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1. Global Governance and Investment
Citizenship Firms
Abstract
Since the 2008
fi
nancial crisis, an increasing number of countries
have begun to "sell" citizenship and residency cards to the global
economic elite in exchange for investments.
This commerce is facilitated by multinational corporations in the
investment citizenship sector, who assist governments with
programme design and reform.
The goal of this essay is to investigate the operations of these
businesses, which have hitherto been mostly ignored in studies.
Introduction
In return for investments, an increasing number of nations are
"selling" citizenship and residency cards to the global economic
elite.
Purchasing citizenship or a resident permit may provide very
af
fl
uent persons with market access, favourable tax regimes, visa-
free travel, and/or personal protection.
There is currently a growing body of academic writing on this topic.
Citizenship policy is fundamental to Westphalian sovereignty and
has historically been a state-exclusive power.
Another trait of these corporations that is of signi
fi
cance here is that
they also serve the global economic elite.

2. According to research, economic inequality has risen signi
fi
cantly to
the advantage of the "top 1%." Milanovic (2016) and Piketty (2014).
My goal is to present a critical examination of how these
corporations' intermediate roles allow them to exert power more
precisely, which may have long-term implications for the broad
social and economic processes connected with modern neoliberal
governance.
Previous research, newspaper articles, website information,
contracts, and numerous industry publications were studied
(magazines, books, statistics, indices, etc.).
Background: citizenship acquisition
methods
With rising migration, the acquiring of citizenship later in life
(naturalisation) has grown more common and politicised.
A critical legislative development that has increased the desire for
naturalisation among immigrants is the acceptance of dual (or
multiple) citizenship by an increasing number of states.
There seems to be a growing acceptance that "land cannot belong
to two states at the same time, but people may."
Citizenship has a huge impact on a person's life chances in
practically every aspect: money, work, health, and so on.
As researchers have conclusively established, being a citizen in a
wealthy and well-functioning democracy is a huge bene
fi
t.
Citizenship is "the contemporary counterpart of mediaeval privilege
—an inherited position that signi
fi
cantly improves one's life
prospects" (Milanovic 2016, 125–137).
Citizenship on the market
The majority of the programmes we see today were developed
during the 2008
fi
nancial crisis.
Selling citizenship has been used by numerous governments to
secure foreign investments.
The programmes are not delivered in the form of direct cash
payments, as other items are.
Rather, they often entail investments in government funding, job
development, and/or real estate.

3. In general, costs are higher in nations with strong levels of safety
and quality of life and when mobility is improved by visa-free travel
to other countries.
Motives vary and are related to wealth levels, among other factors.
For many, it serves as "compensatory citizenship," providing more
mobility, educational opportunities for children, economic prospects,
and tax breaks.
The role of business in global governance
The literature on global governance has identi
fi
ed a vast number of
non-state entities with worldwide impact.
Private companies, religious organisations, epistemic communities,
nonpro
fi
t organisations, and ma
fi
as and mercenary armies are all
examples.
Transnational corporations (TNCs) have grown in size and
resources under their control.
Few researchers today disagree that commercial players may wield
in
fl
uence over governments, although the amount of that power is
debatable.
Neoliberalism has frequently presented itself as anti-statist, but it
relies heavily on the state to provide rules, enforce laws, and foster
a favourable economic climate.
The current combination of governmental and economic powers is
referred to as "neoliberal sovereignty" by Yves Winter and Joshua
Chambers-Letson.
Another innovation, in my opinion, is the rising involvement of
private enterprises in supporting and executing instrumental
citizenship via intermediary positions.
Purchasing investment citizenship is only one example, but it is a
signi
fi
cant one (Joppke 2019).
Power in business and third-party roles
When they directly attempt to in
fl
uence political decision-makers at
the national or global levels, they are exercising instrumental power.
The capacity of companies to in
fl
uence norms and ideologies is tied
to discursive power.
Because of their discursive in
fl
uence, for-pro
fi
t actors are more
trusted to carry out government rules.
These types of power are interconnected and in
fl
uence each other
in a variety of ways.

