Overseas Property Professional – Caribbean nations are playing ‘catch-up’ with European nations when it comes to property-for-residency schemes and although new programmes are being established, they don’t provide the same benefits as many in Europe.
Take a case in point, the new Citizenship by Investment Programme (CIP) that has just been launched by St Lucia on 1 January 2016. Successful applicants must invest at least $300,000 in an approved real estate project or invest qualifying sums in the Saint Lucia National Economic Fund, an approved enterprise project or the purchase of government bonds.
Additional application fees of approximately $168,500 for a family of four are also levied, Paul Williams, from the Goldenvisas.com website tells OPP.Today and applicants must also demonstrate US$3million financial resources.
There is no requirement for applicants to reside in Saint Lucia and dependent children included and the scheme is limited to 500 applications annually.
Given the requirements, Mr Williams says he anticipates “moderate interest” from overseas investors. “There are already four similar programmes in the Caribbean,” he points out.
“The real estate investment option will be limited to specific touristic projects, such as new resorts. We would expect a good proportion of the 500 or so investors each year to choose the real estate option. But the effect will be local and is unlikely to boost the island as a whole.”
The scheme is likely to appeal most to wealthy Asian and Middle Eastern applicants, he believes.
“Interest for the Caribbean programmes is global with a higher proportion of investors seeking second passports rather than residency. It will attract citizens from those countries whose face obstacles to travel with their home passports such as Pakistan, Iran, Syria and Iraq. However their success will depend on the stringent due diligence tests which St. Lucia is adopting.”
Compared with the other citizenship investment and second passport programmes offered by St. Kitts, Dominica, Antigua & Barbuda and Grenada, the St Lucia CIP will be exclusive, but efficient.
“It will be viewed as a more elite programme among its Caribbean peers because of the minimum net worth requirement of USD$3million. The programme is expected to be more efficient resulting in faster processing times which is a big attraction.”
Mr Williams believes that Caribbean countries face tough competition from European programmes such as Spain, Portugal and Cyprus.
“The market is growing and governments are competing for the 20,000 or so families globally each year that are investing in residency and citizenship programmes. Europe offers far greater benefits in terms of residency and more attractive citizenship for those who gain it.
“There is also no restriction on real estate investments in places such as Spain, Portugal and Cyprus. So investors are able to buy in the open market rather than more restrictive government defined programmes such as St. Lucia. The Caribbean programmes are facing increasing competition as demand shifts from many investors to more attractive European options. But they do offer a quick route to a second passport.”
The minimum investment required for Cyprus’ Golden Visa is at least €300,000 (US$326,000), in Portugal €350,000 ($381,000) and in Spain €500,000 (US$544,000).