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Between Benefit and Abuse: Immigrant Investment Programs

Between Benefit and Abuse: Immigrant Investment Programs

Leila Adim*

The full text of this article can be found in PDF form here.


During the last thirty years, an increasing number of countries have introduced Immigrant Investment Programs (“IIPs”) in order to attract foreign capital and boost national economies. Canada, St. Kitts and Nevis, the United States, and Dominica initially implemented IIPs in the late 1980s/early 1990s; in the rest of the world, IIPs have been adopted only recently. In particular, except for Ireland and the United Kingdom, European countries avoided the introduction of similar programs for attracting foreign capital and, until the last decade, admitted immigrant investors on a discretional basis. However, the recession in 2008 induced many states of the European Union (“EU”) to change their approach toward immigrant investors and to regard IIPs as instruments for emerging from the crisis. Nowadays, these programs exist in almost half of the continent and represent the gateway of entry for many wealthy foreign individuals, but what is their overall impact at the domestic and at the global level?

This Article addresses the various effects that IIPs may have on in- and outmigration of people and capital, with a special focus on the programs that have been recently introduced in some European countries. The purpose of the analysis is evaluating whether the benefit that IIPs bring to the host country’s economy justifies a multilevel pattern of discrimination that may involve tax residents, tax jurisdictions, and immigrants with different levels of wealth. The Article is organized as follows: Part I focuses on the main features of IIPs, Part II addresses discrimination related to the coexistence of preferential tax treatments and IIPs, Part III examines the effects of IIPs in the ambit of global (tax) competition, and Part IV approaches the existing disparities in the admission of immigrants. 


IIPs are foreign capital attraction measures based on a conditional-exchange logic according to which the host country provides to third-country nationals, who make substantial investments in the private or in the public sector of the host country, a preferential procedure for obtaining the right to live within its borders. These programs can be very different in scope and characteristics, as every state has shaped IIPs in consonance with its specific needs and priorities. There are IIPs that require private sector investments or job creation, others in which applicants have to invest in the real estate market, and still others that request the payment of non-refundable fees to the state or the purchase of regular or low-interest government bonds.

Apart from the type of investment and its extent, which can vary significantly from country to country, IIPs can also be defined on the grounds of the different “status” conferred to the investor. Some programs allow applicants to receive temporary residence permits, which can be renewed and/or turned into permanent permits under specific conditions, while others entitle investors to directly obtain a second passport and citizenship or a permanent residence with—or without—the option to apply for citizenship after a few years.

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*Faculty of Law, University of Barcelona (SPAIN).