Due Diligence: Why It Is Crucial for Investors

Due Diligence is a comprehensive background check carried out before entering into a financial or legal relationship — whether opening a bank account, purchasing real estate, or applying for a second citizenship or residency by investment.

The Due Diligence procedure is designed to combat money laundering, tax evasion, and the financing of terrorism — in line with international standards set by bodies such as the Financial Action Task Force, FATF[1], and the EU Anti-Money Laundering Directive No. 2024/1640[2].

Standard Due Diligence for citizenship or residency

In the context of investment immigration programmes, Due Diligence goes beyond a standard identity check. It is a multi-layered assessment of an investor's entire background: 

• origin and legality of their wealth;
• business activities;
• tax compliance;
• public reputation;
• and personal conduct. 

The process typically covers financial, legal, tax, and reputational dimensions simultaneously. 

All applicants over a certain age go through it. For example, in Malta, Due Diligence applies to applicants aged 12+, while Caribbean countries mostly check applicants aged 16+.

The strictness and duration of the process vary significantly by jurisdiction — from a few days in Vanuatu to up to 6—8 months in Malta.

Enhanced Due Diligence for high-risk individuals

Enhanced Due Diligence, EDD, applies when a file presents elevated risk indicators: 

• links to a Politically Exposed Person, whether the applicant themselves, a family member, or a close associate; 
• complex or multi-jurisdictional wealth structures; 
• residence or business activity in sensitive or high-risk countries; 
• significant adverse media coverage, unresolved litigation, or prior immigration refusals.

Politically Exposed Persons generally include current and former senior public officials, lawmakers, senior managers of state-owned enterprises, and their close family members — spouses, parents, children, — and known close associates. PEP classification may extend 12 months to several years after leaving office depending on jurisdiction. 

PEP status does not automatically result in a refusal — it raises the evidentiary standard and, in most cases, extends the timeline.

Enhanced Due Diligence goes further than a standard KYC review in several respects. It typically includes:

• expanded screening across press archives, corporate registers, and court and regulatory sources; 
• mapping of beneficial ownership and related-party relationships to demonstrate that transactions were conducted at arm’s length; 
• reconstruction of the source of wealth — tracing how assets were accumulated over time and connecting historic proceeds to current balances; 
• independent references from former employers, auditors, or counterparties where appropriate; 
• and, in some cases, a live interview to clarify specific facts or resolve discrepancies in the documentation.

Documents commonly requested include bank statements, tax returns, audited financials, company registers, dividend and payroll records, asset registers, and sworn affidavits.

The thoroughness and transparency directly affects both the outcome and the time it takes to reach a decision. We recommend following the steps described below.

1. Choose a licensed agent with dedicated compliance expertise

Not all agents approach Due Diligence with the same rigour. Look for a company that has a Compliance Department and direct experience conducting preliminary checks — not one that treats Due Diligence as an administrative formality handled alongside everything else.

Moreover, a reputable agent conducts a preliminary Due Diligence review before you commit to anything. This step exists to identify risks that could lead to a refusal — and to give you an honest assessment of your prospects. Signing a contract and paying for services before this review is complete puts you at an unnecessary disadvantage.

2. Provide complete and accurate information

The strength of your application depends directly on the quality of the information you share with your agent. This includes your personal background, family members included in the application, sources of income and wealth, and — where relevant, particularly for politically exposed persons — information about business partners. 

If there are factors in your personal or business history that could raise questions — negative media coverage, past involvement in legal proceedings, complex corporate structures — your agent needs to know about them before submission, not after. 

Incomplete disclosure does not protect you; it creates gaps that government departments will probe.

3. Collect all the required documents

On the basis of the information you provide, lawyers will compile the specific list of documents required for your case: passports, marriage and birth certificates, registration data, bank statements, and any other personal or financial records relevant to the chosen programme. 

Where additional explanation is needed, lawyers may also prepare affidavits to accompany the submission.

