In 2006, as the government of St. Kitts and Nevis was winding down its ailing sugar industry, a slight, wiry Swiss man with thick eyebrows and a brooding manner arrived on the scene. His name was Christian Kalin, and through his company, Henley & Partners, which helps wealthy people obtain second or third citizenships and residence permits, he proposed restructuring the islands’ “citizenship-by-investment” program.
With a population of about 50,000, the Federation of St. Kitts and Nevis is both the newest and smallest sovereign state in the Americas; when the country gained independence from Great Britain in 1983, it had little with which to support itself save for sugar exports. In 1984, the islands had added a citizenship-by-investment provision to their naturalization act, opening the doors to foreigners who made a “significant contribution” to the state to become bona fide citizens. It seemed like an easy way to attract the occasional entrepreneur in the market for warmer climes and lower taxes. But the program lay practically dormant for 20 years, with only a couple hundred passports exchanged for investments during that time.
Kalin advised the government to create a fund for retraining former sugar workers: Investors could donate $200,000 directly to the fund and qualify for citizenship if they passed a due diligence exam. There would be a three-month wait, but they wouldn’t have to visit the islands. This was key for a small subset of the superrich who consider travel to the Caribbean a dreadful inconvenience. (The price has since been raised to $250,000 for an individual contribution with a waiting period of four to six months.) Kalin also told officials to make it easier for foreigners who purchase properties on the islands to receive citizenship as a perk. Finally, since few people had heard of St. Kitts and Nevis, the government should invest in marketing.
As questions of nationality and belonging grow ever more fraught for refugees trying to cross borders, it is becoming easier than ever for the rich to buy citizenship and the rights, privileges, and protections that go with it—and it’s thanks to middlemen like Kalin that the exchange of passports has become a legitimate, largely above-board industry.
Denzil Douglas, then the prime minister of St. Kitts and Nevis, took well to Henley’s plan. The company was given exclusive rights to market the islands and their passport at conferences, panels, and events abroad. With his Kittitian associate Wendell Lawrence, Kalin took the St. Kitts and Nevis show on the road. Banks that offered their clients relocation services began to list St. Kitts next to Canada, the United States, and the United Kingdom as attractive options, Lawrence remembered. Henley also teamed up with developers to sell property, earning commissions for citizenships sold through the real estate option. The company received $20,000 for every individual contribution into the so-called Sugar Industry Diversification Fund—money that Lawrence said was paid in lieu of marketing fees, which the government could not afford to front.
A St. Kitts and Nevis passport got a lot more desirable in 2009, when holders were granted visa-free access to the Schengen Area, the 26 European countries between Portugal and Finland that have abolished passport checks at their internal borders with one another. Kalin takes credit for this development, which he said is a result of his lobbying European Union lawmakers. Suddenly, a Kittitian passport could be presented to Chinese or Russian businessmen as a must-have. “We put St. Kitts on the map,” Kalin said. “When you market Canada, you don’t have to explain what Canada is—it has a brand. But you have to educate people about what St. Kitts and Nevis is. We positioned St. Kitts and Nevis as a viable product.”
“The amount of work that went into getting it off the ground was tremendous,” Lawrence said. “I’m getting divorced now. I’d blame the travel from the citizenship-by-investment program. My marriage never recovered from it.”
For St. Kitts, though, the union with Henley proved to be an economic miracle. In 2006, “passport money” accounted for about 1 percent of the country’s GDP; by 2014, it hit 25 percent, with almost half of that amount coming from Sugar Industry Diversification Fund contributions. (It’s notable that this figure doesn’t take into account the economic activity spurred by new construction.) Passports are now the country’s biggest export: The citizenship processing fees alone, which amount to $50,000 per applicant, have accounted on average for 7 percent of the country’s annual GDP over the past five years, economists at the Eastern Caribbean Central Bank told me in early 2015. By comparison, the islands’ manufacturing industry hovers at around 5 percent, they said. Citizenship has enabled the country to pull itself out of an economic recession, increase bank liquidity, and balance its budget.