4. Intermediaries in regulatory matters
By de
fi
nition, third-party regulation is indirect.
This makes it common in global governance since the
circumstances for hierarchical steering are often lacking.
In this paradigm, an intermediary joins the regulator in seeking to
in
fl
uence the goal, much as investment citizenship businesses do
when designing or implementing government policy.
The intermediaries themselves might be private, public, or civil
society actors, motivated by power, pro
fi
t, or ideology, and serving
both private and public objectives.
The intermediary's function is linked to the amount of delegation
(legal control) and orchestration (voluntary compliance).
Power may also be gained over time through feedback processes.
The intermediary often engages in lobbying activities that spark the
desire for regulation, and he or she continues to advise the
regulator on how to alter and amend policy.
When the intermediary has captivated (i.e., come to control) the
regulator, it has gone so far as to be "the leaders in regulation," with
the apparent rule-makers following them.
Brokers
The second kind of intermediary function that investment
companies play is that of brokers, who operate as go-betweens for
governments and wealthy clients.
Brokers are always placed between companies that have never
been in direct communication with one another.
Brokerage allows the two parties to get access to resources and
information that they would not have had otherwise.
The broker seldom monopolises interactions between them, but
they often have instrumental control over them.
Brokerage entails the ability to link people and establish the
groundwork for new social identities and relationships.
Much of the brokerage literature implies a preexisting state of
dispute between the two parties.
This broker serves as a matchmaker or headhunter rather than a
dispute mediator.

5. Its productive potential stems from its ability to forge new
relationships between the two parties, which may also transform the
two and produce something new.
As mediators, investment citizenship
fi
rms
are
The investment citizenship sector has grown rapidly.
It is expected to be $21.4 billion in early 2019, having quadrupled
since 2011. (Nesheim, 2019).
China is the most important source nation, followed by Russia,
India, and Turkey.
The nations with the most income from citizenship and residency
programmes are the United States, Cyprus, Turkey, the United
Kingdom, and Portugal.
As regulatory mediators, investment
citizenship
fi
rms advise
The characteristics of middleman businesses
As regulatory intermediaries, the companies advise governments
and/or help them with programme implementation.
The big global enterprises in the citizenship and residency sector
form one category.
PricewaterhouseCoopers (PwC) and KPMG are two examples.
The third category includes companies that work as certi
fi
ed local
agents in countries where citizenship programmes are offered.
Reasons for using private actors
Scandals, a lack of transparency, and corruption have all
contributed to the failure of state-developed programmes.
Governments have gone to private enterprises to get something
that they themselves lack, just as the theory of regulatory
intermediates would have us believe.
Such efforts may be seen in the marketing and promotional
materials used by investment citizenship businesses to persuade
government audiences that they want their services.
Firms' responsibilities
For an outsider, the notion of national citizenship as a "brand" or
"product" may be surprising, yet it is ubiquitous in business and
attests to its commercialization (Boatcă 2015; Tanasoca 2016).

6. Some of the corporations are also actively involved in the creation
and administration of the actual programmes, implying a further
level of involvement for them as regulatory intermediaries.
These various responsibilities provide companies with diverse
degrees of leeway in wielding instrumental in
fl
uence over
governments.
Agreements on concessions
The power of an intermediary is determined in part by how its job is
de
fi
ned (of
fi
cially or informally) and the degree of in
fl
uence the
regulator has over it.
When investment companies function as government
concessionaries, they take on the "hardest" and most hierarchical
position that this regulatory intermediary may hold.
Henley & Partners has been awarded concessions in Moldova,
Malta, and Thailand to develop, execute, and market programmes.
Concession agreements are notable for requiring the government to
reimburse the company if the contract is cancelled.
This is a kind of insurance against future political upheaval, and it
signi
fi
cantly reduces the risk that the corporation bears.
For example, the European Commission launched infringement
proceedings against Malta in 2020 as a result of its investment
citizenship programme.
The result was that Malta restructured its programme, which meant
that Henley & Partners lost the concession and were consequently
entitled to compensation.
Another example is the concession deal with Moldova, which also
ended in 2020 due to the EU's insistence on Moldova discontinuing
its citizenship programme (Nesheim 2020a).
Lobbying
Lobbying, in the RIT model, represents the intermediary's efforts to
in
fl
uence the regulator.
However, we see lobbying in the investment migration business as
an intermediate act for the regulator in order to in
fl
uence its
regulator.
Some of the bigger
fi
rms, such as Henley & Partners and Arton
Capital, are involved in lobbying beyond the national level.

