Second Passports in the Caribbean

A closer look at citizenship by investment in St. Kitts & Nevis, Antigua & Barbuda, Dominica and Grenada.

The West Indies are a great place to explore; island hop, drink rum, bath in clear warm waters and getting a sunburn. Another interesting similarity—shared by the island nations of St. Kitts & Nevis, Antigua & Barbuda, Dominica, Grenada — is the existence of their Citizenship by Investment programs (CIP).

You might wonder why you need a second passport. The actual reasons for multiple citizenships are much more rational than that, but it is true that many people do not need or want a second passport. For others it can dramatically change their lifestyle and their family’s legacy for generations to come.

For Perpetual Travelers, having multiple passports is an essential part of the lifestyle. Others collect passports as a hobby. Whatever the motivations in today’s world, you don’t have to be James Bond to value individual privacy and the options available to you.

Different regions: different reasons

One has to simply look at the world we live in, and restrictions placed on individuals from certain countries and regions, to see the motivation behind having multiple citizenships.

Travel is often limited by your home country’s current and past international relationships. There are many good, law abiding citizens around the world who enjoy travel, but find it hard to get tourist and work visas so travel plans must be made months ahead of time and involve heavy paperwork. Others feel that they may upset their governments, or call unneeded attention to themselves, by traveling around the world on their “home” passports. With what careful choice of adopted country, visa-free travel to most of the world is available.

Many regimes restrict investments and business opportunities available to their citizens. Aside from the obvious travel benefits, Asians in particular use second citizenship as a way to invest back into their own countries and regions, often receiving many benefits of holding assets and companies in foreign (sometimes public) entities. Many countries protect foreign investment rights more than those of their own citizens. In China, there is a well documented case of a successful businesswoman who acquired a second passport, transferred her assets to a new entity, and completed a lucrative IPO for the company on the Hong Kong Stock market: something that would have not been permitted to Chinese nationals.

Individuals from the USA and EU may find that they cannot invest, bank or participate in certain markets (foreign exchange or precious metals) without major government babysitting, and restrictive limitations. Americans are not always invited to invest because their international counterparts may not want to deal with the prying eyes of American regulation.

A new citizenship can alleviate the above mentioned obstacles, opening new revenue streams and often lowering your tax profile.

Security, options and legality

Safety also pays a major role in the decision to acquire another citizenship. Your native citizenship may be not your best friend when doing business in certain parts of the world. Although a U.S. passport is one easiest to travel with, it can also put one in danger, as Americans are often targeted abroad. Sometimes the threat is in your home country. Perhaps your assets are targeted, or worse, your family persecuted for being financially successful. All the money in world is worth nothing if you and your family aren't secure at home.

With constantly changing governments and threatening economic or social restrictions, individuals are looking for a Plan B. A second citizenship can be used as escape hatch in case their government aggressively starts enforcing religious or political beliefs or imposes draconian laws and punitive taxes.

The majority of people who obtain citizenship by investment do not renounce their home passport, their homelands or their day-to-day life. They have simply added options in case they need to “get out of Dodge” whatever the circumstances may be. Waiting until problems solidify is almost always a very bad plan, as you may not be able to leave. You could be stuck with the masses awaiting refugee status, jail or other types of persecution that have repeatedly occurred throughout history.

A second citizenship can be acquired today, and held in reserve until an unforeseen change in the political or military climate requires you to play your hand.

The CIP Programs of St. Kitts & Nevis, Antigua & Barbuda, Grenada and Dominica are completely legal. The laws have been approved by the governments at all levels and are 100 percent legitimate: there are absolutely no bribes. Your passport is renewable and you become a citizen of the country.

The application process takes three to six months in most cases and then you become a lifetime citizen of an independent sovereign nation. Nationals of these countries are allowed visa-free travel to 100+ nations, including Europe and Asia. Visas for travel to other countries are standard, but with much less hassle than many “home” countries. Additionally there is little or no required travel to the West Indies.

St. Kitts & Nevis, Grenada and Dominica have no required residency in the islands, while Antigua & Barbuda require only 5 days residence over the course of five years. Grenada requires residency only if real estate is not purchased.

The due diligence process is fairly involved and applicants must submit plenty of documentation about who they are and where they come from.

Third party investigation firms, as well as island government investigators also screen applicants. Serious crimes or evidence of fraud will disqualify applicants from the process. Health records (HIV Tests), source of funds, professional and bank references are required.