The effects are visible on the ground. The big hotel chains—notably Marriott and the Four Seasons—collectively employ thousands of people to tend to the facilities. All over tiny St. Kitts, new housing developments are cropping up, promising quick citizenship and 5 percent returns on rental income. The properties range from homogeneous white blocks, built cheaply and quickly to ride the passport wave, to high-end resorts like Christophe Harbour, a sprawling luxury development on the southeastern side of the island.
There you can become Kittitian by buying into a share of a villa worth $400,000, which entitles you to several weeks occupancy; or by purchasing plots of land and holding on to them for at least five years, at which point you can resell the land (with a fresh passport attached) to someone else. And if your megayacht happens to be pining for a new port, you can obtain citizenship by buying a marina berth. (Price tag: $1.5 million to $3 million.) In downtown Basseterre, even abandoned lots come with seductive offers: “13,050 Sq. Ft.; Duty Free, Citizenship by Investment, and other Concessions apply,” reads a sign on a yellow shed not far from the port.
This transformation came so suddenly and unexpectedly that observers, skeptical of the durability of the boom, speak of a “passport bubble.” Hastily built property developments, given the go-ahead by the cash-hungry government to attach passports to their stock, can easily end up being overvalued because the minimum real estate investment for a foreign national to qualify as a Kittitian citizen is $400,000.
“It’s a textbook real estate bubble,” said Thomas Liepman, Christophe Harbour’s American director of sales. “What happens in ten years when there are 2,000 ‘luxury’ priced one bedrooms or studio apartments and no one to rent them? People make below-poverty wages here. The rental market doesn’t exist. ... For a lot of developers it’s a race against the clock: Let’s get this built on cheap and easy financing, on the backs of citizenship investors, and then we’ll have a fancy hotel.”
The impact of passport sales in St. Kitts made waves in the normally placid Eastern Caribbean waters. Kalin suddenly had the ear of almost every politician in the region, with the notable exception of the president of St. Vincent, who has loudly and publicly denounced the idea of selling citizenship, saying he has a “fundamental, philosophical objection” to the concept. These programs, critics argue, undermine the sense of community that ties a country’s people together; they’re also unfair because they give the rich opportunities and rights unavailable to everyone else. According to Bloomberg Markets, investor-citizens spent $2 billion buying passports in 2014.
By marketing passports like merchandise, the citizenship business has eroded a moral veneer that, for the past 100 years or so in the West, has come part and parcel with being of a place. What Kalin calls “access rights” to countries have become transactional, an idea that has even seeped on to the airwaves. “I fly like paper, get high like planes / If you catch me at the border I got visas in my name,” the rapper M.I.A. sang on the 2007 hit “Paper Planes.” On the 2011 song “Otis,” a collaboration between rappers Jay Z and Kanye West, Jay Z proudly declared, “Political refugee asylum can be purchased / Everything’s for sale / I got five passports, I’m never going to jail.”
Kalin sees a cultural sea change in the way countries and citizens conceive of the social contract, arguing that traditional ways of allocating citizenship to individuals—by birth or through blood—are fundamentally arbitrary: After all, you don’t choose where you’re born or who your parents are. Since we live in a globalized world, he said, birthplace and blood no longer hold the same significance as they used to.
Perhaps because the implications of his job are far greater than just profits, Kalin has found in his work not just a lucrative business, but an intellectual calling. He spent last winter jetting around the Caribbean, while also completing his doctoral dissertation for the University of Zurich on the subject of citizenship by investment. Evidence of his academic endeavors can be found neatly stacked all over his living room: a paper by the Marxist philosopher Etienne Balibar here, books on European nationality policy there. And when he breaks down the geopolitical trends that drive Henley & Partners, he sounds more like a university professor than a business executive.
“In modern times, we’ve gone from a territorial conception of citizenship, or jus soli, to one tied to heritage or blood—jus sanguinis. Now we’re starting to see citizenship allocated in exchange for contributions to a state,” he said. These contributions include money, of course, but also sporting ability, entrepreneurial skills, and other talents. “Of course it’s only for the wealthy, but that’s not any more of an arbitrary criteria than any other that we currently use to allocate citizenship,” Kalin said.