Is citizenship by investment legal? The facts about second passports and legitimacy

The short answer is yes — citizenship by investment is completely legal. The programs are run by sovereign governments, the investment routes are established by national law, and holding a second passport is permitted in the majority of countries worldwide. If you've heard otherwise, you've likely encountered either outdated reporting about specific programs that were closed, or a conflation of "CBI" with the fraudulent operators who claim to offer passports through illegal means.

This article separates fact from noise. By the end, you'll understand the legal basis for CBI, what the OECD's criticism actually amounts to, how the Caribbean programs are regulated as of 2026, and — critically — the difference between a legitimate program and a scam.

Key takeaways

• CBI is legal: Every sovereign government has the right to grant citizenship on whatever terms it chooses. Caribbean programs are created and administered by national law.
• Second passports are legal in most countries: Japan and China restrict dual citizenship; most others do not (Germany has allowed it since June 2024). Turkish citizens can legally hold multiple citizenships under Law No. 5901.
• OECD criticism ≠ illegal: The OECD has raised transparency concerns but has no jurisdiction to prohibit CBI. Its findings are advisory, not binding law.
• Caribbean programs are more regulated than ever: the ECCIRA agreement, signed in September 2025 by all five Eastern Caribbean programs, provides for licensed agents, common biometric standards, mandatory interviews, and a shared register of applicants once it enters into force (it is not in force yet).
• What's actually illegal: Obtaining a passport through misrepresentation, bribery, or falsified documents — not the CBI programs themselves.

What citizenship by investment actually is

Citizenship by investment (CBI) is a government-run program that grants citizenship in exchange for a qualifying contribution or investment — typically a non-refundable donation to a national development fund, a real estate purchase, or a government bond subscription.

These programs are not legal gray areas. They are written into the national legislation of each jurisdiction. Dominica's Economic Citizenship Programme has operated since 1993. St. Kitts & Nevis launched the world's first CBI program in 1984. Grenada, Antigua & Barbuda, and St. Lucia all run statutory programs with parliamentary oversight.

The sovereign right to determine citizenship policy is a foundational principle of international law. No external body — not the OECD, not the EU, not the United Nations — can override a country's sovereign decision to offer citizenship by investment. When you apply through a legitimate CBI program, you are interacting with a government, not exploiting a workaround.

Why people think it might be illegal — and why they're wrong

The OECD criticism

The OECD has published research criticizing CBI programs, particularly around concerns that they could facilitate tax evasion under the Common Reporting Standard (CRS). The OECD's argument is that some applicants might obtain a second citizenship to misreport their tax residency to financial institutions.

This is a legitimate policy concern. It is not a legal prohibition.

The OECD is an advisory body. Its publications are recommendations, not binding law. It has no jurisdiction over the domestic legislation of sovereign states, and it cannot make CBI programs illegal. Critically, the OECD's own guidance on high-risk citizenship- and residence-by-investment schemes addresses this directly — banks can question a residence claim that rests on such a scheme, meaning more scrutiny, not less legitimacy.

If someone tells you the OECD "banned" CBI, they are wrong.

The EU legal challenges

The European Union challenged the citizenship investment programs of Malta and Cyprus. Cyprus shut its program down in 2020 following a corruption scandal involving its own administration — the program itself was not declared illegal. On 29 April 2025 the European Court of Justice ruled (case C-181/23) that Malta's Citizenship by Naturalisation for Exceptional Services by Direct Investment scheme breached EU law; Malta replaced it with a merit-based route in July 2025.

The key context here: the EU has jurisdiction over its member states, not over Grenada, Dominica, St. Kitts & Nevis, Antigua & Barbuda, or St. Lucia. It cannot shut their programs down, and they remain fully operational. What it does control is Schengen visa-free access: its revised visa suspension mechanism (Regulation (EU) 2025/2441) lets it suspend that access for countries that run investor citizenship schemes. In June 2026 the European Commission asked all five governments to phase out their programs by June 1, 2028. They have asked for more time and talks are ongoing; as of October 2026, Schengen visa-free access remains in place.

The "buying a passport" framing

Critics sometimes use the phrase "buying a passport" to imply something illicit. The framing is reductive. Investment migration — contributing economically to a country in exchange for a pathway to citizenship — has existed in various forms throughout modern history. The US EB-5 investor visa is a form of investment migration. Portugal's Golden Visa is another. The Caribbean CBI programs are the most direct version of the model.

