by Ahmad Abbas, the Imidaily editor
Citizenship by investment has become a major trend among high-net-worth individuals throughout the globe. The ease of obtaining citizenship through investment, coupled with the massive benefits of doing so, has driven tens of thousands of the world’s elite to pursue the matter.
As it becomes more popular, more countries than ever now offer the chance to obtain citizenship by investment. It is in the Caribbean, however, where most of these countries conglomerate, such as Antigua and Barbuda, Dominica, Grenada, Saint Kitts and Nevis, and Saint Lucia, dubbed the “Caribbean Five”, all boast their own versions of a citizenship by investment program.
Citizenship by investment has an abundance of benefits, and the nationals of the US are becoming more aware of how they can take advantage of them
The trend of obtaining citizenship by investment is especially growing among US citizens, as the pandemic and recent political divides have highlighted the need for a backup plan, even for holders of one of the world’s most powerful passports. Citizenship by investment has an abundance of benefits, and the nationals of the US are becoming more aware of how they can take advantage of them.
The benefits these countries offer to investors who obtain their citizenship are boundless, and the matter of obtaining a second citizenship from the Caribbean is one that benefits an investor and their family members perpetually. While each individual has their own reasons and objectives for obtaining a second citizenship, there is a core of benefits that drive investors to pursue the issue, and this piece will take a look at the five most popular reasons people invest in a second citizenship.
One of the most significant benefits of obtaining a Caribbean citizenship from one of the Caribbean Five is gaining greater visa-free travel.
All of these Caribbean countries are Commonwealth nations with close ties to the UK and EU and work tirelessly to sign visa-free travel with as many countries as they can.
This enhanced travel ability relieves investors of the need to obtain visas and cut travels short or altogether due to the complexity of the matter, and gives them unhindered access to the globe.
Another critical factor to consider is that, due to their relatively smaller size, these Caribbean countries are located within the neutral part of the global-political spectrum, allowing them to gain visa-free access to countries on either end of the global political divide.
This means that Americans with a need to travel to certain countries that are not on the US passport’s visa-free travel list may find them among one of the visa-free destinations of one of the Caribbean passports, allowing for easier global travel.
They are also a great second travel document in case a global border closure happens like the one that occurred during the pandemic; having a second powerful passport is the optimal contingency plan.
In fact, during the pandemic, the US passport lost access to a staggering 91 destinations worldwide, accounting for 53% of all its visa-free access destinations. While St Kitts and Nevis also temporarily lost visa-free access to some locations (67) due to pandemic ensued border closures, it maintained almost 50% of its visa-free access capabilities, meaning an American with both passports would have faired easier in terms of global travel.
This is especially important since the US is on one end of the political spectrum, and any political strain between it and other countries could result in visa-free access treaties being terminated, and having a second passport circumvents that issue.
Also, a large number of Americans look to renounce their citizenship each year, many do so to relieve themselves from the citizenship-based taxation the country levies. 2020 saw over 6,000 American citizens renounce their US citizenship, while some sources claim that a further 30,000 are awaiting their renunciation appointments but are yet to officially complete the process. Those looking to renunciate their US citizenship, need a strong second one to rely on, and that is where Caribbean citizenship by investment comes in.
The Caribbean Five all boast robust passports, which allow visa-free access to highly desired locations such as the EU, UK, Singapore, and many more.
Visa-free destinations for each of the Caribbean Five are as follows:
Another major driver for investing in a Caribbean citizenship is the ability to benefit from their lean tax regimes. None of these countries impose global income, capital gains, wealth, or inheritance tax, allowing high-net-worth individuals to maximize their wealth by optimizing their taxation structure.
This tax regime is especially interesting for those hailing from countries with rigid and crushing tax requirements, such as the US or the Netherlands.
