In the aftermath of the global pandemic, the investment migration industry has proven its resilience, opening up exciting new channels for individuals seeking to benefit from investing abroad. With a savvier and more astute demographic entering the market, this is a good time to reconsider what Citizenship by Investment (CBI) programmes have to offer.
Citizenship by Investment is not just an avenue to gain alternative citizenship; smart CBI applicants can gain favourable returns on their investment by choosing the right investment options in the right jurisdictions.
With five successfully operating CBI programmes, the Caribbean is widely regarded as the “cradle of Citizenship by Investment”. These small islands with limited resources have experienced significant economic boosts through the infusion of funds into their economies.
CBI programmes usually offer uncomplicated investment options in the form of either a government donation, which is almost always ploughed into socio-economic projects (such as building schools, hospitals, and necessary infrastructure such as roads and bridges), or through the purchase of real estate neither existing or planned projects, or developments under construction.
Investing in a fund option within a CBI programme offers a direct option with no return, while real estate may provide potential rental income and property appreciation. Both options have pros and cons, so it depends on an investor’s financial goals, risk tolerance, and investment preferences.
In terms of real estate, the Commonwealth of Dominica stands out as having one of the most successful CBI real estate offerings. Dominica’s CBI Programme – ranked second in the 2023 CBI Index – is a longstanding and trusted programme. When the country introduced the real estate investment route, the Government was adamant about utilising the option to grow their tourism offering through hotel development, while concurrently ensuring that the investor received a good return.
In Dominica, investors interested in real estate buy into government-approved hotel developments through share schemes. The Government only approved a limited number of developments to safeguard the investors and the country. The country benefitted significantly from the real estate option, with at least three internationally renowned hotel brands choosing to establish hotels on the verdant island.
In some countries, CBI applicants can purchase a private home, which allows them to generate rental income if they choose to lease out the property, or own a tangible asset for personal use.
For example, in St Kitts and Nevis, CBI applicants can gain alternative citizenship by investing in an approved private home, which can be a condominium or single-family private dwelling home. Even though the private home must be held for a period of seven years, it may be sold to another purchaser who wants to apply for CBI, if the Federal Cabinet is satisfied that substantial further investment was injected into the real estate by way of further construction, renovation or otherwise.
Grenada, on the other hand, cancelled and de-certified five real estate options that took far too long to get off the ground. On 4 August 2023, the Grenadian Government announced in its Government Gazette that the listed properties could not be advertised as listed government-approved projects and as such can no longer source investors.
The downside to investing in real estate is its illiquid nature, making it harder to quickly access funds. Property values can also be affected by market fluctuations, maintenance, economic conditions, and local real estate trends, making it a little volatile.
Some jurisdictions do not provide full transparency regarding their investment strategies, which means that investors may be unclear on what role the funds have in the economy. However, countries such as Dominica transparently communicate the utilisation of CBI funds for sustainable development projects, such as building climate-resilient homes, upgrading renewable energy infrastructure, and the construction of a new international airport.
CBI options continue to offer value for international investors – not only are they straightforward and affordable, they also come with the opportunity to acquire alternative citizenship in some of the safest and most stable countries in the world.
“Investing in a fund option within a CBI programme offers a direct option with no return, while real estate may provide potential rental income and property appreciation. Both options have pros and cons, so it depends on an investor’s financial goals, risk tolerance, and investment preferences.”
