. For example, once the government of St Kitts
and Nevis offers a passport to an investor citizen and their family, these
people and their descendents will no longer be in need of acquiring the
passport of this country. In this sense, the ‘demand’ of such persons is
lost for St Kitts and Nevis. However, it still exists for the intermediaries
because the mentioned individuals may be interested in obtaining further
investor citizenships (e.g. the one of Malta, which would grant them the
 5  ‘LONG-DISTANCE CITIZENS’: STRATEGIES AND INTERESTS …  165

rights of EU citizenship). This indicates that the likely future trend in

this respect is the greater lobbying by intermediaries with governments
for opening up new investor citizenship programmes and more aggres-
sive marketing strategies that will entail the ranking of passports on a
number of counts, or branding of particular groups of countries.
Finally, the investor citizenship market would not function without its
demand side, constituted of the top echelons of the world’s wealthiest
individuals from developing or transitional countries. Due to the high
financial requirements, investor passports are available only to a small
number of affluent individuals, most of whom live in the developed (not
developing) countries. However, the demand for investor citizenship
come from countries in which individuals would benefit from a citizen-
ship status that offers them additional opportunities compared to those
they received through birthright. These include providing an ‘access
card’ to tax havens, or facilitating travel, lifestyles and conspicuous con-
sumption patterns; or an ‘exit card’ from physically unsafe environments
and liability before the law in different jurisdictions.

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 CHAPTER 6

Ius pecuniae in a Multilevel System:

The European Experience

When I speak on the topic of investor citizenship in the European

Union, I often start by citing Sam Spade—the legendary detective played
by Humphrey Bogart in the 1941 The Maltese Falcon—on what money
can buy. The issue of the sale of passports has emerged on the European
agenda precisely due to the small Mediterranean island, whose govern-
ment had decided in October 2013 to allow the wealthy individuals who
invest €650,000 to become Maltese, and by extension, EU citizens. The
country’s decision sparked fierce reactions within Malta, among other
Member States and prompted discussions at the supranational level.
As a result, in mid-January 2014, the European Parliament (EP) held
a debate entitled ‘EU citizenship for sale’, to discuss the programmes
adopted by a number of Member States offering either residence or cit-
izenship on the grounds of investment. The outcome of the EP debate
was a resolution (2013/2995[RSP]), ascertaining that the matters
related to citizenship are indeed an area of exclusive competence of the
Member States, but that in regulating their membership, states should
uphold the values enshrined in the EU treaties, with particular regard
to mutual trust and rights attached to EU citizenship. Following the
EP debate and talks with the European Commission, Malta amended its
investor citizenship programme to include a cap and a one-year ‘effective
residence’ requirement but continued to implement its programme for
naturalising wealthy individuals. Malta’s investor citizenship programme
would be neither as significant nor so contested were it not linked to

© The Author(s) 2019 171

J. Džankić, The Global Market for Investor
Citizenship, Politics of Citizenship and Migration,
https://doi.org/10.1007/978-3-030-17632-7_6
172  J. DŽANKIĆ

the simultaneous acquisition of EU citizenship, a status that offers rights

across the whole territory of the Union to its holders, as well as consular
protection by any Member State while abroad.
Taking into account the particularities of the European Union’s mul-
tilevel citizenship structure, the objective of this chapter is to discuss the
marketisation of national membership in the EU, taking into account:
(a) the unique features of EU citizenship; (b) the role of European
institutions; (c) the limits of EU law; and (d) characteristics of states, as
well as interests and identities they articulate in citizenship policies. To
do so, the chapter starts with a section that examines the links between
membership in national and supranational polities and highlights the
EU’s specificities. This is followed by an empirical classification of the
different investor and residence schemes in the 28 Member States and
case studies of the three passport-for-sale schemes (Bulgaria, Cyprus and
Malta). Using the same tools as in Chapter 4, this section maps how dif-
ferent EU countries regulate access to membership on the grounds of
wealth. The final parts of the chapter are dedicated to the discussion of
the legal, political and symbolic effects of such programmes on the intri-
cate dynamics between national and EU citizenships.

Complexities of Citizenship in Nested Polities

The complex two-way relationship between investor citizenship and res-
idence programmes, and EU citizenship emanates from the relationship
between national and EU citizenship. The latter has been established
by the Maastricht Treaty as a mechanism of promoting European val-
ues and identity, while protecting the rights of citizens who at the time
were affected by increasing integration dynamics. The array of rights
attached to EU citizenship has amplified with the Treaty of Amsterdam
and the Lisbon Treaty to include the rights of free movement, diplo-
matic protection, linguistic rights, and rights of direct representation in
the municipal and European Parliament elections. However, the Danish
rejection of the Maastricht Treaty in 1992 resulted in two provisions
ascertaining that the supranational EU citizenship is only complementary
to national citizenship. The guarantees that EU citizenship is not a fed-
eral one have thus been articulated in Articles 9 and 20 of the Treaty on
the Functioning of the European Union, confirming that the EU citi-
zenship ‘shall be additional to and not replace national citizenship’. In
other words, individuals possessing the citizenship of any of the Member
 6  IUS PECUNIAE IN A MULTILEVEL SYSTEM: THE EUROPEAN EXPERIENCE  173

States can claim benefits from the rights attached to EU citizenship,

while the Member States have the sole prerogative to decide on their
membership.1 In other words, EU citizenship does not and cannot exist
on its own, but is linked to the possession of citizenship status in one
of the Member States. This entanglement between rights and statuses at
national and supranational levels is not static; rather, it has evolved over
the years. According to Dora Kostakopoulou (2007, 2018), a series of
judgements of the Court of Justice have transformed EU citizenship
from a symbolic umbrella that provided a shell for the existing rights
within the free market into a political institution.
The initial bundle of rights contained in the Maastricht Treaty
indeed replicated the free movement rules that had previously existed
(Articles 39, 43 and 49 of the Treaty Establishing the European
Community (TEC), consolidated version), and complemented them
with non-discrimination that also existed in the TEC (Article 12). Yet
already in 1992, the Court of Justice had delivered the Micheletti rul-
ing (C-369/90 Mario Vicente Micheletti and others v Delegación del
Gobierno en Cantabria [1992] ECR I-04239),2 which established
mutual recognition of decisions regulating nationality matters among the
Member States, ‘having due regard to community law’. The principle of
mutual recognition has subsequently been applied in a number of cases.3
Its relationship however to the notion of ‘due regard to community law’
was central to the Rottmann judgement (C-135/08, Janko Rottmann

1 However, the European Court of Justice ruling Janko Rottmann v Freistaat Bayern

(Case C-135/08) confirmed that the Member States must observe the principle of propor-
tionality regarding withdrawals of citizenship.
2 Mr. Micheletti was a dual national of Argentina and Italy, who obtained Italian nation-

ality on the basis of the October 1971 bilateral treaty between the two countries. The
treaty enabled the re-acquisition of the dormant status of Italian citizenship to emigrants to
Argentina once they would take up residence in Italy. Exercising his free movement rights
connected to his Italian citizenship, Mr. Micheletti sought to relocate to Spain and open
a dental practice. His settlement permit was refused on the grounds that his habitual resi-
dence was not in Italy and that his use of the country’s nationality was instrumental. The
court ruled that under international law, EU countries are bound to respect naturalisation
decisions adopted by other Member States, and that Member States as such have the pre-
rogative to decide on the rules of acquisition and loss.
3 For example, mutual recognition was applied in Chen and Zhu (C-200/02—Zhu and

Chen v Secretary of State for the Home Department [2004] ECR I-9925), when Irish cit-
izenship of a child obtained through ius soli became the grounds for the parents to obtain
residence rights in the UK through the related EU citizenship rights.
174  J. DŽANKIĆ

v Freistaat Bayern, [2010] ECR I-01449),4 in which the court stated

that ‘[n]evertheless, the fact that a matter falls within the competence of
the Member States does not alter the fact that, in situations covered by
European Union law, the national rules concerned must have due
regard to the latter’. Even though the Member States retained the pre-
rogative to decide on the acquisition and loss of nationality, when the
exercise of this prerogative affects some of the ‘rights conferred and pro-
tected by the legal order of the Union’, judicial review in the context of
EU law would need to be made available.
While dealing with the loss of the status of EU citizenship of a per-
son who had already enjoyed its rights, principles enshrined in Rottmann
have indicated that ‘due regard to community law’ may also be invoked
in matters related to the acquisition of citizenship. The latter principle
has already been called upon in the context of investor citizenship in the
EU. The European Commission threatened the infringement procedure
when Malta adopted the first version of the IIP, foreseeing an outright
sale of passports. The Commission’s argument was that the exclusion of
any condition attesting to an individual’s ‘genuine connection’ to Malta
violated the duty of sincere cooperation enshrined in Article 4(3) of the
TFEU. That is, since the acquisition of citizenship of any EU Member
State grants automatic access to the rights of EU citizenship, in matters
regulating the acquisition of citizenship, countries are expected to pay
due regard to obligations emanating from the treaties. Limitations to
this principle are rooted in the tension between the derivative nature of
EU citizenship and the prerogative of the Member States to decide upon
mechanisms for admitting citizens.

The Derivative Character of EU Citizenship

Unlike national citizenships, EU citizenship is a status attached to a spe-
cific array of rights promulgated in the treaties. Many of these rights are

4 Janko Rottmann, originally an Austrian national, became an EU citizen after Austria’s

accession in 1995. Upon exercising his free movement rights, Rottmann moved to the
German federal state of Bavaria, where he naturalised in 1999. Upon naturalisation in
Germany, Rottmann lost his Austrian nationality ex lege. Upon discovering that Rottmann
had not mentioned the court proceedings for fraud that were pending against him in
Austria at the time of naturalisation, the authorities of Bayern withdrew his German citi-
zenship (on the basis of fraud). As a result, Rottmann was rendered stateless, and had also
lost all rights he had previously held as an EU citizen.
 6  IUS PECUNIAE IN A MULTILEVEL SYSTEM: THE EUROPEAN EXPERIENCE  175

de facto activated only when an individual crosses the borders of the

Member State where they are a citizen. These two aspects of the rela-
tionship between national and EU citizenship are very much entangled,
and are of particular relevance for understanding how access to national
citizenship through investment can be seen as a challenge to the sym-
bolic and democratic values underpinning European citizenship.
The relationship between national and EU citizenship can best be
described as that of a ‘citizenship constellation’ (Bauböck 2010, 848).
This relationship takes the shape of ‘a structure in which individuals are
simultaneously linked to several political entities, so that their legal rights
and duties are determined not only by one political authority, but by
several’ (Bauböck 2010, 848). The idea of a ‘citizenship constellation’
was developed to explain two dynamics. First, it refers to the overlapping
rights, duties and statuses that exist in the context of individual migra-
tion, thus horizontally. Second, ‘citizenship constellations’ are also a
framework that can explain the hierarchies of statuses and rights in states
formed by subnational polities (e.g. federations, confederations), as well
as those in supranational polities established by sovereign states (e.g.
the EU). Applying the principle to the case of EU citizenship, we can
observe both similarities to and differences from the ways in which sta-
tuses and rights are related to each other in other multilevel polities, such
as federal states.
Indeed, EU citizenship has evolved to give certain political rights to
individuals beyond the territorial boundaries of their Member States (see
Table 6.1). The transfer of these rights also occurs in cases of federal and
confederal states, whereby membership in the nested polity results in the
transfer of rights to subnational polities. Access to statuses in these poli-
ties is linked, and the possession of citizenship in the federation enables
individuals to exercise rights in different territorial units that it is com-
posed of. Yet the nature of the transfer of rights between the Member
States and the EU is very much different from that in federations and
confederations. In the latter, the rights of citizenship are derived both
‘top-down’ and ‘bottom up’. This means that the nested (federal) cit-
izenship gives access to rights at subnational level. By definition, the
encompassing polity (federation) is the access point for citizenship sta-
tus and rights, which are then distributed to subnational polities. Some
exceptions from this general definition exist, such as those in Austria and
Germany where federal provinces have some discretion in controlling
migrants’ access to citizenship; or in Switzerland, where cantonal and
176  J. DŽANKIĆ

municipal citizenships give rise to federal citizenship (Bauböck 2007).

