Yet another Caribbean country has turned to an economic citizenship by investment programme to boost a struggling economy riddled with debt, rising financial commitments, and projected low economic growth for the future. St. Lucia has joined St. Kitts and Nevis, Dominica, Antigua and Barbuda and Grenada as one of the few Caribbean countries that have implemented economic citizen by investment programmes as a means of funding.
These programmes are not necessarily new to the Caribbean, because St. Kitts and Nevis established their programme in the early to mid nineteen eighties. However, before deciding on such a programme, countries must engage in meticulous research, enact stringent regulations to govern the programme and conduct extensive due diligence on prospective immigrants.
Economic Citizenship by Investment in St. Kitts and Nevis
In 1984, St.Kitts and Nevis established its economic citizenship by investment programme in an effort to attract investors who would contribute to the country’s development. Prospective investors are given the opportunity to apply for citizenship, but only after adherence to rigid investment requirements and due diligence. There are two routes, prospective investors can take to become economic citizens of St. Kitts and Nevis.
The first is the Sugar Industry Diversification Foundation (SIDF) contribution which has four investment options for economic citizenship in St. Kitts and Nevis:
1. Single applicant – One applicant, single or married: USD $ 250,000 plus a due diligence fee of US$ 7,500
2. Applicant with up to three dependents- One applicant, one spouse and two children under the age of eighteen years: USD $ 300,000
3. Applicant with up to five dependents – One applicant, one spouse and four children under the age of eighteen years: USD $ 350,000
4. Applicant with up to seven dependents – One applicant, one spouse and six children under the age of eighteen years: USD $ 450,000
* Additional contribution for each dependent above seven: USD $50,000, plus due diligence fees of US$ 4,000 per dependent sixteen years or older.
* Additional contribution for dependents over the age of eighteen years: USD $75,000.00.
The second is the Real Estate Investment contribution where the investor must invest a minimum of USD $400,000 in a government approved St. Kitts and Nevis real estate development. The property must be maintained for a minimum of five years, after which it can be sold to another investor as part of the programme.
Economic Citizenship by Investment in Dominica
Dominica‘s citizenship by investment programme was enacted by law in 1993. It is described as a legitimate citizenship programme which provides prospective applicants the opportunity to become naturalised citizens of Dominica for the rest of their life. There are three types of applications that can be filed for economic citizenship in Dominica:
1. Single Applicant – One applicant single or married: USD $100,000.00.
2. Family Application One – One applicant and one spouse: USD $175,000.00.
3. Family Application Two – One applicant, one spouse and two children under the age of eighteen years: USD $200,000.00.
4. Family Application Three – One applicant and one spouse and more than two children under the age of eighteen years: USD $200,000.00 plus USD $50,000.00 for each child under eighteen years.
Dominica’s economic citizenship programme was primarily implemented as a revenue generating economic tool. The proceeds from the programme were intended to fund lapsed or fund deficient social services initiatives such as building schools, renovating hospitals, development of the offshore sector and improvements in the tourism, agriculture and information technology sectors.
Economic Citizenship by Investment in Antigua and Barbuda
The economic citizenship by investment programme in Antigua and Barbuda was established in 2013 to encourage investments, sustainable growth and development and create jobs for Antigua and Barbuda citizens and residents. The programme grants citizenship to qualified applicants who must satisfy specific residency requirements. Prospective investors can seek economic citizenship via three options:
1. Real Estate Investment – A minimum investment of USD $400,000 into an approved real estate projects. Ownership must be maintained for a minimum of five years or until the real estate project is completed to an acceptable phase if under five years.
2. National Development Fund (NDF) contribution – A minimum investment of non-refundable amount of USD $250,000 for a single applicant and an additional USD $25,000.00 to $50,000.00 for each additional eligible dependent.
3. Business Investment – A minimum investment of USD $1,500,000 directly into an eligible business as a sole investor, or a joint investment involving at least 2 persons in an eligible business totalling at least USD $5,000,000, with each investor investing at least USD $400,000.
