El Salvador has launched a distinctive citizenship-by-investment initiative known as the “Adopting El Salvador Freedom Visa Program.”
The program offers residency and citizenship to 1,000 individuals investing $1 million in Bitcoin or Tether within the country.
Despite its unique embrace of cryptocurrency, the program comes with a significantly higher cost compared to similar initiatives in neighboring Caribbean nations. In these countries, similar programs typically start at $100,000.
The partnership between El Salvador’s government and stablecoin issuer Tether was officially disclosed on December 7. The initiative involves a nonrefundable deposit of $999, credited towards the total investment. If all 1,000 spots are filled, this program has the potential to generate $1 billion for El Salvador.
Assessing El Salvador’s Freedom Visa Program in Global Citizenship-by-Investment Context
Citizenship-by-investment programs are lucrative for many countries. However, critics argue that El Salvador’s offering is less competitive on a global scale.
Alistair Milne, the founder of Altana Digital Currency, expressed on social media that El Salvador’s program is not competitive on the international stage. He underscored that acquiring citizenship in a European Union country, such as Malta, could cost less.
Malta offers citizenship for a €750,000 ($810,000) investment, providing access to the EU’s visa-free Schengen Area.
Comparatively, neighboring Caribbean nations like Antigua and Barbuda, Dominica, and St. Lucia provide citizenship opportunities for a $100,000 contribution to sovereign development funds. Grenada and St. Kitts and Nevis have similar programs with contributions starting at $150,000 and $250,000, respectively.
El Salvador’s Crypto-Friendly Policies Amid Governance Concerns
Despite the higher cost, El Salvador may attract crypto investors due to the pro-Bitcoin policies implemented by President Nayib Bukele. These policies include recognizing Bitcoin as legal tender and exempting tech companies from income and capital gains taxes for the next 15 years.
However, concerns about President Bukele’s governance approach have been raised, particularly regarding human rights violations linked to a crackdown on crime.
President Bukele, who stepped down on December 1 to focus on his reelection campaign, has faced criticism for arbitrary detentions and alleged human rights abuses.
Despite these concerns, Bukele’s policies have established a cryptocurrency-friendly environment. This may still attract potential investors. They may consider El Salvador’s unique offering in the citizenship-by-investment landscape.