Singled-Out: CIPs Are Leaving Money on the Table by Not Targeting Applicants Without Families

Justin Donovan
Hong Kong

Several countries offering citizenship-by-investment (CBI) programs, and all of the Caribbean ones, have significantly discounted fee structures for their programs in an effort to catalyze application volume after seeing COVID-19 take their economies hostage. Nearly all of these discount initiatives have focused on making the CIPs more inclusive and economical for applicants with families, often large ones. However, none of the discounting initiatives have targeted single people, i.e., those without spouses or immediate families.

In my previous writings here on IMI, I have referred to this unfair treatment of single applicants as a “CBI Bachelor Tax”. There are no clear reasons as to why single people have been left out in the cold from CBI program discounts. Perhaps it is a lack of research, or maybe even a lack of strategic long-term planning by CBI program executives.

Whatever the motives, the single-person demographic is one that CBI program executives should be thinking about more often, especially since it is the fastest-growing household constellation type in the world, particularly in Asia, home to the lion’s share of investor migrants. 

Single CBI applicants also provide some potential benefits to a country that families often lack. Though these benefits are numerous, they chiefly come in three forms:

First, single applicants will typically be younger than those with families. Younger applicants provide a stronger future promise for CBI countries’ economies through their widening of the demographic pyramid base. In fact, many countries that use points-based systems – such as Canada – give extra points to immigrants that are younger in age. Young people have more years of economic contribution and more entrepreneurial/risk-taking energy left in them than their gray-haired peers. They are more likely to take a chance at starting a business than to look to preserve their capital.

Second, single applicants will typically have more mobility and flexibility in terms of their life logistics. For CBI countries that are looking to attract globally minded (and wealthy) persons, targeting single applicants seems to be a no-brainer.

Third, single applicants won’t have the social burdens that come with the cost of delivering services. For example, a single applicant would (in theory) be farther off in the area of marriage of having children, thereby keeping government costs on schooling down. Not having to support children, spouses, or aged dependents, they will also have greater disposable incomes (all else being equal).

One of the reasons that CBI programs may not be able to discount for single applicants is because none of them want to break the (informal and psychological) $100,000 price floor. This is why programs are cutting rates on everything they can except on the principal investment. For single applicants, who pay only one due diligence fee, one government fee, and one passport fee, there’s little room to maneuver on the price front (unless you’re happy to trigger another 2017-style price war). Any attempt to drive more single-demographic applicants would, therefore, warrant some creativity.

One such possible innovation might be to recognize common-law spouses, i.e., a couple that – for all intents and purposes except in the strictly legal sense – live together as husband and wife (or as a same-sex couple, for that matter, which is another uncatered-to demographic). Many single people are in long-term relationships, but do not want to get married. In the world of CBI, both individuals would have to apply separately for a CBI for a total of $200,000 at the lowest price range. Including a “common-law spouse” clause in the ever-growing lists of what counts as a dependent would effectively resolve this predicament.

There is a real strategic business opportunity for a CBI program to design a package, program, or discounting regime targeting single investors. The first CBI program to do so will tap into pockets of unmet demand and likely see a surge of applications (at least temporarily, until other programs follow suit) that will not only bring CBI revenue but likely also attract the ‘cream of the crop’ when it comes to applicant quality.

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Justin Donovan AuthorSubscriber

Justin is an analyst on global public policy with a focus on international economic development and human capital mobility.