Citizenship by Investment is a win-win process where applicants and nations both benefit. This week’s episode discusses the benefits that Caribbean nations themselves draw from hosting and developing Citizenship by Investment Programmes. We will focus our attention on St Kitts and Nevis and Dominica – two countries that have been running Citizenship by Investment programmes for decades. Today, our guest is Zahra Khozema, a communications and public relations officer at the CS Global Partners’ London office. Working in the marketing department, Zahra works closely with government mandates and writes about Citizenship by Investment updates in the countries.
Aisha Mohamed: As we’ve spoken about on this show before, second citizenship is often looked at as a Plan B for investors. Do you think nations also look at Citizenship By Investment as a measure to strengthen their economy?
Zahra Khozema: Citizenship by Investment provides an added source of revenue that is independent of tax. Many Caribbean jurisdictions are using their revenues now, to improve their infrastructure, repair damage from natural disasters, support housing schemes and drive sustainability commitments. However, many other nations are also keeping revenue aside for a ‘rainy day.’ Only recently, Prime Minister Harris of SKN pledged 120 million dollars to assist COVID-19 victims and to help the country recover from the pandemic. He was able to do so because of SKN’s “significant financial surplus” – much of which is thanks to the Citizenship by Investment Programme.
AM: Dominica, sadly in 2017, was hit by Hurricane Maria which destroyed a large part of its GDP. How has Citizenship by Investment helped the country make a recovery?
ZK: Citizenship by Investment has helped in the funding of the country’s housing revolution, rebuilding of infrastructure including roads, bridges, hospitals, health centres, supporting for businesses and education and supporting, through the real estate arm, to resorts and hotels to attract tourists and bring life back into the tourism sector.
After Hurricane Maria hit Dominica, the Citizenship by Investment programme helped with the islands housing revolution in which 5000 whether resistant and affordable homes are being built. The Island is also its infrastructure which includes roads, bridges, hospitals and health centres. Citizenship by Investment programme is also sporting business initiatives and education and providing support through the real estate arm, to resorts and hotels to attract tourists and bring life back into the tourism sector.
AM: Dominica is also closing in on its promise to become a climate-resilient country. How is Citizenship By Investment ensuring environmental sustainability?
ZK: There are several ways in which Citizenship By Investment has contributed to Dominica’s goal of becoming climate-resilient. For example, money from the Citizenship By Investment Programme is being used to dredge rivers, thereby mitigating the risk of flooding. It is also being used to support agriculture and fisheries. Most notably, Citizenship By Investment money is being used to build hurricane-proof housing for thousands of Dominican families.
AM: Similarly, St Kitts and Nevis also suffered a setback after the crash of the sugar companies. Was Citizenship By Investment also a part of the nation’s effort to build back the economy?
ZK: The sugar industry was closed in 2005, ending an era for St Kitts and Nevis, whose economy had largely depended on the production of sugar. Likewise, St Kitts and Nevis first formal recipient of funds from the Citizenship By Investment Programme was the Sugar Industry Diversification Foundation. The SIDF was dedicated to assisting St Kitts and Nevis in diversifying its economy in the aftermath of the closure of the sugar industry. It sponsored a variety of projects such as the agricultural training employment project, the student loans guarantee initiative, funds for the realisation of economic employment through subsidised housing, and the people employment program.
Also Read: “St Kitts Is Booming” – FT PWM Documentary
AM: As we have learnt from our previous guests, both Dominica and St Kitts and Nevis offer two different investment options. One is fund investment, and the other is towards pre-approved real estate. How is this money allocated, and how does it help the islands?
ZK: Money that is invested into a fund is, effectively, a contribution to the government. The government then uses this money where it deems there is the greatest need, although there are certain guidelines. For example, in St Kitts and Nevis, fund money must go towards sustainable projects.
The money that is invested in real estate does not go to the government – it goes to the real estate developer and, in exchange, the investor gains proprietary rights to that development (for example, in the form of a share). This money is used to develop real estate. In the case of a hotel project, it is used to grow the number of rooms in that hotel, expand its facilities, or even build it from scratch. In this scenario, the government only receives smaller ‘Government Fees.’ These fees are again put to use as and when a need is detected by the relevant government. This can range from educational projects to clean energy.
Also Read: Unravelling the Real Estate Option
AM: COVID-19 is another global catastrophe that will, in the long term, have a devastating effect on developing nations. Given that Dominica and St Kitts and Nevis are highly dependent on their tourism sector, and that, as travel shuts down, tourism has taken a severe hit. What do you expect is going to be the impact on these islands, and how can or is Citizenship By Investment helping overcome them?
ZK: I’ve previously mentioned Dr Harris’ pledge of money to counter the COVID-19 crisis, and how this would not have been possible without Citizenship By Investment. Fortunately, the COVID-19 pandemic is expected to come to an end, and with this, tourism will again come flowing through St Kitts and Nevis and Dominica. I, therefore, hope that the drawbacks will be short-lived. Investors may even look at countries like St Kitts and Nevis and Dominica as safe havens with working healthcare systems and natural environments and thereby be incentivised to obtain citizenship of these two nations more than ever before to ensure they have a safety net if the world faces a pandemic once more.
This interview has been edited and condensed for length and clarity.