7. The European Commission has initiated infringement procedures
against Malta for inviting of
fi
cials of Henley & Partners to speak at
its events (European Commission 2019, 2020; Pegg, Harding, and
Goodley 2021; Daphne Caruana Galizia Foundation 2021).
Other heads of state are often present at similar industrial
gatherings.
In 2019, three Prime Ministers from Saint Lucia, Albania, and
Montenegro attended the Global Citizenship Conference in London
(Neate, 2019). Arton Capital has also hosted events attended by
political and other elites.
PMs, as well as previous and current heads of international
organisations and entertainment icons such as Robert DeNiro,
Wyclef Jean, and Akon, have visited its "Global Citizen
Forums" (Arton Capital 2021b).
Final thoughts
Naturalization and citizenship choices are made by the sovereign
state, as recognised by international law.
Situations of what the theoretical section referred to as "regulatory
capture" do not seem impossible.
Governments maintain the power to cancel contracts before they
expire, but this comes at a high cost, particularly in the case of
concession agreements.
Brokerage
fi
rms for investment citizenship
Brokerage as a catalyst in investment citizenship
A broker is a company that develops a relationship between two
parties (governments or private individuals) and then withdraws
from it.
A broker has an information edge over the two parties it links, and it
often monopolises communication between them.
Investment citizenship catalyses the most direct new linkages
between governments and new citizens. However, it has far-
reaching implications for citizens in both origin and destination
nations.
The customers
Clients of investment citizenship businesses are often referred to as
Ultra High Net Worth Individuals, or UHNWIs, which indicates they
have at least US $30 million in assets (Knight Frank 2018, 2).

8. This segment has become wealthier in recent decades, as
disparities have increased and taken on somewhat different
patterns than previously.
Several research businesses look at this group's housing choices,
hobbies, spending habits, and charitable interests.
Connecting states and customers
The key advantages for governments are, of course, the in
fl
ux of
capital and gifts, as well as the potential macroeconomic effects on
employment and taxation.
However, there are also intangible advantages associated with
luring af
fl
uent new residents.
It is suggested that the new elite citizens would cause "host nations
to acquire notoriety in the international arena," resulting in more
publicity, tourism, and citizenship applications.
In their periodicals and client guides, Henley & Partners, Arton
Capital, and Apex Capital portray their customers as "global
citizens."
"Global citizenship" is the attitude of people who identify mainly as
members of a global community rather than as citizens of a certain
country or location.
The start of the worldwide pandemic heightened the perceived
necessity for a second passport as a means of escape, spreading it
to ostensibly more prosperous and secure nations.
Handling corruption allegations
As we saw in the theory part, brokers are very sensitive to
allegations of corruption.
They pro
fi
t from the power provided by their intermediate function,
but they must exercise extreme caution in controlling their public
image.
Concerns about controlling impressions centre on due diligence as
well as ethical norms, industry regulation, and certi
fi
cation.
The Investment Migration Council (IMC) seeks to represent and
regulate the new "profession" of investment migration experts.
For present and potential industry players, the IMC has recently
devised an "ethical code of conduct," and it provides courses
leading to a "Certi
fi
cation in Investment Citizenship."

9. The Global Investor Immigration Council (GIIC), founded by Arton
Capital, APEX Capital, and others, is a competitor industry
organisation to IMC (Salerno and Lyetayev 2021).
Final thoughts
Citizenship sales give commercial and movement options to the
global elite, sometimes known as the "transnational capitalist
class" (Carroll 2010; Kantor 2016; Grell-Brisk 2018).
However, it also serves as insurance—a way out if things go wrong.
In many circumstances, citizenship serves as a Global Entry pass
or an American Express card rather than a means of truly de
fi
ning
one's location in the world.
Conclusion
Governments often engage investment citizenship corporations to
design, amend, or advise on their citizenship by investment policies.
Through feedback sequences, modifying and rede
fi
ning investment
migration programmes, corporations may develop instrumental
power with respect to governments.
They may also wield instrumental in
fl
uence via global and national
lobbying efforts.
The literature on intermediaries may assist us to understand the
precise situations in which companies might wield power.
The investment and real estate industries are major actors in what
Thomas Piketty refers to as the "investment citizenship
business" (Piketty 2014, 464–465).
The ability of brokers to create new connections and identities is
what allows them to wield productive power (Barnett and Duvall,
2005). Individually, they contribute to the development of the state-
client relationship.
At the aggregate level and in the long term, this behaviour adds to
global inequality processes.
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