The Swiss lawyer behind the rise of ‘golden passports’

View of Valletta, capital of Malta. The European Court of Justice earlier this month struck down Malta’s citizenship-by-investment programme, which allowed people to acquire a Maltese passport — and by extension EU citizenship — in exchange for a one-off investment of €600,000 (CHF563,000) and purchasing or renting a property. Keystone-SDA

For a man whose standout career achievement has just been ruled unlawful by the EU’s top court, Christian Kälin is defiant.

“If Europe decides to go backwards, let them go backwards. But the rest of the world is going forward, and it’s only one direction,” said Kälin, group chair of Henley & Partners, a London-based consultancy that devises and markets schemes selling passports and residency permits in more than 40 countries.

The European Court of Justice earlier this month struck down Malta’s citizenship-by-investment programme, which allowed people to acquire a Maltese passport — and by extension EU citizenship — in exchange for a one-off investment of €600,000 (CHF563,000) and purchasing or renting a property. The ECJ said the scheme, developed with Henley, had made “the acquisition of nationality a mere commercial transaction”.

It was a blow to Henley and the whole global investment immigration industry. The company takes credit for propelling the growth of paid-for passports, though the schemes have faced accusations of facilitating corruption and the flow of tainted cash.

Henley has defended the schemes, with Kälin arguing that the percentage of “people that turn out to be nefarious” is “minute”. The firm has also been accused of political manipulation in at least one country, a claim it has contested.

In the eight years to the end of 2023, Henley earned more than €55mn through the Maltese citizenship scheme, according to Maltese government figures. In Malta and St Kitts the business received a fee from the relevant government for each successful application, in addition to payments from applicants.

In an interview with the Financial Times, Kälin, a Swiss lawyer, called the ECJ’s ruling a “political decision” but downplayed the effect on his business: “For the sector in Europe, it’s of course not very good . . . Globally, it doesn’t matter at all.”

Countries have for decades offered citizenship or residency privileges in exchange for one-off investments. The European Commission and transparency campaigners have criticised such programmes for opening the door to corruption, tax evasion and money-laundering — but they have become popular among cash-strapped countries seeking funds.

“The demand is expanding, but also the supply,” Kälin said, citing the $5mn US “gold card” announced this year by US President Donald Trump. “Every year there are more countries coming with more programmes.”

Kälin defended the Maltese system as “extremely tough, extremely tight” and said he would like equal scrutiny elsewhere, but conceded that “sometimes people have obtained citizenships that [they] shouldn’t have, that fell through the due diligence or later became a problem”.

The commission, by contrast, hopes that “such schemes will soon be a thing of the past in the EU”, said justice commissioner Michael McGrath.

From St Kitts

The passports-for-cash industry began with Pacific and eastern Caribbean microstates in the 1980s, including St Kitts, which introduced its scheme in 1984, according to Sarah Kunz, a lecturer specialising in migration studies at the University of Essex.

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Kälin arrived later, joining Henley in 1997 as a consultant. He built up the business by marketing Caribbean passports to the wealthy. Omar Mina, who worked at Henley from 2014 to 2016, said: “Henley became the face of investment immigration . . . because they created an industry around that.”

In 2006, Henley won a contract to revamp St Kitts and Nevis’ citizenship-by-investment scheme, which Kälin called “dysfunctional”. At the time it was based solely on real estate purchases. The new scheme required a one-off investment of at least $200,000.

“We put St Kitts on the global map,” said Kälin.

For wealthy people from countries that face visa restrictions, “golden passports” can make global travel much easier — in 2009, St Kitts gained a short-stay visa waiver with Europe’s Schengen area, for example. They can also facilitate opening bank accounts, acquiring real estate and other transactions.

“The more jurisdictions a family can access, the lower its exposure to country-specific, regional and global volatility, and the more secure it will be over the long term,” Henley chief executive Juerg Steffen said in February.

Expansion

As the investment immigration industry became mainstream, it attracted large financial institutions and consultancies. Kälin said HSBC was “very involved in [the St Kitts programme] initially”, providing a rapid interim solution for clients also undergoing the slower process of acquiring Canadian citizenship through a popular investor residency programme at the time. Later, the managing director of HSBC’s global investor immigration services division joined Henley as group chief executive.

