How to pass a Due Diligence check

Answer 10 questions and find out if you can successfully pass a Due Diligence check and obtain the second citizenship or residency permit afterwards.

Only investors who have successfully undergone the required Due Diligence check can be granted residence or citizenship by investment.

Investors have many questions about Due Diligence, including why this check needs to be carried out, what will be assessed and how to undergo the Due Diligence check successfully. The procedure is strict, and the coveted citizenship or residence permit depends on its result.

We have summarised the main points on Due Diligence in 10 questions: in 5 minutes, you can find out the main points of Due Diligence and evaluate your chances of passing the Due Diligence check.

Go to test

When is a Due Diligence check carried out?

No, this is the standard procedure for assessing risks and the trustworthiness of the investor before approving significant financial transactions.

Quite right. A Due Diligence check is a standard procedure required to assess the risk of significant financial transactions and the reliability of investors. For example, it is carried out when buying a business or before choosing a new business partner.

Without a Due Diligence check, it is impossible to close a significant financial transaction in Europe or the United States, including buying real estate, depositing money in a bank account, or transferring money to another person.

The good news is that you can use the Due Diligence results conducted by our company even after you are granted citizenship or a residence permit by investment. For example, if you open an account in a European bank, you will already know the general procedure and which documents are required. Furthermore, you can use the same documents, including any affidavits that show that you successfully met all the conditions needed to undergo a Due Diligence check. The general requirements for Due Diligence checks for different purposes are similar.

No, Due Diligence is mandatory for assessing risks, and the reliability of the investor before any significant financial transactions are undertaken. It does not matter whether you worked as a government official or not.

This is not true. Due Diligence is a mandatory procedure which is used to assess the risks of a significant financial transaction and the reliability of the investor.

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In which countries do I need to undergo Due Diligence to obtain citizenship or a residence permit by investment?

Yes, there is a special regulation governing Due Diligence checks in the European Union. However, this is only part of the answer.

You are partially correct, but there are certain nuances that need to be taken into account.

Yes, the UK and Austria conduct stringent Due Diligence checks on investors. Moreover, due to severe criticism from the European Union, Cyprus and Malta have now also started carrying out equally strict Due Diligence checks on investors.

All countries check the trustworthiness and integrity of investors.

Due Diligence is mandatory, and during the check, a complete picture emerges of the investor applying for citizenship or a residence permit. Checks are made to verify that applicants or family members do not have a criminal record anywhere. These checks are made during the Due Diligence process undertaken by any country, including, for example, Cyprus and St. Kitts and Nevis.

The European Union has issued a special Directive on countering the laundering of proceeds from crime and the financing of terrorism, which is enforced throughout the EU. Applicants for citizenship or residence permits by investment are checked strictest of all, as stipulated in the fifth version of the European Directive.

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What is checked in Due Diligence?

This answer is correct but incomplete.

Citizenship or a residence permit for investment will not be granted to investors if it allows them to enter countries that had previously rejected their applications for a visa, residence permit, permanent residence or citizenship. However, the Due Diligence check is not limited to verifying just this information but is much more broad-based.

The absence of a criminal record is a key element of the Due Diligence check, but not the only one.

In addition to checking for violations of the law and a dubious business reputation, during the Due Diligence process, the sources of the investor’s wealth, or Source of Wealth, and the legality of the origin of their funds, or Source of Funds, to be invested are investigated.

The specific risks associated with the investor’s business and past activities are also checked. If they previously held a public office, the corruption risks related to their role are investigated. Any instance of the investor’s application for a visa being rejected is also an important point, as this may lead to their application for citizenship or a residence permit by investment being rejected.

A detailed and comprehensive list of the information that is checked during Due Diligence can be found in our practical guide to Due Diligence.

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Where can be obtained the information about investors for a Due Diligence check? Select the option that allows you to verify as much information as possible.

No, no such request is made. As part of an investor’s Due Diligence, they may be asked to provide tax returns previously filed with the tax authorities.

Publicly available databases are used to search for information on the business reputation of an investor, including negative reports in the press.

Other sources of information are used more. The investor’s business reputation, any instances of visa applications being rejected, and service in high government positions are also considered.

