Eduardo Munoz/Reuters A view of beaches just outside the main capital Basseterre June 13, 2009. The Caribbean's small island states resist natural hurricanes year after year, but they are fighting to stay afloat in a global economic storm that is battering the world's rich and poor nations alike. Picture taken June 13, 2009.
In 2006, the tiny Caribbean state of St. Kitts and Nevis was in deep trouble. Its sugar plantations had closed a year earlier, gang violence had given it the dubious distinction of having one of the worlds highest murder rates, and only two governments on Earth were more indebted. A three-hour flight south of Miami, the country of 48,000 people was more or less unknown. Certainly, the two specks of volcanic rock in the middle of the West Indies werent of much interest to the worlds rich. St. Kitts and Nevis had run a citizenship-by-investment programhad sold passportssince 1984, but it didnt get much attention and was never a moneymaker.
Then a Swiss lawyer named Christian Kalin showed up.
Thanks to Kalin, St. Kitts has become the worlds most popular place to buy a passport, offering citizenship for $250,000 with no requirement that applicants ever set foot on the islands sun-kissed shores. Buyers get visa-free travel to 132 countries, limited disclosure of financial information, and no taxes on income or capital gains. The program became so successful that St. Kitts emerged from the global financial crisis far ahead of its neighbors in the Caribbean. Its been a complete transformation, says Judith Gold, head of an International Monetary Fund mission to the country.
Just as Kalin put St. Kitts on the map, Bloomberg Markets will report in its April 2015 issue, the reverse is also true. It made his reputation. Before St. Kitts, Kalins firm, Henley & Partners, was an obscure wealth management and immigration consultancy, and Kalin was working out of a small branch office in Zurich. Tall, with a runners build, Kalin was known as a researcher, he says, not the hard-nosed dealmaker hes become. His claim to fame was having edited a 766-page guide to doing business in Switzerland, a tome found in every one of the countrys embassies.
Soon, prime ministers from around the world were seeking Kalins advice, in the hope he could reproduce the magic of St. Kitts, where he effectively created a resource out of thin air for a nation that had few. Many countries allow wealthy foreigners to buy residency cards through what are called immigrant investor programs, but before the financial crisis, St. Kitts and another Caribbean island called Dominica were the only ones selling citizenship outright. Since then, another five countries have gotten into the game. More are coming.
Kalin advised the governments of Cyprus and Grenada, which established citizenship-by-investment plans in 2011 and 2013, respectively. Also in 2013, he designed a program very much like St. Kittss for Antigua and Barbuda. In 2014, Kalin crafted a plan for Malta, the smallest member of the European Union. Pretty much every government that has even contemplated this has talked to us, he says. In St. Lucia, a task force is considering proposals from Henley and other firms. Albania, Croatia, Jamaica, Montenegro, and Slovenia are looking at programs, too.
The bottom lineits a phrase Kalin uses oftenis that more states are open to making citizenship rights available through investment, he says. And it makes a lot of sense. Why not give citizenship to people who contribute a lot to the country?
Since revamping the St. Kitts program in November 2006, Kalin has built Henley into the biggest firm in an industry turning citizenship into a commodity. Investors spent an estimated $2 billion buying new passports last year alone, and Kalin predicts demand will grow along with the ranks of the wealthy in emerging countries. Its a question of mobility and also security, he says. If youre from a country thats politically unstable, where youre not sure what the future holds, you want to have an alternative.
Henley is privately held and Kalin wont discuss its revenue, but he says by the end of 2014, the firm had helped dozens of governments raise $4 billion in direct investment through citizenship or residency programs. It has also advised thousands of multimillionaires on where and how to buy a passport of convenience, collecting fees and commissions from all sides. Last year, at 42, Kalin became Henleys chairman.
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Passport king helps poor nations turn citizenship into a resource
