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The Price of Entry

[dropcap]I[/dropcap] recently stumbled across an interesting dataset compiled by Allison Christians during her research for a new working-paper entitled “The Price of Entry”. Allison Christians is an established tax lawyer and the H. Heward Strikeman chair in taxation law at McGill University in Canada, and has a profound understanding of international tax policy and economic development. Christians is a staple name on the International Tax Review’s Global Tax 50 list—a global ranking of the most influential thought-leaders on taxation policy.

According to Christians, while conducting research on residence and citizenship by investment programs, her team compiled data that provides “a fairly thorough look at the residence and citizenship by investment programs currently on offer around the world.” The above infographic displays the lowest cost program per country for all countries that offer either residence or citizenship by investment. For example, the cheapest residence by investment programs are offered by Panama and Paraguay, each coming in at about USD $5,000. On the other hand, France and Russia have the most expensive programs at USD $10.6 million and USD $9 million respectively.

At the crux of Christians’ interest with immigrant investment programs is what she dubs “The Inequality Factor”—that is, how much can wealthier, more developed countries demand in terms of higher prices and more stringent requirements (such as actual residence in the host country) for entry, versus how much poorer, less developed countries can demand in price and commitments from their applicants. Christians cautions that her research is still ongoing, but “the answer seems to be that there appears definitely a ‘rich get richer’ quality to the distinctions among programs, but there are lots of details in the programs that require further thought.”

Related Post

The implications of the commodification of citizenship and access to immigration vis-à-vis pay-to-play visa programs has long been a hot-button issue for international tax scholars and political scientists alike. Their historical analysis, however, does not typically consider the role taxation dynamics between origin and host countries can play, nor how they impact the tax regime in terms of gross revenue or the distributional effect on the wider economy.

As a matter of philosophy, governments that fast-track immigrant investor programs ascribe to a logic that presumes tax systems can be a tool for increasing (or decreasing) the value of their residency or citizenship. Immigrant investment programs also raise important, normative questions: given the cost involved in reducing revenue from those most able to pay, are these programs actually capable of producing their predicted outcomes? If these programs are in fact able to meet their goals, is there a normative justification for using the tax system as a means of luring the wealthy away from other countries? If so, does the case differ when applied to human beings opposed to companies? Does it differ when the luring state is richer or poorer relative to the origin countries of prospective immigrants?

For more of Allison’s work, head to Tax, Society & Culture

STAR Reporter

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