Even in these cases, the power of subnational units is derived from the
federal level. By contrast, the status of EU citizenship is exclusively reg-
ulated by national naturalisation conditions, while the transfer of rights
is based on a bottom-up dynamic. That is, the access to the rights of
EU citizenship is derived by automatism from the national level by rule,
but not vice versa. As we have seen in the Rottmann case, the relation-
ship between the two levels is more complex in cases when an individual
has already exercised such rights and is at risk of losing them through
citizenship deprivation. However, individuals cannot obtain EU citizen-
ship directly, and then opt for citizenship of one of the Union’s Member
States on the basis of this status. Hence national membership becomes
an access point to claiming the status of an EU citizen and the associated
rights.
Once individuals can benefit from the status of EU citizenship, they
may choose to activate the rights associated with it (Kostakopoulou
2007). This possibility of activation is another point of differentiation
between EU citizenship and citizenship in tightly coupled multilevel
polities, such as federal states. In the latter, most tiers of citizenship are
active for an individual at any given time. In the former, most of the
rights of EU citizenship, as presented schematically in Table 6.1, are
enforceable through mobility, i.e. once the individual crosses the physical
boundaries of their own Member State. Furthermore, rights of EU citi-
zenship can be activated both within the EU and outside it (e.g. diplo-
matic and consular protection).
The basic implication of information presented in Table 6.1 is that
EU citizenship enhances the value of national citizenship. As we have
seen in the previous chapter, these additional rights—enforceable beyond
the specific Member State’s borders—have been the ‘key selling point’ in
countries operating investor citizenship programmes. Such an approach
has been widely criticised for commodifying and distorting the meaning
of membership at both national and European levels. It has been argued
that the practice of the sale of passports in the EU challenges the val-
ues of European citizenship (Shachar and Bauböck 2014), which has not
been intended as an instrument for selectively amplifying the national
membership, but rather as a set of rights reflecting sincere cooperation
and mutual trust among the Member States.
 6  IUS PECUNIAE IN A MULTILEVEL SYSTEM: THE EUROPEAN EXPERIENCE  177

Table 6.1  Activation of EU citizenship rights

Article Right Active Active

in MS abroad

Political rights
Article 22 Voting in European elections: a right to ✓
vote and stand in elections to the European
Parliament, in an EU Member State other
than their own
Article 22 Voting in municipal elections: a right to ✓
vote and stand in local elections in an EU
state other than their own, under the same
conditions as the nationals of that state
Article 15 Accessing documents of EU institutions: ✓ ✓
a right of access to European Parliament,
Council and Commission documents
Article 24 Petition to the European Parliament and ✓ ✓
the Ombudsman: the right to petition the
European Parliament and the right to apply
to the European Ombudsman
Article 24 Communication rights: the right to write ✓ ✓
to the EU institutions in one of the official
languages and to receive a reply in the same
language
Rights of free movement
Article 21 Right to free movement and residence: ✓
a right of free movement and residence in
the entire EU, and the right to work in any
position (including national civil services,
unless those involve safeguarding the national
interests of Member States)
Article 18 Freedom from discrimination on grounds ✓
of nationality: a right not to be discrim-
inated against on grounds of nationality
within the scope of application of the Treaty
Rights abroad
Article 23 Right to consular protection: an entitle- ✓
ment to protection by the diplomatic or
consular authorities of any other Member
State when in a third country, if there are no
diplomatic or consular authorities from the
citizen’s own state
178  J. DŽANKIĆ

Multilevel Citizenship: Approaches to Articulating Interests

and Identities
The question of investor citizenship in the EU is particularly important
in the context of understanding how identities and interests contained
in citizenship policies are regulated and articulated at different levels. As
we will see in the empirical analysis, many of the EU’s Member States
offer legal routes through which affluent individuals can become their
residents or citizens. In some cases, in addition to investment, the only
additional requirements include security-related certification (e.g. clean
criminal record, no threat to public order) or a symbolic act (e.g. oath
of allegiance). In such cases, the grant of citizenship is instrumental,
because ‘individual citizens are like a joint-stock company in which fel-
low-citizens invest’ (Magni-Berton 2014). Within this ‘stockholder cit-
izenship’, investors see their membership in a polity as instrumental to
the materialisation of their personal interest. In the case of EU citizen-
ship, such personal interest is related to the possibility of using the rights
of EU citizenship, rather than those of national citizenship.
Yet in some EU Member States, the exchange of membership for
money is either not possible, or it is more complex and accompanied by
multiple conditions. These conditions may correspond to the ones for
ordinary migrants or be facilitated when compared to them. In particu-
lar, in the former case, they articulate the objective of states to grant citi-
zenship on the basis of a substantial rather than an instrumental interest.
As a consequence, the grant of residence rights and the opening up of
a path to citizenship for investors requires relocation to the destination
country, coupled by multiannual physical presence, and their social and
economic integration. In such cases, the eventual grant of citizenship is
closer to Bauböck’s ‘stakeholder’ model, which entails the idea of con-
ceiving demos in the polity in the increasingly transnational communities
through the idea of conferring membership to those whose interests are
fundamentally affected by communal decisions.
If we look at the different types of investment-based programmes in
the EU, we can, in principle, associate the investor citizenship schemes
and discretionary naturalisation on grounds of investment with the
stockholder approach. This presumes that we cannot think of investors
as stakeholders in the community, because they have only an acciden-
tal and instrumental interest in citizenship in a state that offers them a
favourable investment environment. Equally, those path-to-citizenship
investor programmes that require the individual to make the destination
 6  IUS PECUNIAE IN A MULTILEVEL SYSTEM: THE EUROPEAN EXPERIENCE  179

country the focal point of their activities may be closer to the stakeholder
approach. However, this divide is not a clear-cut one. There are cases
of investor residence programmes (with virtually no physical presence
requirements), which have been designed as less expensive options for
investors to access EU citizenship after holding a residence permit for a
few years.

Mapping Investment-Based Citizenship

and Residence Schemes in the EU

Given that the states have the ultimate competence in establishing con-
ditions for admitting new members, citizenship by investment can
be obtained in different ways across the EU. Investment may result in
the outright conferral of citizenship, or it may enable the individual to
reside in a country and acquire citizenship by meeting other naturalisa-
tion criteria. In line with the typology presented in Chapter 4, we can
distinguish between (1) discretionary naturalisation on grounds of (eco-
nomic) national interest; (2) investor citizenship programmes, whereby
investment leads to full membership with or without further criteria, and
(3) investor residence and entrepreneurial programmes (pecuniary con-
tribution is the basis for obtaining residence rights; citizenship is condi-
tioned by meeting some or all other ordinary naturalisation conditions).
In the first two types of these programmes citizenship is the direct
outcome of investment. Discretionary naturalisation through ‘national
interest’ is widespread around the world, and naturalising individuals on
the grounds of cultural, economic or other achievements is also a com-
mon practice in European countries. Unlike the Caribbean and Pacific
micro-states and Turkey, no EU Member State formally foresees an out-
right exchange between citizenship and money. Rather, Bulgaria, Malta
and Cyprus operate investor citizenship programmes, which entail some
form of mandatory residence prior to naturalisation. In all three cases,
the residence requirement is of one year, and it entails registration of
address rather than physical presence. Further to the major of residence
requirements that would apply to other types of migrants, other natu-
ralisation conditions including language or integration are also waived.
Following a security clearance, the depositing of the required funds,
the lapse of the required registered residence, and oath of allegiance
(where required) investors are granted national citizenship of Bulgaria,
Malta and Cyprus and thus the status of EU citizens. From among the
180  J. DŽANKIĆ

EU countries, Romania has a provision through which it can reduce the

ordinary residence requirement for investors from eight to four years
(Article 8(2)d, Romanian Citizenship Act), while maintaining other
naturalisation conditions, including age, loyalty to the Romanian state,
clean criminal record, language and culture, and the knowledge of the
Constitution and the anthem. While this provision has the objective of
facilitating admission of investors, it has not been conceived as an inves-
tor scheme. This case is therefore considered to be a hybrid, composed
of elements of the state’s discretion to facilitate naturalisation on the
basis of national interest, with the element of the pecuniary contribution
(often found in programmes targeting investors).
In addition to the above-mentioned programmes, in autumn 2018,
23 EU Member States ran a total of 27 programmes that enable inves-
tors to obtain residence rights and thus a path to citizenship.5 In Cyprus,
Greece,6 Malta, Ireland, Spain and Portugal obtaining and maintaining
residence rights through investment is significantly facilitated compared
to other routes, such as employment, marriage or humanitarian rea-
sons. In most countries, however, including Bulgaria, Croatia, Czech
Republic, Estonia, France, Greece, Latvia, Lithuania, the Netherlands,
Romania and the UK, residence rights granted to investors are equiva-
lent to those of other immigrants and entail continuous physical pres-
ence and other conditions for maintaining status. In Belgium, Germany,7
Italy, Poland, Slovakia and Slovenia, obtaining residence rights on
the basis of investment is possible. However, the amounts of invest-
ment or the details on the types of residence are not stipulated in laws.
Differences in regulating these statuses reveal the plethora of approaches
to national, and by extension, to EU citizenship.

5 Some countries have more than one programme.

6 The 2005 programme offered ordinary residence rights in Greece. The programme
was amended in 2014 to facilitate residence rights for investors (minimum requirements of
physical presence).
7 Until August 2012, Germany offered an investor residence scheme to applicants

who invested €250,000 and created ten jobs. Amendments to Article 21 of the German
Residence Act abolished the minimum thresholds for investment, but retained an entrepre-
neurial programme, granting a higher discretion to the authorities to decide on the eco-
nomic priorities of the state.
 6  IUS PECUNIAE IN A MULTILEVEL SYSTEM: THE EUROPEAN EXPERIENCE  181

Discretionary Naturalisation of Investors

A vast majority of EU Member States can facilitate naturalisation of for-
eign nationals on the grounds of their exceptional contribution to the
country’s society, economy, sports or culture. In using their prerogative
on how to constitute the demos and decide on those who have ‘earned’
enough to be their nationals, states may waive some or all of the natural-
isation conditions applicable to other kinds of aspiring citizens. The data
at the Global Citizenship Observatory (GLOBALCIT 2017) indicate
that out of the 28 Member States of the EU, 22 allow discretionary nat-
uralisation on the grounds of special achievements, which may include,
in addition to the economic interest, cultural, sports or scientific. In
only four of them, namely Austria, Bulgaria, Slovakia and Slovenia, ‘eco-
nomic’ or ‘commercial’ interest has been mentioned in the nationality
law as grounds for facilitated naturalisation. In 19 countries of the EU,
provisions on naturalisation based on national interest do not explicitly
mention economic contribution. The practice of the 28 Member States
of the EU regarding this type of facilitated naturalisation is presented in
Table 6.2.
As Table 6.2 shows, authorities in most countries have the right to
waive the residence requirement completely. In Austria, Belgium, Czech
Republic, France, Germany, Lithuania, the Netherlands and Romania,
this requirement exists even though, in some cases, the authorities may
use the discretionary powers to reduce it. In Romania, for ‘honorary
citizenship’, which does not grant full membership rights such as elec-
toral rights, the residence requirement can be completely abolished. Full
citizenship, granted under Article 8(2) requires four years of residence
in the country. In Austria, if citizenship is conferred on grounds of the
constitutional provision 10(6), the residence is completely waived, while
if the applicant is granted admission under Article 11 of the Nationality
Act, the mandatory residence equals six years. In almost all cases, appli-
cants are exempt from ordinary naturalisation conditions, such as lan-
guage, socialisation or subsistence. In countries such as Belgium or
Lithuania, language knowledge may further facilitate the processing of
an application. Furthermore, in discretionary naturalisation procedures,
applicants themselves are commonly exempt from providing a certifi-
cate for criminal record before domestic courts. However, authorities
may perform discretionary checks.
182  J. DŽANKIĆ

Table 6.2  Discretionary naturalisation on grounds of national interest in the

EU Member Statesa

Country (Article Provision Economic Residence

in Nat. Law) interest
(explicit)

Austria (11(4)) Person has been resident in Austria for 6 years ✓ ✓

and acquisition of citizenship is in the interest
of the country in the field of science, com-
merce, the arts or sport
Instead of the 10 years of residence required for
ordinary naturalisation, this Article provides the
discretionary right to authorities to reduce the
residence to 6 years to persons with an actual or
expected outstanding achievement. The investor
is expected to comply with the all other ordinary
naturalisation conditions, including language,
renunciation of other citizenship, socialisation
and secure income. Discretionary security screen-
ing applied
Austria (10(6)) Person has past or future achievements that are
in the special interest of Austria (constitutional
provision)
No residence or secure income requirement and
no renunciation of previous citizenship. No spe-
cific mention of investors, but may apply to them.
Discretionary security screening applied
Belgium (19) Person legally resides in Belgium and has ✓
demonstrated exceptional achievements (sci-
entific, sports, culture) that are in the special
interest of the country
No specific mention of investors, but may apply
to them. Applicants are required to demonstrate
that they are unable to obtain citizenship in other
ways. There are no formal language tests or inte-
gration requirements, but knowledge of official
languages of Belgium enhances an applicant’s
possibility for being naturalised. Discretionary
security screening applied

(continued)
 6  IUS PECUNIAE IN A MULTILEVEL SYSTEM: THE EUROPEAN EXPERIENCE  183

Table 6.2  (continued)

Country (Article Provision Economic Residence

in Nat. Law) interest
(explicit)
Bulgaria (16) Person has special achievements in the social ✓
and economic sphere, in science, technology,
culture or sports
All conditions applicable to ordinary applicants
are waived. Discretionary security screening
applied
Croatia (12.1) Person is someone whose acquisition of citizen-
ship would be in the special interest of Croatia
No specific mention of investors, but may apply
to them. All conditions applicable to ordinary
applicants are waived. Discretionary security
screening applied
Cyprus (CYP Person has performed special services to Cyprus ✓
111, Schedule 3 for reasons of public interest
Article 2(f)) No specific mention of investors, but may apply
to them. All conditions applicable to ordinary
applicants are waived. Discretionary security
screening applied. Persons must not be on the list
of individuals whose property has been frozen by
the EU
Czech Republic Person whose naturalisation is of benefit to the ✓
(16) Czech Republic in the fields of science, educa-
tion, culture, sports, or if it serves to implement
the international commitments of the Czech
Republic, humanitarian purposes or another
state interest
No specific mention of investors, but may apply
to them. Language and integration conditions
waived. Permanent residence and clean criminal
record required. Discretionary security screening
applied
Estonia (10) Person has special merits in the area of science,
culture, sports or in other areas (maximum of
10 persons per year)
All conditions applicable to ordinary applicants
are waived except from renunciation of other citi-
zenship. Discretionary security screening applied

