A large number of Caribbean countries are launching citizenship by investment programs (CIPs) in an attempt to increase their foreign direct investment (FDI). These CIPS allow foreign investors or businessmen to buy passports of these countries and avail the travel and tax benefits that come with them. St. Kitts and Nevis and Dominica have some of the oldest CIPs in the region, and St. Lucia, Grenada and Antigua and Barbuda have also joined the league by recently launching similar programs.
Around the world, many countries offer CIPs to wealthy foreign investors. Countries like Malta, Belize, Cyprus, Brazil, Ireland, and Panama all run CIPs, while Belgium, Australia, Singapore, Belgium, Portugal, Spain, the UK, and the US offer “gold visas” or temporary residence permits to wealthy foreign nationals in exchange for investment. In these countries, applicants can receive permanent residency by sustaining their investment for a period of 2-5 years. However, the Caribbean nations offer cheaper and faster route to full citizenship in exchange for just a one-off investment. For example, St. Kitts and Nevis processes an application in just under 90 days.
It is estimated that such residency or citizenship schemes generate about US$ 2 billion a year all over the world.
Advantages of Dual Citizenship
CIPs offer the applicants the right to work, vote and own property in their new country, while also allowing them visa-free travel to several countries. They also provide different types of financial and tax benefits to prospective investors. These investment schemes have become very popular with investors in China, Russia and the Middle East.
However with their increasing popularity, CIPs have also come under close scrutiny in recent years. There have been concerns about lack of transparency and accountability, and critics of the scheme say that greater regulation is necessary to prevent abuse of the system. Countries like Belize, Grenada, and Ireland suspended their CIPs after revelations of these programs’ misuse. The US has reportedly formed a new inter-agency task force with the UK to investigate any allegations of sanctions-busting.
St. Lucia Mulls a CIP
St. Lucia appointed a task force earlier this year to assess the pros and cons of starting a CIP. The task force is supposed to submit a report by December 1, stating if and under what circumstances citizenship should be offered to foreign nationals in return for financial investment. “Our intention is to broaden the scope of incentives offered to investors to make St. Lucia more attractive as an investment location,” said Governor General Pearlette Louisy.
Prime Minister Kenny Anthony has said that such a program would help the country overcome its economic troubles. Leader of opposition, Allan Chastanet believes that such a program will attract “the brightest and wealthiest people” to St. Lucia.
St. Kitts and Nevis
St. Kitts and Nevis has the world’s oldest CIP, running from 1984. It offers two ways of getting citizenship: making a non-refundable donation of US$ 250,000 to the St. Kitts and Nevis Sugar Industry Diversification Foundation, or investing a minimum of US$ 400,000 in real estate. It is estimated that around 3,000 to 5,000 of St. Kitts and Nevis’ 45,000 nationals have gained citizenship through this scheme.
It takes up to 90 days to approve an application. Benefits of this program include visa-free travel to 139 countries, citizenship for life, a valid passport, and certain tax exemptions.
The US treasury however singled out the program in May this year for facilitating financial crime. The Treasury said that “illicit actors are abusing this program to acquire SKN (St. Kitts and Nevis) citizenship in order to mask their identity and geographic background for the purpose of evading US or international sanctions or engaging in other financial crime.”
Antigua and Barbuda
Last year, Antigua and Barbuda introduced a citizenship investment program based on the model of St. Kitts and Nevis. It requires a minimum investment of US$ 250,000 in a national development fund, or US$ 400,000 in real estate or US$ 1.5 million in a government-approved business. The benefits of the program include a valid passport that allows visa-free travel to over 115 countries, including the UK, France and Canada. “If you look at St. Kitts they’ve been doing quite well over the last 20 years and the main reason for that is that they have a citizenship for investment program,” said Dr. McChesney Emanuel, member of the board of management of the Antigua and Barbuda Investment Authority (ABIA).
“Traditionally we’ve got a lot of foreign direct investment from North America and Europe. However because of the financial crisis of the last four of five years and because of the growth we’ve seen in Brazil, Russia, India and China, and in other big markets like South Africa and some of the Eastern European countries, we believe that these are emerging markets are places that we should be looking to support our FDI inflows. The advantages of citizenship, such as visa-free travel, hold greater appeal for natives of these countries than they would for North Americans or Europeans, and the local authorities are convinced that the program will bolster the country’s competitiveness in terms of attracting foreign direct investment,” he added.
Grenada used to have one of the world’s most controversial CIPs. It required investors to pay just US$ 40,000 for citizenship. The CIP was however scrapped after the 9/11 terrorist attacks in the US, due to fears that their passports could potentially get sold to terrorists. The Grenada government was also blamed for corruption and the country was placed on an international blacklist of countries who do not cooperate in fighting money laundering. After Grenada closed its CIP in 2002, it was removed from the blacklist.
Last year, Grenada reintroduced a CIP. The application for this program is by invitation only. “The mission of the Citizenship-by-Investment program is to strengthen Grenada by creating economic growth through inward investment, leading to the creation of sustainable employment opportunities for Grenadians, training of the workforce and the broadening of skills; at the same time preserving the prestige, honour and value of Grenadian citizenship through a strict invitation and vetting process,” states the government website.
Potential investors who are interested in Grenada’s CIP can contact Authorised Marketing Agents to know if they are eligible for application. After this assessment, they would be required to undergo a background check which may take a number of weeks.
The benefits of Grenadian citizenship include visa-free travel to over 110 countries, including the UK. Their ‘Investor Visa’ also allows successful investors to start a business in the US and reside therein. Investors are required to make a minimum investment of US $500,000 in Grenada’s Mount Cinnamon resort or the Port Louis maritime village.
The Caribbean island of Dominica is the world’s cheapest place to buy citizenship. Dominica’s CIP is very popular and it has been estimated that 3,000 of its 71,000 inhabitants acquired citizenship by investment.
The Dominican citizenship requires applicants to make a minimum investment of US$ 100,000. Successful applicants receive valid passports of the country, which provide them with special privileges in the UK and allow them visa-free travel to over 50 countries. They also benefit from dual citizenship and a largely tax-free existence.
Applicants are required to give a personal interview on the island, but since the interview committee meets only once a month, the application for Dominican citizenship could take anywhere from 5-14 months’ processing time.