Christopher Willis provides an insightful case study on the St Kitts & Nevis Citizenship by Investment program.
St Kitts and Nevis, also known in the country’s constitution as Saint Christopher and Nevis, was named by Christopher Columbus in 1493. St Kitts and Nevis is an exclusive Caribbean destination with twelve hours of sunshine almost year round. The federation has a rich history with its varied influences from the Caribbean, British, French and Africans. St Kitts and Nevis gained its independence from Britain in 1983. The Federation comprises of two islands: the larger island, St Kitts with an area of some 168.4 km² and Nevis with area of 93.2 km². The two islands are part of the group of islands known as the Lesser Antilles, located some 2,000 km southeast of Miami. The two islands offer diverse vegetation from the many fine beaches to the attractive dense mountainous landscape.
The official language is English and the country is very proactive in promoting and attracting investment into the country. St Kitts and Nevis has a well-regulated financial services sector and no restrictions on repatriation of profits or imported capital. The country has a modern infrastructure with an international airport. There are direct daily flights from Miami and bi-weekly direct flights from New York and London.
The Eastern Caribbean Central Bank has its headquarters on St Kitts. It maintains the stability of the Eastern Caribbean Dollar (EC$), the national currency of most Eastern Caribbean countries, which is pegged to the US dollar.
For over 400 years, St Kitts and Nevis operated as mainly a sugar producing country until 2005 when the government closed down the industry due to decreasing profitability. Today, the main economic drivers are tourism, real estate and financial services.
Since 1984, the St Kitts and Nevis Citizenship Act has allowed foreign investors to acquire citizenship, making it the oldest existing citizenship-by-investment program. In 2007, Henley & Partners was mandated by the government to completely reform the program, and it has since become the most successful program of its kind in the world.
The citizenship program of St Kitts and Nevis requires a person to make an economic contribution to the country. In exchange, and subject to a stringent application procedure including thorough background checks, the applicants and their families are granted full citizenship.
To qualify for citizenship, the person must be over eighteen years of age, meet the application requirements and make an investment of at least US$400,000 in one of the approved real estate developments or alternatively pay a contribution to the Sugar Industry Diversification Foundation
(SIDF) of an amount starting from US$250,000 (for a single applicant).
If the applicant chooses to invest in a government approved real estate development, this option may involve additional real estate purchase costs (depending on the developer), and government fees of US$50,000 for the main applicant plus an additional US$25,000 for each dependent. Some of the best real-estate options, such as the Four Seasons or Aman Resorts in Nevis, include the purchase costs for the buyer.
There is also a due diligence fee of US$7,500 for the main applicant and US$4,000 for dependents over the age of 16 years. Real estate that has been purchased and qualified an applicant for citizenship under the citizenship-by-investment program must not be resold for a period of at least five years after the granting of citizenship.
The SIDF is a non-profit foundation established for the purpose of, inter alia, supporting the former sugar workers, conducting research into the development of industries to replace the sugar industry, funding the development of these alternative industries and providing further support to secure the sustainability of the national economy. The Foundation has been designated as a special approved project for the purposes of the Citizenship-by-Investment Program; its accounts are public and are annually audited by Grant Thornton.
An applicant may make a contribution to the SIDF under the following four categories:
A single applicant is required to make a contribution of US$250,000
An applicant with up to three dependents (ie, one spouse and two children under the age of 18) is required to contribute US$300,000
An applicant with up to five dependents (ie, one spouse and four children) must make a contribution of US$350,000
An applicant with up to seven dependents is required to make a US$450,000 contribution
Under the SIDF, in each of these categories, the total amount includes all government fees, but excludes due diligence fees, which are the same for the real estate option (US$7,500 for the main applicant and US$4,000 for dependents over the age of 16 years).
The government allows for a dependent between the age of 18 and 25 years to be included in the application of the main applicant if the dependent is a full-time student at a recognised higher learning institution and is financially dependent on the main applicant. The government also allows for parents and grandparents over the age of 65, of the main applicant or his or her spouse, to be included in the application as dependents, if the parent/s and grandparent/s are living with and are fully supported by the main applicant. There is an additional government fee of US$50,000 payable for each dependent over the age of 18.