(continued)
184  J. DŽANKIĆ

Table 6.2  (continued)

Country (Article Provision Economic Residence

in Nat. Law) interest
(explicit)
France (21- Person is someone with exceptional services ✓
19(6), 21-18(2), for France or a case of special public interest,
21-21) has rendered or could render importance
services for France because of their capabilities
and talents, or is of French background and
contributes to the reputation of France and its
international economic relations with their high
skills. Residence requirement varies (maximum
2 years)
If the alien resides abroad but ‘exercises a private
or public professional activity on behalf of the
French state or of a body whose activity is of
special interest for French economy or culture’
their residence is counted as residence in France
(21–26)
All conditions applicable to ordinary appli-
cants are waived except for language knowledge.
Discretionary security screening applied
Germany (8) Person has been resident in Germany for ✓
3 years and their acquisition of citizenship is in
the special interest of the country, e.g. in the
field of science, research, trade and industry,
arts, culture, media, sports or public service
Residence, legal capacity and accommodation
retained as criteria. Discretionary security screen-
ing applied
Greece (13, 5(3)) Person has provided extraordinary services to
Greece or their naturalisation would serve the
country’s extraordinary interests
No specific mention of investors, but may apply
to them. All conditions applicable to ordinary
applicants are waived. Discretionary security
screening applied
Hungary (4(7)) Person serves an important interest of Hungary
No specific mention of investors, but may apply
to them. All conditions applicable to ordinary
applicants are waived. Discretionary security
screening applied
(continued)
 6  IUS PECUNIAE IN A MULTILEVEL SYSTEM: THE EUROPEAN EXPERIENCE  185

Table 6.2  (continued)

Country (Article Provision Economic Residence

in Nat. Law) interest
(explicit)
Ireland (12) Person has done something important and
noticeable or rendered distinguished service to
Ireland, or is the child or grandchild of such a
person
No specific mention of investors, but may apply
to them. All conditions applicable to ordinary
applicants are waived. Discretionary security
screening applied
Italy (9(2)) Person has rendered distinguished services to
Italy or the acquisition of citizenship would
serve outstanding public interests
No specific mention of investors, but may apply
to them. All conditions applicable to ordinary
applicants are waived. Discretionary security
screening applied
Latvia (13) Person has rendered special meritorious service
for the benefit of Latvia
No specific mention of investors, but may apply
to them. All conditions applicable to ordinary
applicants are waived. Discretionary security
screening applied
Lithuania (20) Person makes a substantial contribution to ✓
strengthening Lithuanian statehood, to increas-
ing the country’s might and to promoting its
authority in the international community
No specific mention of investors, but may apply
to them. Conditions applicable to ordinary
applicants are waived, except for language or
permanent residence. Permanent residence
condition may be waived if the applicant can
communicate in Lithuanian or offer any other
tangible evidence of integration in Lithuania.
Discretionary security screening applied
Luxembourg (8) Person has rendered exceptional services to
Luxembourg
No specific mention of investors, but may apply
to them. All conditions applicable to ordinary
applicants are waived. Discretionary security
screening applied
(continued)
186  J. DŽANKIĆ

Table 6.2  (continued)

Country (Article Provision Economic Residence

in Nat. Law) interest
(explicit)
Malta (10(9)) Person has rendered exceptional services to
Malta or to humanity
No specific mention of investors, but may apply to
them. All conditions applicable to ordinary appli-
cants are waived, except for oath of allegiance.
Discretionary security screening applied
Netherlands (10) Person is a special case ✓
No specific mention of investors, but may apply
to them. Conditions applicable to ordinary
applicants are waived, except from permanent
residence permit (no length of residence specified).
Discretionary security screening applied
Portugal (6(6)) Person has rendered or is called to render rele-
vant services to Portugal or to the Portuguese
community
No specific mention of investors, but may apply
to them. All conditions applicable to ordinary
applicants are waived. Discretionary security
screening applied
Romania (8(1), Person has made an exceptional contribution
36) to Romania. There are two different fully
discretionary procedures. Under Article 8(1),
all substantial conditions are waived, but the
procedure is initiated by the applicant. Under
Article 36, the procedure is initiated by the
government and citizenship is granted through
parliamentary decree. Honourable citizens who
have received citizenship on the grounds of
Article 36 enjoy all the civil and political rights
that are acknowledged to Romanian citizens,
except for the right to elect and be elected and
to hold a public office
No specific mention of investors, but may apply
to them. All conditions applicable to ordinary
applicants are waived. Discretionary security
screening applied
(continued)
 6  IUS PECUNIAE IN A MULTILEVEL SYSTEM: THE EUROPEAN EXPERIENCE  187

Table 6.2  (continued)

Country (Article Provision Economic Residence

in Nat. Law) interest
(explicit)
Romania (8)(2) Person is an internationally famous personality ✓
and is born in and resident in Romania, or has
been resident there for 4 years
No specific mention of investors, but may apply to
them. All conditions applicable to ordinary appli-
cants are retained, and residence is reduced to
from 8 to 4 years. Discretionary security screening
applied
Slovakia (7) Person is someone of special benefit to Slovakia ✓
in the area of economics, science, technology,
culture, sport or society, or the person’s acqui-
sition is otherwise in the interest of the country
Explicit mention of economic interest. All
conditions applicable to ordinary applicants are
waived. Discretionary security screening applied
Slovenia (13) Person is an adult whose acquisition of citi- ✓
zenship is beneficial for the country due to
scientific, economic, cultural, national or other
similar reasons
Explicit mention of economic interest. All
conditions applicable to ordinary applicants
are waived except for subsistence. Discretionary
security screening applied
aConstructed by this author with data available at: GLOBALCIT (2017). Global Database on Modes of

Acquisition of Citizenship. San Domenico di Fiesole: European University Institute. http://globalcit.

eu/acquisition-citizenship/. See information under ‘Mode A24, Special Achievements’. Complemented
with information from national citizenship laws

Table 6.2 also indicates that in only 4 out of 22 countries imple-

menting this type of facilitated naturalisation, namely Austria,8 Bulgaria,
Slovakia and Slovenia, ‘economic’ or ‘commercial’ interest has been
mentioned in the nationality law as grounds for facilitated naturalisa-
tion. With the exception of Austria, the remaining three countries do not
require residence on their soil. Slovakia and Slovenia have the require-
ment for applicants to provide evidence of sufficient means, evidenced by

8 Provision 11(4), for 10(6), see below.

188  J. DŽANKIĆ

tax certificates, payslips, etc. In 19 countries of the EU,9 provisions on

discretionary naturalisation on the grounds of national interest do not
explicitly mention economic interest. Even so, the state has the discre-
tion to equalise the investment with ‘special interest’, or ‘exceptional ser-
vices’ rendered to the state.
In terms of procedures, in most cases, the applicant is proposed by a
line Ministry (e.g. Ministry of Culture, Ministry of Sports), and passed
on to the authority dealing with citizenship matters within the ministry
of justice or interior. Applications are then screened for completeness
and also undergo a security screening by the state’s intelligence services.
Yet exceptions to this general procedural line exist across a number of
Member States. For example, in Hungary, the deputy prime minister
makes the proposal, and following a security screening passes it on to
the country’s president, who in turn has the discretion to waive natu-
ralisation conditions (Article 4(7), Hungarian Citizenship Law). In
Ireland, the discretionary conferral of citizenship is the prerogative of
the president (Article 12, Irish Citizenship Act), and of the parliament in
Lithuania (Article 13, Lithuanian Citizenship Act). In Luxembourg and
Bulgaria (Article 8, Luxembourg Citizenship Act; Article 16, Bulgarian
Citizenship Act), national parliaments act on the proposal of the coun-
try’s executive. In Malta, by contrast, the minister for identity manage-
ment is the sole authority that can decide on the discretionary grant of
citizenship on the basis of exceptional achievements.
The different conditions, institutions and meanings of national inter-
est shows that there is no single approach of the EU Member States to
facilitated naturalisation on the grounds of national interest. A particu-
lar country may consider a pecuniary contribution of a certain amount
sufficient grounds for naturalisation. Yet, the same investment may be
nowhere near the necessary minimum condition in the other Member
States, which may also require residence, language, etc. At the global
level, this might simply illustrate the plethora of national approaches to
citizenship. We also see such approaches in other types of naturalisation.
However, in the EU it has a particular implication precisely because the
possession of citizenship in one Member State grants Union-wide rights.
As a consequence, asymmetries in rules and procedures for the discre-
tionary conferral of citizenship, especially on the grounds of a broadly

9 Austria has both types.

 6  IUS PECUNIAE IN A MULTILEVEL SYSTEM: THE EUROPEAN EXPERIENCE  189

defined ‘national interest’, which could be articulated as investment, may

indicate a dire need for rethinking the approaches to membership across
the EU.

Investor Citizenship Programmes in the EU

As of October 2018, there exist three EU Member States with investor
citizenship programmes—Bulgaria, Cyprus and Malta. Neither of these
programmes formally foresees the outright purchase of the passport, as
is the case in the Caribbean and Pacific islands or Turkey, but all require
one year of residence in the respective country prior to the acquisition of
citizenship. However, in the absence of harmonised definitions and regu-
lation of ‘residence’ across the Member States, the residence requirement
in the European investor citizenship programmes does not presume con-
tinuous physical presence but rather only a registration. The Bulgarian
programme is somewhat different from those of Cyprus and Malta. It
does not entail separate legislative acts adopted specifically for regulat-
ing investor citizenship. Rather, it links provisions from different kinds of
legislative acts thus waiving the substantial naturalisation conditions for
major investors. In all cases, in addition to the pecuniary contribution,
beneficiaries of these programmes are required to undergo due diligence
and in the case of Malta, they sign an oath of allegiance at the end of
the process. Even so, these programmes have been a cause of concern
for European institutions not least because they collide with the principle
of sincere cooperation but also because they have shown high potential
for money laundering, corruption of officials and corruption of democ-
racy (Garside and Osborne 2018b). In a multilevel system, these con-
cerns become more pronounced due to the spillover of policies of one
Member State on to others.

Bulgaria
In September 2013, Bulgaria adopted changes to its Law on Foreigners,
with the aim of attracting more investment in the country, and subse-
quently expanded opportunities for citizenship by investment. Article 25
(para 1, pt. 6) of the Law on Foreigners stipulates that a permanent res-
idence permit can be obtained following an investment of Лb1 million
(Bulgarian lev—€0.52 million) in either of the following: Bulgarian trade
companies with tradable shares, state bonds, ownership of over 50% of a
190  J. DŽANKIĆ

Bulgarian company, intellectual property and trademark, rights to con-

cession in Bulgaria. According to the same article (Article 25, para 1,
pt. 8), an investment of Лb 6 million (€3.12 million) in Bulgarian trade
companies with shares that are not tradable on the market, also gives the
applicant the right to permanent residence. Alternatively, the applicant
may use the provisions of the Investment Promotion Act in conjunc-
tion with Article 25c of the Foreigners Act and invest in a class A project
(amounts vary from €5.6 million to €16.3 million) in order to obtain
permanent residence.
These provisions of the Law on Foreigners are directly linked to
Article 14a of the Bulgarian Citizenship Act (Table 6.3), which stipulates
that, individuals who have held a residence permit on grounds of Article
25 (para 1, pts. 6 and 8) of the Law on Foreigners for at least one year
become eligible for this country’s citizenship. Equally, those individuals
who have obtained permanent residence on grounds of Article 25c and
hold an approved class A project also become candidates for the Bulgaria
citizenship by investment programme. Additional requirements include
only that the applicant is of age (Article 12, para 1, pt. 1) and that he or
she has not been convicted of a premeditated crime by a Bulgarian court
(or that the sentence has expired) (Article 12, para 1, pt. 3).
As Table 6.3 illustrates, the 2007 EU Member States implement a
programme targeting investors that is somewhat different from the ones
existing in Cyprus and Malta. Unlike in the latter, where the application
for residence is an integral part of the investor citizenship programme
and submitted simultaneously with the one for citizenship, formal resi-
dence in Bulgaria needs to be registered prior to submitting a citizenship
application. Further to this, unlike in the case of Malta, where applica-
tions can only be submitted by an approved agent, in Bulgaria, the appli-
cation needs to be filed in person at the country’s ministry of justice or
diplomatic or consular representation (Article 29, Bulgarian Citizenship
Act). Intermediary agents may assist applicants in preparing applications,
but their involvement is not compulsory. As a result of the absence of
intermediaries formally involved in the procedure, the Bulgarian pro-
gramme is thus more similar to the ones that van Fossen (2018) defined
as isolates. In line with the characteristics of such schemes, investor citi-
zenship in Bulgaria has been scarcely used, especially when compared to
Malta and Cyprus: in 2017, there have been only 12 successful applica-
tions (Report of the Bulgarian Citizenship Commission 2017).
 6  IUS PECUNIAE IN A MULTILEVEL SYSTEM: THE EUROPEAN EXPERIENCE  191

