El Salvador announced in December 2023 that they were launching their Freedom Visa program in a bid to attract foreign investment to the country, as well as to attract “transformative individuals who are interested in building a legacy”. (Source: Forbes.com)

So, does the Freedom Visa hit the bullseye or miss the mark? Let’s discuss.

Bukele, Bitcoin, and Crime

In June 2021, El Salvador’s President Nayib Bukele announced a bill to adopt bitcoin as legal tender in the country. With El Salvador being the first country in the world to do this, the move was touted as a step towards greater economic freedom and a way to make it easier for Salvadorans abroad to send money back home. The government also thought it would be a great way to bring in more foreign investment, particularly from crypto investors.

Another move Bukele’s administration has made to increase foreign investment and tourism is his crackdown on crime, specifically gang-related crime, which has plagued the country for decades. Through these efforts, El Salvador has gone from having the highest murder rate in the world to having the highest incarceration rate in the world.

And it looks like the combo of bitcoin and crime reduction is working, as El Salvador saw a 30% increase in tourism alongside a 70% reduction in murders in 2023. While it still lags behind other countries in the region, the future looks to be heading in a positive direction for El Salvador, if they can stay on this course.

The Freedom Visa

Doubling down on their commitment to bitcoin as legal tender in a bid to attract more investment, El Salvador announced their new Freedom Visa program in December 2023. All for the low, low price of US$1,000,000!

Per the official government website, this is the premise of the Freedom Visa program:

El Salvador extends an exclusive invitation of citizenship to 1000 individuals who aspire to make a difference in the world. Successful applicants are eligible for a fast-track Salvadoran passport, becoming an integral part of this transformative journey. El Salvador is experiencing a renaissance driven by bold leadership, economic liberty, and a commitment to financial freedom. We are actively seeking the brightest minds globally to join us in building this vision of a better tomorrow. Limited to 1000 participants per year, this Freedom Visa program is not just an investment; it’s a commitment to building the country of the future.

Essentially, El Salvador’s Freedom Visa is a nation-building project. They are trying to attract foreign investment to the country to build up local infrastructure and make improvements in areas like education and healthcare.

If they are successful in attracting 1000 individuals a year to invest in this program, they’ll be bringing in a cool US$1,000,000,000 annually.

Here are some of the program details:

• Requires a US$1,000,000 crypto donation via Bitcoin or USDT Tether.
• Non-refundable application fee of US$999, to be applied towards your donation upon acceptance.
• One application can include all family members.
• No physical residency requirement.
• Approvals are granted in 6 weeks.
• Upon approval and successful transfer of funds, your Freedom Visa (residency) will be sent to you in the mail.
• Fast-track to Salvadoran citizenship within 3 months of approval.
• The Freedom Visa is aimed at high net-worth individuals or investors who are interested in contributing to building “Bitcoin Country”.

This could be an interesting play for the right type of investor, but it’s definitely not for everyone. Let’s break down some of the pros and cons of both El Salvador as a country and the Freedom Visa itself.

Pros

While most people are more familiar with some of the historically well-known “cons” of El Salvador, it offers a lot of pros, too, including:

• Low cost of living
• Bitcoin and USD as legal tender
• Successful reduction in crime
• Protected property rights
• Beautiful weather and geography
• World-class surfing
• Friendly people

I found this blog article about a female traveling El Salvador alone and she has a pretty positive take on the country. With tourism on the rise and more direct flights being offered, things are looking pretty good for El Salvador overall.

Now that we’ve established that El Salvador has a lot going for it, let’s look at the pros of the Freedom Visa itself:

• Quick online application process
• Quick approval process
• Fast-track timeline to passport
• Whole family can be included in one application
• Application fee gets credited against your required investment
• Opportunity to use crypto for your investment
• Pretty good passport with visa-free travel to Europe’s Schengen area, Hong Kong, Singapore, and many more countries
• A chance to potentially be a part of a real nation-building project and “help build the future you want to see”

Cons

While El Salvador has a lot going for it at the moment and appears to be headed in a positive direction, it comes with a lot of baggage and still has a lot of work to do to become an investment and tourist hub. Here are some of the main cons with the country:

• Very under-developed infrastructure
• Significant language barrier as few people speak English (this is part and parcel of traveling to foreign countries but it is a factor that affects its desirability nonetheless)
• Crime is still a definite concern
• There are not quite as many flight options available as there are for other more well-established tourist destinations in Latin America
• Some concerns about due process and corruption with the current government
• Somewhat uncertain economic future with their bitcoin gamble

The Freedom Visa has some significant cons, as well. I found a great article that goes over the program and its various issues and these thoughts seem to be shared by many others. Here are the big issues:

• The Freedom Visa program is not well-defined and there is some confusion about whether it is a residency or citizenship program, or both? According to the government website it is a “citizenship by donation” program, but in communications about the program the government hasn’t been very clear on this and several other details.
• Way too expensive – with most well-established Caribbean citizenship by investment (CBI) programs starting at US$100,000 to US$150,000, El Salvador’s Freedom Visa is far more expensive for a lower quality passport.

The US$1,000,000 cost of the Freedom Visa alone will be a deal breaker for the vast, vast majority of people. Even Malta’s CBI program is less expensive, and you come out of that one with one of the best passports in the world.

The Freedom Visa is a Big Gamble

El Salvador is clearly swinging for the fences with their Freedom Visa offering. It sounds very interesting in theory, but it appears they need to flesh out the program quite a bit more so people understand what the requirements are and what they are getting in return for their US$1,000,000 investment.

Frankly, I think they are out to lunch on the price. Unless you feel a strong compulsion to be involved in the rebuilding of El Salvador, it’s hard to imagine many people in the market for a second citizenship going this route.

So, while I do think the Freedom Visa has great potential to bring in foreign investment, I’m not sure it will realize that potential without some big changes being made. Especially to the price!

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Thanks for reading and have a great week!