"Buying" implies no process, no scrutiny, no eligibility. In reality, CBI applicants undergo background checks, source-of-funds verification, criminal record checks, and increasingly, in-person biometric enrollment and interviews.

ECCIRA and the 2025–2026 regulatory strengthening

One of the most significant developments in CBI legitimacy is the agreement establishing the Eastern Caribbean Citizenship by Investment Regulatory Authority (ECCIRA), signed in September 2025. It is not in force yet: it takes effect 30 days after the fifth member state ratifies it, and then applies only to applications made after that date.

ECCIRA will be a shared regulatory body covering all five Eastern Caribbean CBI programs: Grenada, Dominica, Antigua & Barbuda, St. Kitts & Nevis, and St. Lucia. Each national CBI unit will still decide its own applications. Once in force, the agreement provides for:

• Common biometric data standards across all five programs
• Mandatory interviews (in person or virtual) for the main applicant and dependants aged 18 and over
• Licensing of agents, promoters, developers and due diligence providers, with a regional register
• A shared register of applicants, designed so that an applicant rejected or flagged in one program is visible to the others

Until then, each program sets its own rules. Dominica, for example, already interviews every applicant aged 16 and over, usually by video.

This is the opposite of what critics would expect from a legitimacy standpoint. Once the agreement is in force, the Caribbean programs will be more transparent, more standardized, and more difficult to misuse than at any point in their history. The ECCIRA agreement represents Caribbean governments proactively raising the bar — not because they were forced to, but because program integrity protects program longevity.

CBI and money laundering: the actual picture

A common concern is that CBI enables money laundering. The premise doesn't survive scrutiny when examined against how these programs actually work.

Every Caribbean CBI program requires documented source-of-funds verification. Applicants must demonstrate that their investment capital comes from lawful activity. This is not a checkbox — authorized agents and government units review the documentation, and once the ECCIRA agreement is in force, its shared register is designed so that a bad actor identified in one program cannot simply move on to the others.

CBI is not anonymous. Governments know who their citizens are. The naturalization process creates a documented record tied to biometrics, legal identity, and financial disclosures.

The more meaningful money laundering risk is not CBI itself, but the fraudulent operators who claim to offer citizenship documents through unofficial or illegal channels. Those individuals are not running government programs — they are running scams that may involve document fraud, which is criminal. This is the category to avoid.

A worked example: when uncertainty stops the right decision

Say you hold a German passport and have been researching Grenada citizenship for two years. You have the financial means, a clear use case (a second citizenship as a long-term hedge for your family), and you've identified an authorized agent. But you keep pausing.

Your concern is not practical — it's reputational. You've heard vague references to "OECD bans" and "EU crackdowns." You aren't sure if applying for CBI might somehow compromise your professional standing or create legal complications in Germany.

Then you speak with a licensed advisor who walks you through the actual legal framework — German law does not prohibit dual citizenship with a country that grants citizenship voluntarily under its own statutes, the OECD criticism is advisory, and Grenada's program has full legal standing — and you move forward within six months.

The thing that had been holding you back was not a real legal risk. It was ambiguity. That ambiguity has a cost: time, optionality, and in some cases, programs that change their terms or increase their costs.

Clarity is valuable. This article is intended to provide it.

CBI program costs in 2026: a current snapshot

For reference, here are the minimum government contribution requirements across the five Eastern Caribbean programs as of April 2026:

Note: These are government contribution minimums only. All-in costs including due diligence fees, agent fees, government processing fees, and passport fees will be higher. St. Kitts & Nevis discontinued its Accelerated Application Programme (AAP) — that route is no longer available. St. Lucia's program lost UK visa-free access as of March 5, 2026, which has affected applicant demand for that program.

These costs are not cheap. That is by design. The qualifying investment thresholds are set to restrict the program to economically capable applicants, which is one layer of the legitimacy framework.

What the US AMIGOS Act actually says

The AMIGOS Act (Advancing Mutual Interests and Growing Our Success Act) was enacted in December 2022 as part of the FY2023 National Defense Authorization Act. It added a restriction, not an endorsement: anyone who gained a treaty country's citizenship through an investment programme must have been domiciled in that country for at least three years before they can get an E-2 visa through it.