Common mistakes in Due Diligence preparation

No clear connection between historic proceeds and current balances. Reviewers need to see how wealth accumulated over time and how it flows through to the funds being used for investment. Dated bank statements, contracts, and tax filings should form a continuous, traceable narrative.

Unexplained cash deposits or third-party transfers. Any funds that cannot be clearly attributed to a lawful source should either be excluded from the investment path or accompanied by documentation establishing their origin and purpose.

Some jurisdictions permit sponsorship if fully documented and transparent.

Mismatched dates and amounts across documents. Contracts, bank statements, and tax filings must be consistent with one another. Where discrepancies exist, they should be identified, reconciled, and annotated before submission.

Undisclosed refusals or investigations. Prior visa or citizenship refusals, regulatory investigations, or legal proceedings that are omitted from the application will typically surface during authority checks — and omissions are treated more seriously than the underlying facts. Disclose early and provide official decisions and relevant context.

Uncertified or untranslated documents. Most programmes require legalised or certified copies and sworn translations where the original language is not English. The requirements vary by jurisdiction and should be followed precisely.

Crypto or foreign exchange flows without KYC documentation. Transactions involving cryptocurrency or currency exchange must be supported by on- and off-ramp KYC records, with counterparties and valuations clearly established.

Circular or round-trip fund flows. Where funds appear to return to their origin before being used for investment, reviewers will question their true provenance. Each link in the chain must be evidenced clearly, or the funds replaced with a demonstrably clean and direct source.

Both the personal and business background of the applicant are subject to scrutiny during the Due Diligence process. Sharing this information fully and accurately with your licensed agent allows the agent’s lawyers to prepare an appropriate package of documents and reduce the risk of a negative outcome.

General information

The following should be disclosed to your agent:

• sources of income, business activities, and ownership structure;
• current financial position;
• criminal record status, or details of any past or ongoing prosecution;
• any prior refusals of a visa, residence permit, or citizenship in another country;
• any matters affecting personal or business reputation;
• any connection — direct or through family members — to political activities.

Immigrant Invest treats all client information as strictly confidential. It is shared only with the government agency handling the application, as required for the official verification process. On the basis of the information you provide, our lawyers prepare the full list of documents to be submitted with your citizenship or residence by investment application.

Risk factors affecting Due Diligence results

Certain aspects of an applicant’s background may raise questions during the eligibility review — and in some cases, lead to a refusal. Understanding these risk factors in advance is the most effective way to address them.

Risk factors are assessed across several key areas: the applicant’s country of citizenship, residence, and business; their prosecution and financial history; the nature of their business activities; the structure and registration of their companies; their status as a politically exposed person; and their public reputation. Each category reflects a distinct compliance concern and is reviewed independently during the Due Diligence process.

The more risk factors that apply to an applicant, the more complex the review becomes. Being aware of these categories in advance allows applicants to prepare the right evidence and approach the process with realistic expectations.

When certain facts require a professional assessment before being submitted for Due Diligence, we attach our expert opinion and additional information on the issue to the application.

The final decision in all cases rests with the relevant government authority. What a well-prepared application and a strong licensed agent can do is ensure that the file presented gives the authority every reason to reach a positive conclusion.

Unconditional approval

The application passes all substantive checks and proceeds to the investment and issuance steps as prescribed by the programme.

Request for further information

The authority requires clarification or specific additional documents — most commonly to bridge gaps between historic proceeds and current balances, reconcile dates or amounts, or verify counterparties. A well-structured response addresses each point directly, with dated evidence and clear cross-references to the relevant documents already on file.

Intent to deny

Some programmes issue a formal notice of intended refusal, giving the applicant a defined window to respond. An effective response addresses each concern raised with new, verifiable evidence rather than restating what has already been submitted. 

Certain programmes may also invite the applicant to an interview before a final decision is reached.

Final refusal

The case is closed. Where re-application is permitted, it typically requires either a material change in the applicant’s profile or the passage of a waiting period — both of which vary by jurisdiction. 

