The new Moldova Citizenship by Investment program (MCBI) enters the global CIP-market with a value proposal and price level that places it squarely in competition with the five Caribbean programs, as well as that of Vanuatu. What impact will that have? We asked service providers with their finger on the market’s pulse to weigh in.
Impact more likely to be felt in Vanuatu than in the Caribbean
“Vanuatu should definitely keep a close eye on this,” says Jean-François Harvey, head of Harvey Law Group, one of the industry’s biggest firms and one that processed several hundred cases last year.
“The MCBI will have a slight effect on the Caribbean offering but, from my experience, the program is likely to attract a different clientele due to its location, as well as other variables,” he adds, and also points out that since Moldova is a small and relatively unknown country, major education efforts will be needed just to get it introduced to the market.
“Clients do care about the location and about how much they know about the country’s profile and reputation and so on. When we introduced Saint Kitts in China many years ago, most of our efforts were spent explaining where it was on the map. The same will be true for Moldova,” says Harvey.
“European passport at this price point will turn heads”
One who will be paying close attention to the development of the MCBI is James Harris, Managing Director of the Vanuatu Information Centre (VIC), one of the major purveyors of the Vanuatu DSP (one of two concurrent citizenship programs in that country).
“Obviously, the addition of any well-conceived and managed program is good for market maturation. It also reinforces the point that CIPs such as Vanuatu’s DSP need to adapt and evolve to maintain competitiveness, as well as keep up with best practices and industry benchmarks,” writes the VIC-boss.
He goes on to say that “it is too early to comment on the likely appeal, as the benefits aside from visa-free travel are not yet clear. However, a “European” passport at this pricing point is going to turn heads and is an interesting additional option if the country also offers attractive investment opportunities. I have heard the wine is good!”
Russia is a natural source-market
“The real question to be asked here,” says Gareth Brookes of Dubai-based Brookes & Partners, “is whether we’ll see Moldova joining the EU along with its neighbor Romania [ed: which is already a full EU-member]. This is unlikely to happen any time soon. Montenegro has a much clearer roadmap and is up for review in 2020.”
Update: The editor has been informed that the EU’s official stance on Montenegro is that it will definitely not be joining the EU before 2025.
Brookes indicates that Moldova’s CIP, like most other such programs, will attract very few investors intending to physically reside in the country and that the program’s success will, therefore, be tightly linked to its ability to negotiate and maintain visa-waiver agreements with popular destination countries.
“This program will be assessed largely based on its visa-free travel options. As it stands, the UK is missing from Moldova’s roster, a major competitive drawback as compared to Caribbean programs, all of whom have this advantage,” says Brookes.
The Brookes & Partners CEO also thinks cautious investors may consider the likelihood of a Schengen visa-waiver withdrawal lower for Moldova than for Caribbean countries, and further postulates that Russia is a natural source-market for the MCBI.
“The Russian market is a great opportunity for the Moldova program thanks to the linguistic and cultural ties. The MENA region, I believe, will still favor the Caribbean programs over Moldova for the foreseeable future. In my eyes, the EU Bulgarian proposition is a stronger medium-term candidate,” adds Brookes.
“We’ll let others test the waters” but H&P as concessionaire is “good news”
“Would we offer this option to our clients?” asks Jean-François Harvey rhetorically.
“First, we will do our usual due diligence and see how their process works but, for sure, we will wait and see how it goes. New programs involve new processing units and the usual learning curves and, hence, we’ll definitely wait and see, and let others test the waters.
Harvey notes that Moldova, as a relatively unknown country, could easily have become the kind of destination that attracts the wrong kind of applicant, and that he is glad to see the program development in the hands of an experienced concessionaire of good repute.
“Knowing that Henley and Partners will be behind the due diligence process – which I consider good news – I think it will be more selective and consequently attract a higher caliber of clients,” says Harvey.
Updated Jul 19th:
“The MCBI program will for sure be a fantastic addition to the industry with a second to none due diligence system, newest standards of a smart application procedure while an efficient application process at the Government is the main objective. The program is highly attractive due to its competitive pricing structure and a strong value proposition,” responds Marco Gantenbein, the managing partner appointed by the official concessionaire to head the program’s launch, in an email to the editor.