In 2006, the tiny Caribbean state of St. Kitts and Nevis was in deep trouble.

Its sugar plantations had closed a year earlier, gang violence had given it the dubious distinction of having one of the world’s highest murder rates, and only two governments on Earth were more indebted. A three-hour flight south of Miami, the country of 48,000 people was more or less unknown. Certainly, the two specks of volcanic rock in the middle of the West Indies weren’t of much interest to the world’s rich. St. Kitts and Nevis had run a citizenship-by-investment program—had sold passports—since 1984, but it didn’t get much attention and was never a moneymaker.

Then a Swiss lawyer named Christian Kalin showed up.

Thanks to Kalin, St. Kitts has become the world’s most popular place to buy a passport, offering citizenship for $250,000 with no requirement that applicants ever set foot on the island’s sun-kissed shores. Buyers get visa-free travel to 132 countries, limited disclosure of financial information, and no taxes on income or capital gains. The program became so successful that St. Kitts emerged from the global financial crisis far ahead of its neighbors in the Caribbean. “It’s been a complete transformation,” says Judith Gold, head of an International Monetary Fund mission to the country.

Just as Kalin put St. Kitts on the map, Bloomberg Markets will report in its April 2015 issue, the reverse is also true. It made his reputation. Before St. Kitts, Kalin’s firm, Henley & Partners, was an obscure wealth management and immigration consultancy, and Kalin was working out of a small branch office in Zurich. Tall, with a runner’s build, Kalin was known as a researcher, he says, not the hard-nosed dealmaker he’s become. His claim to fame was having edited a 766-page guide to doing business in Switzerland, a tome found in every one of the country’s embassies.

Soon, prime ministers from around the world were seeking Kalin’s advice, in the hope he could reproduce the magic of St. Kitts, where he effectively created a resource out of thin air for a nation that had few. Many countries allow wealthy foreigners to buy residency cards through what are called immigrant investor programs, but before the financial crisis, St. Kitts and another Caribbean island called Dominica were the only ones selling citizenship outright. Since then, another five countries have gotten into the game. More are coming.

Kalin advised the governments of Cyprus and Grenada, which established citizenship-by-investment plans in 2011 and 2013, respectively. Also in 2013, he designed a program very much like St. Kitts’s for Antigua and Barbuda. In 2014, Kalin crafted a plan for Malta, the smallest member of the European Union. “Pretty much every government that has even contemplated this has talked to us,” he says. In St. Lucia, a task force is considering proposals from Henley and other firms. Albania, Croatia, Jamaica, Montenegro, and Slovenia are looking at programs, too.

“The bottom line”—it’s a phrase Kalin uses often—“is that more states are open to making citizenship rights available through investment,” he says. “And it makes a lot of sense. Why not give citizenship to people who contribute a lot to the country?”

Since revamping the St. Kitts program in November 2006, Kalin has built Henley into the biggest firm in an industry turning citizenship into a commodity. Investors spent an estimated $2 billion buying new passports last year alone, and Kalin predicts demand will grow along with the ranks of the wealthy in emerging countries. “It’s a question of mobility and also security,” he says. “If you’re from a country that’s politically unstable, where you’re not sure what the future holds, you want to have an alternative.”

Henley is privately held and Kalin won’t discuss its revenue, but he says by the end of 2014, the firm had helped dozens of governments raise $4 billion in direct investment through citizenship or residency programs. It has also advised thousands of multimillionaires on where and how to buy a passport of convenience, collecting fees and commissions from all sides. Last year, at 42, Kalin became Henley’s chairman.

The business Kalin pioneered has its share of critics, who say it gives the wealthy more room to avoid taxes and provides safe harbor to people who made their money illegally. “We’ve created over the past 50 years an entire shadow financial system that helps people hide money,” says Raymond Baker, president of the Washington-based advocacy group Global Financial Integrity. “This is a new wrinkle in that.”

In June, Bloomberg News reported that Paul Bilzerian, a former Wall Street raider who served two prison terms for fraud, was claiming to be licensed to process citizenship applications for St. Kitts, where he now lives. Bilzerian helped an entrepreneur named Roger Ver—a provocateur widely known as Bitcoin Jesus—to purchase citizenship on the island. The two men then launched a website called Passports for Bitcoin to help people in places such as China use virtual currency to skirt local laws limiting money transfers. Learning of this, the St. Kitts citizenship unit made a hasty announcement that it wouldn’t be accepting bitcoins as payment. Bilzerian declined to comment for this story.

“Like everywhere, in any industry, you have a spectrum of highly professional people all the way down to crooks and idiots,” Kalin says.