It is worth noting that a refusal in one programme may affect eligibility in others, particularly within the Caribbean, where participating countries share a common database of refused applicants.

At Immigrant Invest, Due Diligence is not a formality — it is the foundation of every application we handle. 

We analyse each case individually, prepare a comprehensive supporting package, and conduct our own preliminary review before any documents are submitted to the government department. 

Our compliance procedures are carefully structured, and we use the databases — World-Check and Dow Jones — which include data from Interpol and Europol.

Immigrant Invest has been working in the industry since 2006 and built up a reputation of a trustworthy partner — both among governments and clients.

We are a licensed agent

Immigrant Invest holds official licences to advise on and represent clients in citizenship and residency by investment programmes. These licences are issued by the relevant government authorities in each jurisdiction where we operate, spanning the European Union, Caribbean, Oceania, and Africa.

A license in the field of investment migration is not a formality — it is a legal prerequisite for any company offering these services, and obtaining one requires demonstrating that the company meets defined standards of compliance, transparency, and professional conduct. For investors, working with a licensed agent is not simply advisable; in most countries, it is the only permitted route to submitting an application at all.

We ensure your confidentiality and data protection

Every application we handle is treated with strict confidentiality. Personal and financial information is shared only with the competent government authorities and accredited Due Diligence agencies directly involved in processing your application — and only to the extent required for that purpose.

Our data protection practices reflect the sensitivity of the information entrusted to us:

• all documents and data are stored in encrypted repositories with controlled access and retention logs;
• access is granted on a least-privilege basis — each team member sees only what their role requires;
• third-party vendors operate under binding non-disclosure agreements and are permitted to use your data solely for the purpose for which it was shared;
• we work exclusively with traceable funds belonging to the applicant. Third-party funding arrangements are not accepted, as they compromise both compliance standards and the integrity of the application.

Originals and certified copies follow a documented chain of custody throughout the process. We do not engage informal financial intermediaries or indirect counterparties — practices that, beyond raising compliance concerns, create unnecessary risk for the applicant.

At Immigrant Invest, certified Anti-Money Laundering Compliance Officers conduct preliminary checks and follow up document preparation throughout the process.

The core elements of Due Diligence are consistent across citizenship by investment programmes: CBI Units verify criminal records, sanctions status, prior visa or citizenship refusals in other countries, and the legality of the investor’s and their family members' sources of income and wealth. 

What differs between jurisdictions is the practical detail — the timeframes involved and the fees charged at each stage.

The purpose of Due Diligence is straightforward: to confirm that the applicant’s background meets the requirements of the programme. Governments want to be confident that neither the investor nor their relatives included in the application have a criminal history, and that the funds intended for investment come from entirely legal sources.

Understanding the shifts within the investment migration environment is important for any investor considering a citizenship or residency by investment: the stricter the process, the more securely the status will hold over time — and the more thoroughly the investor should prepare before submitting an application.

Criticism of investment migration programmes

Citizenship and residence by investment programmes have faced sustained criticism from the European Union and international civil society organizations. The primary concern is the quality of Due Diligence checks — specifically, the risk that individuals involved in criminal activity, tax evasion, or terrorism financing could gain access to EU territory through these programmes.

In response, rules have grown more complex and screening procedures more rigorous. Malta, for instance, examines not only the investor and their immediate family, but also their wider network of associates and business partners.

Some countries have gone further by re-examining applications that were approved in previous years. 

Cyprus engaged three independent companies to recheck all citizenship by investment applications approved before 2018, ultimately revoking citizenship of 26 investors in 2019 alone[4]. Officials responsible for the citizenship by investment programme, however, were cleared from fraud and corruption allegations by court in 2026[5].

Vanuatu similarly announced a retroactive review of all citizenships granted since 2015, while simultaneously strengthening its Due Diligence process with the involvement of the British agency FACT UK — a decision directly linked to EU pressure. From March 2022, Vanuatu citizens who obtained their passport through the investment programme after May 25th, 2015, lost their visa-free access to the Schengen Area[6]. In November 2022, visa-free entry was suspended for all Vanuatu citizens[7]. In December 2024, visa-free access was fully suspended[8].