It is important to note that with the Citizenship programs in the West Indies you will become a true citizen with rights, in contrast to merely holding documents. Panama for example, has been known to issue passports to ex-pats living in the country under the retirement pension program. This facilitates travel through Latin America, but does not include citizenship, and therefore includes no rights for the holder.

Beware of illegal passports offered by independent agents or government officials from other countries around the world. There have been many scandals in emerging markets, where a passport may have been illegally issued, quite possibly with the ID of another citizen. These often do not work, or cannot be renewed. There have been cases of the officials and the passport holders being prosecuted and imprisoned for the falsification.

Not selling passports, just building countries

With the cost to obtain citizenship options starting with a few hundred thousand and ranging to over half million it is hard to say that the CIP programs are simply selling passports. The investment required to qualify is directed into programs benefiting the local populations, which strive to build a base for economic stability into the future.

Investment is used to develop crucial industries for the survival of these small island nations such as creating jobs, providing small business loans and creating much-needed infrastructure. The acquisition of authorized real estate, construction jobs are immediately created then management and service related employment follow, then lodging. Then, as always, the tax base is increased.

Creating a successful vacation destination is very difficult. In order to attract resort developers, the destination must show the ability to successfully maintain a high occupancy of travelers, who require ample airlift. Conversely, the airlines require stiff guarantees that the planes will be full, which depends on the existence of multiple resorts, vacation homes, restaurants and other underpinnings that can cost billions to develop. These economic citizenship programs can be the lifeblood of a remote island, allowing these countries to break out of this dilemma; building the required tourism backbone, which then attracts the airlines, while simultaneously providing revenue, not costly expenses, for the small governments.

The citizenship by investment programs are key elements to the success of these island nations and the economic success of their individual citizens.

Federations of St. Kitts & Nevis

The two-island nation of St. Kitts & Nevis citizenship initiative is the oldest and, in one-way or another, the base for all the other programs. Indeed the first draft I saw of another country's program actually still had “St. Kitts & Nevis” in the wording. The program began in 1984, is well accepted by the locals. This successful CIP has helped create one of the largest economic middle classes in the Caribbean and became the envy of other island nations during the latest recession. The bureaucratic nature of the island has translated into a program that is run in a professional manner attesting to the tenure of the program.

The SKN Program offers two options to qualify for citizenship, through a charitable donation to the government to run the Sugar Industry Diversification Foundation (S.I.D.F.) or the acquisition of authorized real estate.

The S.I.D.F. donations range from US$250k for an individual to US$300k for a family of four, and more for larger families. Due Diligence and professional agent fees apply, but other government processing fees are included.

With real estate, the applicant must purchase authorized, tourism-based real property with a minimum value of US$400k. Developments offer full and fractional options, and strive to make all other fees inclusive or at least not complicated with rental and lease back programs available. For example, the blossoming Kittitian Hill development, which is a private and government venture, offers a guaranteed return on the purchase price, comparable to a CD. With the real estate option there are the same due diligence and professional agent fees, but the government also charges individual processing fees, so that total investment for a family of four is around US$600k. The property must be kept for a minimum of five years, at which time it can be sold on the open market, with the new buyer also qualifying for citizenship.

The cabinet has accepted a third option, not officially included in the CIP Act, which is the purchase and or investment of shares in an authorized project. The Park Hyatt resort, which is currently under construction, has been funded in this manner, with hundreds of citizenships currently being processed. This new investment option has created many investment opportunities in the island federation and has spiked the growth of new projects.

Unlike other Caribbean nations offering these programs, St. Kitts & Nevis has no formal ties with the People’s Republic of China, (they recognize Taiwan!), which is attractive to Chinese nationals who value privacy. Economic citizenship in the Federation of St. Kitts & Nevis is a solid and established option for today’s world citizens.

Antigua & Barbuda

In March 2013, the Senate of Antigua and Barbuda voted to establish a citizenship by investment program to spur growth in the islands. Antigua has long been an international hub for the West Indies. With some of the best beaches in the Caribbean it already has a fairly robust tourism foundation. However, with the recession of the past years, combined with the Stanford Economic scandal — the overall economy has deteriorated, stranding some resort developments in the construction phase. The new CIP program is breathing life into the tourism and financial sectors.

The locals often don’t understand the CIP program and are skeptical, as the funds have just started to flow into the country in the summer of 2014. I feel the program will be a success in the islands, as the strength of the passport, availability of flights and a well-established travel network will lend it a strong future.

