Citizenship and residency by investment programs as a challenge to tax deoffshorization and economic development

This study examines citizenship by investment (CBI) and residency by investment (RBI) programs as a tool for attracting capital and a risk factor for tax deoffshorization and national economic development. The objectives of the study are to analyze the impact of CBI and RBI programs on the transparency of financial flows within the framework of the international automatic exchange of information under the CRS standard and their socioeconomic consequences, including the risks of tax evasion and increased social inequality; and to develop recommendations for countering these phenomena. The study examines the characteristics of the programs, high-risk taxpayer schemes for minimizing tax liabilities by minimizing their presence in the jurisdiction, and recommendations from the Organisation for Economic Co-operation and Development (OECD) and the Financial Action Task Force (FATF) on their prevention. It concludes that the economic benefits to the state, such as GDP and employment growth, contrast with the corruption risks and economic vulnerability associated with the use of these programs for tax avoidance. Measures to strengthen due diligence procedures and a proprietary algorithm for their implementation are proposed, as well as the inclusion of CBI/RBI personal data of individuals in CRS reporting for international automatic information exchange. The introduction of quotas for the number of applicants to participate in the program and the requirement for mandatory physical presence in the country for at least 183 days are justified. An algorithm for interdepartmental information exchange for tax residency control in Russia has been developed.