In 2025, Vanuatu continued to strengthen the Financial Intelligence Unit’s check[9] and later took the next step and updated its billing process to make all the fees to the treasury directly, thus ‘closing loopholes that may have allowed corruption and abuse over the years, which have undermined the government’s citizenship programmes.’[10].

Following the cancellation of Vanuatu’s visa-free access to the Schengen Area, the EU stepped up scrutiny of Caribbean CBI programmes. In 2023 and 2024, the EU engaged in direct negotiations with Antigua and Barbuda, St Kitts and Nevis, Dominica, Grenada, and St Lucia — threatening to suspend or limit their visa-free access to the Schengen Area unless they strengthened their Due Diligence standards[11]. 

Caribbean countries responded by raising investment thresholds and application fees, tightening document requirements, and joining enhanced information-sharing arrangements.

Regulatory context

Due Diligence developments reflect a broader global trend toward stricter anti-money-laundering and anti-tax-evasion standards. Especially, the period from 2022 to 2025 has brought a significant tightening of the global regulatory framework relevant to citizenship and residence by investment programmes.

EU Anti-Money Laundering Package. In May 2024, the European Parliament adopted a landmark AML legislative package, which entered into force in July 2024. It comprises two instruments: 

• new AML Regulation (EU) 2024/1624[12];
• AML Directive (EU) 2024/1640[2];
• and a regulation establishing the Authority for Anti-Money Laundering and Countering the Financing of Terrorism, AMLA[13]. 

The main points of the AML Regulation (EU) 2024/1624 are:

1. Direct applicability across all EU member states, which eliminates the inconsistencies that existed under the previous framework and creates a genuinely level playing field across the EU.
2. An expanded list of obliged entities. In addition to banks and financial institutions, the list now explicitly includes: wealth managers and family offices, real estate agents and professionals involved in property transactions, crypto-asset service providers, mortgage and consumer credit providers, crowdfunding platforms, and high-value goods dealers. For investors with diversified portfolios or complex asset structures, this means Due Diligence requirements will apply across a wider range of their financial relationships.
3. Stricter Customer Due Diligence standards. Obligated entities must conduct individual risk assessments for each client relationship, apply Enhanced Due Diligence in all cases involving high-risk jurisdictions or Politically Exposed Persons, and monitor relationships on an ongoing basis — not only at onboarding. 
4. The rules on Politically Exposed Persons, or PEPs, have been tightened in particular: the period of heightened scrutiny following a person's departure from public office has been extended, and lifting enhanced measures requires an active risk reassessment rather than the simple passage of time.
5. Beneficial ownership transparency. Institutions must actively verify — not merely accept declarations about — the ultimate beneficial owners of companies, trusts, and similar structures. Complex or opaque ownership arrangements will attract additional scrutiny.

AMLA is headquartered in Frankfurt and ensures direct supervisory operations. For the first time, a dedicated EU-level body has binding authority over financial institutions and, indirectly, over the Due Diligence standards applied to high-risk activities — including investment migration.

FATF updated guidance on beneficial ownership. In March 2023, the FATF published revised Recommendation 25 and updated its guidance on transparency and beneficial ownership of legal arrangements. A year later, FATF also updated its risk-based guidance for Recommendation 25[14]. 

These revisions require countries to collect and maintain more detailed information about the true owners of trusts and similar structures — directly affecting investors whose wealth is held through complex corporate or trust arrangements.

OECD and tax transparency. The OECD's Common Reporting Standard, CRS, already operational since 2017, continues to expand its reach. As of 2026, over 120 jurisdictions automatically exchange financial account information[15]. 

The OECD guidance requires jurisdictions to report schemes that pose high CRS risk. It does not directly impose obligations on investors; reporting obligations fall on financial institutions.