Almost identical to neighboring St. Kitts and Nevis, the options for qualifying are through a government contribution (called the National Development Fund) or authorized real estate of US$400K. The associated due diligence, processing and legal fees are slightly higher than in many other West Indies countries, but the difference is negligible. As of fall 2014, Antigua & Barbuda is the only Caribbean CIP to offer Visa-Free travel to Canada.

Antigua & Barbuda also formally recognize two other options, a donation to specifically named charities and investment into island-based businesses. The minimum investment in a company with minimum capital of US$5mis US$400 for each applicant, or US$1.5m for an individual wanting to set up a smaller company.

Although travel to the island is not necessary to receive citizenship, the new citizen is required to visit the islands for a minimum of 5 days over the first five years or risk forfeiture.

Antigua & Barbuda have taken the foundation of a successful program and attempted to improve on it, upping the ante in the budding competitive CIP market in the Eastern Caribbean. An established destination, with solid base, Antigua & Barbuda is the new kid (with a lot of experience) in the financial investment game.

The Сommonwealth of Dominica

Since 1993, Dominica has been the most economical choice. The island is under developed and financially limited, and yet, in my opinion one of the most beautiful places in this world. Even with an increase in investment in September 2012, the program still offers an incredible passport and citizenship at a value price.

Currently an individual can apply with US$100k, while a family of four qualifies with US$200k, donations to the government plus due diligence and processing fees. The required documentation and process seems a bit tedious compared to their counterparts a bit to the north, but the lower entry fee is enticing.

Dominica is currently launching a real estate option with a minimum investment of only US$200k plus processing fees of US$25-50k per individual. There should be some interesting developments announced over the next few months.

Although economically struggling, the spectacular island of Dominica is making strides in the right direction. An uptick in international business, paired with major investment from China, highway construction between the two main cities and the airport, gives Dominica incredible potential for the eventual future. Without question, Dominica is a solid option for many who are considering a seconds passport.

Granada

In fall 2013, the Island of Spice launched the reincarnation of its Citizenship by Investment program. The act, which has been law for many years was postponed in 2001. Grenada’s CIP is a bit different than the others. First and foremost with a promised processing time of 2-3 months it is the quickest option available.

Instead of having multiple options for real estate investment, until now the government has chosen to select only one resort as approved investment. The Mount Cinnamon Beach Resort, (rumored to be a Conrad International resort) has been selected as the pilot development. Lately a few other projects have been approved for the Grenada CIP, but whereas Mount Cinnamon is ready to begin construction, the other projects are in various stages of the approval and development process.

Additionally the minimum real estate investment is US$350k, plus additional fees bring the total investment for an individual to under US$400k. A family of 4 or 5 can apply for citizenship for less than US$450k. Grenada is quickly establishing itself as a viable option for CIP investors.

Grenada also offers a two-step donation option, where as the individual pays US$75k and spends approximately 14 days on island to establish residency. A year after residency is established, Citizenship can be applied for, with a US$125k government donation – processing, due diligence and other fees apply. The donation option in Grenada has had a rocky launch. The agency contracted by the government to promote the option in Asia has been reprimanded for offering residency with no travel to the islands - which is contradictory to the CIP laws, and may have included some under the table negotiations.

West Indies options

The West Indies is an exciting place to live, visit and explore. There is always an interesting conversation to be had with a local whose family has been on the islands for generations or the ex-pat sailors just passing through. The citizenship through investment programs offered here are very attractive to the PT or to anyone wishing to add travel, security and privacy options to their lives.

Whatever your reasons, if you are interested in acquiring a second citizenship, make sure that you are being processed by a reputable authorized local agent. There are many immigration agencies throughout the world that can help you through the process. Although it is not necessary to travel here, please take the time to come and visit this incredible world sandwiched between the Caribbean Sea and the edge of the Atlantic.

Visa free Europe

Citizens of St. Kitts & Nevis and Antigua & Barbuda have long enjoyed visa-free travel to Europe. Until recently, Grenada and Dominica citizens have required a visa to travel to the EU. Recently the inclusion of visa-free travel to the Schengen area of Europe, definitely increases the attractiveness of these citizenship programs. although the visa-free travel has been approved, and are currently in effect, the changes have not been fully announced. The visa-free status will be formally applied in q1 2015, at which time all four Caribbean citizenship initiatives will have very strong passports.

UPD: Grenada and The Commonwealth of Dominica received visa-free travel to the Schengen area of Europe in spring, 2015. 

 

- ROBERT MARTIN