That’s right, these are special multi-industry databases created to check risks as part of the Due Diligence procedure. They contain different blocks of information: on companies, politicians, court cases, sanctions lists, and press publications. This is the complete source of information. We use these databases when carrying out a Due Diligence check on our clients.

The Due Diligence check is carried out by experts qualified to assess financial and legal risks, also known as Anti-Money Laundering Compliance Officers. This again shows that combating international money laundering is an integral part of the Due Diligence process.

As a result of the Due Diligence process, only law-abiding investors with a positive business reputation and with no criminal record will be able to obtain citizenship or a residence permit by investment.

Next question

Due Diligence is carried out in two stages in banks and other well-established companies. First, a preliminary Due Diligence check is made, followed by the main one, which includes deep risk analysis. What is checked at the preliminary stage?

The financial component of the application is checked at the main stage.

This is the wrong answer.

There are no restrictions placed on the investor’s political preferences.

This is the correct answer. Before signing the contract with a prospective client, the preliminary Due Diligence check is carried out. Usually, it takes no more than 48 hours.

At the preliminary Due Diligence stage, the following information is checked:
— negative information about the investor in international databases;
— whether they are associated with companies engaging in illegal activities;
— whether they are on the sanctions lists;
— whether they held a high position in the civil service

The preliminary Due Diligence stage is also called KYC (know your client). The preliminary Due Diligence check is carried out by certified Anti-Money Laundering Compliance Officers in our company.

We sign a contract and work only with those candidates who successfully undergo the preliminary Due Diligence. We do not provide support in obtaining citizenship or a residence permit by investment to individuals associated with terrorism, extremist organisations, or corruption. We also do not work with individuals on the EU or US sanctions lists.

Next question

If I have a suspicion that something may prevent me from successfully passing the Due Diligence check, what should I do?

The amount of investment does not affect the result of the Due Diligence check.

This is not the best idea. The thorough and deep check made during Due Diligence will almost certainly expose the information you are trying to hide.

You are right: honesty and openness are essential in preparing for a Due Diligence check. Even if revealing sensitive information about yourself results in difficult or awkward moments, the risk of your application being rejected can be significantly reduced. You need to disclose all the relevant information in advance to the licensed agent dealing with registering your citizenship or residence permit by investment application. At Immigrant Invest, we guarantee that all data transferred to us is not passed on to other organisations or government bodies. The privacy of your data is strictly protected.

The government department considering your application will pay particular attention to any complex offshore company structure you may have or if the investment funds are derived from sources that are not related to your core business and assets.

In order to increase the likelihood of your application being approved, it is necessary to prove the legality of the origin of your funds and income and disclose in detail all the information about your company and its major shareholders and partners. In this way, it will be possible to undergo the Due Diligence check successfully.

It is better to disclose all the information relevant to the application in advance to the licensed agent involved in registering your application for citizenship or residence by investment. Doing so can reduce the risk of your application being rejected to 1%.

This is definitely not what you should do. The Due Diligence check is carried out by specialists who are fighting against corruption and money laundering: offering them bribes is a very bad idea.

Next question

Who is ineligible to successfully undergo Due Diligence and obtain a second citizenship or residence permit by investment?

Yes. High-ranking government officials are politically exposed persons (PEPs).

Case: how a former civil servant was granted St. Lucia citizenship

Not all politicians are politically exposed persons (PEPs). This means that some politicians may be subjected to the same Due Diligence requirements as other eligible investors.

Case: how a former civil servant was granted St. Lucia citizenship

Correct. Members of parliament are politically exposed persons (PEPs).

Case: how a former civil servant was granted St. Lucia citizenship

This is the correct answer. High-ranking government officials, members of parliament, and senior leaders of political parties are politically exposed persons (PEPs).

They are subject to particularly stringent Due Diligence requirements, as their powerful positions in government or politicians expose them to corruption risks.

However, all of them can successfully undergo the Due Diligence check and get second citizenship or a residence permit by investment if they can prove the legality of the source of their income and wealth.

Case: how a former civil servant was granted St. Lucia citizenship

Next question

Now let us look at Due Diligence cases using a few real examples.

Daniel wants to apply for citizenship in a Caribbean country. During the Due Diligence check, it turns out that the police want a person with exactly the same Christian name and surname on criminal charges. Will this prevent Daniel from obtaining second citizenship?