The OECD has also introduced rules specifically addressing the misuse of residence and citizenship by investment programmes to circumvent CRS reporting — requiring that such programmes be disclosed to tax authorities in the investor’s country of origin[16].

The new OECD framework — the Multilateral Competent Authority Agreement on the Exchange of Readily Available Information on Immovable Property (IPI MCAA) — extends the existing infrastructure for automatic information exchange, which already covers financial accounts, crypto-assets, and digital platform transactions. 

The purpose was to address a gap that has persisted for some time in cross-border tax reporting: until now, tax authorities in one country had limited visibility into real estate held by their residents abroad. Under the IPI MCAA, that changes. Tax administrations gain systematic access to information that is considered ‘readily available’ in the country where the property is located — including ownership details, property value, transaction history, and rental income[17].

Illegal schemes and discounts from fraudulent agents

Regulatory tightening has not eliminated attempts to circumvent programme rules. Across multiple jurisdictions, a consistent pattern emerges: agents or developers offer citizenship below the official minimum price, arrange unofficial financing, or structure undisclosed side agreements. Investors who participate — knowingly or not — bear the consequences.

Caribbean citizenship by investment programmes prohibit unauthorised discounts, cashback arrangements, and credit-based financing. 

In Grenada, 8 applications have been rejected for violations, and 1 investor who had already received approval now faces revocation. Grenada's Investment Migration Agency has responded with formal enforcement, including licence revocations and permanent bans for non-compliant agents.

São Tomé and Príncipe. Just 5 months after launching its citizenship by investment programme, São Tomé's Citizenship Investment Unit revoked the licence of an agent found to have offered the programme at $89,000, which is below the prescribed investment threshold of $90,000. The CIU described this as a precedent, affirming a zero-tolerance approach to violations[18]. 

Romania. In 2025, Le Monde published an investigation into large-scale fraud involving Romania's repatriation-based citizenship process. Approximately 19,000 passports were fraudulently obtained using forged documents, fictitious registrations, and stolen personal data — with the involvement of corrupt officials, notaries, and lawyers[19]. 

Romanian authorities have since strengthened verification procedures and tightened applicant requirements.

It is important to realise the Illegality and consequences of using ‘financial options’ to bypass citizenship by investment programme conditions.

Citizenship by investment programmes offer individuals the opportunity to become citizens in exchange for a significant financial investment in a country. However, some individuals seek to bypass the conditions of these programmes through illicit financial means, which can have severe legal and personal repercussions.

1. These are legal violations

Attempting to bypass CBI programme conditions through ‘financial options’ constitutes a violation of the law of the chosen country. 

All CBI programmes are regulated by local legislation and are supervised by governmental authorities. It is an offence to knowingly provide false information with the intent to defraud a government authority. 

Moreover, by signing your citizenship application, clients confirm and certify that all information provided by them is true, the client’s signature on this document is notarised, so the client will not be able to avoid liability for breaches of these obligations in the future.

2. Risk of loss of citizenship

Engaging in illegal financial activities or misrepresenting information in a citizenship application may result in revocation of the obtained citizenship and significant legal consequences, including administrative or criminal proceedings and disqualification from participating in other investment programmes.

3. Financial consequences

Individuals involved in such activities may face substantial financial penalties, including forfeiture of invested funds and legal fees. 

Financial schemes are most often offered by companies with non-transparent structures, non-public closed offshore companies and counterparties without proper licence. With such partners, you will never have a guarantee that you will not lose all your investment amount.

4. Criminal prosecution

Illicit financial practices associated with bypassing CBI programme conditions can result in criminal prosecution, tarnishing one’s reputation, and limiting future opportunities. 

How governments battle ‘financial options’

Governments and regulatory bodies are raising public awareness about the risks of ‘financial options’ and grey schemes and the importance of conducting thorough Due Diligence before participating in CBI programmes. 