The applicant must have a completely clean personal record with no criminal record. The regulations further provide that a person who has been denied entry to a country with which St. Kitts and Nevis has visa-free travel arrangement and has subsequently not obtained a visa to the country after the first refusal shall not be entitled to apply under the program. A person that is deemed a potential national security risk, a reputational risk or is subject to criminal investigation will also be denied citizenship.
The government authority responsible for administering the program, the Citizenship-by-Investment Unit (CIU), examines the application thoroughly and if deemed necessary, may request that the applicant attends an interview, although this is not generally a requirement. The CIU undertakes strict due diligence checks and will decline an application if the applicant makes a false statement or omits any relevant information on the application.
The applicant must apply on the prescribed government forms which are only available from the CIU or from an authorised provider. The applicant is required to personally complete the form in English and submit the prescribed forms together with original or certified supporting documentation as specified by the government.
The documentary requirements of the St Kitts and Nevis citizenship-by-investment program are reasonable and the procedures straightforward. Furthermore, most investors would normally visit the islands before making a decision on the purchase of real estate, which also needs to be taken into consideration. However, it is not a prerequisite for the application process.
The process usually takes between four to six months from submission of the application to the CIU to approval. Under the real estate option, the time frame may vary depending on the development, therefore it is important to choose a real estate project that is efficient in acquiring and completing the paperwork needed for the citizenship application.
If the real estate option is favoured, it is important for an applicant to be aware of the investment potential, financial strength, track record and reputation of the developer before committing to the property. There are real estate developments which provide excellent value, as well as those which are at the other end of the spectrum – buyer beware. Once the applicant has chosen their preferred real estate, a sales and purchase contract is signed which is usually conditional upon the person receiving citizenship. After approval by the government, the real estate purchase is completed and the ownership title transferred to the buyer.
Upon approval-in-principle of the application by the CIU, the funds for the real estate or SIDF contribution, government fees and other fees will be released to the various parties. Thereafter, the Prime Minister will sign the official citizenship certificate which confirms the citizenship status. Once the citizenship certificate is issued, the person is entitled to apply for a passport. There is no formal ceremony that the citizen must attend and the grant of citizenship is not made public.
A St Kitts and Nevis citizen is entitled to take up residence in St Kitts and Nevis at any time and for any length of time. A St Kitts and Nevis citizen may also reside in any other CARICOM country. There are no restrictions on dual citizenship in St Kitts and Nevis.
There is no direct taxation in St Kitts and Nevis. Even if a citizen resides on the islands, they will not be subject to personal income tax, estate duty, inheritance or succession taxes, gift taxes or net worth tax. In St Kitts and Nevis, there is a corporate income tax of 35 per cent of net profits but the country offers qualified companies a tax holiday on corporate profits for up to 15 years. Nevis does not levy tax on companies and foundations as long as the business is not transacted on the island. The current rate of VAT in St Kitts and Nevis is 17 per cent.
In 2009, the St Kitts and Nevis government signed a visa-waiver agreement with the Schengen member countries which allows a St Kitts and Nevis citizen to visit the Schengen countries without a visa for the period of three months within a six month period following the date of first entry into any EU country.
Full citizenship with passports is granted to the applicant and family. St Kitts and Nevis is a member of the Commonwealth, which entitles St Kitts and Nevis citizens to certain limited privileges in the UK and other Commonwealth countries.
Christopher Willis is the Managing Partner of Henley & Partners Caribbean Ltd and is responsible for operations in St Kitts, Nevis and Antigua. He has been involved in the immigration industry since 1995 and is a member of the Immigration Consultants of Canada Regulatory Council (ICCRC) and of the Canadian Association of Professional Immigration Consultants (CAPIC). He is a regular contributor to immigration specific newspapers and magazines as well as a speaker at immigration and industry conferences.