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We recently made a video about why New Zealand has become a top haven for the world's richest people, and a prime example of this trend is Peter Thiel, who was granted New Zealand citizenship in 2011 after spending a total of 12 days in the country. It seems that Thiel was looking for a new backup option, because, apparently, one shelter in case the world ends is not enough for him. Earlier this year, he temporarily moved his family to Buenos Aires and purchased a $12 million estate in one of the city's most elite areas. It would seem that this is just a billionaire buying a very nice house. Billionaires sometimes do that. But, as they say, a few months later, the Argentine government announced something that makes this case seem less like an
isolated one. For a non-refundable payment of $350,000, foreigners can now become citizens of Argentina. You don't even have to live there for a single day. You didn't even need to be there. Just send the money to the state treasury-and the passport is yours. If you come with your wife and two children, the family package will cost $500,000, which is a pretty generous bulk discount. This puts Argentina in a very narrow and, let's be honest, not very prestigious circle. About 47 countries sell residency, but only about a dozen sell citizenship directly. And most of them are small island states, usually associated with cruise ships and offshore accounts. Argentina is the first
country in South America to take such a step, and by area it is the largest country to ever try it. But there is a small problem. Argentina does not have a reputation for being a stable country. It has defaulted eight or nine times, depending on how you count, and next year the country has to pay off almost $25 billion in foreign currency debt, which is actually the main reason. Argentina needs dollars, and it has decided that one of the few things it has left for sale is its membership in the state. So what exactly is Argentina selling and why now? Who is actually going to buy this and
what is the price for Argentina? And finally, can "golden passports" actually help fix the economy, like in Argentina? With the holidays just around the corner, it may seem like your spending is spiraling out of control. I know that I have it. Every meeting seems to be accompanied by a few purchases. It's hard to keep all of this in mind without losing sight of your long-term goals. That's why I'm using today's sponsor-Monarch. Monarch is a personal finance platform that brings all your accounts together in one place. It connects to over 13,000 institutions, including all major banks and credit card companies, and syncs them in one convenient dashboard. But the best part of Monarch is the
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The standard product that most countries sell in this market is the so- called "golden visa" or residence permit through investment program. You invest a certain amount of money, usually by buying real estate or opening a deposit in a local bank, and in return you receive the right to live and work in that country. Dozens of countries offer similar options, but a residence permit is not citizenship. You can live and work, but you don't get a passport. You also usually cannot vote, and your status depends on maintaining investments, renewing permits, and complying with laws. Citizenship is a completely different product, because a passport means that you belong to this country.
You cannot be deported, you can vote, and most importantly for buyers in this market, you gain the visa-free travel rights that this passport grants. In other words, a golden visa is like a lease, while a golden passport is ownership. Only about a dozen countries openly sell citizenship, and this list says a lot about the state of the market. These are small economies with limited natural resources and little foreign investment. For them, selling passports is one of the few available income generating tools. Several major countries have also taken steps in this direction: Turkey, Egypt, and Jordan are implementing citizenship-by- investment programs of varying scales. But Argentina is a category in itself. It is a G20 country with a
population of about 46 million people, the eighth largest country in the world. Under current conditions, there are two ways to enter the program. The first is the non-refundable contribution to the state treasury that we mentioned: $350,000 for the main applicant, $100,000 for a spouse, and $25,000 for each child under the age of 18. The second way is to buy $800,000 of new government bonds and hold them for 7 years, which, given the history of Argentine bonds, is probably the riskier of the two options. In any case, you bypass the standard two-year residency requirement. You don't need to live in Argentina, you don't need to know Spanish, there are no language exams or any cultural integration requirements. This
makes the program one of the easiest in the world to buy citizenship, and Argentina one of the largest economies to offer it. So why now? The economic situation in Argentina has been eventful for decades, to say the least, but the pressures the country is currently experiencing make this a difficult time to ignore. Growth is sluggish, inflation remains high by any standards, even after declining from triple digits, and the government faces a wall of debt. The $25 billion due next year includes sovereign bond maturities and IMF debt. And for a country that has very few reliable ways to earn dollars, that's a colossal sum. The obvious step would be to
simply borrow more on international markets, but the government is reluctant to do so, and there are good reasons for that. In December 2025, the country managed to sell new dollar bonds to raise fresh funds for the first time since 2018. These were Bonar 2029N bonds with a yield of 6.5%. But they were issued under Argentine, not New York, law, meaning international investors receive weaker legal protection in the event of another default. And in the case of Argentina, this "in case" means a lot. Creditors remember everything. So the government is not completely cut off from capital markets, but it borrows at a higher rate under its own legal system and from investors who understand perfectly well what they are getting into. This
means that the country is looking for dollars wherever it can, and selling citizenship is one of those ways. A group of consultants advising the government has estimated that the program could bring in about $2.5 billion if their projections for the number of applicants come true. At a cost of $350,000 per primary applicant, that's approximately 7,000 buyers. $2.5 billion sounds like a large sum, and it really is. But when you compare that to the $25 billion bill next year, that only covers 10% of the annual obligation. This is a useful contribution, but it does not solve the problem. The bigger bet they make is about something bigger than one-time payments. These are wealthy newcomers who spend money
locally, bring with them international business connections, and help Argentina transition to a service economy based on foreign clients. In general, this is the same rate that New Zealand is making. New Zealand recently lowered the threshold for investor visas to NZ$5 million for 3 years and completely abolished the English language requirement. In the 10 months since these changes, the program has received 756 applications and NZ$3.93 billion in potential investment, compared to just 115 applications in the previous 2.5 years. But there is a big difference between Argentina and New Zealand.
