By Alison Lowe
Nassau Guardian Business Editor
NASSAU, Bahamas -- The government could allow The Bahamas to gain a “huge advantage” over its competitors and create an “economic game changer” if it amends the Nationality Act and allows investors to trade investments of at least $10 million for citizenship rights, a private banker has argued.
Ian Fair, chairman of Butterfield Bank, said that anything less than offering immediate citizenship rights would be better than the policy-based incentives that currently exist for high-net-worth individuals (HNWIs) to relocate, but would “not go far enough”.
The banker told Guardian Business he thinks that providing the ability for investors to gain citizenship rights without the long-term residency requirements that are demanded today would have a “significant” impact on the economy.
“I think some very wealthy people in the world would seriously look at The Bahamas if they could get some real permanence,” he said.
He also argued that the government must move quickly to gain the greatest dividends from any reforms.
“I think the longer we delay the more chance we give the competition at getting an advantage on us. The quicker we do this, the better. First off the starting point is always better,” said Fair.
His comments come after a source with knowledge of ongoing discussions between the private sector and the government over creating new incentives for HNWIs to move both their businesses and their residences to The Bahamas said efforts in this regard are progressing, possibly leading to the possibility that a new program could be announced within months.
However, the source told Guardian Business that the government is at present indicating that it does not intend to implement any reforms that would require amendments to the Nationality Act, given the political controversy that could surround this.
Under that act, eligibility to apply for citizenship occurs after seven years of residency in The Bahamas. To apply also does not necessarily imply that it will be granted.
Instead of amending the act, the source said that under consideration is the possibility that the government might offer investors permanent residency with the immediate right to work in their own business based on an investment that meets a certain threshold.
This could be “coupled”, it has been suggested, with a government “guarantee” of sorts promising that the investor would be granted citizenship after seven years of residency.
While better than what currently exists, Fair said that such “tweaks” will not cut it.
“Every bit is welcome but I don’t think it’s enough to make a meaningful difference for the future of the country. That won’t attract the right caliber of people. If you give them some serious options about why they should choose The Bahamas, they will come. If you continue to go half-half that won’t do it.”
Fair, who is also the former chairman of the Grand Bahama Port Authority and the Maritime Authority, said that, while it is important “not to cheapen” the significance of citizenship, now is the appropriate time for The Bahamas to “think outside of the box for a bit” by incentivizing ultra-high-net worth people to “follow their money” to The Bahamas through an investor citizenship program that would confer such rights on a much swifter basis.
However, he proposed that any offering of citizenship rights in return for investment would have to be at a “very high price”, of around $10 million or more plus a commitment to job creation of a certain level, emphasizing that he does not support the type of economic citizenship program that has been pursued by some countries, such as St Kitts and Nevis, which have low thresholds for entry, both in terms of investment thresholds and residency requirements.
Meanwhile, he added that while citizenship could be gained early on, voting rights should be based on more extensive residency requirements.
Fair said: “Some will jump up and down and say you’re selling citizenship, but it can be couched in the right terms. It would have to be at a very high price. You can’t accept all and sundry.”
“In this current environment the world is changing so fast you have to embrace it or risk being buried by it.”
“I don’t fear change at all. I think it gives us a huge advantage which could attract some serious new investors into the country. People who could be major contributors to the economy.”
A number of key players in various industries have come out in favour of reforms being undertaken in this regard after Sean McWeeney QC, a key adviser to the prime minister, suggested in a mid-May speech to the Society of Trust and Estate Practitioners (STEP) Caribbean conference that an investor citizenship program could be key to unlocking future growth in the economy. This, he said, could create incentives for high-net-worth individuals to move to The Bahamas and set up businesses there.
In interviews with Guardian Business, top realtor George Damianos of Damianos Sothebys International Realty; Baha Mar’s senior vice-president of administration and external affairs Robert Sands and a senior banker, speaking on condition of anonymity, have all thrown their support behind such reforms, to some degree.
Damianos was the most enthusiastic, saying he would be “dancing in the streets” if such reforms were passed, suggesting they would generate a “wonderful boost” for the economy. He told this newspaper that the government should seek to make it “as simple as possible” for citizenship to be obtained, while excluding those with criminal record.
Fair took a similar view, stating: “Anything which is a game changer to The Bahamas, which gives us a bigger advantage to attract more business to The Bahamas while we are going through this transition, the better. We are so well placed to do it. We do need to think big, we need to think different, we need to be pragmatic and proactive.”
‘History repeats itself’
As McWeeney did during his speech at STEP Caribbean, Fair pointed to the 1930s as a period when The Bahamas succeeded in attracting HNWIs such as Harry Oakes due to adaptation of policies to accommodate their needs, and in turn secured significant long term investment in the country.
“I’m a great believer in the saying that history repeats itself; we have a great history of foreign investors coming here and settling. People can be encouraged to come here and follow their money, but we probably need to think about giving them a bit more than we are right now.”
Fair said he views any adaptations of polices on obtaining citizenship in this regard as a natural progression from what The Bahamas has to date been “enormously successful at” – attracting wealthy expatriates to buy second homes in this country.
“The world has changed. The Bahamas has been enormously successful at bringing second home owners in, to Bakers Bay, Albany... and it will be ongoing, so why not encourage them to put down more roots and contribute to our economy?”
Discussion around the easing of current immigration restrictions as a necessary means of spurring economic stimulus has become increasingly common in recent months, both in the private and public sector.
While the government has not come out with a stated position on economic citizenship, Guardian Business has been informed that high level discussions are underway in this regard.
In his budget communication last month, Ryan Pinder, minister of financial services, threw his support behind a “residency program” to encourage greater investment, but stopped short of making mention of economic or investor citizenship.
Republished with permission of the Nassau Guardian