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Kunz said: “Former HSBC employees helped turn Henley & Partners into the prominent investment migration firm it became.” HSBC did not provide a comment before publication time.

After St Kitts, Henley expanded to other Caribbean nations and then Europe, helping nations to revamp and market existing schemes or set up new ones. Kälin said the company proactively approached countries. “We did the entire programme in Antigua . . . We made Saint Lucia do it,” he said.

Henley’s contract with St Kitts ended in 2013, but several Caribbean countries, including St Kitts, have faced scandals in recent years over their programmes, with claims that passports were sold by international agents at prices below those set out in local law. Henley is not among the companies named in those scandals.

Accused of meddling in politics

Henley has been accused of trying to meddle in politics to further its business. A UK parliamentary inquiry in 2019 was told Kälin was the “hidden hand” behind election campaign work in the Caribbean by analytics company Strategic Communication Laboratories (SCL), including the 2010 election in St Kitts, when then-premier Denzil Douglas was re-elected.

The parliamentary report said Kälin “arranged for investors to supply the funding to pay for campaigns”. In exchange, “Henley & Partners would gain exclusive passport rights for that country, under a citizenship-by-investment programme,” it said.

Leaked documents, seen by the FT and first reported by the Organized Crime and Corruption Reporting Project, show that in the months after the election, Henley signed a contract with SCL to act as a “referral partner” and identify potential clients.

Abided by the laws

Henley has denied providing any funding for an election campaign and said the parliamentary inquiry was given false information. “As we have comprehensively demonstrated with ample evidence, all of these accusations are false and simply politically motivated,” said Sarah Nicklin, spokesperson for Henley. She added that “just the timeline itself, of when contracts with governments were signed, and various elections were held, make it clear that those allegations do not hold proper scrutiny.”

“Henley & Partners has, at all times, abided by the laws and regulations in all the countries in which it operates,” Nicklin said.

Kälin claimed that the investments flowing into countries struggling with “postcolonial economic problems” gave them a significant boost.

“I’m very proud to have saved several countries’ economies,” he said.

Critics say the investments, mainly one-off payments into sovereign wealth funds or real estate, yield little economic growth and few benefits for local populations.

“It’s not the real economy that benefits,” said Kunz, of the University of Essex, adding that governments often use the funds to pay “running costs”. “In the Caribbean, the money paid to the government through the donation options is often used to respond to natural disasters or repay debt to international lenders.”

After the Caribbean schemes, Henley approached Malta, which already had a residency programme. “We openly said, ‘Why don’t you consider citizenship?’” said Kälin. The government thought it was too “politically delicate”, he said, but the opposition approved the programme when it came to power in 2013.

Henley won the tender to set it up, “literally down to job descriptions of the government employees that you need. We built the whole system for the government to run,” Kälin said.

‘Completely blindsided’

Matthew Caruana Galizia, a campaigner and director of the Malta-based Daphne Caruana Galizia Foundation, said that “everyone was completely blindsided” by the measure in 2013. “It was one of the first things that [new prime minister] Joseph Muscat did . . . It was never a part of their electoral manifesto,” he said.

Matthew’s mother Daphne, a journalist who investigated corruption in Malta and the citizenship scheme, was murdered by a car bomb in 2017. Another son, Paul, is a journalist at the FT.

The FT has identified 16 people who successfully paid for Maltese citizenship despite being politically exposed individuals, or who later appeared on sanctions lists or were convicted of crimes. So-called politically exposed people are treated by regulators as bearing a particular risk of corruption.

Despite the criticisms, Henley has had significant success in marketing investment immigration. Several other companies have sprung up in the sector, some led by former Henley employees.

Mina says the sector remains insufficiently regulated. “The industry had no barriers to entry and Henley was hoping to create some, and I don’t think [it] was successful in that,” he said.

Kälin remains confident, however: “There isn’t actually any other company in the world that has this kind of expertise.”

Additional reporting by Cynthia O’Murchu in London

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