Context: Recently, Former IPL chief Lalit Modi has applied to surrender his passport to the Indian High Commission in London, and acquired the citizenship of Vanuatu Island.
- Vanuatu has a popular citizenship by investment (CBI) or “golden passport” program, which allows wealthy individuals to purchase their passports.
- The cost of Vanuatu citizenship ranges from $135,500 to $155,500 (Rs 1.18 cr to 1.35 cr), with options to also purchase citizenship for a family of four with a processing time of 30-60 days after filling out the application.
- Recently, the President of the USA also proposed a $5 million ‘gold card’ for wealthy migrants seeking US residency, aimed at generating significant government revenue.
- In 2022, Indians made up 9.4% of global applicants, seeking benefits such as expanded business networks, global investment prospects, tax planning, and a safety net during economic instability.
About Golden Passport
- It is a service offered by some countries through a Citizenship-by-Investment (CBI) Program, allowing individuals to acquire citizenship through significant investments or property purchases.
- Golden passports, or investor citizenship programs, allow foreign nationals to acquire a new nationality through investment.
- Each Golden Passport scheme has unique guidelines and investor incentives.
- Some countries grant resident rights for a minimal investment, while others require a higher amount. The required investment amount varies by country.
- Wealthy individuals can gain enhanced privileges, such as business opportunities and access to healthcare, in other nations through these programs.
Benefits of Golden Passports
- Increased Mobility: An Indian passport allows visa-free entry to only 60 countries. In contrast, golden passports from nations like Saint Kitts and Nevis provide access to 157 countries, including the European Union and the UK, making cross-border business meetings easier.
- Business Expansion: Countries like Portugal, Grenada, and Malta offer specific advantages. For example, Portugal provides access to the EU, while Grenada grants visa-free entry to the US and offers tax-friendly policies for high-net-worth individuals.
- Tax Benefits: Many countries with golden passport programs have favorable tax regimes, with no taxation on global income, capital gains, gifts, wealth, or inheritance, attracting wealthy individuals for tax planning opportunities.
Disadvantages of Golden Passport
- Potential for Corruption: Foreigners may be able to claim international arbitration and avoid the domestic, potentially corrupt, legal system.
- Security Concerns: It raises concerns about global terrorism and money laundering.
- Undermining the Concept of Citizenship: Traditional citizenship is earned through birth or naturalization, tied to national identity, while golden passports commodify citizenship by allowing it to be purchased, raising concerns about its value and meaning.
- Exacerbating Global Inequality: Golden passports are accessible mainly to the wealthy, creating a divide between those who can afford them and those who cannot.
Popular Golden Passport Countries
- Portugal: Ideal for EU access.
- Grenada: Visa-free entry to the US and favorable tax policies.
- Cyprus: Fast-tracked EU citizenship.
- Malta: Broad EU citizenship with visa-free access.
- Dominica: Immediate visa-free entry to China, beneficial for business there.