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Avoiding the Pitfalls of Investment Immigration Programs

Investment immigration programs have historically been perceived as a fad among the ultra-rich who wish to hold a second passport as a status symbol. Only recently experts and wealthy individuals have begun viewing programs as a tool for financial planning and securing better opportunities for themselves and their children.Avoiding the Pitfalls of Investment Immigration ProgramsVisa-free travel privileges to the E.U., the U.S., Canada, and other developed countries, liberal and lenient tax regimes, better education for children and political and economic stability are some reasons why investment immigration programs are gaining popularity.

With most programs offering real estate as an investment option, property developers are scrambling to benefit from such programs. With so many options available the risk is magnified of investors buying real estate at excessively-high prices or investing in unviable projects with little chance of generating a return.

Applicants should seriously consider seeking professional assistance when choosing which option to take.

Investing money in a property situated halfway across the world or buying a stake in a project on a remote island having never visited can be a complicated task. It requires vetting of investment agreements, understanding of the impact of statues and regulations, plus the preparation and finalization of paperwork.

Property investment is also not the only option. CIP programs in the Caribbean offer multiple streams including a one-time deposit in a development fund, purchase of real estate, and investing in approved commercial enterprises.

The minimum investment threshold for the development fund option is often lower than the real estate investment requirement. The enterprise investment option, although often costlier, may offer better scope for sustainable returns.

The important caveat is that blindly putting money into a real estate project or buying an overvalued holiday home may not always be the best way to qualify for a coveted second passport.

Apart from comparing options within the program, candidates may also require professional help when comparing programs offered by different nations. Grenada’s investment immigration program offers applicants the option of applying for an E2 treaty trader visa in the U.S. by virtue of the country’s treaty arrangement with America.

Such strategic factors apart, candidates also have to consider valuations, tax rules, processing times, program credibility and physical presence requirements before making a decision.

Recently, three Caribbean nations, St. Kitts & Nevis, Antigua & Barbuda, and Grenada, announced a temporary reduction in minimum investment requirements under their citizenship-by-investment programs in an attempt to garner funds for hurricane relief.

The cut-throat competition combined with proliferation of programs presents a risk for investors who can no longer blindly select a project and write a cheque.

Investing in real estate involves numerous legal and regulatory hurdles, which, if ignored, may render the entire investment illegal. Further, paying an excessively-high premium just because the project is considered an eligible CIP investment may prove to be an expensive mistake in the long run.

Completing tasks like comparing investment immigration programs offered by different nations, various investment options offered in a single program, and taking a final decision after considering viability, regulatory compliances, valuation, and project credibility is best done with a professional advisor by your side.

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