Case Study: The Dominica Citizenship by Investment Program

The Commonwealth of Dominica is located between the French-speaking islands of Guadeloupe and Martinique in the Eastern Caribbean. Often referred to as the ‘Nature Island’, it beguiles its visitors with its untouched natural beauty, tropical rainforest, and rich fertile soil. Today, it has also become the new frontier for foreign investors, offering citizenship by investment to investors and their families. In fact, Dominica has the second oldest citizenship by investment programme in the world, formally established in law in 1991.

Dominica is an attractive country for investors to explore due to its stability. Dominica is a republic within the Commonwealth, with English as its official language. Its currency is the Eastern Caribbean Dollar (XCD), which is pegged to the US dollar. The country is a member of the Organization of Eastern Caribbean States (OECS), the Caribbean Common Market (CARICOM), the British Commonwealth, the Association of Caribbean States (ACS), the African Caribbean and Pacific States (ACP), the World Trade Organisation (WTO) and the Bolivarian Alliance for the Peoples of Our America (ALBA).

This excellent business environment exists alongside an attractive living environment with many lifestyle benefits. Dominica has one of the lowest crime rates within the Caribbean, and the Government has established an enticing environment for tourists and investors. Many foreigners move to Dominica to escape their busy city lifestyle and to make the most of the island’s healthy, safe, tranquil and picturesque setting.

Dominica has maintained its reputation as a trusted option for investors through the careful management of its investment programme, to which the Government remains committed.

The Dominica Citizenship by Investment Programme is the most affordable citizenship programme of its kind in that a single contribution of US$100,000 (GB£67,000) to the Government Fund qualifies an individual to gain full citizenship. A husband and wife will contribute US$175,000 (GB£118,000) and a family of four qualifies for citizenship by making a contribution of US$200,000 (GB£134,000) to the Fund. A fee of US$50,000 is applicable for additional dependants.

The success of the programme has prompted the Dominican Government to introduce a second option to qualify for citizenship under the programme by making an investment of a minimum of US$200,000 into an approved real estate project. The Government has also made significant changes to the processing of citizenship applications. Embodied in the new regulations (SRO no 37 of 2014), the Government has established a dedicated Citizenship by Investment Unit (CBIU) that is responsible for the administration of the programme and the processing of all citizenship by investment applications. The CBIU is well-structured and managed by competent and qualified personnel to process the applications and deal with licensed agents.

The changes also include the removal of a mandatory interview and the introduction of a strengthened due diligence process so applicants are able to apply for second citizenship from their respective home countries without having to travel to Dominica. However, if the CBIU considers it necessary and in the interest of the country, it may request enhanced due diligence and/or an interview with the applicant.

Under both investment options, a due diligence fee is set at US$7,500 for the main applicant and USD4,000 for all dependants over the age of 16 years. Under the real estate option, additional government fees apply – the fees are US$50,000 for the main applicant; US$25,000 for the spouse, US$20,000 for children under 18 and US$50,000 for qualifying dependants over the age of 18.

The Government allows for dependants between the ages of 18–25 years if the dependant is in full time attendance at a recognised institution of higher learning and financially dependent on the main applicant. An unmarried daughter of the main applicant who is under 25 years of age and is living with and fully supported by the main applicant also qualifies as an adult dependant. The law also recognizes dependent children over 18 who are physically or mentally challenged and are fully supported by the main applicant. Parents and grandparents of the main applicant or a spouse above the age of 65 who are living with the family and are financially supported by the main applicant are also considered adult dependants under this programme.

The programme is structured to suit people from all walks of life, however only those applicants who are 18 years of age, of good character and without criminal records may apply.

The application process is relatively straightforward provided that the applicant completes fully and in English the prescribed forms (D1, D2, D3 and D4), which must be submitted with additional mandatory supporting documentation. Even though the applicant need not show business or managerial experience, the applicant must provide sufficient information regarding his or her net-worth and source of wealth. All documents must be presented to the CBIU in English with the proper translations, certification and legalisation.

The CBIU is committed to the efficient processing of applications and to meeting the three month processing time-frame, as long as the applicant has provided the correct information and documentation to support his or her application.

The programme is beneficial to applicants who would like to keep their second citizenship application completely confidential. The Government does not advertise a successful applicant’s citizenship to any authority and maintains full confidentiality in issuing citizenship.

The Dominica citizenship offers investors a myriad of opportunities and benefits including visa-free travel to up to 90 countries. Additionally, the Government has entered into agreements with the European Schengen member countries to allow Dominican citizens visa-free travel to the Schengen region, which are expected to become effective by Summer 2015.

Besides these visa-free travelling benefits, Dominica has a welcoming business environment to be explored. The country is dedicated to working with the private sector and foreign investors to promote development and growth, which can be seen, among other things, in the robust legal and institutional frameworks that support this growth.

The World Bank ranks Dominica 46^th out of 183 countries in terms of convenience of setting up a business due to its hassle-free approach to forming companies and registering businesses.

As an emerging economy, the Government welcomes interesting investment initiatives to promote economic growth and aid the country’s transformation from an agricultural economy to a more service-based economy. In 2007, the jurisdiction established the Invest Dominica Authority (IDA) to provide the necessary support to investors through a structured approach to investment, with the goal of driving effective economic growth.

The country has a strong banking system, providing offshore banking facilities and allowing for an easy process of opening accounts. In parallel, the process of forming a company is just as seamless. A Dominican company may be formed online, and there are certain tax benefits associated with incorporating in Dominica. Individuals who retire in Dominica are exempted from taxes on overseas income.

Dominica has double tax treaties with Switzerland, Great Britain, the United States and the CARICOM countries. A double tax treaty prevents citizens from having to pay tax on income earned in Dominica.

There is also no capital gains tax or inheritance tax in Dominica. This provides citizens with dual citizenship the security that their wealth and investment profits will not be taxed in Dominica.

Conclusion

Dominica is often referred to as the ‘Switzerland of the Caribbean’ due its generous tax legislation and attractive offshore banking facilities. Even though investors interested in becoming citizens of Dominica do not need to travel to Dominica, an opportunity to travel there should not be missed.

With its unique character, developing tourism industry, and business environment, the country has much to offer. The future certainly looks bright for the country, and Dominica will undoubtedly be regarded as one of the Caribbean’s premier investment locations.

Micha-Rose Emmett
Micha Rose-Emmett is a South African and English lawyer with degrees in business and law. Her expertise includes international private client advice, commercial law, property investment and citizenship planning. Micha has many years of experience in citizenship, residence, immigration and foreign investment law and has held several senior legal advisory roles across a range of industries. She specialises in providing citizenship planning services to HNW individuals. Micha has also travelled extensively providing consultancy services to governments and private firms. The jurisdictions she has worked in include the UK, UAE, Africa, the Caribbean, Asia and Europe. In advising governments, Micha has led professional teams and coordinated the development, delivery and on-going management of citizenship programs and projects.