New Zealand is a stable, wealthy country that sells residency. Argentina sells the passport itself, being in a much weaker economic position. Whether these two strategies will produce the same results is an open question. I will be frank. Argentina's "Golden Passport" has several significant advantages. Because as a product, the Argentine passport is better than almost everything else in the "citizenship for money " market. Argentina ranks 16th in the Henley Passport Index with visa-free or visa-on- arrival access to 169 countries, including Europe's Schengen Area, the United Kingdom, China, Japan, and the UAE. For comparison, the Saint Kitts and Nevis passport allows you to visit approximately 157 destinations, and the
Dominica passport allows you to visit approximately 144. Both of these programs are generally cheaper for families than the Argentine one, but even at the higher price, Argentina offers significantly more travel freedom. And this is not limited to the passport itself, as Argentine citizenship also provides Mercosur benefits. According to the Mercosur Residence Agreement, citizens of the bloc's member countries, namely Argentina, Brazil, Bolivia, Paraguay and Uruguay, as well as associated states such as Chile, Colombia, Ecuador and Peru, can obtain a 2-year residence permit and the right to work in each other's countries. This can then be converted into permanent residence with only proof of citizenship and a
clean record. So, you are actually buying more than just entry into one country. It's more like buying a pass to most of South America, which is a pretty strong argument for anyone thinking about diversifying their places of residence and business. Some buyers view the "golden passport" as something much more than just access to travel. They perceive it more as an insurance policy. Argentina is self-sufficient in food and increasingly self-sufficient in energy, which attracts a certain group of people, such as those who spend a lot of time thinking about geopolitical risks and worst-case scenarios. People who, for example, may already have a "backup airfield" in New Zealand. And then there's the lifestyle argument. Argentina has Patagonia, the Andes, the
wine regions of Mendoza, the culture of Buenos Aires, and perhaps the best steaks on the planet. This is not a small Caribbean island, but a huge country with some of the most impressive natural landscapes on Earth. Which brings us back to Peter Thiel, who may be the best advertisement this program could ever dream of. His family's move to Buenos Aires and that mansion in Barrio Parque sent a clear signal: Argentina was in the sights of serious money. The New York Times reported that Thiel's interest was driven in part by concerns about the future of the United States and the prospect of a major conflict. His commitment to Milley's libertarian policies and the proposed one-time tax on billionaires in
California were also cited as reasons for seeking a "plan B." To be fair, a spokesperson for Miley denied that Thiel was offered citizenship under this program, and there is no confirmed connection between him and the scheme. But for marketing purposes, it doesn't really matter. One of the world's most famous tech billionaires chose Buenos Aires, and regardless of whether it was agreed upon, such a signal cannot be bought even with a $350,000 advertising budget. The problem is that billionaires with clean money and three passports already have other options. So the question is not who Argentina wants to sell citizenship to, but who will actually come to buy it. Because citizenship by investment programs have a well-known tendency
to attract the wrong buyers. It's such a common phenomenon that economists even have a name for it. This is called "adverse selection," and a classic example is the so-called "market for lemons," which, ironically, helped an economist win the Nobel Prize. Imagine you are buying a used car. Some of the cars on the lot are great, and some are "lemons" (an American term for a car that looks good but is actually junk). The seller knows exactly where which ones are , but you don't. Therefore, the most sensible thing to do is to offer an average price, something between the cost of a good car and a "lemon". But if you have a really good car, selling it at an average price is a bad deal. So you just don't put it up
for sale. However, if you have a "lemon ", the average price is a fantastic offer. So you are first in line. So, good cars are quietly leaving the market, average quality is falling, buyers are offering even less, and even more good cars are disappearing. In the end, you end up with a market where there are mostly "lemons" left. Now replace the cars with passport buyers. Argentina can conduct any checks it wants, but buyers will always know more about the origin of their money than the Argentine government. And, as with good car owners, the buyers Argentina is really after have better options. A billionaire with clean money and a secure passport can purchase residency in New Zealand, Portugal, or any other stable
country without taking on the economic risks of Argentina. And Argentina, as much as we love it, is not the most peaceful place to plan your future. Between 1930 and 1976, there were six military coups there, about one per decade, and the 2020 default brought the total to the eight or nine we mentioned earlier. The country has experienced triple-digit inflation, exchange controls, and currency crashes with a regularity that is almost startling. For someone like Thiel, who already holds US and New Zealand citizenship, Argentina could be an interesting additional insurance. But for the typical wealthy person who seeks security above all else, it's a much more complicated proposition. So the question arises: who will buy? Now
