Arton Capital’s Philippe May on Vanuatu’s citizenship-by-investment program, investors migration and the future of CBI industry
Philippe May with the Prime Minister of St. Kitts and Nevis, Dr. The Hon. Timothy Harris
Philippe A. May, Head of Asia Pacific at Arton Capital, one of the leading global financial advisory firms, in this exclusive interview for Vila Times talks about the potential of Vanuatu for the citizenship-by-investment industry, explains why major firms do not want to promote Vanuatu, and says attracting inbound investment from wealthy migrants is more popular globally than ever.
‘Some people find it hard to put Vanuatu in the same categories with seasoned CBI countries such as St. Kitts and Nevis or Cyprus’
– When reading articles with market news and analysis written by CBI (citizenship by investment) industry experts I often sense a bit of a scorn there when Vanuatu and its citizenship program is mentioned. What is the perception of Vanuatu by CBI market players on a general scale?
While Vanuatu does have options for citizenship-by-investment its two programs are so different in many aspects from other, more established programs that some people find it hard to put Vanuatu in the same categories with seasoned CBI countries such as St. Kitts and Nevis or Cyprus. In particular the fact that only a honorary citizenship is bestowed on applicants sets Vanuatu apart.
‘Vanuatu’s weak point is the lack of consistency in the program and the lack of political stability in the country’
– What are the main strong points, selling points of Vanuatu’s CBI program, in your opinion? Weak points?
An advantage is the geographic location of the country in the Asia-Pacific region, its proximity to countries with huge demand for CBI, the small time difference and the fact that visits there can be arranged easily without passing through countries which often require visas from applicants. To visit the Caribbean or European CBI-countries many applicants need visas for the US, UK or Schengen first.
– Weak points?
To be precise there is not only one CBI program in Vanuatu, but two: DSP and VCP. The differences are not obvious, but VCP has only one local agent and one so-called “exclusive master marketing agent” overseas. That’s rather unusual. Arton Capital – at this stage – is not involved in marketing Vanuatu’s CBI-programs, and neither is any other of the major industry players. Another weak point is the lack of consistency in the program and the lack of political stability in the country.
‘I don’t think that Vanuatu has engaged any professional consulting service from an industry leading company’
– Vanuatu’s citizenship program is pretty much the only program of this kind in the Pacific and South East Asia. Would that allow it to win the competition with Caribbean and Europe for clients in Asia?
The geographic location of a country is only one aspect. Vanuatu’s proximity to Asia alone, however, is not enough. Typically, governments who set up CBI program seek the advice from large investor migration firms like Arton Capital with an experienced government advisory practise. I don’t think that Vanuatu has engaged any professional consulting service from an industry leading company.
‘There must be no distinction between new, economic citizens on one hand and previous, original citizens on the other hand’
– What are the main things Vanuatu should learn from the Caribbean countries experience of developing the successful CBI programs?
There must be no distinction between new, economic citizens on one hand and previous, original citizens on the other hand. If you have two classes of citizens you have a problem. If one part of your citizenry cannot vote, is only “honorary” citizen, cannot pass their citizenship to future generations and does not know if future governments will renew their passports you have a serious issue. You create uncertainty.
‘Large number of unknown local agents and total absence of international players is irritating’
– What needs to be done by Vanuatu’s government, or local agents, working under this program, to make it more popular and more successful globally?
There are many things that need to be changed. Communications of the citizenship commission, in particular about any changes, must be improved. The large number of unknown local agents and total absence of international players is irritating. And Vanuatu is the only country where a contribution amount has to be paid before an applicant gets his approval. That’s very unusual, to say only the least. I would not feel comfortable transferring a six-digit amount to an unknown local agent in Vanuatu before I have the assurance from the citizenship commission that my application is approved.
‘If the citizenship program is professionally managed I see a great potential for Vanuatu’
– Generally do you see a potential for Vanuatu in the CBI market?
Absolutely, yes. Vanuatu is beautiful, peaceful, low tax country with lovely, friendly people. Its passport travels quite well, as we can see on www.passportindex.org. It is far from conflict zones and if the citizenship program is professionally managed I see a great potential for Vanuatu.
‘Attracting inbound investment from wealthy migrants is more popular than ever’
– I have heard more than once from the industry insiders that this whole market the way it is now, is close to cease to exist for a number of reasons like tightening of regulations, or radically transform. Do you see that coming?
By the contrary! Large CBI firms like Arton Capital do welcome strict regulation in order to ensure transparency and uphold industry standards. Many CBI countries have made great efforts in this regards. The latest example is Cyprus which has just this month announced it will beef up its regulations, limit the number of agents and reign in their activities. At Arton Capital we welcome this development because it makes CBI more sustainable. The number of countries offering CBI or “golden visa”-type residency-by-investment programs is constantly increasing. This week Moldova in Europe has announced it will come up with a program. With growing wealth in developing countries that do not offer an attractive work-life balance (think Red China, Bangladesh and mega cities like Jakarta, Mumbai, Manila etc.) the demand keeps increasing. I see no reason why the industry would diminish. Attracting inbound investment from wealthy migrants is more popular than ever. Big countries like the USA (EB-5), Canada and the UK have residency programs. Who would be able to stop them? Only fools and bigots can believe that high net-worth individual would not seek global mobility through second passports and a safe place for living, education, medical care etc.
‘If you operate in obscurity, produce delays in processing, do not communicate properly with the stakeholders or have no international marketing agents with offices around the globe you will lose out’
– What are the latest trends in this industry in terms of understanding which countries now are the leaders, and if there are some particular segments of the market that are growing faster than others?
Those countries which operate programs in transparency, promote their programs openly, have the relevant government units to process applications efficiently and co-operate with global advisory firms are thriving. If you operate in obscurity, produce delays in processing, do not communicate properly with the stakeholders or have no international marketing agents with offices around the globe you will lose out. An attractive tax environment and good public security are other important aspects.
‘The Pacific Island nations have an appalling record of failed programs, abuse, corruption etc’
– Tell me a little bit about the CBI industry and its development over the last decades. Maybe share some particularly interesting experiences or observations.
Citizenship-by-investment goes back not only decades, but centuries. Even in ancient Greece and in the Roman Empire people who contributed significantly could become citizens. That’s nothing new. In modern times St. Kitts and Nevis was the first. They started in 1984 and still benefit from this early mover advantage. They never interrupted the program. They have greatly increased efficiency and can now charge a premium. Antigua and Barbuda came later but constantly improves the program which also enjoys strong support from the government. They keep learning and exert their utmost. Other countries failed miserably. The Pacific Island nations have an appalling record of failed programs, abuse, corruption etc. Tonga still suffers today from the partly illegal sale of passports many years ago. There were shenanigans in the Marshall Islands, Samoa, Nauru and others. In Vanuatu at least everything is on a legal basis, but the implementation and marketing is weak. I would be happy to see Vanuatu and other Pacific countries thriving and reaping the benefits from investor migration.