Introduction to Citizenship by Investment
Citizenship by investment, once the domain of the very few, is increasingly popular with discerning West African high net worth investors. The concept is very simple and enshrined in the relevant country’s legislation: in return for a real estate investment or a contribution to the relevant country, an investor is afforded the opportunity to apply for citizenship of a country, and if successful, eligible for many of the benefits that follow, including visafree travel to many worldwide destinations, access to a tax efficient jurisdiction, and much more.
From its early beginnings about 40 years ago, it has grown to an industry of more than US$20 billion a year. There are about 25 countries in the world offering such investment schemes, ranging from Europe, to the United States to the Caribbean Islands. Remarkably, the first country to offer a formal citizenship by investment programme was St Kitts & Nevis, a small Caribbean island, immediately after the country became a sovereign nation in 1983. Since its modest origins, Citizenship and Residency by Investment has become a global phenomenon. There are now five countries in the Caribbean offering citizenship-by-investment programmes, including Grenada, St Kitts & Nevisanddominica.
According to one leading expert, the Caribbean is the place to invest, as not only is the industry well entrenched and understood there, but also prices are competitive and citizenship can be obtained within a 3 to 4 month window.
“The Caribbean is the place to look if you feel prejudiced and your potential iscurtailed solely by where you were born and thus what kind of passport you hold, and you want to change that,” said Mohammed Asaria, managing director and founder of Range Developments, the leading developer of luxury hotels in the Caribbean which are approved by the relevant governments as qualifying investments for Citizenship purposes.
“A second citizenship gives you and your family global mobility – you may travel visa-free to the UK, Schengen region, Russia and in the case of Grenada, to China as well,” he said.
According to him, “You don’t need to go and live in Grenada – but of course, you can if you want to. It gives you a hedge against political, economic and social volatility, as well as in the case of a real estate investment, gives you something of value that you can sell on in the future to a subsequent citizenship seeker, whilst you maintain your citizenship in perpetuity.”
With an enviable and unrivalled track record of completion and success across the Caribbean, Asaria is well qualified to discuss the ideal kind of investment. Range founded in 2012, is responsible for three of the most coveted hotels in the region: The Park Hyatt St Kitts (named by CNN in 2018 as the Best New Hotel in the Caribbean and
secured a place in the Conde Nast Hot List in 2018), Cabrits Resort Kempinski (highly praised by the Wall Street Journal and Forbes), and the recently-launched Six Senses La Sagesse in Grenada, where construction has begun and is expected to complete in 2022.
“There is no doubt that Grenada offers the most attractive citizenship programme in the world at the moment,” he says. “By investing US$220,000, plus government fees, in a state-approved real estate project in Grenada such as the Six Senses La Sagesse, individuals can become eligible for Grenadian citizenship. Moreover, by subsequently investing in a viable business in the US, individuals may also apply to live in the United States through an E-2 visa in around six weeks. Due to historical links between Grenada and the United States, Grenadians have a number of privileges in the United States, including the ability to invest and reside in the United States.”
Global Mobility Is On The Rise Amid COVID-19
According to Asaria, since the pandemic, a large number of people are seeking second citizenship. “We are seeing many west Africans look at the threat of deglobalisation and looking at Grenada citizenship and applying for the US E-2 visa.”
Following the disruption to international supply chains and travel, investors are looking for stability for their families and businesses.
“Those who are seeking a safe haven could secure Grenadian citizenship with a US E-2 visa and start a business in the United States (with a recommended minimum capital of USD150,000) within six to nine months, obtaining access to the world’s largest economy for themselves, their families and their businesses, and all being very cost effective.”
“In the case of Grenadian citizenship, applicants’ spouse, parents and children below the age of 30 may be included. As pertains, the US E-2 visas, the investor’s spouse and children below 21 also qualify. The investor’s spouse can also apply for authorisation to work anywhere in the United States and the children are entitled to a number of educational benefits, including In State reduced fee scales at certain universities.”
Grenadian citizenship also permits attractive visa-free travel advantages (including to the Schengen region, UK, Russia, China and in total close to 140 countries globally), although Asaria sees this as a required expectation rather than a primary consideration in the current climate. The ability to have the option to migrate to a mature market (the United States) is nevertheless often at the forefront of high net worth investors’ minds.
Second citizenship in Grenada, while offering residency to the United States through the E2 visa, does not require investors (subject to being present in the US for less than 122 days in a year) to pay US taxes on their non-us income. This is one of the key reasons for the E2 visa’s popularity.
Citizenship-by-investment programmes should be distinguished from residency or Golden Visa programmes. Golden Visa programmes are primarily offered by southern European countries such as Portugal, Spain, Italy, offering permanent residency and will only lead to citizenship after several years, typically, after 7 years and after learning the native language. In the case of Citizenship by Investment programmes offered by a few Caribbean nations, Citizenship is awarded within 3 to 6 months of making an application. The expediency and efficiency of the award of citizenship is directly related to the success of these programmes.
According to Asaria, seismic economic shifts have changed investors’ reasons for seeking second citizenship since the pandemic.
He refers to three types of clients who commonly seek second citizenship. The first are investors looking to liquidate their businesses in emerging markets and reinvest their capital in advanced economies such as the US, avoiding the risk of exposure to economic, political or social challenges in their home countries.
The second group of investors are often those with substantial, globalised businesses who are increasingly seeking to establish a physical presence in developed markets such as United States to combat deglobalisation and forge closer relationships with clients in key markets.
The third segment are those looking for a better quality of life with increased standards of health, safety and education, as well as, global mobility, especially for their families.
“All three groups of investors will invariably require a second citizenship that provides access and residency in advanced economies such as the United States,” he said.
“We have helped more than 1,600 families from around the world gain new citizenship,” Asaria further said, adding that “The reputation of our developments is unrivalled. We are the only company involved in the Caribbean that has delivered, and this is why we are trusted”
Citizenship- by- Investment looks set to grow even more in the coming months. “The benefits are obvious,” Asaria said.
According to him, “People are waking up to the idea that it’s an accessible, legitimate and cost effective option. In the wake of the coronavirus pandemic and the elevated levels of global anxieties, Citizenship by Investment is no longer a luxury for the West African HNW, it has become a necessity.”