Also, the European Union conducts separate work and prepares to take action in relation to the offence in CBI programmes. In response to a request from the European Parliament’s Special Committee on Financial Crimes, Tax Evasion and Tax Avoidance for a study on CBI and RBI schemes in the EU developed an innovative methodology to identify questions that raise particular challenges, taking into account all involvement parties specific concerns.

CBI programmes are actively taking measures (Citizenship by Investment Secures Agreement on Six CBI Principles) to combat ‘financial options’ or grey schemes by enhancing Due Diligence, increasing regulatory oversight, promoting global cooperation, enacting legislative reforms, raising public awareness, and implementing strategic screening mechanisms.

Passing Due Diligence once has long-term consequences that may simplify many processes in years to come.

Secured future

A thorough Due Diligence process offers more than a path to citizenship or residency approval — it provides long-term security. 

When a government agency has rigorously vetted an applicant, the risk of subsequent revocation is significantly reduced. That said, all programmes include conditions under which a status may be withdrawn, such as criminal convictions or inclusion in sanctions lists. 

Maintaining the status obtained depends on continued compliance with the programme’s terms and applicable law.

Identified risks and ways to mitigate them

There is the question of what a professional preliminary review can reveal that an investor might not anticipate on their own. 

Politically exposed person status, for example, is defined differently across jurisdictions — an investor may not consider themselves a PEP under the laws of their home country, yet qualify as one under the rules of the programme country. Our certified Anti-Money Laundering Compliance Officers are familiar with these distinctions and factor them into every preliminary review we conduct.

Experience

Due Diligence is a standard requirement for any significant financial activity within the EU: opening a bank account, purchasing real estate, or conducting a substantial transaction all involve equivalent verification procedures. 

An investor who has been through a well-prepared Due Diligence process understands what is expected, has their documentation in order, and is better positioned to meet these requirements efficiently in the future.

Working with an experienced team means arriving at each subsequent check — whether for banking, property, or another CBI or RBI programme — with a clear understanding of the questions likely to be asked, a structured account of your business, and a complete set of supporting documents already prepared. That preparation, built once with care, continues to serve you well beyond the initial application.

1. Source: The latest FATF Recommendations can be found on the official website.
2. Source: Directive 2024/1640 of the European Parliament and of the Council is designed to prevent the use of the financial system for the purposes of money laundering or terrorist financing, amending Directive 2019/1937 and Directive (EU) 2015/849.
3. Source: Alex Muscat’s comment on investment migration programmes was published in the article by Times of Malta in 2021.
4. Source: BBC News reported on the investigation process and results in 2019.
5. Source: The decision of the three-judge Criminal Court was reported by Reuters in February 2026.
6. Source: The decision to partially suspend visa waiver agreement with Vanuatu due to risks posed by golden passport schemes was published on the European Council’s official website.
7. Source: The decision to fully suspend visa-free travel agreement with Vanuatu was published on the European Council’s official website.
8. Source: The decision to cancel visa-free exemption for Vanuatu citizens was published on the European Council’s official website.
9. Source: All provisions of the revised procedure were described in the Government’s Notice of January 14th, 2025.
10. Source: The decision of the Citizenship Commission was published by Vanuatu’s Daily Post in April 2025.
11. Source: The approach that the EU took on citizenship and residency by investment programmes is described in the respective briefing published in September 2024.
12. Source: The full text of the Regulation (EU) 2024/1624 is published on the official website of the European Union.
13. Source: More information about AMLA can be found on the agency’s official website.
14. Source: The guidance on Beneficial Ownership and Transparency of Legal Arrangements can be found on the official FATF website.
15. Source: The full list of countries can be found on the official OECD website.
16. Source: In 2023, the OECD and FATF published a joint report on the misuse of citizenship and residency by investment programmes.
17. Source: The full text of the Multilateral Competent Authority Agreement on the Exchange of Readily Available Information on Immovable Property is published on the official OECD website. 
18. Source: The incident was described by the IMI Daily resource.
19. Source: Le Monde investigation into the fraudulent use of forged Romanian documents was published in December 2025.