Still, the passport business isn’t quite like any other. It presses moral buttons that most industries don’t. Is it right to turn citizenship into something that can be bought and sold? That’s still an open question for most people, and Kalin admits as much. “It’s sensitive,” he says.

Beyond those sensitivities, there’s also concern that criminals, or even terrorists, are buying second passports. The U.S. Treasury Department issued a warning in May 2014 that St. Kitts had granted passports to Iranian nationals seeking to avoid trade sanctions on the country for its nuclear program. In November, Canada announced it would no longer allow St. Kitts citizens to enter without a visa, due to concerns about “identity management practices within its Citizenship by Investment program.”

St. Kitts responded the next month with a passport recall. Those issued from January 2012 to July 2014 would have to be returned and replaced with ones indicating the holder’s place of birth and any other names by which he or she had been known—information that wasn’t on the originals. Montreal-based Arton Capital, Henley’s biggest competitor, estimates as many as 16,000 passports may be returned.

Nicholas Shaxson, author of Treasure Islands, a 2010 book about tax havens, says the industry feeds into a culture of corruption in poor countries that make a business of ignoring their own laws. “These smaller jurisdictions haven’t got anything to sell besides ‘we’ll let you do anything you want,’” he says.

Developed countries run into trouble, too. Miguel Macedo, Portugal’s interior minister, stepped down in November, and the head of the country’s immigration services was arrested amid an investigation into influence peddling and embezzlement in its new residency-by- investment program. Macedo has denied any wrongdoing.

“All of the programs have a certain tendency for corruption, unfortunately,” Kalin says. “But you have to understand that we, and I, have not paid a single cent to any government official, ever.”

Gaston Browne, the prime minister of Antigua and Barbuda, starts his sales pitch with a geography lesson for all would-be citizens who might have trouble finding the country on a map. (It’s about 60 miles [100 kilometers] east of St. Kitts.) Then, bending over the podium, he reads out a list of the country’s selling points, including its “365 beaches, its pristine waters, beautiful climate.” The prime minister sounds less like a statesman than a tour guide, or perhaps the property developer he once was.

He’s selling Antiguan citizenship, which can be had for a $200,000 donation or a $400,000 investment in real estate, plus about $60,000 in fees, a deal similar to the one St. Kitts offers. In the weeks before, Browne had delivered the same pitch at roadshows in Toronto and London. This time, in late October, he’s in Singapore at the five-star Fullerton Hotel, where Henley & Partners is hosting its eighth annual Global Residence and Citizenship Conference.

The prime minister of Malta, the premier of Nevis, the commerce minister of Cyprus, and a Portuguese ambassador are here, too. They’ve all come at Kalin’s invitation. Each will have about 15 minutes to make his pitch. For Joseph Muscat of Malta, it’s the fourth appearance at a Henley event in 12 months. Malta’s contract with Henley requires high-ranking government officials to speak at the firm’s events “whenever requested.”

The audience is 300 or so lawyers and accountants, middlemen in the citizenship-by-investment industry who probably have little interest in tourist amenities. For their clients—mostly wealthy Chinese, Russians, and Middle Easterners looking for second passports—the less time spent in places like Antigua the better.

Indeed, one of the first things Browne did after being elected last June was to lower Antigua’s residency requirement for citizenship buyers to five days over five years from 35 days over the same period. Browne also threw out a plan to publish passport recipients’ names. No other program except Malta’s does that. “It was an issue of competition,” he explains the day before his speech. Antigua settled on five days of residency as a compromise, he says, “so there will be some familiarity with the destination. We don’t want it to appear as just a vulgar sale of passports.”

That’s what the industry is most afraid of, says Nuri Katz, CEO of Apex Capital Partners, an immigration consulting firm based in Montreal. It’s the reason leaders like Browne talk about beaches few want to visit and people in the business insist on the term citizenship by investment rather than passports for sale. “There’s a stigma against it, so everyone is trying to keep it under the radar,” Katz says.

There are things about Antigua’s situation that Browne leaves out of his standard speech. The economy has shrunk by a quarter since the financial crisis. Tourism has taken a hit, and the country’s biggest employer, Stanford International Bank, collapsed after the U.S. Securities and Exchange Commission charged its owners with operating a massive Ponzi scheme. “We need the money,” Browne says.

Yiorgos Lakkotrypis, the commerce minister of Cyprus, makes a few remarks about beaches and then cuts to the chase, taking about 30 seconds to speed through the procedure of buying citizenship in the third-smallest country in the European Union, with no residency required. “The process?” he says. “Very simple.” Applicants fill out a three-page form, invest €2.5 million ($2.8 million) in a villa, and pay €7,000 in fees. Then, as long as they’re able to produce a Certificate of Clean Criminal Record, “within 90 days, they can get their European passport.”

