What is Due Diligence in Citizenship by Investment Programs?

What is Due Diligence in Citizenship by Investment Programs?
Published on: 08 August 2021

Individuals who feel constrained by their original nationality can pursue second citizenship from countries offering citizenship by investment programs. By financially investing in a participating nation, eligible clients can obtain citizenship and a passport from a foreign country—as well as the significant lifestyle, financial, and travel advantages inherent to their new nationality. Citizenship by Investment (CBI) schemes are available from numerous countries around the world; some of the most popular are offered by European and Caribbean Island nations. If you have already begun shopping around for second citizenship, you may already have a general idea of the application process for CBI programs. In addition to submitting multiple financial documents and personal references, applicants must meet numerous application requirements. While different CBI programs require the fulfillment of different conditions, all reputable programs will practice “due diligence.” But what does this mean? What is due diligence in citizenship? This blog will provide an overview of the concept of due diligence for obtaining Citizenship by Investment. In addition to learning about how to prepare for due diligence, you will learn about the advantage of strict due diligence for investors, as well as how to avoid a red flag on your application.

What is Due Diligence in Citizenship

  • Depending on how far along you are in the CBI process, you may already have encountered the term “due diligence.” However, even if you’re somewhat familiar with the term in general, you may still be wondering, “What does this mean in the context of economic citizenship?”
  • While different economic citizenship programs offer different avenues for investment, the majority offer applicants the prospect of either making a financial donation to the country or purchasing pre-approved real estate. In exchange, they will receive citizenship and a passport.
  • Regardless of the CBI program, you pursue, due diligence for obtaining Citizenship by Investment is one of the main steps of the application process. Due diligence begins with an assessment of an applicant’s CBI application, which includes a number of basic required documents and forms. While different CBI programs require different documents/materials, most schemes ask you to submit the following:
    • Identifying documents (birth certificate, passport, etc)
    • Financial materials (i.e. bank account numbers, information about your income and other sources of wealth, employment history, etc)
    • Personal references
    • Criminal history
  • Due diligence is performed by the authorities and officials who are processing your CBI application (it therefore occurs after an applicant has submitted a completed application) and can be defined as the act of investigating the person applying for citizenship by examining the above forms (i.e your complete CBI application) and other available information about the applicant. Essentially, due diligence is performed in order to confirm the following:
    • Your identity (that you are who you say that you are)
    • Your financial profile (that you have enough money to afford your CBI investment and all of its associated and future costs
    • Your security profile (whether you have a criminal history—and therefore whether you will threaten the security of the country you are attempting to achieve citizenship from).

How to prepare for due diligence

  • As an investor, you can prepare for due diligence by submitting required documents and materials that convey the information requested of you in an organized and consistent way.
  • Wondering how to avoid a red flags on your application? Be as thorough, consistent, and as organized as possible. If you exaggerate your financial status (such as your income or investment streams) this will likely raise a red flag on your application.
  • Do not try to hide assets or any fraudulent/criminal history from CBI officials. If you are found to have lied/defrauded CBI officials, your application will be in jeopardy.
  • Once CBI has confirmed your identity, your criminal history (or lack thereof), and your financial profile, (by investigating the validity and legitimacy of your required documents and by performing other checks on your person), they will make a ruling on your application. A successful CBI applicant is therefore someone whose application does not raise any red flags—i.e. someone who can afford the cost of citizenship has a clean criminal history and does not present a security risk to the country.
  • While due diligence requirements may seem onerous for the investor, they are in fact an essential aspect of any reputable CBI program. As an investor, you should want to participate in a CBI program that performs these kinds of rigorous financial and security checks on applicants. The advantage of strict due diligence for the investor is that it involves him or her in a process that confirms the authenticity and validity of the program they are participating in. Be wary of programs that do not perform due diligence.
  • Ultimately, due diligence goes both ways! As an investor, you should also perform your own form of due diligence toward the programs you are considering obtaining citizenship from. This is something that a reputable marketing agent can help you with.
  • Contact Guide Consultants to learn more about the various CBI program on the market, and to ensure that you pass any due diligence checks in the event that you do apply.
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