BASSETERRE, St Kitts — In yet another press release on Tuesday attempting to explain the recently announced changes to the investment requirements for its citizenship by investment (CBI) program, the St Kitts and Nevis government continued to mislead and obfuscate the true details and purpose of the changes.
The issue first arose following a press statement on Friday issued by the Citizenship by Investment Unit (CIU), which stated that the “investment product will see a proportion of the investment going into the Hurricane Relief Fund to be distributed upon application. Citizenship by investment applicants will make a non-refundable contribution of US$150,000, which will go into the Hurricane Relief Fund”, thus implying that the $150,000 was merely a “proportion” of the total required investment.
The situation prior to the announcement of the new fund was as follows (taken from the CIU website):
- Single applicant: a non-refundable contribution of US$250,000 is required
- Main applicant with up to three dependents (for example, a spouse and two children): a non-refundable contribution of US$300,000 is required
- Additional dependents, regardless of age: US$25,000
However, a separate notice to agents issued by the CIU on Monday stated that citizenship by investment applicants will be required to make a nonrefundable contribution as follows:
- US$150,000 for a single applicant
- A family of four (4) main applicant, spouse and two (2) dependents will also be required to contribute US$150,000
- US$25,000 for any additional qualified dependents
- Due diligence and application processing fees remain the same
In other words, the contribution required from a single applicant has been reduced by 40 percent and the contribution required from a family of four has been reduced by 50 percent, contrary to the claim by the St Kitts and Nevis ambassador in Washington that everything remains the same except that proportion of the contributions at the original levels will go to the Hurricane Relief Fund (HRF), without specifying that proportion.
This was and is widely perceived as a shameful attempt by St Kitts and Nevis to undermine the competitiveness of the corresponding CBI programs in Antigua and Barbuda and Dominica at a time when both countries are in dire need of investment for rebuilding after direct hits by two major hurricanes. In the case of Dominica, its CBI program is now the only source of revenue it has left after all other industries were wiped out.
On Tuesday, Valencia Grant, press secretary to the prime minister of St Kitts and Nevis Dr Timothy Harris, issued a press release confirming that the hurricane fund contribution is in fact a “third investment option under the CBI program that will take the form of a non-refundable contribution of US$150,000 (plus due diligence and processing fees), a proportion of which will go into a Hurricane Relief Fund.”
Grant did not respond to request for clarification as to this yet another “proportion”: How much is this “proportion” exactly? Where will the rest go?
In the meantime, the other two investment options under the CBI program are said to remain: the minimum real estate investment option (US$400,000 plus fees) and the Sugar Industry Diversification Foundation (SIDF) option (a non-refundable contribution of US$250,000 for a single applicant plus fees).
But left unexplained is how many citizenship applicants are expected to invest $250,000 or $300,000 in the SDIF when they can get exactly the same benefits from the drastically reduced $150,000 contribution to the new HRF.
Grant went on to say that “The third investment option – the Hurricane Relief Fund – is open to investor families of up to four persons.” Again, this is apparently not true since the notice to agents clearly admits the possibility of additional dependents at $25,000 each.
Meanwhile, opposition sources in St Kitts have suggested that successful applicants under the new investment requirements could eventually have their citizenships revoked, since the local legal fraternity is questioning the legality of this new fund, now dubbed the Harris Re-election Fund (HRF).