Caribbean CBI reforms 2024 Outlook: Updated price tags

• • • Economic citizenship programs in the OECS are reformed. The objective is to enhance the integrity of the programs and increase and harmonize investment thresholds.

By Bayat Group

THE CARIBBEAN – The Caribbean’s Citizenship by Investment (CBI) programs are experiencing a wave of change, with all five nations now participating in a major reform effort. To strengthen the international reputation and integrity of their CBI programs, four Caribbean nations – Antigua & Barbuda, Dominica, Grenada, and St. Kitts & Nevis — signed a Memorandum of Agreement (Memorandum-of-Agreement-CBIP-20-March-2024) in March 2024. St. Lucia, the fifth member of the CBI club, officially joined the agreement in June, solidifying a unified approach across the region.

The MoA outlined several key provisions aimed at strengthening and harmonizing CBI programs. The most significant is the establishment of a minimum investment threshold of USD 200,000, applicable to all options, including real estate investments and government fund contributions. It calls for stricter due diligence procedures, encompassing mandatory interviews for CBI applicants, conducted by independent firms.

The agreement encourages information sharing among participating nations about CBI applicants, including exchanging information on application denials. This is expected to improve transparency and reduce the risk of program abuse.

The memorandum also pushes for increased transparency in program finances, which could involve publicizing the amount of funds generated through CBI programs and commissioning independent financial audits. It aims to establish common marketing and promotion standards for the CBI programs, eliminating misleading or aggressive marketing tactics. Strict regulations for authorized agents who act as intermediaries between CBI applicants and governmental agencies are also suggested.

The signatory countries agreed to create a regional regulatory body to oversee CBI programs. All five nations are members of the Organization of Eastern Caribbean States (OECS) and have substantial experience in regional cooperation.

The MoA set a deadline of June 30, 2024, for implementing these reforms. Since then, all five countries have begun aligning their individual CBI programs with the agreement’s provisions.

St Kitts and Nevis

St Kitts & Nevis, a forerunner in the CBI industry, was the first Caribbean country to launch its economic citizenship program in 1984. Now boasting a “platinum standard” CBI program, it underwent a major reform in the summer of 2023. The Sustainable Growth Fund (SGF) was replaced by the Sustainable Island State Contribution (SISC) option with a significant increase in the required contribution minimums. At the end of June 2024, authorities in St Kitts & Nevis updated the minimum contribution and investment requirements in compliance with the MoA and in a bid to unify the CBI program price tags with their Caribbean counterparts.

As of July 2024, the Saint Kitts and Nevis CBI program offers four investment options with the following investment and contribution amounts:

1. The Sustainable Island State Contribution (SISC);

• Investors plus three persons can qualify if they donate at least USD 250,000
• An additional minor dependent cost is USD 25,000.
• Each additional adult dependent costs USD 50,000

2. Approved Public Benefit Project;

• Investors with three family members can qualify if they donate at least USD 250,000

3. Investment in a Developers’ Real Estate Project approved by government that must be retained for at least seven years;

• Minimum Investment is USD 400,000

4. Investment in Private Real Estate;

• Minimum investments in the case of a condominium unit is USD 400,000
• If investing in a single-family private dwelling home the minimum is USD 800,000

CBI applicants have to pay government fees for application processing, which have been lowered and are not applied for the Public Benefit Project option. For the main applicant, it stands at USD 25,000, for a spouse of the main applicant at USD 15,000, and for each dependent at USD 10,000 for minors and USD 15,000 for adults. Additionally, Due Diligence fees apply for all applicants aged 16 years old and above: USD 10,000 for the main applicant and USD 7,500 for each dependent.

Antigua and Barbuda

Antigua & Barbuda unveiled significant revisions to the investment requirements for its CBI program at the end of June 2024 and asked additional 30 days beyond the deadline of June 30^th set by the MoA to perform all parliamentary procedures. Starting from August 1^st, 2024, Antigua & Barbuda will require the following investment and contribution amounts from CBI applicants:

• National Development Fund (NDF):
  • Families of up to four persons can apply if the main applicant contributes at least USD 230,000.
  • Families of up to five or more qualify if the contribution is at least USD 245,000.

• University of the West Indies (UWI) Fund:
  • The minimum donation starts from USD 300,000 inclusive of processing fees.

• Real Estate Investment:
  • The minimum investment threshold is USD 325,000.

• Investment in a business:
  • For a single applicant the minimum investment in an approved business is USD 1,5 million
  • In the case of Joint Investment, the threshold starts from USD 400,000 per applicant, with a total project budget of at least US$5 million.

The CBI application process also entails processing fees, which are USD 30,000 for a single applicant or a family of four. Families exceeding four members will pay a processing fee of USD 10,000 for each additional dependent. Remarkably, applicants qualifying through the UWI option are exempt from paying processing fees.

Updates in the CBI program reflect the commitment of Antigua & Barbuda’s government to enhancing the program’s value and integrity per the MoA.

Dominica

Dominica announced changes in its CBI) program in compliance with the signed memorandum at the end of June 2024.

Starting from July 1, 2024, the following investment and contribution amounts are due for two qualifying options of the Dominica CBI program.

• Economic Diversification Fund (EDF):
  • Main applicant must contribute at least USD 200,000;
  • Main applicant plus three family members – USD 250,000;
  • Each minor dependent (under 18 years old) costs USD 25,000;
  • Each adult dependent – USD 40,000.

• Real Estate Investment
  • An applicant must invest in a government-approved property with a minimum value of USD 200,000.
  • The property must be held for three years after receiving citizenship. However, if the property is sold to another CBI applicant, the holding period is extended to five years.

