## Proposed Recommendations: 1.4 Citizenship-by-Investment (CBI) Programs ## Source details **Canonical URL:** [Proposed Recommendations: 1.4 Citizenship-by-Investment (CBI) Programs](https://www.imf.org/-/media/files/data/statistics/gfsm/global-consultations/proposed-recommendations-gfsm-2014-update-1-4-citizenshipbyinvestment-programs.pdf) ## Other formats - [Markdown version](/-/media/files/data/statistics/gfsm/global-consultations/proposed-recommendations-gfsm-2014-update-1-4-citizenshipbyinvestment-programs.pdf.md) - [Structured JSON version](/-/media/files/data/statistics/gfsm/global-consultations/proposed-recommendations-gfsm-2014-update-1-4-citizenshipbyinvestment-programs.pdf.json) --- ### Summary - The proposed recommendation is to treat nonrefundable contributions to government (or their nominated agency) under Citizenship-by-Investment (CBI) programs as other revenue, specifically as transfers not elsewhere classified. - Whether the contribution is recorded as a current transfer or a capital transfer will depend on the specific details of the specific CBI program. - The GFSM 2014 is silent on the topic; the proposed recommendation would introduce new text on CBI programs in the GFSM. ### Links to related guidance and consultations - GN B.8 Recording Citizenship-by-Investment Programs - Draft 2025 SNA and Draft BPM7 - Global Consultations: BP Consultation: June 2021; GFS Consultation: August 2021 - Discussions at the Advisory Expert Group on National Accounts (AEG) / Balance of Payments Committee (BOPCOM): BOPCOM: June 2021 - Discussions at GFSAC Meeting(s): To be determined ### Background and issues - Definition and forms: - CBI programs: government schemes under which an individual (nonresident to a country) may obtain an additional citizenship or passport by making economic contributions to the country, usually with no or very minimal requirements to visit or reside in the country. - Contributions often take the form of investments in land and property, business activities, or financial assets (which fit existing investment recording guidance), but some programs take the form of nonrefundable contributions to government (or a government nominated agency). - Scope: - The proposed recommendation applies only to nonrefundable contributions made under CBI programs and not to other visa schemes (employment, study, visitor visas). - SNA/BPM guidance note (GN B.8) considered four treatment options for nonrefundable CBI contributions: 1. Taxes 2. Sales of service 3. Transfers (other than taxes) 4. Partitioned between a sales of service component and a transfer other than taxes component - Two key conceptual questions guided arguments for and against options: 1. Are the payments compulsory? 2. Are the payments requited? - Divergent views: - Compulsory: From an applicant’s perspective payments are compulsory; from the citizenship perspective they can be non-compulsory because citizenship can be obtained by other routes (e.g., residing in the country). - Requited: From the individual’s viewpoint value received is high (citizenship), but macroeconomic statistics do not treat citizenship or passports as an asset; from the government’s viewpoint direct costs of granting citizenship are substantially lower than nonrefundable contributions. - Consultation outcomes: - Consultations on the four options and conceptual questions attracted opposing views; outcomes summarized in the SNA/BPM guidance note. - The GFS community was consulted in August 2021 (responses summarized in the guidance note); a revised SNA/BPM guidance note was shared for comment in July 2022. - Decision in SNA and BPM updates: - Final decision in the SNA and BPM updates was to treat nonrefundable contributions to government as non-tax revenue of government (specifically as transfers not elsewhere classified). - Note: Eurostat published in September 2024 a GFS interpretation, based on the current manuals, which differs from the decision reached for the 2025 SNA and BPM7; Eurostat agrees contributions are not requited but argues they are compulsory and so should be recorded as taxes. The interpretation difference hinges on whether the payment is “necessary in order to achieve the residence status or citizenship” versus the view that CBI schemes offer only one route to citizenship. ### Proposed recommendations - Treatment: - Nonrefundable contributions to government (or their nominated agency) under CBI programs should be treated as other revenue, specifically as transfers not elsewhere classified (GFS code 144). - Classification between current and capital: - Whether the contribution should be recorded as an other current transfers not elsewhere classified (GFS code 14412) or a capital transfers not elsewhere classified (GFS code 1442) depends on the details of the specific CBI program. - General rule: record as current transfers unless contributions are specifically earmarked for spending of a capital nature (e.g., capital investment projects, or repayments of debt). - Data dissemination recommendation: - In jurisdictions where nonrefundable contributions to government under CBI programs are a significant revenue source, it is recommended these transactions be separately identifiable as “of which” lines within disseminated government finance statistics. ### Rationale for proposed recommendations - Objective: - Harmonize the updated GFSM with the 2025 SNA and BPM7, a key objective of the GFSM 2014 update process. - Conceptual basis: - Payments are not compulsory because nonresidents may obtain citizenship through routes other than a CBI program (e.g., living in the country for a sufficient length of time). - Payments are unrequited (or at least not fully requited) because from the government’s perspective the nonrefundable contributions are greatly in excess of the direct cost to the government in providing citizenship. ### Proposed text for GFSM update (examples from draft 2025 manuals) - BPM7 (Chapter 13, para. 13.56a in draft BPM7): - Where a program consists of a nonrefundable contribution (as opposed to an investment) by a nonresident individual to the government, nominated development funds, or possibly NPISHs, this transaction is recorded as a transfer. If the program is not intended for capital investment projects, then the transfer is treated as a current transfer. Nonrefundable contributions under citizenship-by-investment type programs are not identified separately in the balance of payments; however countries for which these programs are important can publish a supplementary item within other miscellaneous current transfers. - BPM7 (Chapter 14, para. 14.35a in draft BPM7): - If contributions are specifically earmarked for capital investment projects, they should be recorded as capital transfers. Where these contributions are important, countries can publish a supplementary item within other capital transfers. - 2025 SNA (Chapter 9, para. 9.148 in draft 2025 SNA): - If contributions take the form of non-refundable contributions to the government, nominated development funds, or possibly NPISHs, they should be recorded as current transfers, unless the contributions are specifically earmarked for capital investment projects. In the latter case, the contributions should be recorded as capital transfers. --- _Source: https://www.imf.org/-/media/files/data/statistics/gfsm/global-consultations/proposed-recommendations-gfsm-2014-update-1-4-citizenshipbyinvestment-programs.pdf_