Investment programs are gaining popularity in the U.S. and internationally, as more millennials shift their money into cryptocurrency.
The dynamic represents both an opportunity for citizens to obtain a second passport, and an option to claim permanent residency in a foreign country, according to one market observer. He cited the Caribbean and Europe as prime destinations for nascent crypto investors.
“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,” Armand Tannous, vice president of North America and Latin America for Apex Capital Partners, told Yahoo Finance Live on Monday.
Investors approved for the Caribbean will have to wait three to four months for citizenship, while those applying for European nations will have to wait six to 18 months.
Additionally, Tannous noted that if a citizen decides to renounce their U.S. citizenship, even though they have a second citizenship, they “don’t have access to the tax benefits that the other countries offer.”
Still, there’s been “an increase of 36% of individuals who have renounced their citizenship within the last year. [That’s] a huge number,” Tannous said.
As more countries allow investment into their nation by foreign nationals and offer them substantial benefits in return, Tannous explained that citizenship by investment programs (CIP) do a lot of “due dilligence” when it comes to vetting applicants.
Successful applicants “need to present a clean criminal record” and also “show a legal source of funds or source of wealth as well as invest in one of the government approved investment opportunities,” Tannous said. That could range from real estate to government bonds, or even a donation to the national economic fund of a specific country.
According to data compiled by Apex Capital Partners, the pandemic fueled a 200% surge in applications from U.S. citizens applying for citizenship and residency by investment programs, with strong growth in Canadian applications (47%).
The interest fueled by crypto comes during what has been a volatile yet monumental year for digital coins. Bitcoin (BTC) — the leading cryptocurrency — soared to new highs, but has since retreated amid fears about the Omicron variant of COVID-19, as well as concerns about Federal Reserve monetary policy.
However, the sector is still booming amid sustained interest by small investors in smaller crypto units, and soaring institutional buy-in from major companies. Meanwhile, digital currency enthusiasts — many of whom are millennials — are driving interest in dual citizenship.
“Over the last 24 months, with the pandemic, [we have seen]that you don’t necessarily need to be living in your country of which you’re were born in to be able to continue [or] actively [be] running your business, whether it’s a crypto business, simple trading, or even having access to different investment opportunities internationally,” Tannous said.
The reasons for why the crypto crowd is gravitating toward having a second home country are related to “opportunity cost, tax exposure, as well as a lot of uncertainty in the field,” the investor said.
“They see that trend of where you’re treated best and that’s when they look at being global citizens,” he added.
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter: @daniromerotv