Economic Citizenship: Is it Worthy Investment?

Abstract

The selling of economic citizenship is expanding and gradually becoming an industry. Economic citizenship is a well-defined process whereby wealthy individuals can obtain a second citizenship quickly in exchange for an investment or donation. A Caribbean passport settles for 100,000 USD for singles and 150,000 USD for a family. The economic analysis of economic citizenship calls for a different approach than naturalized citizen’s decisions. This paper explains the economic citizenship concept and weighs the cost-benefit analysis of economic citizenship in three aspects, vis-a-vis: visa free, marginal contribution and investment threshold aspects. The return on economic citizenship investment for the visa free access is moderate, around 1% for a single and 2.5% for a family. However, the benefits of acquiring the economic citizenship from an EU country can compensate the low return on visa free access. Under the marginal analysis, we eliminated the redundancy among passports and we calculated the additional benefits of an extra passport. This shows that acquiring passport from developing countries is not meaningful for the citizens from developed countries, especially, Turkish and Jordanian citizenship, because investment programs remain very expensive. We are expecting that they will lower the investment threshold. Under the investment analysis, we demonstrated the minimum investment requirement and we suggested that the best deal is from Montenegro. Moreover, the paper predicts the upcoming fee changes and investment opportunities of economic citizenship programs in different countries.