Government fees associated with the Real Estate investment option have also gone up. The main applicant has to cover USD 75,000, and USD 100,000 if applying with up to three family members. Each additional minor dependent will cost USD 25,000 and each adult dependent USD 40,000.

There is also an application processing fee of USD 1,000. An interview fee of USD 1,000 is payable for each person included in the CBI application aged 16 and over. The Due Diligence fee is USD 7,500 for the main applicant and USD 4,000 for each person aged 16 and over.

Dominica has prioritized stricter background checks and introduced a new Financial Intelligence Unit (FIU) within the CBI Unit, which will examine applicants.

Grenada

Grenada’s CBI program underwent adjustments at the end of June 2024, aligning it with the MoA provisions. The Grenada Citizenship by Investment (Amendment) Regulations 2024 outlined the following changes in contribution and investment thresholds, effective July 12, 2024:

• National Transformation Fund (NTF):
  • Contribution of at least USD 235,000 for the main applicant and up to three dependents.
  • Additional dependents: USD 25,000 for each child or grandparent over 55 years. USD 50,000 for each grandparent under 55 years old, and USD 75,000 for each dependent sibling.

• Real Estate Investment:
  • Minimum investment of USD 350,000 in a government-approved real estate project.
  • Shared investment in a Tourism Accommodation priority sector: Minimum USD 270,000 per share, with a total project value of at least USD 440,000, provided that at least 20 percent of the construction cost is invested before applying.

Fees associated with CBI applications have also been updated: Government contribution fee, which applies only to the real estate investment option is USD 50,000 for a family of four (additional dependents charged similarly to the NTF option). Real Estate investors must also cover the Application Fee of USD 10,000. The Due Diligence fee is USD 7,500.

Grenada has also taken steps to strengthen its due diligence practices, aligning with the MoA’s goals. The program incorporates mandatory interviews for all applicants over 16 years old and authorities are committed to sharing all CBI-relevant information with their Caribbean counterparts.

Saint Lucia

Following its official adherence to the MoA at the beginning of June 2024, Saint Lucia finalized its CBI program adjustments by the end of the same month and effective from July 1 the following minimum contribution and investment requirements are defined to qualify for the CBI program:

• National Economic Fund (NEF):
  • Minimum contribution of USD 240,000 for the main applicant with three family members.
  • Additional dependent will cost USD 10,000 for each minor dependent (under 18), and USD 20,000 for each adult dependent (over 18).

• Real Estate:
  • Minimum investment of USD 200,000 in a government-approved real estate project.
  • Dependent fees mirror those of the NEF option. Non-refundable administrative fees apply upon citizenship approval for dependents.

• National Action Bonds (NAB):
  • Minimum investment of USD 300,000 in non-interest-bearing government bonds that must be retained for five years.
  • Non-refundable administration fee of USD 50,000.

• Investment in Enterprise Projects:
  • Option one: Single Applicant must invest at least USD 3,5 million and cover the administration of USD 50,000
  • Option two: Joint Venture – each applicant must invest at least USD 1 million, with a total project budget of at least USD 6 million.
  • Option three: an investor with up to three other qualifying dependents must invest at least USD 250,000 in the government-approved national infrastructure improvement project and pay other applicable administration fees.

There is also the Application Processing fee of USD 2,000 for the main applicant and USD 1,000 for each family member. The Due Diligence Fee is USD 8,000 for the main applicant and USD 5,000 for each dependent aged 16 and over. Saint Lucia CBI program, like all other Caribbean neighbours, also entails mandatory interviews for all CBI applicants aged 16 and over.

Conclusion

The signing of the MoA and reforms of the Caribbean CBI programs mark a significant shift towards greater integrity, transparency, and uniformity across the region. These changes were prompted by the US-Caribbean Round Table discussion held in February 2023 to enhance the integrity and transparency of CBI initiatives. It led to the consensus on ‘six principles’ aimed at addressing longstanding concerns raised by Western nations regarding the potential misuse of CBI programs.

The backdrop to this agreement and followed reforms is also rooted in ongoing diplomatic engagements with European Union officials and other Western stakeholders, who have voiced apprehensions about the security and regulatory frameworks governing CBI schemes. Over recent years, these programs have faced scrutiny for their perceived vulnerabilities, including the risk of financial crimes, lack of thorough vetting processes, and geopolitical implications. In response, Caribbean nations have undertaken substantial reforms to fortify their CBI programs, emphasizing due diligence and aligning their practices with international standards.

This collective move not only signifies a commitment to safeguarding their national interests but also highlights a proactive approach to fostering sustainable economic growth through responsible and well-regulated investment pathways.

Each country has already adjusted their CBI program to align with the MoA’s provisions, reflecting a commitment to regional cooperation and standardization. St Kitts and Nevis, Antigua and Barbuda, Dominica, Grenada, and Saint Lucia have all updated their investment options and fees to ensure compliance with the new guidelines. These changes not only standardize the investment requirements but also emphasize the importance of rigorous background checks and financial transparency.

The creation of a regional regulatory body to oversee the CBI programs is also a significant step towards maintaining high standards across all participating nations.

Overall, the 2024 Caribbean CBI reforms demonstrate a collective effort to enhance the value and integrity of economic citizenship programs. The MoA represents a pivotal moment in the evolution of the Caribbean investment migration industry. By harmonizing their CBI offerings, the signatory countries aim to enhance the credibility and attractiveness of their programs while ensuring robust compliance with global expectations. These reforms position the Caribbean to remain a distinguished force in the global CBI market, offering a secure and attractive option for discerning persons seeking alternative citizenship opportunities.

Source: Bayat Group