Table 6.3  Citizenship by investment in Bulgariaa

Permanent residence (Law on Foreigners) Citizenship by investment
(Citizenship Act)
Prov. Contribution Prov. Condition

Article 25 1 million ( 0.520 million) 14a One year

(1)(6) permanent
residence

Class A investment project (Investment Promotion Act) 12(1)(1) 18 years of age

16.3 Regular projects
million
12(1)(3) Non-conviction
Article 8.18 Projects in areas with high unemployment in Bulgaria
25c million High technology in industry sector
5.62 High technology in service sector
million
aConstructed by this author with reference to the Bulgaria Citizenship Act and Law on Foreigners in the

Republic of Bulgaria

Cyprus
The investor citizenship programme in Cyprus was introduced on 24
May 2013, two months after the announcement of the international
bailout of €10 billion by the Eurogroup, European Commission (EC),
European Central Bank (ECB) and International Monetary Fund (IMF).
Due to the levies imposed on uninsured benefits, many foreign investors
who used the Cypriot favourable tax regime incurred multimillion losses.
The goal of enhancing the country’s business climate, coupled with the
desire to compensate the foreign clients for their losses motivated the
Cypriot government to revise the investor citizenship programme.
The direct link between the consequences of the bailout and investor
citizenship in Cyprus can best be seen in the 2013 and 2014 versions
of legislation that enabled the sale of passports. In the past, the Cypriot
laws required an investment of €10 million in exchange for citizenship.
The 2013 Scheme for Naturalisation of Investors in Cyprus by Exception
on the basis of subsection (2) of Section 111A of the Civil Registry Laws
of 2002–2013 introduced six routes for the wealthy to obtain citizen-
ship, including property purchase, investment in bonds, property, cap-
ital investment or a combination of different investment types. On top
of these, between 2013 and 2016 a special route was in force, aimed at
compensating the losses of investors incurred due to levies. This option
applied to people whose deposits in Laiki Bank were impaired following
the introduction of the levy on foreign deposits implemented as a part of
192  J. DŽANKIĆ

the bailout after 15 March 2013. Eligible applicants included those who
lost at least €3 million due to the levy. In cases when the loss was lower,
a combination with other routes was possible to balance out the amount
of the pecuniary contribution required for the grant of Cypriot citizen-
ship. This option has been discontinued in the most recent version of the
programme, in force since 13 September 2016.
Between 2013 and 2016, there had been a further interim change
to the Cypriot investor citizenship programme. The revision mostly
concerned the amounts of investment required under different routes
(Council of Ministers 2014). In this respect, we can identify a trend for
lowering investment thresholds, from the initial €10 million in force
before 2013, through €5 million applied between 2014 and 2016, to
the required €2 million since September 2016. The lowered investment
amounts are most likely the outcome of the developments in the global
citizenship market, and the rise of schemes that would provide investors
with similar benefits. In the EU context, the opening of the IIP in Malta
in 2014 (with required investment of slightly over €1 million) is likely to
have affected the investment thresholds in Cyprus.
Other investor citizenship programmes had further implications for
the Cypriot scheme, which neither in its original form nor in the 2014
version contained any substantive naturalisation criteria (Džankić 2015).
As a result of multiple pressures, including those from the EU authori-
ties, other Member States and the ‘citizenship industry’, Cyprus revised
its 2013 programme again in late 2016 (Council of Ministers 2016), and
modified its implementation in 2018 (Council of Ministers 2018a, b).
Table 6.4 summarises the options for naturalisation of investors under
this programme.
In addition to required investment amounts, the Cypriot investor citi-
zenship regulation foresees the condition of a clean criminal record, cou-
pled with the requirement that the applicant is not on the list of persons
whose assets have been frozen by the EU. It further stipulates that peri-
odic checks of whether applicants meet the conditions are possible, and
that cases of breach may result in the deprivation of citizenship (2016
Scheme for Naturalisation of Investors in Cyprus). These provisions, in
place since 2013, have been generated by a 2011 controversy involving
the wealthy investor Rami Makhlouf, a relative of the Syrian president
Bashar al-Assad. On 4 January 2011, Makhlouf received the citizenship
 6  IUS PECUNIAE IN A MULTILEVEL SYSTEM: THE EUROPEAN EXPERIENCE  193

of Cyprus, a few weeks before the start of the protests in Syria. In May
2011, the EU imposed sanctions on Makhlouf due to his cooperation
with the Syrian repressive regime (Farolfi et al. 2018). The EU sanctions
led to the revocation of his Cypriot citizenship, but the episode showed
how these programmes are vulnerable to abuse.
The other two conditions applied in Cyprus are the outcome of the
debate over the sale of citizenship in Malta and the introduction of the
‘effective residence’ condition in that country’s IIP. As illustrated in
Table 6.4, as of 2016, Cyprus requires the possession of ‘residence’ and
a ‘residence permit’ in Cyprus. Interestingly, the notion of residence
entails possession of property valued at a minimum of €500,000 (exclu-
sive of VAT).10 By contrast, the residence permit condition requires the
applicant to possess the status of a resident in Cyprus, even though this
does not entail a continuous physical presence in the country. What it
means is that the investor submits a request for the residence permit
under Regulation 6(2) of the Aliens and Immigration Law simultane-
ously with the application for naturalisation. The country’s administra-
tion grants the residence permit ahead of citizenship, thus meeting the
condition stipulated in the country’s legislation.
Further amendments to the programme came along in early 2018.
Rather than changing the substance of Cypriot investor citizenship,
they affected its implementation. The Council of Ministers decision
84.068 of January 2018 introduced three changes. First, it established
the Supervisory and Control Committee, composed of Officers of the
Ministry of Interior, the Ministry of Finance and the Cyprus Investment
Promotion Agency (CIPA) to monitor the implementation of the pro-
gramme. Second, it set up an Investor Citizenship Scheme Providers
Registry, listing companies that are involved in providing services to

10 If the applicant acquired property of this value under option A1, such property may

suffice to meet the residence condition. Under other options (A2–A4), purchase of prop-
erty of this value is required, but any excess value of property can be used to reduce invest-
ment amount required by the respective option. For example, a property purchase valued
at €1 million can reduce the investment amounts under A2–A4 to €1.5 million.
194  J. DŽANKIĆ

beneficiaries of the programme.11 Third, it introduced a ban on adver-

tising the scheme in public places. A further decision of the Council of
Ministers (2018a) capped the applications to 700 per year.
The multiple changes described above point to the intricate relation-
ship between national membership, EU citizenship and the global mar-
ket for the sale of passports. Above all, the Cypriot investor citizenship
programme has been vastly affected by the country’s EU membership,
which has provided both opportunities and constraints for the sale of
passports. First, and most obvious, Cyprus uses the benefits of EU cit-
izenship to increase the value of its national citizenship and to attract a
greater number of investors. In particular, in the aftermath of the bail-
out, the Cypriot government revised the original investor citizenship
programme by lowering the investment amounts from €10 million to
€5 million and by opening a special route for individuals who incurred
losses due to EU levies. Second, the subsequent amendments and addi-
tional requirements were a direct product of the development of inves-
tor citizenship in the EU, including the start of the IIP in Malta and
the pressures from EU institutions. The criteria not to be on the list of
individuals whose property is frozen at the EU level, ‘residence’, ‘resi-
dence permit’ and the annual cap on applications have all been generated
not only through the vertically entangled Cypriot and EU citizenship
but also through horizontal spillover from Malta’s IIP. Third, the low-
ering of investment thresholds and the establishment of the registry of
non-public authorities following the code of conduct are the outcome of
the global market for investor citizenship and the related industry. The
substantially lower investment amounts required in Malta’s IIP, offering
similar benefits in terms of status, have pushed the ‘price’ of the Cypriot
passport downwards. The establishment of the public registry of agents
engaged in investor citizenship is likely to be the outcome of the pres-
sures emanating from the ‘citizenship industry’ for enhanced visibility in
an isolate programme.

11 Unlike in Malta, there is no obligation for the applicant to submit the application

through an accredited agency. However, the impact of the ‘citizenship industry’ is mirrored
in the recent legislative changes and the very fact that a registry of companies following a
code of conduct exists.
 6  IUS PECUNIAE IN A MULTILEVEL SYSTEM: THE EUROPEAN EXPERIENCE  195

Table 6.4  Citizenship by investment in Cyprus (September 2016)a

Article Contribution requirement Other requirements

A1–A4

A1 Investment of €2 million in property, land develop- – Clean criminal

ment and infrastructure project record and not
• Property includes both commercial and residential on the list of
property persons whose
• For land development and infrastructure projects, inves- property is frozen
tors are required to submit plans in the EU
A2 – Residence
Investment of €2 million in Cypriot companies, by
in Cyprus
means of purchase, establishment or participation
(property)
• Companies must have a legal residence and physical
– Residence permit
presence in Cyprus. A further condition is that they
in Cyprus (status)
employ at least five Cypriot or EU nationals who have
continuously resided in the country for at least 5 years
before the investor submits their application
A3 Investment €2 million in Alternative Investment Funds
(AIF) or financial assets of Cypriot companies or
Cypriot organisations licenced by CySec
• AIF investments need to be in the areas approved by
the Minister of Finance and funds need to be kept for at
least 3 years
A4 Combination of A1, A2, and A3 in the amount of €2
million
• In this option, there is a possibility for the applicant to
purchase Cypriot government bonds up to €500.000.
Bonds need to be retained for at least 3 years
aConstructed by this author in line with the 2016 Scheme for Naturalisation of Investors in Cyprus by

Exception on the basis of subsection (2) of Section 111A of the Civil Registry Laws of 2002–2017. The
table refers to contributions by the main applicant, but it is also possible to include family members in
the application (spouse, minor children and adult unmarried children up to a certain age)

Malta
In October 2013, Malta adopted Act XV of 2013, which amended the
Maltese Citizenship Act, Cap 188, and introduced the much-debated
IIP. This first draft of the IIP sparked negative reactions both from
within Malta and at the EU level, because it proposed a direct exchange
of Maltese citizenship for a contribution of €650,000, following due dili-
gence and criminal record checks. The main rationale behind Malta’s IIP
programme has been the revenue associated with investor programmes.
According to the country’s Minister of Interior Emmanuel Mallia,
‘[n]ot only is this contribution paid by the applicant non-refundable
196  J. DŽANKIĆ

but this will also help attract quality individuals to become Maltese citi-
zens’ (Maltese Community 2013, web). Similar remarks, noting that the
investment is irreversible have also been made by the representatives of
Henley and Partners, the company which helped to design the IIP, and
received the concession for implementing it (Camilleri 2013, web).
As the outright exchange of membership for money resulted in much
domestic and international contention (van Gorp 2014, web), Malta
revised its IIP in November 2013. The Act LN of 2013, that amended
the Maltese Citizenship Act, Cap 188, and the IIP, stipulated additional
criteria that the investors were required to meet in order to become eli-
gible for the status of Malta and EU citizenship. These additional criteria
included either the possession of property in the value of €350,000, or
the rental of property for at least €16,000 per year (Article 4); and an
additional investment of €150,000 into a project determined by the state
authorities (Article 5). That is, apart from increasing the amount of the
contribution and specifying its targets, the amendments did not require
further commitment on behalf of the investors. The amendment how-
ever established a ceiling of 1800 successful main applicants.
The amended policy of Malta caused discontent among other EU
Member States, which expressed concerns that such a programme could
potentially negatively affect EU-wide security and result in an influx of
wealthy individuals with criminal backgrounds (van Gorp 2014, web). As
a consequence, the implementation of the IIP was put on hold for several
months. Moreover, it spawned concerns over the effects of such schemes
on the value of EU citizenship, which was a topic of the EP debate held
in mid-January 2014. The conclusions to the EP debate reaffirmed that
even though the regulation of citizenship was an exclusive competence of
the Member States, it highlighted that there was a concern ‘that this way
of obtaining citizenship in Malta, as well as any other national scheme
that may involve the direct or indirect outright sale of citizenship, under-
mines the very concept of European citizenship’ (M1 in EP resolution
2013/2995(RSP)). Hence the conclusions represented a call upon Malta
to revise its investor citizenship programme and bring it ‘into line with
the EU’s values’ (M12 in EP resolution 2013/2995(RSP).
While the Maltese authorities received a strong signal from Brussels
that the IIP needs to be changed, no amendments were made imme-
diately following the debate (Carrera 2014). Rather, the Directorate
General Justice considered initiating infringement proceedings for the
incompatibility of the scheme with EU law. Eventually, after a meet-
ing between the representatives of Malta and DG Justice took place in
 6  IUS PECUNIAE IN A MULTILEVEL SYSTEM: THE EUROPEAN EXPERIENCE  197

late January, the two parties reached an agreement on amending the

scheme to include a residence requirement as evidence of genuine ties
with the country (EC Press Release MEMO/14/70, 29, January 2014).
Subsequently, in February 2014, Malta amended its IIP adding a one-year
effective residence requirement. The current conditions for obtaining the
citizenship of Malta through investment are presented in Table 6.5.
In addition to the pecuniary contribution, the IIP of Malta includes a
condition of ‘effective residence’ of one year, as a mechanism of attesting
the link that the applicant has established with the country. This require-
ment, however, does not mean that the applicant needs to be physically
present in the country, and can be met upon the presentation of ‘(a) flight
ticket printouts, stubs, boarding passes, entry and/or visa stamps on one’s
passport and also (in some cases) through a declaration made by the agent
in question ascertaining presence in Malta; (b) local hotel bookings span-
ning different time periods and covering the main applicant and/or his/her
dependants; (c) transportation services (taxi or car rental)’ (ORiip 2017,
32). Further evidence of links with the country include philanthropic activ-
ities, purchase of additional property, local services (phone, internet bills),
or tax receipts (ORiip 2017, 32). Further criteria stipulated in the country’s
legislation include due diligence, proof of the applicant’s moral standing, a
clean criminal record, health certificate and insurance, and an oath of alle-
giance. The programme is not open to citizens of Afghanistan, Iran and the
Democratic People’s Republic of Korea, or individuals with significant ties
to these countries, as well as to applicants originating from a country sub-
ject to a travel ban (Individual Investor Programme 2018).

