Citizenship by investment programs becoming popular amid crypto rise

Armand Tannous, VP of Apex Capital Partners North America & Latin America, joins Yahoo Finance Live to discuss citizenship by investment programs in Caribbean countries that offer golden visas and insight on the application process.

Video Transcript

We are going to shift gears a little bit and talk about a recent trend that caught our attention nearly half a million– I’m sorry, nearly half of millennials have a 25% stake of their wealth in crypto. But what are they doing with it? Here to help us discuss this is Armand Tannous, Apex Capital Partners North America and Latin America VP. And Young Finance’s Dani Romero. Thank you both for joining us.

One of the things they’re doing with it, Armand, is they are trying to pursue citizenship in another country. And I’m wondering where are the countries that folks are looking at?

ARMAND TANNOUS: So thank you very much for having me, actually. So they are looking at different Caribbean nations for citizenship investment programs, as well as in the EU. We’re looking specifically at the islands of St. Kitts and Nevis, Antigua and Barbuda, as well as countries such as Portugal that offer golden visas, which are residency by investment programs.

DANI ROMERO: And can you talk about the vetting process for this program?

ARMAND TANNOUS: Yeah, definitely. So citizenship-by-investment programs are actually, I would say, the best vetted immigration programs available or offered by a country, right? So there’s a lot of due diligence done behind every single application or applicant prior to that application being submitted for review and for approval or refusal.

So one of the things that’s very important that you see throughout the different citizenship by investment programs is the need to present a clean criminal record. So that’s one of the first and most important aspects of the application process or the vetting process. You need to also show a legal source of funds or source of wealth. so a legal source of wealth so that you can move forward, as well as invest in one of the government-approved investment opportunities. They range from real estate, to government bonds, or even a donation to the national economic fund of the specific country.

DANI ROMERO: And I guess a follow up to that is what are the reasons that people are moving towards this direction, especially crypto investors, leaving the US? What’s the reasoning behind that?

ARMAND TANNOUS: A very good question, Dani. So what we’re seeing and the reason why we’re seeing a lot of crypto investors show a lot of interest in citizenship by investment or even residency by investment programs is due to the fact that there are, I would say, three very important points that everyone’s looking at in the crypto world, and that goes by the following: opportunity cost, tax exposure, as well as a lot of uncertainty in the field.

And so these are the main reasons why a lot of crypto millionaires nowadays have been choosing to get a second citizenship, a second passport, or even a complete change of residency so that they can make sure that they have their well-earned investment funds protected. And so that they can legally minimize the amount of tax exposure they have to their home country.

We’ve also seen a lot of crypto millionaires be US citizens, for example, but trade and live and permanently be located somewhere else. And so they see that trend of go where you’re treated best. And that’s when they look at being global citizens, obviously.

DANI ROMERO: Give us an idea, Armand, for how soon that can be turned around. How soon can investors get their citizenship? And why are we seeing so much interest among millennials do you think?

ARMAND TANNOUS: So in regards of how soon, you look at the Caribbean nations or the five jurisdictions that have that offer citizenship by investment programs, which are St. Kitts and Nevis, Antigua and Barbuda, Grenada, Dominica, and St. Lucia. These five jurisdictions have a normal processing time frame of three to four months, I would say, where obviously after the application has been submitted to the host country there’s a lot of you government vetting, due diligence, review of application. Investment is required and then the approval or refusal of the application.

And then you have European nations such as Portugal with the golden visa, Montenegro with the citizenship by investment program, as well as Malta with their immigrant investor program where you are looking more for a 6- to 14- or even sometimes 18-month process.

The reason why–


Yeah, go ahead. Go ahead, please.

ARMAND TANNOUS: No, I was going to say the reason why they’re looking, these millennials are looking, is because, I mean, you’ve seen it over the last 24 months with the pandemic is that you don’t necessarily need to be living in your country of which you were born to be able to continue actively running your business, whether it’s a crypto business, simple trading or even having access to different investment opportunities internationally.

So what we’ve seen is that they realized that the need of being permanently located in their home country is not necessary anymore. So they look at different options which can grant them a residency or citizenship status and that can have obviously additional benefits to it such as travel mobility, tax benefits in regards of legally lowering your tax obligations, and you can’t do so if you’re not a citizen somewhere else or a citizen of a country that offers that.

OK. And really quickly, not too much time left, I just want to ask you what percentage of these people, millennials or older even, that are using this process to gain citizenship, how many of them are giving up their US citizenship? Because even if they do have dual citizenship, they do have to pay US taxes, correct?

ARMAND TANNOUS: Correct. That’s a very good point. So unless you renounce your US citizenship, as a US person, even though you have a second citizenship, you don’t have access to the tax benefits that the other countries offer. So we’ve seen actually with this information from the different US consular services internationally an increase of 36% of individuals that have renounced their citizenship within the last year.

So that’s something that’s really interesting, and obviously citizenship and residency by investment planning is being proactive in regards of when that time comes for you to trigger the renunciation of your citizenship, you must have another document, another status somewhere else for you to be able to do so. And so that’s what we’ve seen. 36%. Huge number.

That is a big number. OK, we will have to leave it there, Armand Tannous. Somehow I think the government is watching all of this happening. No such thing as a free pay day. Thank you so much for your insight today.