“Within 90 days,” he repeats. “Lately, we even achieve 70 days. It’s very easy process and has very high approval rate.”

Kalin says the essential attraction of a second passport has to do with travel: People of means want to be able to move around without endless visa hassles. Taxes are another motivation. Citizenship in places such as St. Kitts or Antigua, where the rate on capital gains is zero, can help a tax lawyer make the case you don’t owe money in other jurisdictions.

Thomas Liepman, director of the Christophe Harbour resort in St. Kitts, is at the Singapore conference selling time-share condominiums that come with citizenship for a minimum investment of $400,000. Henley promotes Liepman’s resort, along with several others, and collects referral fees. Condo-with-passport packages have become so popular that the island is dotted with villas that are rarely occupied. “This is a fantastic property to have a home, to have an address when the taxman comes asking why I claim that I’m a resident of St. Kitts and Nevis,” Liepman tells the audience.

There are a few passport shoppers mingling among the crowd of brokers during intermissions. Auyong Jeen is one of them. A short man from Indonesia in his late 60s, with his shirt untucked and a stack of brochures under one arm, he says he has commercial interests all over the place, including cigarette and cup ramen factories in Cambodia. “Travel difficult,” he says, struggling for words in English. Indonesians can visit only 56 countries without a visa, and prized destinations like the U.S. and the EU countries aren’t among them.

Another potential buyer is Gul Chotrani. A heavyset Singaporean with his sleeves rolled up, he says his job is managing the family fortune. He’s come to the conference as a guest of his representative at Bank of Singapore. “If you haven’t noticed,” Chotrani says, “there’s no such thing as home loyalty anymore. You have to protect your assets. It’s the simplest economic logic.”

After Henley struck the deal in St. Kitts, business came more easily. So did controversy. Kalin made enemies by driving hard bargains in country after country. In Antigua, the government backed out of its agreement with him just months after the ink dried on a November 2012 contract that would have given Henley the exclusive right to market its citizenship program. Then–Attorney General Justin Simon says Henley took advantage of Antigua’s desperation.

“I’m just a very good negotiator,” Kalin says. “The former prime minister and Justin Simon can say they were cornered, or they can say what they want. But the process was very fair and very transparent. They reneged.”

When Kalin started the St. Kitts deal, the world’s oldest citizenship-by-investment program had already been around for decades, but it was slow-moving and bureaucratic. “It was a mess,” Kalin says. Earlier that year, the U.S. State Department had warned the program’s inadequate regulation was adding to the islands’ already high risk of corruption and money laundering.

Kalin’s idea was to put the program directly under the oversight of Prime Minister Denzil Douglas, a physician who’d been in power since 1995. It was a move that had unintended consequences.

The deal gave Henley exclusive rights to market St. Kitts as a citizenship destination and a 10 percent commission on every $250,000 investment into a vehicle Kalin set up: the Sugar Industry Diversification Foundation, a fund meant to generate jobs for people who’d lost work in the cane fields. The government, which had owned the sugar plantations and processing plants, shuttered the industry in 2005, saying it was no longer competitive.

Henley’s deal was a five-year, renewable monopoly. From the start, the contract made members of Douglas’s own cabinet uncomfortable. “I didn’t believe that anybody should get exclusivity,” says Sam Condor, the former deputy prime minister.

“All these people who are now saying Henley got a sweetheart deal?” Kalin says. “It’s bullshit. We all started from zero. Totally from zero. No one knew how successful this would be.”

‘The process? Very simple,’ says the commerce minister of Cyprus. ‘Within 90 days, they can get their European passport.’

Shortly after the agreement was concluded, Henley hired a man named Wendell Lawrence, a consultant who was at the same time a paid adviser to the prime minister. Lawrence had been the top bureaucrat at the finance ministry until mid-2005 and was also related to Douglas through marriage, a typical connection on an island where everyone knows everyone. Lawrence says his consulting work for Douglas never involved the citizenship program. “There were firewalls to prevent conflict of interest,” he says. Kalin says that although Lawrence was advertised on Henley’s website as a partner, he didn’t have an ownership stake in the firm.

The tangle of relationships stretched in other directions, too. Douglas appointed the mother of his two children, a former diplomat named Kate Alex Woodley, to head a consulate in Dubai that opened in 2012 to market the citizenship program.