Table 6.5  Citizenship by investment in Malta (main applicant only)a

Provision Contribution requirement Other requirements

2(d), Schedule of Contribution of €650,000 (main One year residence in

fees 1(a) applicant) Malta
2(e), 5(a-I), or Clean criminal record, no
Property purchase valued at €350,000
5(a-II) major offences
OR
Due diligence—proof of
Lease of property at €16,000 per annum moral standing
2(f), 6 Investment of €150,000 in bonds, Health certificate and
debentures or other projects determined insurance
by the state Oath of allegiance
Schedule of fees Due diligence, passport, bank fees
aConstructed by this author with reference to LN 47/2014. The table refers to contributions by the

main applicant, but it is also possible to include family members in the application (spouse, minor chil-
dren, adult unmarried children up to a certain age, parents)
198  J. DŽANKIĆ

Differently from the cases of Cyprus and Bulgaria, Malta’s IIP is well
integrated in the global market for investor citizenship and between
February 2014 and June 2017 it attracted over 1100 applicants (ORiip
2017). As noted in Chapter 5, the programme has been designed and
implemented through a franchise agreement with Henley and Partners.
While originally, all the applications to the programme had to be sub-
mitted through the concessionaire, its role has subsequently diminished,
and other approved agents may receive and submit applications to Malta
Individual Investor Programme Agency. Furthermore, the due diligence
process is now managed by the country’s authorities instead of the con-
cessionaire, which nevertheless retains substantial influence in marketing
and implementing the IIP.12
While both the government of Malta and the representatives of the
‘citizenship industry’ maintain that the outsourcing of the programme
to a non-public authority increases transparency, the IIP has been tainted
by a number of controversies. In addition to cases of corruption already
described in Chapters 3 and 5, in October 2018, OECD listed Malta,
along with Cyprus, among 21 countries whose citizenship or residence
by investment schemes could ‘be potentially misused to hide their
assets offshore by escaping reporting under the OECD/G20 Common
Reporting Standard (CRS)’ (OECD 2018). This has caused concern at
the EU level, and the Justice Commissioner Věra Jourová ‘described the
programmes as “problematic” and “unfair” – echoing the private con-
cerns of Europe’s intelligence agencies, who fear “golden passports”
have been exploited by people with enough money to buy access to the
UK and Europe’ (Garside and Osbourne 2018a).
Similar to Cyprus, the case of Malta’s IIP also shows how the com-
plex relationship between national and EU citizenship plays out in the
global market for the sale of passports. First of all, there has been a com-
bination of horizontal and vertical iterative processes in the development
of Malta’s IIP. EU citizenship grants rights that are enforceable beyond
Malta’s borders, which opened up opportunities for Malta to market
its IIP as an access point to EU citizenship. At the same time, other

12 See Chapter 5 for the role of the concessionaire. The due diligence process consists of

four-tier checks, including (1) know-your-client checks performed by the agents; (2) clear-
ance by police authorities; (3) checks by MIIPA; (4) outsourced due diligence (intermedi-
ary company).
 6  IUS PECUNIAE IN A MULTILEVEL SYSTEM: THE EUROPEAN EXPERIENCE  199

Member States, liable for enforcing the EU citizenship rights stemming

from the investor’s status as a Maltese national, voiced concerns regard-
ing the sale of the country’s passport. The latter generated restrictions
to the programme in the form of the cap and the ‘effective residence’
requirement. At the same time, Malta’s IIP is the EU investor pro-
gramme most affected by the developments in the global market for citi-
zenship. Having been developed by the ‘citizenship industry’ it is tightly
coupled with intermediary companies that manage its different aspects
(application submission and handling; due diligence; obligations of the
authorities towards the concessionaire).

Investor Residence Programmes in the EU

While only three EU Member States have developed investor citizen-
ship schemes, offering residence rights on the grounds of pecuniary
contribution is far more widespread across the Union. There is a total
of twenty-six different investor residence programmes implemented in
twenty-two EU Member States. Out of these programmes, seventeen
have clearly stipulated investment amounts and conditions for obtaining,
maintaining and renewing residence rights (Bulgaria, Croatia, Cyprus,
the Czech Republic, Estonia, France, Greece, Hungary,13 Ireland,
Latvia, Lithuania, Malta, the Netherlands, Portugal, Romania, Spain and
the UK). Further to these countries, Belgium, Germany,14 Italy, Poland,
Slovakia and Slovenia facilitate the conferral of residency through invest-
ment, but the details of the contribution or the kind of rights received
are not stipulated in main laws governing the entry and stay of aliens.
Table 6.6 provides a schematic overview of the different EU investor
residence programmes. Pecuniary criteria differ not only in terms of the
amount of investment required, but also in terms of the type of invest-
ment and its effect on the economy. There are also variations in the type
and duration of residence across countries.

13 The Hungarian programme has been suspended since April 2017, but it has been

included in Table 6.5 as it may be reactivated in the course of 2019.

14 Until August 2012, Germany offered an investor residence scheme to applicants

who invested €250,000 and created 10 jobs. Amendments to Article 21 of the German
Residence Act abolished the minimum thresholds for investment, but retained an entrepre-
neurial programme, granting a higher discretion to the authorities to decide on the eco-
nomic priorities of the state.
200  J. DŽANKIĆ

Table 6.6  Investor residence programmes in the EUa

Country Law Investment Status obligation

Belgium ‘Professional Card’ The amount of investment Temporary residence

programme is not clearly specified in (physical presence
the Belgian legislation, but requirement: not
the utility to the country’s specified)
economy is assessed by FPS
Economy, SMEs, Self-
employed and Energy
Bulgaria Law on Foreigners, €310,000 in property or Temporary residence
Article 24(19), company shares, or €127,000 (physical pres-
Article 24(20) million in poorer regions ence requirement:
and jobs for five Bulgarian 6 months and 1 day)
citizens
Croatia Aliens Act, Articles Owning a trade company Temporary residence
76–78 (min. value €13,200) or (physical presence
investing €26,400; employ- requirement: over
ing three Croatian citizens in 6 months)
both cases
Cyprus Regulation 6(2) Property purchase of at Permanent residence
of the Aliens and least €300,000 and deposit (physical presence
Immigration of €300,000 in a Cypriot requirement: 1 day)
Regulations bank, and income of at least
€300,000 per year
Czech Act on the Establishment of a limited Temporary residence
Republic Residence of Foreign company with minimum cap- (physical pres-
Nationals, section 31 ital of €7300 and possess 50 ence requirement:
times the minimum monthly 6 months and 1 day)
subsistence
Estonia Aliens Act, Article Investment of €65,000 Temporary residence
192 (physical pres-
ence requirement:
183 days)
France Decree 2009-114 of €10 million and 50 jobs in Temporary residence
11 September 2009 France (physical presence
requirement: over
6 months)
Germany Section 21 of the Act Amount not specified: eco- Temporary residence
on the Residence, nomic interest of the state, (physical presence
Economic Activity regional need, positive effects requirement: over
and Integration of on the economy. 6 months)
Foreigners in the
Federal Territory of
Germany

(continued)
 6  IUS PECUNIAE IN A MULTILEVEL SYSTEM: THE EUROPEAN EXPERIENCE  201

Table 6.6  (continued)

Country Law Investment Status obligation

Greece Law No. 4251 on Investment of €250,000 in Temporary residence
Immigration and property (physical presence
Social Integration requirement: no
Code and other pro- formal requirement,
visions, Article 20 but cannot apply for
citizenship)
Hungary The Hungarian Investment of €300,000 in Permanent after
Investment five-year securities or treasury 6 months (physical
Immigration bonds presence require-
Program (suspended ment: 180 days, noti-
on 31 March 2017) fication of absences
of over 6 months)
Ireland Immigrant Investor Investment of €1 million in (Temporary res-
Programme investor bonds, or €300,000 idence: physical
in an Irish company (must be presence require-
held for 3 years), or property ment: 1 day per year,
purchase and investment but cannot apply for
(total of €950,000), or a citizenship)
€500,000 donation in an
approved fund
Italy Provisional budget Annual payment of taxes in Temporary residence
of the State for the amount of €100,000 (physical presence
2017 and multi-an- requirement: no for-
nual budget for mal requirement)
the triennial period
2017–2019, para
152–159
Latvia Immigration Law, Invest €35,000 in a company Temporary residence
Section 23 that pays at least €40,000 (physical presence
in taxes; or investment of requirement: 6 con-
€150,000 in a company that secutive months)
employs at least 50 people;
or investment of €250,000 in
property; or €280,000 of lia-
bilities with a Latvian credit
institution; or a €250,000
deposit in a Latvian bank
Lithuania Law on the Legal Register a company whose Temporary residence
Status of Aliens, capital is at least €28,000 (physical presence
Article 45 and own at least €14,000 of requirement: over
capital 6 months)

(continued)
202  J. DŽANKIĆ

Table 6.6  (continued)

Country Law Investment Status obligation

Malta Malta Residence and Own property valued Temporary residence
Visa Programme at €275,000 in Malta (physical presence
(€220,000 in the south of requirement: no for-
Malta; €250,000 in Gozo), mal requirement)
or rent property at a mini-
mum of €9600 per annum
(€8750 in the south of Malta
and Gozo)
Netherlands Decree of September Invest €1.25 million in a Temporary residence
23, 2013 establish- company located in the (physical presence
ing the entry into Netherlands requirement: over
force of the Modern 6 months)
Migration Act
Poland Poland Aliens Act, Amount not specified: Temporary residence
Article 53 economic activity beneficial (physical presence
to Poland requirement: over
6 months)
Portugal Order n. 1661- €1 million of investment Temporary residence
A/2013 of the (maintained for 5 years), or (physical presence
Ministry of Foreign creation of 10 jobs, or prop- requirement: 7 days
Affairs and of the erty purchase of €500,000 in the 1st year and
Ministry of Internal 14 days in the subse-
Affairs quent two years)
Romania Emergency Invest €70,000 in a limited Temporary residence
Ordinance No. 194 company, or €100,000 in a (physical presence
from 12 December stock company, or create 10 requirement: over
2002, Article 43 jobs in a limited company or 6 months)
15 jobs in a stock company
Slovakia Act No. 404/2011 Amount not specified: Temporary residence
on Residence permits for investors and (physical presence
of Aliens and business people, on a case- requirement: over
Amendment and by-case basis 6 months)
Supplementation
of Certain Acts,
Article 22
Slovenia Slovenia Aliens Act, Amount not specified: per- Temporary residence
Article 20, Article 51 mits for investors and busi- (physical presence
ness people, in the interest of requirement: over
the state 6 months)

(continued)
 6  IUS PECUNIAE IN A MULTILEVEL SYSTEM: THE EUROPEAN EXPERIENCE  203

Table 6.6  (continued)

Country Law Investment Status obligation

Spain Law 14/2013, €2 million investment in Temporary residence
on the assistance Spanish debt bonds, or €1 (physical presence
to investors and million in Spanish banks or requirement: no
their internation- companies, or property pur- required minimum)
alisation and Act chase of at least €500,000
25/2015 on the
Internationalisation
of the Spanish
Economy
United Immigration Rules Possess €2.34 million dispos- Temporary residence
Kingdomb for the Tier 1 able in the UK (£2 million), (physical presence
(Investor) category or open a bank account in requirement: no
applicable as of July the UK with the intention absences over 90 days
2018 of investing at least €2.34 in a 180-day period)
million

Derived from Džankić (2015) with updates based on national legislation until October 2018.
Highlighted countries have no clearly stipulated investment amounts and/or residence conditions
bSuspended in December 2018

