Last Updated on April 4, 2017
Small nations in the Caribbean region hit hard by the prolonged recession in the past decade are relying on economic citizenship programs to generate revenue for much-needed infrastructure and economic development.
Nations like St. Kitts and Nevis rely on tourism and trade in commodities like sugar for their economic growth. The economy of St. Kitts and Nevis faltered when tourism dipped due to the recession and sugar exports fell due to European economic reforms. Today, the nation generates close to 25% of its GDP through its popular investment immigration program.
A low investment requirement of just $250,000, accessibility to nations like the USA and Canada, and the benefits of owning a second home in the beautiful nations are some reasons why investment immigrations are seeking the St. Kitts and Nevis passport. These programs are being marketed as innovative strategies designed to help small nations attain economic prosperity.
Although demand for economic citizenship has risen significantly in the past few years, the idea of selling citizenship to wealth investors is quite old. St. Kitts was the first nation to introduce such a program in 1984. The citizenship by investment program offers benefits like visa-free travel privileges, a liberal tax regime, hassle-free establishment of offshore businesses, and lenient transparency laws.
Today, these programs are being offered by other Caribbean nations, capital-starved nations in Eastern Europe, and even by developed nations like the USA and the UK. Of course, prosperous nations offer fast-track permanent residence with the option of applying for naturalized citizenship in due course. Presently, investment immigrants spend around $2 billion every year to purchase a second passport from a nation of their choice.
The St. Kitts and Nevis program, revamped in the past decade, has become very popular among applicants. In 2014, the program generated 36% of the nation’s revenue as investors shifted from costlier and more complicated programs offered by European nations.
However, St. Kitts investment immigration program was hit hard by the advisory issued by the U.S. Treasury’s Financial Crimes Enforcement Network in May 2010 that criticized the program for allowing Iranian nationals to obtain the nation’s passport with the intent of evading financial sanctions imposed on Iran.
Subsequently, St. Kitts has adopted a multi-pronged strategy that includes stricter regulations, more effective due diligence, assistance of professional risk management firms, and rigid ban on citizens of Iran, Afghanistan, and Syria from applying for its fast-track citizenship. The authorities have also undertaken steps to convince the US Treasury Department to lift its advisory.
Further, the authorities have emphasized their preference for applications who are truly interested in setting up a real home in the islands and contributing towards the economic development of the nation. It remains to be seen whether countries like the USA and Canada restore travel and other privileges that were revoked due to security concerns about investment immigration programs setup by small nations like St. Kitts and Nevis.
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