OECD issues consultation documentation regarding the investment schemes involving misuse of residence for circumventing the Common Reporting Standard

OECD investment schemes

A growing number of jurisdictions are offering Citizenship by investment (CBI) or Residence by investment (RBI) schemes allowing foreign citizens to obtain local citizenship or permanent or temporary residence rights in order to take advantage of the local flat fees or in exchange for local investments. These individuals may be interested in these opportunities for a number of legitimate reasons such as taking advantage of visa free travelling, increased mobility or better job or educational opportunities, or the choice of living in an economically stable country. But at the same time the information which is released on the market and obtained by the OECD CRS public disclosure facility stresses on the various RBI and CBI misuse schemes which are aimed at circumventing the requirements for reporting under the Common Reporting Standards (CRS).

The newly released consultation document by the OECD includes information regarding:

  1. Assessment of the ways in which schemes for circumvention of CRS are used
  2. Identification of the types of schemes which are at high risk of abuse
  3. Reminder for stakeholders regarding the importance of correct application of the CRS due diligence procedures for prevention of such abuse
  4. Explanation for the follow-up steps which will be undertaken by the OECD to further address this problem which is assisted by public input

Such public input is requested and used for obtaining more evidence regarding the misuse of RBI/CBI schemes as well as the effective methods for preventing this type of abuse. The input will be taken into consideration when the next steps are planned for stopping this type of abuse.

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