Different Residence Rights and Obligations

There are several differences however in holding residence rights in an
EU Member State and the outright sale of passports, even though the
former constitute a pathway to investor citizenship. First of all, residence
rights are confined to a single Member State, although this status enti-
tles its holder to travel freely across other countries in the Schengen area
for no more than 90 days in a 180 days period. For example, a benefi-
ciary of Malta’s IIP receives the rights of EU citizenship, including free
movement (right to relocate to another EU country), consular protec-
tion, as well as electoral rights associated with this status. By contrast, a
beneficiary of Malta’s Residence and Visa Programme (MRVP) receives
residence and employment rights in Malta only, with the possibility of
limited free travel, as explained above. Second, for holders of investor
residence programmes naturalisation is conditional upon maintaining the
resident status for several years in the given EU Member State. However,
the definition of residency is by no means uniform in the underlying
countries. While some countries significantly facilitate the conditions for
204  J. DŽANKIĆ

obtaining and maintaining the resident status, others require the investor
to spend a substantial amount of time there or to relocate to the said
country making it the focal point of their personal and professional life.
In Cyprus, Greece,15 Malta, Ireland, Spain and Portugal maintaining
and renewing residence rights is largely facilitated for investors compared
to other migrants. In none of these countries is the investor required to
be continuously physically present for extended periods of time. Rather,
investors are required to evidence that they have visited these countries
during the validity of their residence permit. For example, to renew the
investor residence permit in Portugal, an applicant needs to provide evi-
dence of stay in the country for 7 days in the first year and 14 days in
the subsequent two-year period (Order n. 1661-A/2013, Article 5). In
Cyprus a single visit to the country is sufficient for obtaining permanent
residence rights for investors, and in Malta a one-time visit is required for
temporary residence under the MRVP. Spain and Portugal offer investors
the possibility for naturalisation after ten and six years of such facilitated
residence, respectively. Ireland grants only residence rights to investors
through this programme, but physical presence is required for naturali-
sation. In Greece, the permit obtained through investment grants facili-
tated residence rights, but this type of residence does not count towards
citizenship or EU long-term resident status (Law 4251 on Immigration
and Social Integration Code and other provisions, Article 20). In all of
these countries, third-country nationals who are not investors can lose
their residence rights if they are absent from the country for substantial
periods of time (usually six months).
In countries that facilitate residence conditions we can also observe
the difference between ‘residence’ and ‘tax residence’, whereby only
those present on the country’s soil for over 183 days are subject to the
regular tax regime. For example, the holders of investor residence in
Malta who are physically present in the country for less than 183 days are
taxed only on remittances and the income generated in Malta. Portugal
and Spain tax country-based income of non-habitual residents at 20 and
19%, and Greece at 22% (Deloitte 2017). Christians (2017, 3) high-
lighted that the linking between preferential taxation and facilitated resi-
dence is salient in programmes targeting investors because ‘governments

15 The 2005 programme offered ordinary residence rights in Greece, while the 2014 pro-

gramme offers facilitated residence with minimum requirements of physical presence.

 6  IUS PECUNIAE IN A MULTILEVEL SYSTEM: THE EUROPEAN EXPERIENCE  205

increasingly appear to view their tax systems as a means of potentially

increasing the value of residence and citizenship in their countries’. In
fact they seek individuals who will contribute to the fiscal system through
multiannual taxes or through a one-off disbursement in a vulnerable
aspect of the respective country’s economy.
In a number of EU countries, including Belgium, Bulgaria, Croatia,
the Czech Republic, Estonia, France, Latvia, Lithuania, the Netherlands,
Romania and the UK, applicants receive temporary but renewable res-
idence permits, which would subsequently set them on the track to
permanent residence or citizenship.16 In all of these cases, to maintain
residence rights investors are bound to be present on the countries’
soil and subject to regular taxes. Maintaining such residence rights over
several years, and the fulfilment of other naturalisation conditions are
requirements for investors to eventually become citizens of these coun-
tries. Hence unlike in cases of investor citizenship or facilitated residence
programmes where status is merely instrumental, in countries that main-
tain physical presence requirements there is a de facto investment-based
migration.

Different Investment Amounts

In terms of the amounts of investment required under the investor res-
idence programmes, there is a dynamic different from that under inves-
tor citizenship schemes, precisely due to the linkage of the programme
to a single country. Consequently, the contribution under golden resi-
dence programmes varies from €65,000 in Estonia to €10 million in
France. The reason for such a discrepancy in the amount of investment
required under golden residence programmes is the economy, which in
some countries is more favourable and thus more attractive to investors
than in others. In the former (e.g. UK, France) the pecuniary contribu-
tion required for residence is higher than in the latter (e.g. Romania,

16 Currently only Cyprus offers permanent residence to investors. The Hungarian pro-

gramme, which existed between 2012 and 2017, also foresaw the grant of permanent res-
idence rights. The programme was the outcome of the negotiations between the ruling
Fidesz party and the Chinese-Hungarian Friendship Association (Džankić 2018). Chinese
applicants have been the main beneficiaries of the Hungarian scheme, due to China’s single
citizenship policy which precludes investor citizenship (unless the applicant withdraws from
Chinese citizenship). The programme has been suspended due to corruption.
206  J. DŽANKIĆ

Bulgaria). In other words, residence programmes follow a market logic,

whereby investment thresholds in larger and more stable economies may
be almost 20 times as high as those in the smaller or weaker ones. Hence
we can identify a few general trends regarding the amounts and types of
pecuniary contribution in investor residence programmes.
First, investment amounts in post-communist countries are consider-
ably lower than those in the old Member States. Six out of the seven
EU post-communist countries, namely, Croatia, the Czech Republic,
Estonia, Latvia, Lithuania and Romania grant residence for investments
below €100,000. In Bulgaria, the seventh post-communist EU state, the
minimum investment is slightly higher, but still set at €127,000. The
likely reason for such low investment requirements is the fact that in all
of these countries, the GDP per capita is below $18,000 (World Bank
2017). Large EU economies, whose GDP per capita exceeds $36,000
(World Bank 2017), require multimillion investments, ranging from
€1.25 million in the Netherlands, to €2.34 million in the UK (£2 mil-
lion),17 to €10 million in France.
Second, the types of investment differ significantly among the
Member States and reflect their imminent economic needs. Most
countries require capital investment or investment in a company phys-
ically located in its territory. In Ireland and Spain (previously, also in
Hungary), it is possible to invest in government bonds tenable for three
years. Interestingly, countries that allow investment in bonds are those
that reformed or reintroduced investor residence programmes follow-
ing the 2009 Eurozone crisis. This is most obvious in the Spanish case,
where the legislation regulating residence for investors confirms that the
country ‘is experiencing a grave and large economic crisis, with acute
social consequences. Between 2008 and 2012, almost 1.9 million com-
panies in Spain have been destroyed […]’ (Preamble, Ley 14/2013).
Similarly, Ireland, which operated an investor citizenship programme
from 1989 to 1994, reverted to residence for investors in 2012.18 Unlike

17 At the time of writing, in November 2018, £1 amounted to €1.17. Fluctuations of the

exchange rate are expected in 2019.

18 The previous programme was based on Article 16(a) of the 1956 Irish Nationality and

Citizenship Act, stipulating that exceptional naturalisation could be granted to people of

‘Irish descent or Irish associations’ while waiving other criteria. The interpretation of ‘Irish
associations’ allowed for the development of the former Investment Based Naturalisation
Scheme. The scheme was terminated in 1994 due to the perception that Irish passports
 6  IUS PECUNIAE IN A MULTILEVEL SYSTEM: THE EUROPEAN EXPERIENCE  207

the previous scheme that offered investor citizenship, the new Irish pro-
gramme, in addition to an investment of over €1 million, entails com-
pulsory residence and other criteria for applicants seeking naturalisation.
In Bulgaria, Cyprus, Greece, Ireland, Malta and Portugal it is possible
to obtain residence rights through investment in property. Parker (2017)
highlighted that the financial crisis had a particularly adverse effect on
the property markets in these countries, and that the decision to open up
this strand of the programme has likely been motivated by the need to
bolster this particular sector. Bulgaria and Croatia require the opening of
jobs for the countries’ nationals on top of investment, while in Portugal
the creation of positions for ten citizens alone is one of the routes for
obtaining residence rights albeit it is rarely used.19
Third, investment requirements and thresholds vary frequently, and
in most cases they have been lowered. In Greece, the required invest-
ment in property has been lowered from €0.3 million to €0.25 million,
as a result of the economic crisis that the country has faced since 2011
(Parker 2017). In Malta, the most recent MRVP, opened in late 2015,
substituted earlier residence programmes such as the High Net Worth
Individuals Scheme with higher residence requirements. In the latter,
the minimum value of the purchased property was set at €400,000 (now
€220,000–€270,000); the minimum rental value was €20,000 (now
€8750–€9600); and instead of the €30,000 non-refundable contribu-
tion, a €0.5 million bond was required for each main applicant. Unlike
in the case of Greece, where the lowering of the investment thresholds
has been motivated by internal economic dynamics, in Malta it has also
been caused by the developments in the EU corner of the global market

would become depreciated, as the investors ‘have little or no connection with Ireland and
[…] no plans to strengthen those connections’ (Seanad Eireann Debate 2002, web), but
no legislative change took place. The 2002 Report of the Review Group on Investment
Based Naturalisation considered such an interpretation of ‘Irish associations’ to be too
broad. The subsequent Irish Nationality and Citizenship Act (2004) limited the associa-
tions to relationship to an Irish citizen by ‘by blood, affinity or adoption’ thus terminating
the investor citizenship programme.
19 Since the opening of the programme 5930 investors received residence in Portugal

through property purchase, 338 through capital transfer and only 11 via the creation of
jobs for Portuguese nationals (Diário da Assembleia da República, of 12/3/2015 (61), 4).
208  J. DŽANKIĆ

for investor citizenship. Spain and Portugal (at the time also Hungary),
as slightly larger EU markets, opened investor residence programmes. At
the same time, Malta opened its offering of citizenship to investors. As a
consequence of all of these dynamics, the country’s residence scheme has
been restructured.
By contrast, the UK is the odd example, in which investment thresh-
olds for obtaining residence rights had augmented significantly before
the scheme was suspended in December 2018. The increase in the
required investment thresholds had been debated in the country since
2014 (Migration Advisory Committee 2014, 8), but has materialised
only several years later in the context of instability caused by the impend-
ing departure of the UK from the EU. Contrary to other EU countries,
which have lowered the already low investment thresholds in contexts of
crisis, the UK has doubled the required amounts that were already sec-
ond highest in the EU. The toughening UK immigration policy is the
likely cause of the increase, coupled by the fact that the holders of the
UK Tier 1 permit are and will remain exclusively related to residing and
doing business in this country.20 In December 2018, the scheme was
suspended indefinitely ‘as part of a crackdown on financial crime’ (BBC
News 2018).

Conclusion
The EU is a sui generis complex, nested polity, in which the matters of
status at the national level reflect upon individuals’ rights and duties in
27 further countries. Such an entrenchment of citizenship statuses in
the EU as a multilevel polity gain particular salience in the case of inves-
tor citizenship programmes. The sovereignty that Member States have
in attributing nationality enables them to create citizens who can have
access to rights across the EU with very few constraints under EU law.
Being linked to rights enforceable in twenty-eight Western democra-
cies, EU citizenship has enormous value in the global market. EU cit-
izenship, as the prototypically light citizenship with a high objective
and low subjective value, has shed communal baggage disconnecting
citizenship from nationhood. These features imply that EU citizenship

20 As the UK has opted out of the Schengen area, a third country national who holds a

Tier 1 permit has no entry and stay rights in other EU Member States. It is unclear if and
how the UK’s departure from the EU will reflect on investor citizenship and residence pro-
grammes despite its implications on EU citizenship (Kostakopoulou 2018).
 6  IUS PECUNIAE IN A MULTILEVEL SYSTEM: THE EUROPEAN EXPERIENCE  209

can be more easily marketed to individuals aspiring to capitalise on its

objective value. Investor citizens have an instrumental interest in obtain-
ing the citizenship of a Member State because rights associated with EU
citizenship make such a status far more functional in terms of mobility,
security and business opportunities. The excess of the value of EU citi-
zenship over national citizenship also provides substantial fiscal benefits
for small or economically weak Member States. National citizenship of
minute European economies such as Bulgaria, Cyprus and Malta would
be far less attractive to investors if they were not related to the rights
of EU citizenship. These rights create particularly favourable conditions
for passports of small EU countries to be placed, valued and sold in the
global citizenship market. Larger and economically more developed
states, which would receive fewer fiscal advantages from a one-off sale of
passports, opt for ‘path-to-citizenship’ programmes that enable them to
retain naturalisation conditions that articulate the state’s constitutional
identity. As a consequence, most EU Member States run investor resi-
dence programmes, with different routes to settlement and citizenship.

