Caribjournal.com HOW TO BUY A CARIBBEAN PASSPORT?
By Nuri Katz
As globalization continues, increasing numbers of global high net worth individuals (HNWI) have sought out citizenship by investment opportunities, according to a recent report by the New World Health Organization.
Citizenship-by-investment provides HNWI and their families the opportunity to become citizens of a new country of their liking through investment in real estate or government programs. While moving their families may have once seemed a difficult decision, many find the tax advantages, succession planning, alterations in lifestyle, and other factors are too financially attractive to pass up.
These programs vary from country to country, but typically fall into one of three categories: investing in private sector assets, such as real estate or a business venture; investing in an entity or instrument issued by the government, such as a bond or promissory note; and, contributing to a government development fund.
Of the three options available, the most common financially sound approach to dual citizenship by HNWI is through real estate. These types of investment opportunities are mutually beneficial to both the investor and the participating country – helping to create jobs and stimulate the local economy through the injection of direct investments from foreign investors, while also allowing the investor to gain lawful and permanent access to a more financially desirable region or country. The Caribbean has become an ideal destination for HNWI looking to secure a new home and second citizenship for themselves and their families.
The benefits and minimum investment requirements vary tremendously depending on the participating country. In 1984, St Kitts & Nevis was the first country to introduce a citizenship by investment program. Today the Caribbean countries offering citizenship via investment for affluent investors continues to expand. Within this trend there are multiple benefits, factors, and due diligence requirements to consider.
BELOW IS A LIST OF THE MOST POPULAR DESTINATIONS FOR HNWI:
St. Kitts and Nevis
In 1984, St. Kitts and Nevis introduced its citizenship by investment program, the first country to do so. Today the country’s passport is considered one of the top 25 in the world, offering citizens access to visa-free travel to more than 120 countries, including the United Kingdom and Schengen area, as well as eligibility to apply for a ten-year U.S. visa.
Additionally, St. Kitts and Nevis has also introduced legislation designed to attract financial services businesses and expand investment opportunities, making it even more attractive to HNWI. For families looking to gain citizenship, they are required to invest $400,000 or more in government-approved real estate and hold the property for at least five years, with the option to sell it afterwards. In addition a fee is required of $50,000 for the main applicant government (plus $25,000 for a spouse and $25,000 per child under 18 years old) As an alternative, applicants can make a non-refundable donation of a minimum $250,000 to the Sugar Industry Diversification Foundation. Processing fees, passport fees and due diligence charges also apply.
Antigua and Barbuda
Citizenship acquired through Antigua and Barbuda’s citizenship by investment program facilitates visa-free travel to more than 130 countries. Applicants can either donate $200,000 to the Antigua National Development Fund, invest $1.5 million into an eligible business or $400,000 in a government-approved real estate project. The applicant government fee is $50,000 for an individual, $50,000 for a spouse and $25,000 for each child under 18 year’s old, plus processing fees.
Grenada, a member of the Caribbean Community (CARICOM) and the Organization of Eastern Caribbean States, reinstituted its citizenship by investment program in 2013.
Applicants, including family members and business partners, must be individually reviewed and vetted by the government. Routine applications are processed within 60 days, and passports are issued shortly thereafter. Grenadian citizenship affords visa-free travel to more than seventy countries, including the United Kingdom, the European Union, and China, and citizens of Grenada are entitled to enroll in the United States’ E-2 visa program, which allows investors to reside and launch businesses in the U.S. where they can remain U.S. residents as long as they renew their visas and continue to meet the program qualifications. Both a real estate and government donation program exist.
Established in 1994 under its Economic Citizenship Program, Dominica’s citizenship by investment program is the most financially advantageous program of its kind, starting from $100,000 for a single applicant for the government fund or $200,000 USD investment in an approved real estate project. The country’s passport enables visa-free travel to 95 countries and the European Union recently waived all visa requirements and established visa-free access to the EU for citizens of Dominica, a decision was ratified on May 28, 2015.
In January 2016, St. Lucia became the latest Caribbean Island to establish an Economic Citizenship Program. Applicants for this program can obtain citizenship through various investment options such as a minimum investment of $300,000 in a pre-approved real estate development or contribute a minimum of $500,000 for a Government Bond. In addition, to obtain citizenship in St. Lucia, qualified applicants are required to have a minimum net worth of $3,000,000, be of outstanding character, hold no criminal record and be in good health. In a world that is constantly changing, HNWI are realizing that their families, as well as their assets, may be better served by relocating and diversifying in a new country.
Next year, the Organization for Economic Co-Operation and Development (OECD) will implement their new Global Standard on Automatic Exchange of Information (AEOI). The Standard requires that banks worldwide report any financial information to an individual’s country where they are tax residents. This exchange means for instance that if an individual opens an account with a bank outside of their country of residence, all account details will automatically be shared with their country of tax residence.
This Standard can present a challenge for individuals living or doing business internationally. As a result, the Caribbean can be considered an ideal destination to acquire an alternate citizenship. Through establishing a tax residency in the Caribbean, HNWI and their families can take advantage of the low-tax environment and all the additional benefits of living in Paradise.