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China Offshore Summit

CEO of St Kitts and Nevis’ CBI Programme Speaks at China Offshore Event

Hello, my name is Les Khan. I’m the CEO of the Citizenship by Investment Programme of St Kitts and Nevis. The St Kitts and Nevis Programme is one of the longest-running programmes in the world. Actually, it started in 1984 and was the first programme to offer citizenship [by investment] to candidates around the world.  

Leading by Example

All of the [other citizenship by investment] programmes have emanated from this special event in St Kitts and Nevis. [Countries] around the world have structured their citizenship by investment and residence [by investment] programmes based on what St Kitts [and Nevis] had done back in 1984. Since 1984, the Programme has evolved. It was created to replace the sugar industry, which at the time was [a] major industry and economical solution for the Federation.  

After that, the country needed to […] create alternative forms of investment and alternative forms of economic growth. The Citizenship by Investment Programme offered this, and as a result, the SIDF, which is the Sugar Industry [Diversification] Fund, was established initially to raise funds to diversify the economy. 

In addition to the SIDF, there was also the creation of a real estate option which allowed private enterprise to build hotels, which meant that the country could further diversify its economy into tourism. We have evolved since 1984, and we’ve evolved [so much] that the Programme has been acknowledged as one the best in the world. We are the platinum brand. Our platinum brand is based on a number of factors. One of the most important factors is the due diligence that we do on our [applicants].  

St Kitts and Nevis’ Due Diligence Process

We have [multiple] levels of due diligence. The first [layer] is done by our agents around the world who do checks on [each applicant] before they accept the [applicant] as a candidate. For citizenship, they will do anti-money laundering checks [and anti-] terrorism financing checks. That’s the first level.  

The second level is when it comes to our local service providers. All files for citizenship must go through a local lawyer or accountant registered with [and overseen by] our regulatory body which will ensure that the service provider is properly regulated and licensed. That service provider also has to do due diligence on the [applicant] again to make sure they know the [profile of the applicant] they are submitting to the Unit.  

The third level of due diligence would be when the file comes into the Unit. The documents are sent to an international due diligence provider. This due diligence company will do open-source searches. [They’ll] find out what’s going on in terms of media, but they will also send the information to agents on the ground wherever that person is located at that point in time. There will be checks on marriage certificates, birth certificates, education, [and] employment information. All of this data is provided back to the Unit in a report that […] supports the integrity of the individual.  

The fourth level of due diligence is when we submit the files or the information to international law enforcement. The international law enforcement is a group in the Caribbean that consolidates all of this data, and they will search databases for anti-money laundering, fraud, criminal activity, terrorism financing, [and] terrorism activity, and we will get that information back at that point.  

When we have all these due diligence reports, we will go through a rigorous vetting of the file, and there is a level one veteran, there is a level two veteran, a level three, level four, [all of whom look at the file]. Each one of these stages looks at the documents in the file against the reports that we receive from the due diligence sources. 

We will look for money laundering activity and bank statements. We look for the source of income and proof of funds. This is all the rigour that we put around the due diligence and the actual application process to ensure that we maintain the platinum brand, and we only ensure that individuals of high integrity come into our Programme. 

Available Investment Options for the St Kitts and Nevis CBI Programme

Now, our Programme is divided up into two categories. One is the [pre-approved] real estate option, and the other would be what we now call the Sustainable Growth Fund. The Sustainable Growth Fund replaced the original SIDF and is now priced differently. The Sustainable Growth Fund is US$150,000 for a single applicant. 

As we add dependants to that, it will be an additional US$25,000 for the spouse [and] US$10,000 for each child below the age of 30. Now, we recently passed a Regulation that allows [applicants] to add siblings, so siblings can be added onto a file, as long as they are single, they are under the age of 30, and they are dependent on the main applicant.  

In the application, the siblings’ cost is an additional [US$20,000 under] the SGF. So, the Sustainable Growth Fund is US$20,000. Now, the real estate market option is priced at US$400,000 for a [single] unit. What we’ve allowed our developers to do is to split that unit into two [for] US$200,000 [per applicant]. So, the developer can sell two [units for] US$200,000 and put both names on one title in joint tenancy. 

We have also allowed our developers to sell shares so they can create a company that allows them to sell shares in that company. Now, the difference between the two is that if you’re buying a title property at USD $400,000 in single tenancy or joint tenancy, the holding period for that property is going to be five years. 

With the second option, USD $200,000 as a share, the holding period is seven years. The [overall] pricing on [the pre-approved real estate option is therefore] US$200,000 or US$400,000, with Government Fees attached to the sale. The Government Fees are US$35,000 for a single applicant, US$20,000 for the spouse and USD$10,000 for the dependants. Siblings also qualify under this, but [under] the real estate option, [Government Fees are] US$40,000. 