I want to tell you about the Economics Explained newsletter. If you're watching this video and think there should be more stories like this, we've launched a newsletter for that. Once a week, we send out one economic story about things that quietly shape how the world works but are rarely properly explained. The newsletter is absolutely free, and you can subscribe via the link in the description or via the QR code on the screen now. Back to who is most likely to buy Argentina's "golden passports"? Decades of experience show that the most willing customers are people who need a passport more than a safe country. Sanctions evaders, tax evaders, organized crime figures, and in the worst
cases, people fleeing justice altogether. The Financial Action Task Force (FATF) has repeatedly warned that criminals are using citizenship and residency programs to hide their identities and launder dirty money while remaining beyond the reach of the law. And this is not just a theory. Turkey has investigated thousands of investment citizenship cases and canceled many of them after discovering inflated property valuations, fictitious sales, and forged documents. In early 2025, the EU's top court ruled that Malta's "citizenship by investment" scheme violated EU law because it granted citizenship without any real connection to the country-a decision widely seen as a ban on similar programs across the bloc. And
Vanuatu's programs were so poorly vetted that the country completely lost visa-free access to the Schengen zone. The only thing that buyers actually paid for simply disappeared. This latest example is a nightmare for Argentina. If the program becomes a conduit for those who evade sanctions, evade taxes, or launder money, other countries could respond by tightening visa requirements for Argentine passport holders, destroying the very thing that makes the passport valuable. That's the catch. The program only works because the passport is of high quality, but if it attracts the wrong buyers, the passport becomes worse. And as soon as the passport gets worse, the program stops working. The Argentine government says it
will conduct a thorough investigation, which, frankly, is exactly what you would expect from them. But history shows that Argentina's institutions tend to buckle under fiscal pressure, and the temptation to let a few dubious applicants pass becomes very hard to resist when debtors are already knocking on the door. So, can this actually work? In the best case scenario, the program will raise about $2.5 billion. This is real money, but as we have seen, it barely covers the debt for one year. The real benefit, if any, lies in the secondary effects. Wealthy newcomers who spend locally, invest in businesses, attract international connections, and help Argentina develop a more diversified economy. But such a
transformation takes years, as well as something Argentina has not been particularly famous for- long-term stability and institutions that people truly trust. Political timing is also not conducive. The scheme comes about a year before the 2027 general election in a country where nationalist sentiment is already on the rise. Thiel's arrival has already sparked protests in Buenos Aires and much speculation that wealthy foreigners are shaping Miley's agenda. Government supporters see the presence of venture capitalists as proof that Milley is successfully transforming Argentina into a reliable destination for global capital. Meanwhile, Miley's critics see this as another example of the country being
sold to the highest bidder. And, frankly, this political tension may be the program's biggest weakness. "The government is literally selling out the country" is the kind of campaign slogan that writes itself, especially in a nation with a history of inequality and foreign creditors dictating terms. In the worst case scenario, you will get a corruption scandal like in Turkey, a loss of visa-free access like in Vanuatu, or both. And then you'll damage one of the few truly valuable assets you were working with. So, what have we come to? Golden passports alone will not fix Argentina's economy. They can only help partially. And all else being equal, trying to attract wealthy immigrants is a perfectly
reasonable strategy. But Argentina's problems are structural. Things like debt, inflation, institutional weakness, and political instability require structural solutions. And no citizenship program can replace fiscal reform. It is also no substitute for truly sound monetary policy and years of boring but consistent governance. What it can provide, if managed properly, is a signal that Argentina is open for business and ready to compete for global capital. No one can predict the future, especially economists. But, for better or worse, Argentina is now betting its passport on being able to get the vetting right. And this is not the task that its institutions have historically handled
best. Whether this signal will attract the right attention, or the opposite-that is the risk Argentina is taking. We already made a whole video about why New Zealand has become a haven for the world's rich, so we didn't want to repeat it here. But if you're interested, you can jump to it by tapping on the screen right now. Thanks for watching, friend. Goodbye.