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 CHAPTER 7

Conclusion

Since I started working on this book, there have been quite a few
­developments in the global market for investor citizenship. While the
outright sale of passports regulated through separate programmes
exists only in a handful of states worldwide, there is a growing aware-
ness of how states can use their discretion to admit individuals on the
basis of wealth. These exchanges are not limited to the individual barters
between money and membership, but as in the case of Comoros, have
evolved to a wholesaling of passports. Yet we see the rise of a growing
‘citizenship industry’, which is increasingly active not only in marketing
and providing legal services to the beneficiaries of investor citizenship
programmes, but also in lobbying with governments to open up prefer-
ential routes for naturalising the high net worth individuals (HNWIs).
We could also see that these programmes have the potential to corrupt
democracy at different levels: by corrupting individual politicians as
happened in Austria; by corrupting a broader political elite, as was the
case in the Commonwealth of Dominica; or by corrupting the structure
of the democratic system, as evidenced in the cases of Caribbean states
and Malta, where the investor citizenship lobby financed electoral cam-
paigns in exchange for concessions in the sale of passports (Garside and
Osbourne 2018). At the same time, we could see that the small coun-
tries yielded significant shares of their GDPs through these programmes
and presumably the sale of passports has made them better off (ORiip
2017). Equally, these schemes are a kind of a corrective mechanism for

© The Author(s) 2019 213

J. Džankić, The Global Market for Investor
Citizenship, Politics of Citizenship and Migration,
https://doi.org/10.1007/978-3-030-17632-7_7
214  J. DŽANKIĆ

some of those whose ‘birthright lottery’ was an unlucky draw (Kochenov

2018); obviously, only for those who can afford to buy an expensive new
‘ticket’.
Yet what does the future have in in store for investor citizenship?
There is no straightforward answer to this question, and much of it will
depend on how the content and boundaries of citizenship are reconsti-
tuted to match the evolving patterns of global mobility. What I hope
to have achieved with this book is to have emphasised the resilience of
citizenship, a notion that has been undergoing constant transformation
from the times of ancient Greece to this date. Equally, I have highlighted
how the relationship between money and membership has morphed in
different historical periods, always serving the function of what had at
different times been understood as belonging to a community. And in
fact, up until the end of the Second World War, money and property
have been intimately related to the internal differentiation of s­ocietal
membership, with the notable exception of Sparta. As explained in
Chapter 2, together with privileges of birth, possessions structured inter-
nal hierarchies of communities and enabled participation or greater vot-
ing weights to the more affluent individuals. In some instances, wealthy
individuals could use their affluence to climb up the ladder of commu-
nal hierarchies, but history reveals that hardly ever was money the only
requirement. Wealth did not suffice for the metic Cephalus to be granted
Athenian citizenship; rather, his son obtained it by using a share of this
wealth for helping Athenian exiles during the Thirty Tyrants Rule. The
famous centurion who arrested St Paul, and whose story is often men-
tioned in relation to the roots of the contemporary sale of citizenship,
served in the Roman legions on top of purchasing a house in Rome in
order to become a citizen. Before being granted all the rights and privi-
leges in the Florentine republic, to become citizens, the wealthy incollati
needed to reside in the city and prove commitment to it.
The evolution of the modern human rights system, coupled with the
state-based Westphalian world order had profound consequences on the
notion of citizenship, and by extension on the link between property
and membership that it entails. With the encapsulation of the communal
‘boundaries’ within the territorial and national ones, citizenship started
to denote formal equality in decision-making, equality before the law of
the state, regardless of possessions. But boundaries continued to exist,
and the status of citizenship became a marker of limits among communi-
ties as opposed to within them. The increased global interconnectedness
 7 CONCLUSION  215

over the past five or six decades brought about tremendous change in
the outlook of the world. Tied to the conception of sovereign states, cit-
izenship statuses emphasised inequalities among different c­ountries, in
terms of security, mobility, opportunities for individual growth and lead-
ing a ‘good life’. These contrasting dynamics—the resilience of sover-
eign states, growing inequalities and the emergence of new global agents
including individuals and transnational actors—re-envisioned ­citizenship
status as merely instrumental. The outcome of this has been the rise of
policies enabling states in primis to strategise on who, how and why
they want as members, be it by introducing language and culture tests
for migrant workers seeking citizenship; by facilitating the ­naturalisation
of expatriates to extend foreign policy or stimulate remittances; by
admitting talented sportspeople who will compete under national flags
and thus reinforce the symbolic dimensions of citizenship; or by seek-
ing funds from rich investors on the lookout for the benefits of another
passport.
Being the one most related to transnational flows of capital and the
global race for wealth, this last strategy of states has been an enabling
condition for the marketisation of citizenship, a process which nowa-
days has several aspects. The key aspect of this marketisation reflects the
decoupling between the internal and external dimensions of citizenship.
The internal dimension of citizenship is related to the rights and duties
within the state, participation in common rule and identification. These
are becoming more and more related to residence, which has led some
scholars to conclude that the status of citizenship is becoming increas-
ingly redundant for access to what is understood and practised as citi-
zenship internally (Joppke 2010; Spiro 2016). The external dimension
of citizenship denotes belonging to a jurisdiction and is relevant as an
enabler of international mobility, which in turn is more or less restricted
(through visas) depending on which jurisdiction an individual belongs
to. The intensification of global mobility has in a way underpinned the
marketisation of citizenship through the ‘passport paradox’, a notion
examined in detail in Chapter 5. That is, the document attesting to an
individual’s membership, guaranteeing the right to return and enabling
mobility, has become a ‘product’ with, at least in theory, unlimited sup-
ply. This product is then attributed ‘value’ for its users through differen-
tiation from other products of this kind. We can best see the outcome of
this process in the international passport rankings, such as the Quality
of Nationality Index (2017), the Passport Index (2018) and the like.
216  J. DŽANKIĆ

These rankings are based on different criteria, ranging from mobility that
a passport enables, to the GDP per capita of the country, to different
kinds of opportunities that are related to the possession of the passport
in question. Importantly, these rankings are developed by intermediary
companies, which serve as the essential link between states as the suppli-
ers of passports and wealthy individuals as the demand side. Intermediary
companies—through ranking of passports—perform a sui generis brand-
ing, which then becomes essential for setting price tags on citizenship.
The sale of passports functions similar to other markets, with various
entities enabling services to states or individuals.
This ‘citizenship industry’ seems to be blooming in late 2018 and
early 2019, and attracts increased interest from media, academics and
policymakers. However, it is unclear what the future has in store for it in
the global market for investor citizenship. As highlighted in Chapter 5,
market is available only to the top echelon of the world’s wealthiest
individuals and functions as a market for luxury goods and services.
This already small market further shrinks owing to two conditions spe-
cific to the sale of passports. First, the ‘demand’ side is further reduced
to only those HNWIs where acquiring another passport would have a
positive impact in comparison to the passport they already possess. That
is, the acquisition of another passport would need to facilitate the con-
sumption of some goods or services to the individual. Even in cases
when such purchase is the case of conspicuous consumption, not moti-
vated by interest but by ‘branding’, the number of sovereign states that
can sell passports is limited. Second, for the subsequent generations,
the ‘demand’ side is also likely to shrink due to the birthright or other
rules for the acquisition of citizenship. For example, children of inves-
tors may be entitled to their parents’ passports through parentage, and
so may their children. Hence, the only possible options for the demand
side of the global market for investor citizenship not to implode are
(a) for the number of ultra-HNWIs to continuously grow in the devel-
oping countries, or (b) for citizenship status to be depreciated to such an
extent that it is available for purchase at ‘high street prices’.
The future of the global market for citizenship will also be framed by
the ensuing political developments. The post-2010 era has been marked
by a surge in global mobility, caused not only by economic, but also by
forced migration. That is, while a decade ago the key push factor had
been economic, increased conflicts in the Middle East and in Africa have
generated refugee crises in a number of European countries. Coupled
 7 CONCLUSION  217

with the economies that had weakened after the global financial crisis,
the influx of migrants and refugees has set off a wave of nationalism and
populism (Brubaker 2017). But this in itself would not have a weakening
effect on the global market for investor citizenship, as states would likely
continue to facilitate the preferential admission of investors while leaving
refugee boats aside. Rather, in a context of crisis, nationalism and pop-
ulism could become enabling factors for states to focus on short-term
high economic gains from small numbers of ‘desirable’ new citizens,
compared to long-term economic contributions from migrants.
Strong objections to the sale of citizenship may however come from
international organisations or grassroots movements concerned with
the mounting corruption and scandals in a number of investor citi-
zenship programmes. Over the last few years, we could spot the roots
of this opposition to the sale of citizenship in the activities undertaken
by the European Commission in monitoring the investor schemes in
the EU, but also in the activities of organisations such as Transparency
International and Global Witness (2018) that unveiled how a number
of passport-for-sale programmes were used for money laundering. While
these international organisations have little say in the regulation of cit-
izenship policy itself, they have the potential to activate transnational
networks and raise awareness of the outcomes of investor citizenship
in different countries. A share of the opposition to the sale of citizen-
ship may come from grassroots movements, concerned not necessarily
with antiglobalisation, but rather from the causes and consequences of
these programmes in local contexts. We could observe such instances
in the Commonwealth of Dominica, where violent protests erupted
in February 2017, as a result of public discontent over corruption of
high-level officials through investor citizenship. A further, and proba-
bly more resonant instance of grassroots protest has been caused by the
assassination by car bomb of the Maltese journalist Daphne Caruana
Galizia in October 2017. In the months following her death, demon-
strations in Malta ensued, and were accompanied by the creation of an
international group of journalists gathered around the Daphne Project
(2018). The project itself has not been a protest movement, but it had
a major role in raising awareness of the potentially problematic aspects
of the sale of passports. Journalists involved in this initiative discovered
that in the months before her death Caruana Galizia was investigating
allegations of corruption in Malta’s IIP, and proceeded to dig into other
similar programmes unpacking relationships between representatives of
218  J. DŽANKIĆ

the citizenship industry, corrupt government officials and controversial

business people from the developing countries (Daphne Project 2018).
The coupling of such grassroots processes with activities of international
organisations and transnational networks may slow or completely clamp
down on the industry-driven investor citizenship programmes.

Contributions to Comparative Citizenship Studies

and Avenues for Future Research

Having completed this book, I would like the readers to take away six
key points, which I believe are at the very core of what this monograph
contributes to comparative citizenship studies. I hope that each of these
points will open up an avenue for the future exploration of one or more
facets of the ever-changing notion of citizenship.
First, citizenship is a continuously transforming notion, which struc-
tures the different layers of the relationship between individuals and their
communities of membership, both internally and externally. This book
has presented the first historical overview of how wealth was related to
inclusion in the communal decision-making, which in fact depended
not only on the rights of birth but also on possessions. Anywhere from
ancient Athens, through ancient Rome, medieval Florence, to the seven-
teenth-century Prussia, or the nineteenth-century US, the more affluence
you had, the more was your voice valued within the community. Hence
in a way, possessions have historically played a major role in drawing the
boundaries of the internal hierarchies of membership. At the same time,
wealth had hardly ever been the sole mechanism of configuring those
hierarchies, even though it could, combined with some other service
to the community, provide for an access point to the full rights of citi-
zenship. Thus the broad overview of the evolution of the link between
money and communal membership is the first contribution of this book
to our understanding of citizenship. Importantly, if we think of citizen-
ship as an ever-transforming notion, we can reflect on its meaning for
the generations to come. After the Second World War, the notion of
citizenship became associated with internal equality (at least formally).
Citizenship also continued to perform its post-Westphalian function as
a mechanism of allocating individuals to sovereign jurisdictions, primar-
ily through birthright. As highlighted by Shachar (2009), the major gaps
among states in terms of development, wealth, and opportunities for
mobility and personal growth meant that the association with a state by
 7 CONCLUSION  219

virtue of birth created hierarchies of rights, opportunities and resources

at the global level. If we think about investor citizenship in this context,
we see that wealth has retained its potential of providing an access point
for entering a new layer of membership (e.g. in modern terms: obtaining
a passport that offers greater mobility and opportunities globally). More
importantly, wealth has become a mechanism of structuring hierarchies of
membership at the global level, enabling only the most affluent to choose
from different menus of rights that the purchased passports can offer to
them. It will be immensely interesting to see how this dynamic will evolve
in the years to come, and I hope that scholars interested in normative and
historical facets of citizenship will pick up this point. If global citizenship
is ever to emerge, what would be the role of wealth in it?
Second, while states may develop different grounds for attributing
­citizenship at and after birth, the substance of each of these grounds has
a normative value and can be discussed from the global justice perspec-
tive. Some states waive a significant number of naturalisation conditions
for those who established links with their nationals through marriage or
adoption, for instance. Others have mechanisms for protecting recog-
nised refugees by offering them a facilitated path to citizenship; or for
mobilising the diaspora by handing out passports extraterritorially; or
for using the full discretion of the state to waive admission requirements
for talented individuals, those who rendered special services to the state,
or for investors. While discussing the normative merits of each of these
cases falls well beyond this book, its key contribution is the mapping of
arguments in the three major citizenship traditions—liberal, republican
and communitarian—that could be used to justify or object to the sale
of citizenship. Each of these traditions would offer different arguments
as to why investor citizenship is right or wrong. They would emanate
from their respective understanding of the content and boundaries of
citizenship, how they conceive of communities of membership and the
individuals’ roles within them. The ‘club good’ theory of membership
arguing that those contributing more than the median member should
be granted admission, the ‘lightening’ of citizenship in view of its instru-
mental uses (among other issues, to rectify birthright inequalities) are
the key arguments favouring investor citizenship. Notions of ‘genuine
links’ and abuse of rights stand in stark contrast to them emphasising
the strength of the relationship between the individual and the state, and
communal equality. One issue that is difficult to explain through nor-
mative theory is related to the practice of investor citizenship: from the
220  J. DŽANKIĆ

