Sun, Jul 22, 2018 - Page 15 News List

Selling citizenship creates opportunities, headaches

By Sophie Hares  /  Thomson Reuters Foundation, ST GEORGE’S

Investing in the tropical Mount Cinnamon Resort in Grenada, with its white sand beaches, buys more than a slice of paradise — it comes with citizenship and a passport with visa-free entry to almost 130 countries.

Few who take up the offer might ever visit their new homeland, but for cash-strapped Caribbean states such as Grenada, “citizenship by investment” is a lucrative way to bankroll development and smart hotels, while chipping away at huge debts.

Grenada is one of a growing list of countries, including four others in the Caribbean, cashing in on a booming industry that offers citizenship or residency in return for investment as more people look for political and economic safe havens.

However, the trend is also sparking concerns over global security and illicit financial activities, especially as small nations cut the price of citizenship as competition heats up and disasters hit their economies, boosting the need for fast funds.

Grenadian Prime Minister Keith Mitchell said his country had gained massively since starting a program in 2014 through which people can acquire citizenship by investing at least US$150,000.

Applications rose 50 percent last year, a budget statement showed.

“It’s bringing in an enormous amount of money, and it’s helping us to reduce our debt burden in a very serious way,” said Mitchell, whose government is using 40 percent of citizenship revenue to pay off its debts.

“It’s making a significant contribution to the solutions to the problems in our country,” he told the Thomson Reuters Foundation in an interview.

Saint Kitts and Nevis, Antigua and Barbuda, Dominica and Saint Lucia are also tapping into the global citizenship market estimated by international advisory firms at US$2 billion per year. All those countries’ passports allow visa-free travel to the EU.

However, moves by several Caribbean nations to cut the price of citizenship after hurricanes ravaged the region in September last year has raised concerns about the practice.

A string of scandals has flagged the need to tighten checks and regulation, otherwise countries in these schemes could see the money dry up, experts said.

That raises a potential “conflict of interest between the duty to do due diligence and the desire to leverage these programs for revenue” on the part of governments, he said.

Government officials from Saint Kitts and Antigua were not available to comment, despite repeated requests.

Nationals of China and Middle Eastern nations are the biggest buyers of Caribbean citizenship, often sought by wealthy individuals seeking ease of travel or a “plan B” enabling a sharp exit for political reasons, industry experts said.

Various European nations, including Britain, Spain and Malta, as well as New Zealand, Singapore and the US have similar, albeit more expensive schemes, some of which require residency. The relatively low cost of Caribbean citizenship, promoted at international fairs and advertised in glossy in-flight magazines, sets the islands apart from other countries.

Dominica charges US$100,000 and Saint Kitts — which has the region’s longest-running program, set up in 1984 — until recently offered citizenship for a family of four for a US$150,000 donation to a hurricane relief fund.

In Grenada, to gain citizenship investors can buy a US$350,000 stake in a development like Mount Cinnamon, or donate US$150,000 to a national transformation fund for the island.

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