Investment-based citizenship and residency programs (CBI/RBI) have evolved into instruments used by corrupt individuals and criminals to hide their identities, launder money, or commit more crimes.

Additionally, the illegal use of citizenship and residency programs is a profitable “multi-billion-dollar business,” allowing people to evade justice, enter third countries, and launder proceeds from fraud and corruption. These conclusions are the result of joint research by the Financial Action Task Force and the Organization for Economic Co-operation and Development (OECD). The research examined criminal activity related to CBI/RBI schemes, taking into account issues related to taxation and migration as well as fraud, corruption, and their effect on public integrity.

While acknowledging the possibility of economic expansion, FATF President T. Raja Kumar also acknowledged the myriad irregularities surrounding these programs. The misuse of programs that permit foreigners to gain citizenship and residency through investment has developed into a multibillion dollar industry for evading justice, laundering illicit proceeds, and gaining access to foreign territories, as noted by OECD Secretary-General Cormann.

Many nations run residency and citizenship programs. In the former case, foreigners can become residents by investing a certain amount, while in the latter case, investment leads to citizenship. The required amounts of investment differ between nations. These initiatives, while potentially beneficial to the economy, are frequently mired in irregularities like money laundering, tax evasion, and corruption.

Although properly run CBI/RBI programs can be advantageous to both host nations and individuals, there is a considerable risk of illegal activity when these programs are actually put into practice. The report highlights how these schemes help criminals move around the world while keeping their identities secret by using shell companies in various jurisdictions. It also highlights the schemes’ flaws, such as the use of middlemen, cooperation with several government organizations, and professional facilitators’ exploitation.