So the Act is a safeguard against using investment citizenship as a shortcut to US status. It doesn't validate or condemn any programme. The legitimacy of CBI rests on the citizenship laws of the countries that run it, and on whether their due diligence is real.

The increasing demand case: EES and ETIAS

Two European travel policy changes are directly relevant to CBI demand in 2026 and beyond.

The EU Entry/Exit System (EES) started progressively on October 12, 2025 and has been fully operational since April 10, 2026. It digitally records the entry and exit of non-EU nationals at Schengen borders, enforcing the 90/180 rule more strictly. For travelers from countries whose citizens are already subject to that rule, crossing Schengen borders becomes more administratively visible.

ETIAS — the EU Travel Information and Authorisation System — is not yet in operation; there is no official start date yet, and 2027 is widely expected. Once it starts, it will require pre-authorization for visa-free travel into the Schengen area from eligible countries.

These changes are creating genuine demand for second passports among globally mobile individuals who want more travel flexibility, cleaner immigration records, or simply fewer points of friction. This demand is a driver of interest in Caribbean CBI specifically because Caribbean passports offer visa-free or visa-on-arrival access to the UK (for most programs), EU Schengen area, and a range of other jurisdictions.

Who this is NOT for

CBI is a legitimate, legal tool — but it is not the right tool for everyone. Be clear-eyed about when it does not fit:

• If your home country prohibits dual citizenship and you are unwilling to renounce: Japan, China, and several others have restrictions. Proceed with professional advice if this applies to you.
• If your only goal is tax avoidance without changing your actual residency: A second passport does not change your tax obligations in your country of residence. You need to actually change where you live — and do it compliantly — for tax planning to work. Citizenship alone does not accomplish this.
• If you cannot document your source of funds: CBI requires proof that your investment capital comes from legitimate sources. Applicants who cannot meet this standard will not pass due diligence.
• If you are looking for a shortcut rather than a legitimate process: Official processing windows run from about 90 days to six months across the Caribbean programs. There is no legitimate "express" route that bypasses due diligence.
• If you are working with an agent who cannot provide government authorization credentials: Authorized agents are licensed by the relevant government. Any agent claiming to expedite your application through unofficial channels is running a scam, not a CBI program.

What's actually illegal: the fraudulent agent problem

The illegal activity adjacent to CBI is not the programs themselves — it is document fraud and impersonation.

Fraudulent operators do exist. They take fees from applicants, submit falsified applications, create fake government websites, or simply disappear with the money. In some cases, they forge passport documents entirely.

This is criminal. It is also entirely distinct from the government-run programs described in this article.

The way to avoid this is straightforward: only work with agents who are officially authorized and listed on the government's authorized agent registry for that program. Every legitimate Caribbean CBI program publishes its authorized agent list.

Important: If someone approaches you claiming to offer a Caribbean passport without going through the official government application process, they are engaged in document fraud. This is illegal — the CBI programs are not.

Frequently asked questions

Conclusion

Citizenship by investment is legal, government-run, and increasingly well-regulated. The OECD's criticism is a policy concern, not a prohibition. The EU cannot outlaw Caribbean programs, but it can suspend Schengen visa-free access, and it has asked the five governments to phase their programs out by June 2028; talks are ongoing. The ECCIRA agreement, signed in September 2025 and not yet in force, is set to strengthen the regulatory framework across all five Eastern Caribbean programs.

The real complexity here lies not in the legality of the programs, but in the secondary questions: dual citizenship rules in your home country, tax residency implications if you plan to relocate, and due diligence requirements that applicants need to prepare for carefully.

If you're researching Caribbean CBI programs and want to understand which program fits your situation, Atlasway has detailed guides on Grenada citizenship by investment and Antigua & Barbuda citizenship, and our Caribbean CBI comparison sets Dominica, St. Kitts & Nevis and St. Lucia beside them.

Once you know the direction, we introduce you to a licensed authorised agent who has your details before the first call.

The information in this guide is for research and educational purposes. It does not constitute legal or tax advice. Immigration rules and tax regulations change frequently — always verify current requirements with a licensed advisor before taking action.