None of these countries impose global income, capital gains, wealth, or inheritance tax
By obtaining a Caribbean citizenship, a person can shift their major tax base to their second home while maintaining the lowest possible tax payments in their country of origin. It also provides them with a risk mitigation tool in case their original country decides to raise taxes or change the laws.
This is the case in the US, for example, with a new tax reform directed at the nation’s wealthy set to nearly double capital gains tax and uphold greater margins on income tax. By obtaining a Caribbean citizenship and moving their tax base to the Caribbean, US nationals could alleviate their tax burden.
Conducting global business is not a simple task for everyone, especially those who attempt it from within sanctioned countries or those with fragile global relationships.
For example, doing international business from within Iran is more difficult than doing so from Saint Kitts and Nevis, as Iran’s financial restraints mean moving money throughout the globe requires greater scrutiny and higher processing times. Or consider China’s current restrictions on moving money out of the country as a massive obstacle that needs a lot of effort to operate within.
Having a Caribbean citizenship and setting up a business on the island allows international entrepreneurs to conduct international business with ease, especially considering that all of these Caribbean countries boast outstanding financial service sectors and banking abilities, while their currency (the Eastern Caribbean Dollar) is pegged to the USD, adding even greater stability to local businesses and making it better for American business owners as they will always have a stable exchange rate.
But even entrepreneurs hailing from pro-business countries such as the US can benefit from the Caribbean’s business environment, especially those looking to invest in cryptocurrency. Many US citizens are overlooked for new coin offerings or major deals outside the US, but by allowing a Caribbean LLC to conduct their business on their behalf, they can circumvent these obstacles.
As mentioned, the Caribbean Five all have magnificent financial service sectors, and it is in terms of wealth management and protection where they really shine.
First off, banking in the Caribbean is highly evolved and extremely private, ensuring investors’ records and assets are well preserved and hidden away from prying eyes.
Secondly, these nations offer a multitude of wealth protection tools that their citizens can take advantage of, such as dedicated offshore banks, offshore trusts, and specialized bonds that allow investors to protect their assets and maximize their wealth.
Banking in the Caribbean is highly evolved and extremely private, ensuring investors’ records and assets are well preserved and hidden away from prying eyes
This is especially important for US citizens that want to alleviate their tax burden while also protecting their wealth, as offshore trusts can help Americans safeguard their money but as a trust inherently relocates the ownership of the assets (from person to trust) it adds a layer of protection.
It is important to note that offshore trusts in the Caribbean do not fall under the US Court System’s jurisdiction, meaning that no US court can order a trust to liquidate itself or pay an amount to a creditor, making them excellent options for US citizens.
One of the most important factors that anyone considers when looking to obtain a second citizenship is using it as a contingency plan.
Citizenship by investment has arisen as the most robust “Plan B” the world has to offer, as obtaining a second citizenship is the best way to hedge against political turmoil or acts of foreign aggression.
They provide their holders with a quick route of escape and a second home to go to until any political instability is resolved. Take the recent cases of Syria, Yemen, Myanmar, and Ukraine as prime examples, where the population had little time to react to the crises that unfolded, and very few had the means to escape the situation.
Second citizenship can give its holder greater opportunities and an enhanced measure of safety and security for themselves and their family members.
Taking the US as an example once more, having second citizenship gives investors the extra layer of protection needed should things deteriorate in their home nation. The US currently ranks a lowly 129th on the Global Peace Index, highlighting how low the safety standard in the nation has slipped, and further emphasizing how important it is to have a second citizenship.
The benefits of obtaining a Caribbean citizenship are too many to count; add to that the simplicity and efficiency of the process, which can be done remotely and only takes a few months, then it is understandable why many of the world’s wealthy continue to flock to it.
It is also highly affordable, with many options starting off at 100,000 USD, and it also allows the addition of a wide array of dependents such as a spouse, dependent children, dependent siblings, and dependent parents and grandparents to the same application.
Getting a Caribbean citizenship has never been easier, and the benefits it provides are too great to ignore.
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