El Salvador Wants to Give Citizenship to Foreign Investors

Central American nation, El Salvador, is looking at reforming its laws such that foreign investors coming into the country can gain citizenship by investing in the economy. Taking to Twitter, the country’s President, Nayib Bukele made this revelation, noting that he would be sending a total of 52 reforms to Congress to address some of the necessary provisions to make this happen.

“I’m sending 52 legal reforms to congress, to remove red tape, reduce bureaucracy, create tax incentives, citizenship in exchange for investments, new securities laws, stability contracts, etc,” he said, adding that, “the plan is simple: as the world falls into tyranny, we’ll create a haven for freedom.”

The announcement has resonated well with the crypto community, some of whom are billed to benefit from the proposed tax incentives the country is offering. Justin Sun, the founder of the Tron Blockchain network commented saying the “Citizenship by Investment” is crucial, adding that he would like to join the El Salvadoran citizenship path once the deal is live.

CBI (Citizenship by investment) project is the key. I would like to join 🇸🇻 citizenship once the project is live!

— H.E. Justin Sun 孙宇晨 (@justinsuntron) February 21, 2022

That the reform is coming from Nayib Bukele is more or less a free pass amongst the legislators as the president is known to lead in an authoritarian manner. The President was accused of imposing his will on the lawmakers in relation to the adoption of Bitcoin (BTC) as a legal tender in the country.

Deemed an authoritarian leader, El Salvador’s Bitcoin as a legal tender stance has generated a lot of internal rumblings and chaos, however, the move to incentivize foreign investors may receive a soft landing, seeing the move is likely to come with extra jobs for the locals.

Is El Salvador an Attractive Country?

Moving to El Salvador may have its pros and cons, and deciding to pursue the Citizenship by Investment route, should the reforms be passed into law, will have to be made with a lot of other considerations. 

Economically, El Salvador does not have as much of a robust GDP when compared to other developed nations. The country has a falling out with the World Bank and the International Monetary Fund (IMF), a development that is threatening the country’s access to external funding, although there is a claim the reservations of the IMF will not affect ongoing negotiations.

With many things to enjoy in the country, financial data metrics such as the downgrade from Fitch Ratings, and other potential upheavals from the BTC adoption should be adequately considered.