Over the years, we have received a number of accolades for what we do. One of those things is the innovation of our programme. Innovation: we are always changing. We have implemented things like a fast-track [route], which allows our [applicants] to receive citizenship within a very short period of time between 40, 45, to 60 days and this comes with an additional price. But with that price, we’re able to facilitate the accelerated process and ensure that the client gets his citizenship within that period [after passing due diligence]. It’s a very good option, and a lot of candidates take this option if they have an immediate need to travel or for different purposes. 

Always Striving for Improvement

We’ve also done a lot of modifications to our programme over the last couple of years. This ensures that we are maintaining the platinum brand. For example, under the real estate [option], we recently implemented legislation that allows us to ensure that the [applicant’s] investment is used towards the construction of the development. We’ve [enacted] legislation and it is called the Escrow Bill. One of the latest features of the Escrow Bill is to have a payout schedule based on construction. This again ensures the integrity of our programme and ensures that the [applicant’s] investment is being used for construction. 

We’ve also passed some recent legislation on what we call some innovative activities. One is the sale of real estate outside of the hotel business [and] outside of the condominium [business]. We are now allowing the sale of private homes under CBI for a period […] of two years and as long as the value of the house that is being sold, it’s a villa or house, is at a minimum of US$400,000. 

This allows our clients who wish to have something outside of [a] hotel [share], who might want to have [a home] available to bring [their] family in on a regular basis, or to have something on the ground that they call their own and they’re not sharing [as] part of [a] hotel management structure [to have a different option under the Programme]. This feature is new, and it’s being promoted as we speak. 

This also will encourage our local entrepreneurs and real estate agents to be involved in the Citizenship by Investment Programme and to be able to market the Programme. On behalf of the Government, another option that we recently implemented [is] legislation [that] allows us now to have something that’s called an Alternative Investment Option.  

This Alternative Investment Option is intended to allow private investment into Government-mandated initiatives, and those Government-mandated initiatives can be incentivised through citizenship by investment. So, as we work through that legislation and as we work through each proposal, it is intended to drive the economy, to drive job opportunities, to drive diversification to create alternative means of growth within the Federation. 

Why St Kitts and Nevis?

As I mentioned before, [St Kitts and Nevis has] the oldest programme, the Platinum programme, it is the legacy [programme]. It is the best. 

Travel freely to 157 countries: One reason we’re the best [is] we have 157 countries that we have visa-free access to or visa upon entry. Actually, within all of the CBI programmes within the Caribbean, we are ranked number one. So, we intend to be number one in the [whole] Caribbean in a short time. Our Ministry of Foreign Affairs is aggressively looking to expand visa-free access, and we hope in the near future we will be advanced into the number one position in the Caribbean. 

Zero tax on personal income and excellent handling of the pandemic: St Kitts and Nevis is also known as a country that has zero tax on personal income. We have zero tax on hereditary income, and we are one of the most stable economies in the Eastern Caribbean. Our growth rate is projected to be about five percent in the next year. During the [Covid-19] period, while a lot of other countries in the Caribbean were suffering, St Kitts and Nevis was slowly growing. As a result of the CBI Programme, we have been able to fund a stimulus programme that allowed our local businesses and individuals to benefit from over EC$100 million in stimulus, and we were fortunate enough that we were able to do this. During [Covid-19], our country has been locked down, and we’ve been very, very diligent in how we’ve managed [Covid-19]. We’ve only had 42 cases, and now more people have been in quarantine, but [all] 42 cases [have] recovered.  

This speaks to the integrity of the country and the way that the Government has managed the [Covid-19] pandemic. We continue to grow we were working on our vaccination programme. We expect later this year, by around September, the country will open up, and we will see more growth. But in the meantime, we continue to enhance the programme.  

Limited Time Offer: We continue to ensure that the [CBI] Programme is robust. The volume of applications that we have seen from last year into this year has been significant and steady. We implemented something that was called a limited-time offer a while back, and this is [for] our Sustainable Growth Fund. So, in our Sustainable Growth Fund, where the price of a [typical] family of four was US$195,000, we have implemented a limited-time offer, which is US$45,000 [less] for a family four, and we’re seeing a lot of interest in that. As a result, [application] volumes are growing.  

What does that attest? It attests that [applicants] around the world trust the St Kitts and Nevis Programme, they trust that their investment is safe, that the investment is being used for growth within the country, that they are confident [in] the citizenship that they gain from St Kitts and Nevis. With that, I say thank you and have a good conference, and I look forward to visiting China to thank you. 

This speech has been lightly edited and condensed for length and clarity.