Prime Minister of St. Vincent and the Grenadines, Ralph Gonsalves is adamant that his administration would not allow a Citizenship by Investment Programme (CIP) in that country, describes the initiative as superficially attractive and expresses doubt about due diligence being conducted by countries offering that path to citizenship, according to a report published by CMC.
Dr. Gonsalves told CMC that the downside outweighs whatever money collected as due diligence would be an issue, one OECS country has already taken the lead and others coming later are unlikely to get the same results.
St. Kitts and Nevis has generated billions in investment through its CIP established in 1984 and amended in 2006 to include money paid into the Sugar Industry Diversification Foundation (SIDF). The country’s real estate investment option costs US$400,000 per single applicant while the SIDF requires US$250,000 per single applicant.
Several local attorneys, accountants and business people are accredited to offer a service under the CIP but the process is completed by the Citizenship by Investment Unit (CIU) in the Office of the Prime Minister.
Dominica has a decades-old CIP that requires US$100,000 per single applicant. Antigua and Barbuda recently issued its first passport under the CIP. The Antigua and Barbuda programme mirrors the St. Kitts and Nevis CIP in some respects: There is a National Development Fund option for US$250,000; a real estate investment option of Us$400,000 and then there is a minimum investment of US$1.5 million directly into an eligible business as a sole investor or a joint investment involving at least 2 persons in an eligible business totaling at least US $5,000,000 and each of those persons individually invest US $400,000.
St Lucia’s government is now exploring its options for a CIP.
St. Vincent and the Grenadines faces the same persistent challenges like other countries in the OECS including a highly indebted economy, low productivity, the constant threat of natural disasters and the need to attract direct foreign investment. But apart from expressing his disdain for the CIP, Dr Gonsalves is publicly casting doubts on existing due diligence practices in the region, according to the CMC report.
He reportedly said, “When anybody tells me that they do due diligence, I know how due diligence is being done, and to do due diligence for one or two investors or one or two persons who come in and seeking citizenship in one of the other ways, … you can manage the due diligence in those respects.
“But if you have a flood of application, as you have in some jurisdictions for citizenship, you tell me you are doing the due diligence, I only smile, because I know you are going to get caught with several,” the CMC quotes Dr Gonsalves as saying. “This is why in some jurisdictions you have all these complaints being made about this or that persons being associated with this or that criminal enterprise and so on and do forth, ” Dr Gonsalves reportedly said.
Caribbean countries are not the only ones offering CIPs. The United States and Canada also do the same.
The US offers a path to citizenship for a US$1 million investment in a US business employing at least 10 people or US$500,000 in designated economically depressed areas. The investor can apply for residence in two years and citizenship in five.
The attraction to Caribbean versions of the “economic citizenship option”, apart from the region’s natural beauty, include visa free travel to over 100 countries, no requirement to relinquish citizenship, confidentiality – application information is kept secret, access to international banking institutions, strong asset protection, no residency requirement and the opportunity to live in generally stable democracies.