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Caribbean Nations Selling Second Passports Are Slashing Prices

Caribbean Nations Selling Second Passports Are Slashing Prices

Caribbean nations are so strapped for cash after the pandemic hammered their tourism industries that they have begun dangling deep discounts on the passports they sell to wealthy foreigners. Selling 1000 citizenship to people that will never visit the island anyway for $100K each can inject $100 million to the government every month.

Many of the islands in the region have long offered “citizenship-by-investment” programs as a way of supplementing the hard currency they pull in from tourism. With their hotels and white-sand beaches now almost entirely empty, this unconventional business has suddenly taken on a much greater importance.

St. Kitts and Nevis, a mountainous twin-island nation of 53,000 people, was among the first to slash prices. It’s offering a special deal through the end of the year: A $150,000 contribution to the country’s “Sustainable Growth Fund” will score passports for a family of four. That’s a 23% drop from the regular price of $195,000. Other islands in the region, including Dominica and Antigua and Barbuda are offering even cheaper deals.

“In these days of Covid, when tourism is not happening, we have to find ways to create revenue to sustain our economy,” said Les Khan, CEO of St. Kitts and Nevis Citizenship Investment Unit, in a phone interview.

St. Lucia, Grenada, Antigua and Barbuda, and Dominica have also put changes in place to lure more clients, Khan said. Some offer citizenship for as little as $100,000.

Since St. Kitts helped pioneer the industry in the 1980s, citizenship-by-investment has grown into a multi-billion dollar business, offering wealthy clients an escape from the travel restrictions on their home countries’ passports and helping them plan for emergencies.

“Clients look at these citizenship options as volatility management or risk management tools,” said Paddy Blewer, director of the U.K. office of Henley & Partners, a London-based consultancy that provides advice on citizenship and residencies.

The fallout from Covid has highlighted the value of a second passport, he said, as governments in Europe and elsewhere imposed restrictions on people who can normally travel without a visa, such as U.S. citizens.


Chinese Clients


During the pandemic, Khan’s unit has seen an increase in interest from clients in China and the Middle East, he said. The office does not release statistics.

Its passport offers visa-free travel to more than 100 countries, including the U.K. and Italy. Citizenship can also be acquired via an investment in real estate.

The second-passport industry has come under fire from U.S. authorities. The State Department last year criticized Dominica for “lax” due diligence in approving applications. In 2014, the U.S. Treasury urged St. Kitts to tighten its vetting process after Iranian nationals allegedly used a passport from the island to evade U.S. sanctions.

Khan said the government takes a strict approach to the process, adding that clients from Iran and Afghanistan are currently not eligible.


Zero-Interest Bonds


St. Lucia offers would-be citizens the option of buying five-year, non-interest bearing bonds. In May, it cut the required investment by half, to $250,000 for an individual or $300,000 for a family of four. The deal on these “Covid-19 Relief” bonds expires at year’s end.

Read More: Global Tourism Losses May Exceed $1.2 Trillion

Since it launched its program in 2015, the nation of 182,000 has given passports to about 700 people, said Nestor Alfred, the CEO of the St. Lucia Citizenship by Investment Program.

The program “provides a wonderful avenue for all those persons who have not had the possibility to participate in this big wide world because of their passport,” he said in a phone interview.

Antigua & Barbuda offers citizenship for a family of four in exchange for a $100,000 donation to its development fund. The government recently cut the price for adding additional children.

The government of Barbados has floated the idea of a ‘Welcome Stamp’ to give people working remotely the option of doing it from the island for up to a year.

People who acquire Caribbean citizenship are usually not looking to leave their homes, Blewer said. That’s a big difference with E.U. nations such as Malta and Cyprus where people generally want residency and the investment required is much greater, he said.

The industry has become increasingly competitive in recent years as more governments started selling citizenship, said Beatrice Gatti, of CS Global Partners, which helps clients navigate the citizenship programs.

“In the past there has been a tendency toward lowering prices, but the current cuts seem to be temporary and Covid-19 related,” she said.

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