The term due diligence is synonymous with investment migration. Whether a person is applying for a second citizenship or residency through investment, they must undergo what is known as the “due diligence process”.
In this piece we want to cover the basics of due diligence, what it is, why it matters, and how it is done.
What is due diligence?
Due diligence is the process of conducting background checks on citizenship or residency applicants to ensure they are a safe addition to any community.
The main goal of due diligence is to make sure that any given applicant does not have a criminal record. Criminal activity, such as theft, money laundering, and embezzlement, amongst others, is the core objective and the main reason due diligence checks are at the center of any investment migration process.
Why does it matter?
It is the cornerstone of residency and citizenship by investment. For an investment migration program to survive, it needs to maintain a high level of due diligence.
The integrity of any residency or citizenship by investment program relies heavily on the level of due diligence the government provides. The more detailed the framework, the greater integrity the program boasts.
However, a far more important factor is the safety of the applicants and the population of the destination country. Bringing in new people into the community is a major responsibility, and the government must ensure that the people it introduces into its population are safe and responsible.
This process eliminates the possibility of adding offenders to the community and ensures the safety and security of the country and the new additions, be it residents or citizens.
How due diligence is done
The process is the longest part of any residency or citizenship by investment program. It takes months and involves a flurry of parties that all work to ensure they cover all aspects of an applicant’s background.
Through conducting exhaustive searches in various databases, including but not limited to local authorities such as the police or central intelligence, global authorities such as the Interpol, financial entities such as local or global banks, and other foreign entities such as the FBI.
Every country has its own due diligence structure, but overall, most of them will look into the following criteria of any applicants:
- Education credentials
- Company associations
- Personal details
- Employment records
- Source of wealth
- Track records
- Licenses, certificates & awards
- Potential conflicts of interest
- Political and criminal links
This comprehensive background check paints a picture of the applicant, and the immigration officer can then check for any red flags. Some programs even require their government-approved agents to conduct their own due diligence as the first line of defense, this can be done through coordinating with specialised due diligence firms or through the use of specialised tech and software.
Once the agent sends their finding to the relevant government, it becomes the government’s job to conduct a more comprehensive, detailed background check to ensure that the individual is a safe addition to the community.
It is worth noting that while due diligence also shows current claims and legal action being taken against applicants, it does have a massive differentiation between civil and criminal lawsuits.
Any criminal lawsuit will most probably result in a rejection of an application, or a postponement of the decision until the court has a verdict. If an applicant has been charged with a criminal lawsuit in the past but was found innocent, that would not affect their application.
Civil cases are another thing entirely, as they do not point to criminal activity and, most often than not, do not influence the decision of an immigration officer, except in the cases where a civil lawsuit is a corridor to criminal litigation, which is a very rare occurrence.
Understanding more about due diligence
Citizenship and residency applicants must be able to provide the documentation required for due diligence to be conducted effectively. This set of documents is mostly similar amongst residency and citizenship by investment programs but does slightly differ depending on their framework.
