The St. Kitts and Nevis citizenship by investment program is widely recognized for being reliable and having well-established action mechanisms. International expert organizations keep naming the program among the leaders of the industry. In November 2017, the program won the title of World’s Most Innovative Investment Immigration Programme at the Russian Global Citizen Awards in Moscow.
Saint Kitts and Nevis has already issued over 11,000 passports to foreign investors, and the CBI program keeps drawing the attention of high net worth individuals from all over the world. But the level of competition between similar Caribbean citizenship by investment programs keeps rising, too. Which prompts market participants to periodically modify the conditions of their respective programs to make them more attractive in the eyes of potential clients.
Not all functionaries support the “race to the bottom,” but the demand dictates its own conditions. In the fall of 2017, the St. Kitts and Nevis government announced the establishment of a hurricane relief foundation and introduced it as one of the citizenship acquisition options. The donation amount has been reduced by 50%. To obtain a citizenship, an applicant is expected to make a donation in the amount of US$150,000 to the fund, which is applicable to both individual investors and families up to 4 people. The reduced price offer is valid through March 30, 2018. However, Saint Kitts and Nevis authorities didn’t stop at just that; citizenship by investment in property option has also become less costly.
After consulting with country’s largest real estate developers, the authorities of Saint Kitts and Nevis have made the decision to encourage investment in real estate and significantly reduce the size of the state fee. The news was announced by the country’s prime minister, Timothy Harris.
“Real estate developers made a case to the Cabinet. Cabinet received that case and determined that we could assist in further giving a boost to our real estate programme by making an adjustment in the fees,” the prime minister said. “And so we have decided that the Government fees will be adjusted to $75,000 for a family of four. This makes us more competitive, although we are still above the threshold in other CBI jurisdictions.”
Thus, according to the recently-adopted act, the applicants are to pay the following amount when purchasing real estate:
THUS, FOR A FAMILY WITH TWO CHILDREN AGED BELOW AND ABOVE 18 YEARS, THE STATE FEE AMOUNTS TO $75,000. PREVIOUSLY, THIS SUM WOULD HAVE AMOUNTED TO $150,000, THAT IS – TWICE AS MUCH.
The cost of due diligence check will remain unchanged — $7.5k for the main investor, and $4k for each dependent member of the family.
The minimum investment amount for the purchase of real estate is $400,000. This is considerably higher than the donation option ($150,000 until the end of March 2018, and $250,000 after that date). But this kind of investment (real estate) is returnable, since in 5 years’ time, your villa or apartment could be resold. Keep in mind that the real estate object you invest in must be included in the list of government-approved investment projects.
Even though not right away, the global financial crisis did reach the country. In 2010, real estate prices have suffered a 20% drop after a period of steady 5-10% growth per year. Gradually, the market has been coming to life, and not in a small part thanks to the citizenship by investment program.
Tourism in Saint Kitts and Nevis primarily focuses on affluent individuals, so the selection of luxury housing is fairly wide. For the price of $400,000-500,000, one can purchase a small villa or an apartment in a closed-type complex. A seafront villa with a swimming pool costs around $1.5 million. Many investors prefer to purchase a share in a hotel or a resort complex. There are promising options here, like the Park Hyatt hotel by the Christophe Harbour, a luxury yacht marina, or Four Seasons Nevis, a complex of luxury villas. In case of buying a share, it is especially convenient that it’s only necessary to spend just the required minimum. Share ownership includes the right to reside in the apartment or the room a couple of weeks per year. At all other times, the owner is entitled to receive a passive income from renting out the property, with the management company handling the associated procedures on behalf of the investor. Profitability of renting out ranges from 4.9% to 5.31% per annum.
It should be noted that investing in real estate in Saint Kitts and Nevis may be tied to a certain risk. Primarily, it concerns the disaster risk. In 2017, many Caribbean countries lost billions to hurricanes Irma and Maria. As trite as it sounds, the forces of nature are unpredictable, so there is no guarantee that the mandatory 5 years of holding real estate will pass without any force majeure. In regard to objects under construction, there is also a risk that they will not reach the stage of completion.
If your goal isn’t just a Caribbean passport, but also purchase of real estate on the islands, take a closer look at the Antigua and Barbuda or Grenada’s CBI programs. Thanks to the liquidity of real estate, developed infrastructure, a large airport, and perpetual interest from yachtsmen and celebrities, the demand for housing in Antigua has been skyrocketing, so it’s not likely you’ll experience troubles with merchanting of your object. Grenada, in particular, lies south of the hurricane formation zones, so there’s little danger of real estate destruction on the island.
The St. Kitts and Nevis CBI program has been in operation for over 30 years now, and investors choose it because of its popularity and credibility. And it has just become more affordable. The option of citizenship by investment in real estate has become more attractive thanks to lowered state fees. This change has come into effect in February 2018, and the government is not planning to cancel it.
And don’t forget about another proposal by the government of Saint Kitts and Nevis that is about to end. The opportunity to obtain a passport with a “discount” of up to 50% is valid until March 30.
Also, Antigua and Barbuda’s CBI program is worth looking at, especially since this country’s passport can be obtained for half a price until the end of October 2018.