Such a coincidence is a risk for the investor; however, there is no need to change their first or last name. Furthermore, the government department will automatically pay greater attention to the application when they see that an applicant has changed their name.

Of course, this is true, but problems can nonetheless arise in practice. The government officers considering the application will have to work out for themselves that it is just a coincidence that these two individuals have exactly the same name and that the investor is not the one wanted by the police. However, it is not inconceivable that they may draw the wrong conclusion and reject the application.

The coincidence of the first and last names of the investor and another person who is wanted by the police on criminal charges is a risk. Countries offering residence or citizenship by investment programs monitor criminal records very strictly.

If, at the preliminary Due Diligence stage, it turns out that the database shows that the investor has the same name as an individual wanted by the police on criminal charges, it is important to prepare documents that clearly prove that the investor is not related in any way to the other person. For such cases, our lawyers prepare affidavits that prove that the investor is not wanted by the police and has no criminal record.

This is mistaken. Countries offering residence or citizenship by investment programs closely monitor criminal records in the applicant’s country of origin. Therefore, there is a risk.

Next question

One more example:

Amir was planning to invest in Malta and apply for Malta citizenship. A few years earlier, he had closed three companies owned by him. Does he need to disclose information about these companies in the Due Diligence check?

Quite right. Even if the companies were liquidated several years ago, you need to disclose information on them and provide the relevant documents.

No. During a Due Diligence check, information may be required on companies that have been liquidated. In our practice, there was such a case.

During a Due Diligence check, the government officers may request information about companies that previously belonged to the investor, including those closed.

However, no time frame has been specified: companies closed 2 years or 7 years ago can be checked.

Any questions that arise during the investor’s Due Diligence check have to be answered. Otherwise, the risk of the application being rejected will increase significantly.

Next question

And the last question:

Adikhan wanted to apply for Cyprus citizenship by investment. However, he was working as a manager in a Kazakh company included in the sanctions list. Will Adikhan be able to apply for citizenship by investment?

This would be excessively strict. Large companies employ thousands of people. This does not automatically make them subject to sanctions.

Sanctions are important for international relations. For example, previously issued passports for investment in Cyprus are being reviewed as part of the state investment program.

If it turns out that the passport holder is now under sanctions, their passport can be revoked even though the sanctions lists were compiled after they were granted the passport.

Even a manager can be sanctioned. It is not possible to determine whether an employee of the company is included in the sanctions list or not simply based on their position at the company.

This is a correct and balanced answer. Large companies employ thousands of people. This does not automatically make them sanctioned persons.

If an employee does not take important financial decisions or sign contracts related to the reason for sanctions being imposed on the company. In that case, it is unfair to sanction them.

To apply for citizenship or residence by investment, the licensed agent needs to conduct a detailed analysis of the employee’s powers and responsibilities to prove that they were not the target of the sanctions.

Find out the result

You have learned a lot from the test: that’s great. New knowledge will be helpful to you in preparing for the test and obtaining citizenship or a residence permit in the country selected by you.

We advise you to read these two articles published by us Our general guide to Due Diligence

Schedule a meeting

Do you have any questions left on Due Diligence?

Let’s talk about all the nuances of the Due Diligence check. We will help you assess the risks and find a solution that suits you.

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It appears that you were preparing for a test! You know a lot about Due Diligence. Use this knowledge to prepare for the Due Diligence test and get citizenship or a residence permit in the country selected by you.

We advise you to read Our general guide to Due Diligence

Schedule a meeting

Do you have any questions left on Due Diligence?

Let’s talk about all the nuances of the Due Diligence check. We will help you assess the risks and find a solution that suits you.

Schedule a meeting
Prefer messengers? WhatsApp Telegram

Congratulations, you know a lot about Due Diligence and passed our test with distinction. We are sure that you will be able to easily prepare for the test and get citizenship or a residence permit in the country selected by you.

You may find it useful to read these two articles published by us Our general guide to Due Diligence

Schedule a meeting

Do you have any questions left on Due Diligence?

Let’s talk about all the nuances of the Due Diligence check. We will help you assess the risks and find a solution that suits you.

Schedule a meeting
Prefer messengers? WhatsApp Telegram