Meanwhile, the business got an unexpected boost. In May 2009, the EU and six Caribbean countries, including St. Kitts, signed an agreement permitting mutual visa- free travel. All of a sudden, a St. Kitts passport was a lot more valuable.

Then another piece fell into place. Canada started to close its investor immigration window. Since the 1990s, the country had been offering residency to wealthy people in exchange for an interest-free loan worth about $650,000. When the program was shuttered outright in early 2014, there were 75,000 unprocessed applications, an enormous opportunity for every other country trying to lure investors.

The St. Kitts citizenship-by-investment unit doesn’t say who buys passports or how much money has been generated. The country has no freedom of information legislation, and an integrity-in-public-life act, promised when Douglas took power, hasn’t been made law.

“Dr. Douglas handled all of the passports. He signed them all,” says Dwyer Astaphan, a former minister of national security who resigned in 2008 and became an outspoken critic of Douglas. “Nobody in St. Kitts has the slightest clue how many passports have been issued, including his cabinet members. I was one.”

Douglas didn’t respond to multiple interview requests and declined to answer questions in writing. The prime minister was defeated in a Feb. 16 election by Timothy Harris, a former political ally. At the time of this writing, Harris had yet to comment publicly on his plans for the citizenship program.

In the summer of 2013, Kalin took his product to Malta, an island of 420,000 people near Sicily. The stakes were now much higher. Maltese citizenship confers the right to live and work anywhere in the European Union and to travel visa-free to the U.S. “That’s pretty much the entire story,” says Demetrios Papademetriou, an expert on investor immigration programs and founder of the Migration Policy Institute in Washington.

In January of last year, Malta started selling citizenship for €650,000. (Over the next few months, it added additional investment requirements.) During its first year, the program raised more than €500 million—an amount equal to 16 percent of the government’s 2014 budget. Henley earns a 4 percent commission on all the funds paid to Malta. The firm also gets €70,000 from each of its clients, and additional fees if their spouses or children apply.

Kalin says he designed the program with higher barriers to entry than elsewhere. Applicants are run against law-enforcement databases and checked by a due diligence firm. Even then, a candidate who comes up clean might be rejected simply because something doesn’t feel right, Kalin says, offering the hypothetical example of a Pakistani national with a pharmaceutical business in the Central African Republic.

Despite these apparent safeguards, then–EU justice commissioner Viviane Reding blasted the program in January 2014. “Citizenship must not be up for sale,” she said. The truth is, though, the EU can do little about the program other than make speeches. There’s no legal basis for stopping a member country from exercising its sovereignty. “The reason the EU commission really slammed down on this,” says Papademetriou, “was because it amounted to selling an EU passport and they didn’t trust Malta to do the due diligence.”

Jason Azzopardi, a Maltese lawmaker from the opposition Nationalist Party, calls the program the “prostitution of our citizenship.” He says the prime minister deceived voters by waiting until after being elected in June 2013 to mention the idea of selling passports.

Kalin brushes it all aside. “This is the key point,” he says. “The opposition realizes that this program is going to keep them out of power for a long time. It’s going to bring in a lot of money, and whoever is in office is going to benefit.”

Malta’s Individual Investor Programme was eventually modified to include a residency requirement that is vague even according to the program’s CEO, Jonathan Cardona. “It doesn’t say physical residency,” Cardona says. “We expect an individual to be in Malta for a number of days; we don’t go into the specific number. If you’re asking me, are these people going to move here entirely, I would say, ‘Listen, let’s not fool ourselves.’”

“Forget residency,” says Apex Capital’s Katz. “There’s not even an educational requirement. You don’t have to have graduated high school. The only criteria are you have dough and you’re not a criminal.”

Prime Minister Muscat presents things differently. He describes Malta’s citizenship program as an exclusive membership club open only to the best and brightest of the wealthy. “If you are after the cheapest route to citizenship,” he tells the audience at Henley’s Singapore conference, “Malta is not for you. If you’re after a program that allows in all and sundry, then, sorry again, we’re not for you. But if you want to join the highest-end talent program in the world, we welcome you.”

As the prime minister speaks, a PowerPoint glitch plays an unfortunate trick on him. He’d come onstage after a slide show introducing Henley’s salespeople, the last of whom was blond- haired Christopher Willis, the firm’s rep in St. Kitts. Willis’s giant head shot, next to a map of the Caribbean, is frozen on- screen. It looms over the prime minister’s shoulder the entire time he’s pitching Malta and its better class of citizenship program. However Muscat tries to sell it, nobody watching will be able to forget where it all started.

This article was written by Jason Clenfield from Bloomberg and was legally licensed through the NewsCred publisher network.