conception of the most recent programmes to their implementation, we

see instances of corruption, not only of individual policymakers but also
of electoral processes and, in the case of Comoros, of human rights. This
raises the question of whether and how would the marriage between
investor citizenship and fully democratic institutions work. Or, put dif-
ferently, to what extent does the sale of passports corrupt democracy?
Third, states have the prerogative to decide who they want as mem-
bers, and how. While the issue of the state’s discretion to naturalise has
been largely debated in the academic literature, this book also looks
at the specific mechanisms states may employ in the global market for
investor citizenship. State officials may use the discretion to naturalise
investors as individuals who have offered a major contribution to the
country’s economy through provisions reserved for exceptional services,
merits and talent. They can also use this discretion as the basis for devel-
oping specific investor citizenship programmes that specify the amounts
and types of pecuniary contribution, as well as other applicable condi-
tions (if any). The first kind of mechanism mentioned here is largely
uncontentious and thus exists in at least two-thirds of the world’s coun-
tries. By contrast, proper investor citizenship schemes or sales of pass-
ports are currently implemented only by a handful of countries, precisely
because they cause major internal and external contestation. Instead of
engaging in the outright sale of citizenship, a number of countries have
thus opted for ‘path-to-citizenship’ programmes that are somewhat less
controversial. These programmes offer investors residence in the first
instance, and the possibility to obtain citizenship after a number of years.
Even in these cases, programmes are not uniform, and given the variation
in what ‘residence’ means in different countries, these programmes can
range from being proper schemes for attracting entrepreneurial migrants,
to hidden investor citizenship. In other words, lines among these differ-
ent mechanisms are often blurred and warrant a global empirical analysis,
possibly coupled with quantitative indicators which would measure the
degree of facilitation the pecuniary contribution can offer across coun-
tries and over time. Could we identify clusters of countries implementing
different programmes and think about what the configurations of these
programmes can tell us about the changing nature of citizenship?
Fourth, as any other structured exchange, the market for inves-
tor citizenship has different components, with different roles in the
global race for resources. States, and especially those faced with eco-
nomic difficulties, or unfavourable geographic positions or climate, seek
 7 CONCLUSION  221

alternative ways for attracting wealth. In this sense, states represent the
‘supply’ side of investor citizenship as they are the only ones who can
legitimately grant the status of membership to those within their bound-
aries. Investors who use the passport to perform the instrumental func-
tion of facilitating access to goods and services worldwide constitute the
‘demand’ side of the market. Intermediary companies engaged in devel-
oping programmes for states and handling the different aspects of inves-
tor citizenship are the ‘industry’ behind this process. In the second half
of 2018, there have been allegations of a great degree of involvement
of the transnational companies in lobbying for the opening of investor
citizenship schemes, especially in the cases of Malta and the Caribbean
islands (Garside and Osborne 2018). To that end, an important direction
to study will be the normative and empirical analysis of the process of
franchising of the sale of passports. Can we compare the concessions for
investor citizenship to any public service contract? Have these been han-
dled in an open and transparent way? What impact does outsourcing the
design and implementation of investor citizenship have on the notion of
citizenship? These are but a few questions that I expect scholars to pick
up after reading this book.
Fifth, the regulation of membership in multilevel polities is complex,
particularly when citizenship of one state confers substantial and signif-
icant rights in other countries. For this reason, the book has unpacked
the variety of investor citizenship and residence programmes in the 28
countries of the EU, where the Bulgarian, Cypriot and Maltese pro-
grammes for the sale of citizenship reveal how instrumentalised national
membership can become. After the recent publication of the European
Commission’s (2019) report on investor citizenship and residence
schemes, I expect further research on specificities of legislative provisions
and their implementation in different countries. Importantly, for scholars
of EU integration, it will be relevant to study the effect of ‘spillovers’ of
these programmes, especially if there were to be cases related to investor
citizenship before the Court of Justice.
Sixth, and last but not least, investor citizenship has been analysed
here taking into account the contours that shape the global market for
the sale of passports. Global inequalities have been one of the crucial
facilitators for sustaining its growth. As a result, not everyone can take
part in this market. This is especially true for the ‘demand’ side, where
passports as the ultimate products of the marketisation of citizenship are
available only to a small number of the world’s wealthiest individuals.
222  J. DŽANKIĆ

This means that exchanges entailed in investor citizenship acquire many

traits of the market for luxury goods, used not only as a marker of an
instrumental status but also as a symbol of the social one. Admittedly,
the ‘demand’ side is perhaps the most interesting yet the most diffi-
cult aspect of this market as the beneficiaries of investor citizenship
schemes are high-profile wealthy individuals, whose identities are diffi-
cult to reveal. Building on the work of investigative journalists, citizen-
ship scholars may seek to further the rough mapping of the interests and
strategies that individuals pursue by purchasing passports.

References
Brubaker, Rogers. 2017. ‘Between Nationalism and Civilizationism: The
European Populist Moment in Comparative Perspective’. Ethnic and Racial
Studies 40, no. 8 (March): 1191–1226.
European Commission. 2019. Report from the Commission to the European
Parliament, the Council, the European Economic and Social Committee and
the Committee of the Regions. Investor Citizenship and Residence Schemes in the
European Union. COM (2019) 12 Final. https://ec.europa.eu/info/sites/
info/files/com_2019_12_final_report.pdf.
Garside, Juliette, and Hilary Osborne. 2018. ‘The Passport King Who Markets
Citizenship for Cash’. The Guardian, 16 October. https://www.theguardian.
com/world/2018/oct/16/the-passport-king-who-markets-citizenship-for-cash.
Joppke, Christian. 2010. ‘The Inevitable Lightening of Citizenship’. European
Journal of Sociology/Archives Européennes de Sociologie 51, no. 1 (June): 9–32.
Kochenov, Dimitry. 2018. ‘Theoretical Aspects of Citizenship and Residence
Sales’. Paper Presented at the 2018 Association for the Studies of Nationality,
Columbia University, 2–5 May.
Office of the Regulator Individual Investor Programme (ORiip). 2017. Fourth
Annual Report on the Individual Investor Programme of the Government
of Malta (1st July 2016–30th June 2017). https://oriip.gov.mt/en/
Documents/Reports/Annual%20Report%202017.pdf.
Passport Index. 2018. https://www.passportindex.org/.
Quality of Nationality Index (QNI). 2017. https://www.nationalityindex.com.
Shachar, Ayelet. 2009. The Birthright Lottery: Citizenship and Global Inequality.
Cambridge, MA: Harvard University Press.
Spiro, Peter J. 2016. At Home in Two Countries: The Past and Future of Dual
Citizenship. New York, NY: New York University Press.
The Daphne Project. 2018. https://www.occrp.org/en/thedaphneproject/.
Transparency International and Global Witness. 2018. European Getaway: Inside
the Murky World of Golden Visas. http://files.transparency.org/content/
download/2321/14306/file/2018_report_GoldenVisas_English.pdf.
 Index

A Commonwealth of Dominica, 2, 10,

ancient Greece, 17, 27, 214
ancient Rome, 4, 13, 25, 31–36, 45,
218
Antigua and Barbuda, 10, 18, 76, 78,
81, 92, 102, 109, 110, 115–117
Arton Capital, 152
Austria, 2, 8, 10, 82, 98, 102, 175, 182
B 198, 199
birthright, 29, 30, 46, 50, 66, 69, 70,
72, 84, 138, 155, 161, 165, 214,
216, 218, 219
boundaries, 4, 16, 26, 42, 45, 46, 50,
52, 60–64, 74, 76, 79, 92, 97,
99, 175, 176, 214, 218, 219, 221
C Cyprus, 11, 18, 76, 78, 81, 84, 92,
citizenship acquisition, 7, 39, 71, 93,
97, 101, 143
club good, 62, 66–68, 83, 219
colonial, 41, 47, 51, 132, 137, 164
18, 19, 47, 48, 76, 78, 81, 84,
94, 105, 109, 111, 113–116, 148,
150, 151, 156, 213, 217
communism, 49, 50, 52, 143
communitarian, 17, 58, 59, 61, 65,
66, 83, 219
concession, 147–151, 190, 196, 213,
221
concessionnaire, 149–154, 156, 157,
content, 5, 6, 16, 60, 61, 64, 65, 70,
71, 74, 76, 80, 83, 97, 99, 214,
219
corruption, 1, 19, 73, 81–84, 114,
115, 119, 148, 149, 151, 164,
189, 198, 205, 217, 220
CS Global, 111, 113, 150, 152, 156,
157
94, 104, 109, 153, 154, 156,
157, 159, 161, 163, 172, 179,
180, 183, 189–195, 198–200,
204, 205, 207, 209

© The Editor(s) (if applicable) and The Author(s) 2019 223

J. Džankić, The Global Market for Investor
Citizenship, Politics of Citizenship and Migration,
https://doi.org/10.1007/978-3-030-17632-7
224  Index

D I
discretionary naturalisation, 8, 18, 75, IIP (Individual Investor Programme,
80, 97–99, 127, 178, 179, 181, Malta), 3, 11, 81, 152, 157, 160,
182, 188 174, 192–198, 203, 217
donation, 2, 3, 82, 101, 110, 114– intermediary, 82, 113, 115, 117,
116, 132, 201 147–153, 155–157, 162, 164,
Dreiklassenwahlrecht, 10 190, 198, 199, 216, 221
investor citizenship, 1, 9, 13–19, 47,
48, 58–61, 65, 66, 69, 71–84,
E 91–96, 99, 100, 102–107, 109,
EU citizenship, 3, 4, 19, 26, 109, 148, 111–116, 120, 131, 132,
156, 157, 165, 171–180, 194, 138–159, 161–165, 171, 172,
196, 198, 203, 208, 209 174, 176, 178, 179, 189–194,
European Union (EU), 1, 15, 156, 196, 198, 199, 203, 205–208,
157, 171, 172, 174 213, 214, 216–221
exceptional achievement, 78, 80, 182, ius nexi, 7, 8
188 ius pecuniae, 8, 11, 13, 17–19, 57–59,
65, 66, 77, 91–93, 110, 111,
115, 117, 120, 138, 139, 171
F ius sanguinis, 7, 8, 50, 69
Florence, 37–40, 51, 145, 218 ius soli, 7, 8, 39, 50, 69, 173
franchise, 10, 26, 45, 151, 153, 198

L
G Latini, 9, 25, 32, 34
genuine link, 58, 72, 73, 75, 80, 84, liberal, 17, 46, 58, 59, 61–63, 65, 66,
118, 119, 219 77, 79, 83, 219
Global Citizenship Observatory luxury, 28, 139, 140, 143–146, 158,
(GLOBALCIT), 15, 50, 75, 97, 164, 216, 222
98, 101, 109, 181, 187
global market, 4, 5, 9, 11–18, 20,
51, 59, 65, 76, 83, 91, 97, 99, M
111, 112, 138, 139, 142, 144, Malta, 3, 9, 18, 72, 76, 78, 81, 82,
146–149, 154, 155, 161–164, 84, 92, 94–96, 106, 109, 141,
194, 198, 207, 208, 213, 216, 148–153, 157, 159–161, 164,
220, 221 171, 172, 174, 179, 180, 186,
188–190, 192, 194–199, 202–
204, 207, 209, 213, 217, 221
H migrant, 12, 46, 48, 66, 76, 92, 93,
Henley and Partners, 82, 149, 150, 95, 99, 120, 130, 138, 158, 175,
152, 154, 157, 162, 196, 198 178, 179, 204, 215, 217, 220

money laundering, 81, 82, 84, 151,
161, 189, 217
Montenegro, 1, 9, 13, 61, 98, 99, 150
N real estate, 121, 128, 139, 152, 154,
national interest, 7, 8, 18, 68, 75, 76,
78, 80, 81, 91–94, 96, 100, 127,
131, 177, 179–182, 188
naturalisation, 7–9, 18, 19, 31, 44, 46,
58, 59, 66–68, 70, 72, 74–82,
84, 91–93, 95–108, 111–113,
117, 120, 131, 132, 158,
173, 174, 176, 179, 181–184,
187–189, 191–193, 195, 194,
203–207, 209, 215, 219
Nottebohm, 73
P T
passport, 1–5, 9, 11–13, 15, 26,
46–49, 52, 57, 64, 65, 70–73,
77, 82–84, 91, 92, 94, 113–119,
130, 132, 138–149, 153, 155–
165, 171, 174, 176, 189, 191,
194, 197, 198, 203, 206, 209,
213, 215, 216, 219–222
path to citizenship, 9, 10, 18, 48, 74,
92, 93, 95, 130, 132, 156, 178,
180, 219
pecuniary contribution, 9, 80, 82, 92,
120, 179, 180, 188, 189, 192,
197, 199, 205, 220
Index   225
Peregrini, 33
poll tax, 43, 44
R
155, 157
republican, 17, 39, 58–60, 63–65, 83,
219
S
St. Kitts and Nevis, 2, 10, 18, 47, 48,
76, 78, 81, 82, 84, 92, 94, 109,
111, 113, 115, 116, 141, 146,
148, 150, 156, 159, 163, 164
St. Paul, 9, 34, 35, 214
Turkey, 94, 98, 110, 115, 116, 131,
141, 148, 156, 179, 189
W
wealth, 1, 3, 9, 10, 12, 16–19, 28–32,
34, 36, 38–40, 42–44, 46, 48,
51, 57–59, 63, 69, 72, 77, 79,
80, 84, 95, 122, 137–142, 144,
146, 147, 158, 159, 161–164,
171, 172, 191, 192, 196,
213–216, 218, 219, 221, 222