Citizenship by investment programs offered by the Caribbean nations should increase their investment requirements, the European Union has urged.
In a bid to reduce demand for Caribbean CIPs without significant loss of revenue for the Caribbean countries, the EU has suggested that Caribbean nations should consider substantial hikes in minimum investment requirements.
This suggestion strikes at the foundation of Caribbean CIPs because fast-track access to citizenship and a second passport at a low price are the key factors contributing to the popularity of these programs.
Lowest Investment Option in Caribbean CIPs
St. Kitts and Nevis has a minimum investment requirement of $250,000 under its Sustainable Island State Contribution and the Public Benefit Option.
Investors can qualify for the Antigua and Barbuda passport by making a $100,000 contribution to its National Development Fund. Dominica and St. Lucia also have a minimum requirement of $100,000 while Grenada is slightly more expensive at $150,000.
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These CIPs have other more expensive options like real estate investments that allow investors to recover their investments in the future. However, the one-time contribution option is the cheapest way to qualify for a second passport.
A significant hike in this requirement will mean a significant source of demand for these programs may dry up as investors may explore alternatives like golden visa programs in Europe.
Controversial Suggestion Unlikely to Work
Caribbeans countries are unlikely to give serious consideration to the EU’s suggestion. Even if they, in a hypothetical scenario, hiked minimum investment requirements, it may still not lead to the sharp fall in applications volumes as envisaged by the EU.
Whether Caribbean CIPs successfully weed out unsuitable applicants depends primarily on the quality of due diligence. There is no guarantee that a fall in the number of applications would automatically lead to a significant improvement in the quality of due diligence.
Whether CIP agencies do their duties properly and whether applications are scrutinized as well as they should be is not a direct function of how much investors are expected to contribute to qualify for the second passport.
The EUs suggestion is unlikely to elicit a positive response in the Caribbean because it hints that these countries are not doing their job of assessing CIP applicants properly. Further, such a move may be the first step in EU’s strategy of hitting CIPs where it hurts – visa-free access to Caribbean passport holders.
From Cyprus to Ireland and Portugal to Greece, pressure from the EU has been one of the, if not the primary factor, leading to major changes to the programs. Ireland chose to shut down its program while Portugal and Greece have become much more expensive.
If EU starts withdrawing the benefit of visa-free access granted to holders of passports of Caribbean nations with CIP programs, then the popularity of these programs will crash irrespective of the minimum investment requirement.
With demand for golden visa and citizenship by investment programs going strong, it remains to be seen whether these suggestions by the EU will lead to significant changes in the Caribbean.