Citizenship-by-investment and residency-by-investment programs open doors. The question is whether those doors lead to where your clients expect — and whether the fund trail behind them will survive US regulatory scrutiny.

The following article is from Kripa Upadhyay, partner at law firm Buchalter. She advises family offices, private wealth managers, and UHNW investors on cross-border investment compliance, source-of-funds structuring, and US entry strategy. The editors are pleased to share this content; the usual editorial disclaimers apply to views of guest contributors. To comment, email tom.burroughes@wealthbriefing.com and amanda.cheesley@clearviewpublishing.com 

The gap the programs don’t fill
Family offices and private wealth managers who work with internationally mobile clients have watched the investment migration industry mature into a sophisticated global infrastructure. The programs – citizenship-by-investment in Turkey, Malta, the Caribbean, Vanuatu; residency-by-investment through Portugal, Greece, Spain, the UAE – are legitimate instruments of sovereign states, professionally administered, and genuinely useful for a wide range of estate planning, travel, and business objectives.

But the programs share a structural gap that has significant consequences for clients whose investment horizon includes the US. The programs issue a document. They do not conduct the analysis that US regulatory agencies will conduct when that document is presented in connection with an EB-5 petition, an E-2 visa application, an L-1A corporate transfer, or a real estate investment reviewed under FinCEN’s anti-money laundering framework.

That analysis – source-of-wealth tracing, OFAC sanctions screening, beneficial ownership documentation, prior nationality disclosure counseling, and the coordination of those elements into a legally defensible US entry strategy – is what the programs cannot provide. It is what advisors need to ensure that their clients have before the US process begins.

This article is written for family offices, private wealth managers, and investment migration advisors who serve clients with existing or planned citizenship-by-investment (CBI) and residency-by investment (RBI) documentation and a US investment or immigration objective. Its purpose is to map the territory between what the program provides and what US regulators require – and to explain why that gap, if left unaddressed, can convert a well-structured investment migration plan into a permanent regulatory liability.

“The program issues a document. The US requires an analysis. Advisors who serve both needs protect their clients. Those who serve only the first create an exposure they may not discover until it is too late to remediate.”

The regulatory risk is not always proportional to the program’s reputation or cost. A Maltese CBI passport is more expensive and more carefully administered than a Vanuatu CBI passport – but the CJEU’s 2024 ruling questioning the EU portability of investment-only citizenship has created a new layer of uncertainty specifically around the programs that clients believed were most secure.

Second, the fund trail is the central issue in every case. US source-of-funds review for EB-5, E-2, and L-1A purposes traces the investment capital back to its origin, not to the CBI program entry point. A Turkish bank account funded by a rouble-to-lira conversion chain from a Russian energy sector business is still a Russian energy sector fund trail, regardless of the Turkish citizenship certificate that sits above it.

Third, the disclosure obligation applies regardless of what the program does or does not require. US visa and immigration forms ask for all prior citizenships and nationalities. The investment migration program’s KYC form does not. The gap between those two requirements is where the most severe legal consequences arise.

The EU dimension – what Schengen and Golden Visa residency actually provide
EU residency-by-investment programs occupy a distinct position in the compliance landscape because the access they provide; Schengen freedom of movement, EU banking, and the ability to establish EU-domiciled entities, is genuinely valuable and genuinely different from what Caribbean CBI programs offer. But that access comes with a compliance architecture that advisors frequently underestimate.

A client who holds Greek Golden Visa residency and a Russian passport has Schengen mobility and EU banking access. They do not have OFAC relief for any transaction that touches the US financial system. The US dollar remains the world’s primary reserve and correspondent currency; the vast majority of cross-border transactions of significant size clear through US banking relationships regardless of where the transacting parties are domiciled. Greek residency does not insulate those transactions.

Equally important: the path from EU Golden Visa residency to EU citizenship, which several programs explicitly market, has become significantly more uncertain following the European Commission’s challenge to Malta’s CBI program and the CJEU’s subsequent ruling. Advisors who have structured client plans around the assumption that Portuguese or Greek residency will mature into full EU citizenship within a defined timeframe should revisit that assumption in light of the current regulatory environment.

The ESTA disclosure trap – VWP-eligible CBI passports
Several CBI programs – including Malta and certain Caribbean states – issue passports that qualify holders for US entry under the Visa Waiver Program without a visa. This feature was heavily marketed as a key benefit of those programs. The ESTA application now requires disclosure of all citizenships. A client who applies for ESTA as a Maltese citizen without disclosing a prior Russian nationality is making a material misrepresentation to DHS – the same permanent inadmissibility bar that applies to visa applicants. Advisors whose clients hold dual CBI/origin-country citizenship should ensure full ESTA disclosure is in place before any US travel.