These investment options are subject to due diligence fees for each applicant and dependent which range from USD $2,000.00 to USD $7,500.00.
Economic Citizenship by Investment in Grenada
Legislation for Grenada‘s Citizenship by Investment Programme was passed in 2013. The programme has strict requirements and is only available for application by invitation. The rationale behind the programme was the creation of investment opportunities which could lead to sustainable employment. Prospective applicants could qualify for citizenship in Grenada via two options:
1. Real Estate Project Investment – Prospective investors under this type of investment require a minimum investment of USD $200,000.00 from a single person up to a family of four and USD $200,000 for a family of more than four plus $50,000 for each additional dependent.
2. National Transformation Fund Investment – Prospective applicants must invest at least USD $350,000.00 and must keep the real estate for at least four years following the successful issuance of the citizenship. Government fees of USD $50,000.00 per applicant, USD $25,000.00 per each dependent and additional application, due diligence and processing fees ranging from USD $1,500.00 to USD $5,000.00 per person.
Economic Citizenship by Investment in St. Lucia
St. Lucia’s economic by citizenship by investment programme will be the fifth of its kind in the Caribbean and is expected to be launched in early 2016. The St. Lucian government has specified that the programme is tailored towards foreigners with a net worth of at least USD $3,000,000 and there will be an annual cap of five hundred applications. The programme is expected to offer four routes to receive citizenship in the country. These routes are:
1. Real estate investment
2. Business investment
3. St. Lucia National Economic Fund contribution
4. Purchase of St. Lucia government bonds
This programme, similarly to the other programmes in the Caribbean, is intended to generate revenue for development. There is a general concensus among St. Lucian policymakers that the country needs innovative sources of investment to achieve growth in the economy, especially in areas which have declined. It is believed that St. Lucia’s citizen by investment programme would be of great benefit to the country and would provide much needed opportunities including employment.
Review of Economic Citizenship by Investment Programmes
Over the years, there has been considerable backlash to the economic citizenship by investment practice. According to Nearshore Americas, this backlash has included the blacklisting of countries who push economic citizen by investment programmes and increased scrutiny due to concerns about lack of transparency, accountability, ineffective regulation and evasion practices.
Additionally, the Cayman Financial Review raises additional concerns about the potential problems that surround such programmes. Critics argue that such programmes can “facilitate institutional corruption, damage public trust in citizenship, corrode the institution of citizenship and break the link between residency/attachment to a state and the grant of citizenship.” These concerns can be see in the case of St. Lucia, where the opposition party, the Lucian People’s Movement has denounced the model selected by the government and sees it as having a negative impact on the country and its citizens.
Academics in the international finance industry both support and reject the economic citizenship by investment model. One supporter of the model, Andrea Roberts, notes that it is a “legitimate response by governments to the need to raise revenue through direct foreign investment” and is a “create and valid strategy to change the economic landscape. She argues that strict requirements, constant monitoring, and scrutiny of prospective applicants to the programme can legitimize the programme. These are also strengthened in countries like Antigua and Barbuda, where the government has the sole authority to process all applications.
But seeing that these Caribbean countries have continued with their programmes in light of rising criticism, one could surmise that they have complete faith in the governance of their programmes and their ability to stem any crises. And although the economic citizenship by investment has several financial benefits, there must be careful consideration of the social impact. There must never be the notion that citizenship can be bought as long as the price is right and it’s only worth what it was purchased for.
Burke Files offers sound advice to citizenship by economic investment practitioners – do your due diligence. He states that unlike regular pathways to citizenship which is earned over a period of time, citizenship by economic investment has a very short time frame for assessment. This means, that due diligence and background screening has to be “aggressive and comprehensive” in order to protect the country. The candidate’s history must be perused, and family members, friends and associates must also be scrutinised. If a country that promotes the citizenship by economic citizenship model does not engage in such rigorous Know Your Citizen practices, then its priceless authenticity, integrity and reputation will be tarnished for a minor sum.
To buy a car or lease a car – that is the question. I may have the answer.
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