The US regulatory review – what happens when your client’s capital arrives
The US regulatory review that a CBI or RBI investor will face is not a single check. It is a layered system involving USCIS (for immigration petitions), the State Department (for consular visa processing), OFAC (for sanctions screening), FinCEN (for AML compliance in real estate and investment transactions), and – for investment transactions with national security dimensions – CFIUS. These systems share data and operate in coordination in ways that most investment migration advisors and their clients do not anticipate.

The source-of-funds review – the central compliance challenge
For EB-5 immigrant investor petitions, US Citizenship and Immigration Services requires documentation of the lawful origin of the investment capital across every step of its journey from source to US project account. This is not a perfunctory review. USCIS routinely requests five or more years of bank statements, documentation of every wire transfer and currency conversion in the chain, records of every intermediary entity through which the funds passed, and explanation of the source of every deposit.

For clients whose CBI or RBI qualifying investment was itself funded from complex or multi-jurisdictional wealth – the common case for clients from Russia, the Middle East, China, or Latin America – the source-of-funds documentation chain begins at the original wealth source, not at the CBI program entry point. The Turkish bank account that held the funds for the Istanbul property purchase is not the origin of the funds. It is a waypoint. USCIS traces the chain back to its origin.

The same source-of-funds standard applies, in different forms, to E-2 visa applications (where the ‘substantial capital’ requirement triggers a source-of-funds review at the consular level) and to L-1A petitions (where the corporate structure review examines the beneficial ownership and financial history of both the US and foreign entities involved).

OFAC screening – the person behind the passport
OFAC’s Specially Designated Nationals list and the broader sanctions programs it administers are maintained based on a person’s connections to sanctioned activities, sectors, and governments – not their legal nationality. A Russian national who is an SDN remains an SDN after Turkish naturalization. A non-designated Russian national whose wealth derives from the Russian energy, defense, or financial services sectors may be subject to OFAC’s Sectoral Sanctions Identifications regardless of personal designation status.

For family office advisors and wealth managers, the practical implication is that OFAC screening must be conducted against the client’s birth identity – including birth name, patronymic, prior-nationality name variants, and all known affiliated entities – not merely against the name and nationality on the CBI passport. A clean OFAC screen of the Turkish passport name is not a complete compliance analysis for a client who was born in Moscow.

The FinCEN AML framework – real estate and investment transactions
FinCEN’s 2024 final rule extending anti-money laundering program requirements to residential real estate professionals means that the US real estate transactions in which many CBI and RBI clients invest – including EB-5 real estate projects and direct E-2 investment properties – are subject to AML oversight that reaches into the fund trail behind the purchase.

FinCEN’s Geographic Targeting Orders, which require title insurance companies to identify beneficial owners in all-cash real estate transactions in major metropolitan areas, add a further layer of disclosure for clients investing in US real estate without mortgage financing. For clients whose CBI passport does not disclose their full beneficial ownership chain, compliance with these requirements requires careful coordination between the investment migration advisor, US real estate counsel, and US immigration and sanctions counsel.

The Corporate Transparency Act’s beneficial ownership disclosure framework applies an additional requirement: any US entity in which the client holds a 25 per cent or greater interest must report the beneficial owner’s identifying information to FinCEN. A client who has not fully disclosed their prior nationality and the full chain of their beneficial ownership – including any entities held through intermediate offshore structures – is at risk of incomplete beneficial ownership reporting.

The FDNS parallel review – what USCIS sees that clients don't
USCIS’s Fraud Detection and National Security Directorate conducts independent background investigations on immigration petitions that draw on intelligence community databases, prior US visa applications across all agencies, and biometric repositories that are entirely nationality-agnostic. A fingerprint record created by a tourist visa application filed in 2014 as a Russian national will be retrieved and cross-referenced against an EB-5 petition filed in 2025 as a Turkish national. The CBI certificate does not appear in the FDNS database. The fingerprints do.

The disclosure obligation – the risk that compounds
The legal consequence that most consistently surprises investment migration advisors and their clients – and that creates the most severe long-term exposure – is not OFAC designation or source-of-funds denial. It is the material misrepresentation bar under Section 212(a)(6)(C)(i) of the Immigration and Nationality Act.

Every US visa application – including the DS-160 for nonimmigrant visas, the DS-260 for immigrant visas, and the associated USCIS petition forms – asks applicants to disclose all nationalities and citizenships they hold or have held. The question is direct and unambiguous. A client who presents a Turkish CBI passport and does not disclose a prior Russian nationality when directly asked is making a willful misrepresentation of a material fact to a US government agency.

The consequences are severe and permanent. The misrepresentation bar under INA § 212(a)(6)(C)(i) carries no time limit. It cannot be waived in most circumstances. It applies regardless of whether the underlying visa application would have been denied had full disclosure been made. It follows the individual across every future US application they file. And it may affect the naturalization applications of family members who are US persons.

What makes this risk particularly acute in the investment migration context is that it compounds with each step the client takes into the US system without addressing it. An EB-5 petition filed without disclosing prior nationality. An E-2 application filed the following year with the same omission. An ESTA application for a family member. Each undisclosed filing adds a further ground of inadmissibility to a record that US agencies can access and cross-reference indefinitely.

“The misrepresentation bar is permanent. It carries no time limit and limited waiver availability. For advisors who understand this, it is the most urgent reason to ensure disclosure counsel is in place before any US application is filed – not after.”

For family office advisors and wealth managers, the practical implication is straightforward: any client who holds CBI or RBI documentation and is considering a US visa application, a U.S. investment that triggers USCIS or FinCEN review, or US travel under the Visa Waiver Program needs disclosure counsel before any of those steps are taken. The analysis is significantly simpler and less costly before the first filing than after a misrepresentation has been made.

A note on interdisciplinary coordination
The most effective US entry strategies for CBI and RBI clients are built by teams, not individuals. Migration counsel brings the visa-specific expertise. OFAC and sanctions counsel provides the designation screening and sectoral analysis. International tax counsel addresses treaty benefits, FATCA compliance, and cross-border wealth structure. Forensic accountants trace and document the fund chain. Investment migration advisors who build referral relationships with US practitioners who can provide this full team are better positioned to serve their clients than those who attempt to address US regulatory requirements through the program’s own compliance infrastructure.

What advisors should be asking before the first wire
For family offices and private wealth managers whose clients are evaluating CBI or RBI programs with a US investment or immigration objective, the following questions should be part of every engagement before any program application is filed and certainly before any US transaction is initiated.

-- Has the client’s source of wealth been analyzed against the OFAC sanctions programs applicable to their country of origin, sector of wealth accumulation, and known business affiliations – not merely against their personal SDN status?

-- Has the client been advised of their disclosure obligations under US visa and immigration forms, including the requirement to disclose all prior citizenships and nationalities?

-- If the client has previously filed any US visa application – including tourist visa applications predating the CBI acquisition – have those prior filings been reviewed for consistency with any future applications?

-- Has the CBI or RBI qualifying investment itself been documented as a waypoint in the fund chain, with the source of those qualifying funds traced to their origin?

-- For EU Golden Visa programs: has the client been advised of the CJEU’s 2024 ruling on investment-only citizenship and the implications for the EU portability assumptions on which their plan may have been based?

-- For VWP-eligible CBI programs: has the client been advised of the ESTA multi-citizenship disclosure requirement and the consequences of non-disclosure?

-- Has a realistic US entry timeline been established that accounts for the OFAC screening, source-of-funds documentation, and disclosure counseling that must precede any US filing?

These are not questions that the investment migration program can answer. They are questions that require US-qualified counsel with specific expertise in the intersection of immigration law, sanctions compliance, and AML regulation. The advisor who ensures that these questions are answered before the process begins is the advisor whose clients arrive at US regulatory review with a defensible file.

The advisor’s competitive advantage – closing the gap
Family offices and private wealth managers who work with internationally mobile clients are increasingly encountering the CBI and RBI industry as a standard component of the wealth management toolkit. The programs are sophisticated, the advisors are professional, and the documents they produce are genuine. The gap they leave – between what the program provides and what US regulators require – is not a deficiency in the programs. It is a structural feature of the regulatory environment that the programs operate in.

Advisors who understand that gap and who have built the relationships necessary to close it – with US immigration counsel, OFAC specialists, AML practitioners, and forensic accountants who work regularly at this intersection – are better positioned to serve the growing population of clients whose investment migration strategy includes a US component. They are also better positioned to protect their clients from the consequences of a regulatory misstep that, at the source-of-funds and disclosure stage, is not recoverable through amended filings or additional documentation.

The regulatory environment governing CBI and RBI use in the context of US investment and residency is not easing. FATF scrutiny of investment migration programs is increasing. The EU Commission’s challenge to its member states’ most permissive programs continues. OFAC’s nationality laundering doctrine is developing. USCIS has expanded its fraud detection resources for investor immigration from high-risk source countries. The advisors whose clients are prepared for that environment, because they sought qualified US counsel before the first filing, not after the first problem, are the advisors whose client relationships survive it.

“The gap between what the program provides and what US regulators require is not a deficiency in the programs. It is an opportunity for advisors who are willing to close it.”