“Caribbean CBI Real-Estate projects are turned into cash cows,” says Sam Bayat

In the series of exposing individuals, agents and developers cheating government under Real Estate investment option of the Citizenship by Investment Programme, WIC News correspondent reached out to few prominent immigration consultants globally.

Senior Lawyer and Managing Director of Bayat Legal Services Sam Bayat exposed the frauds being conducted by the CBI actors in the Caribbean.

According to Bayat, the discounting phenomenon is not recent, yet it has been in existence since a long time. Several developers to compete with fund option, offer a substantial reduction in application cost under Real Estate option, which ultimately damages the running as well as the reputation of the programme, “The scars of failed or uncompleted projects are omnipresent in the Caribbean. Many in the industry are pointing at the governments as they never bothered going after these bad actors including Applicants, Authorised Service Providers, Agents and Promoters.”

Almost all the agents who deal with Citizenship by Investment agreed on the fact that the Real Estate option in the Caribbean is which entails considerable risks. “Some miscreant developers with the help of agents are using methods to reduce the minimum legal cost threshold for investment under CBI.” The methods are used with or without the consent of the investor.

Divulging details, Sam Bayat said that many are discounting and trying to bring the total financial requirements to be less than the fund option than the Real Estate. “ZZZ a local agency here in UAE calls it the "Zero Share" option. Where they will finance half of the full share purchase (US $200K) and in return, they own the share after 5 years. Therefore, the applicant is only paying US $100K to "ZZZ" for the purchase of a share. Off course the applicant will need to pay also the government fee of US $35K for a family of 4 to the unit and US $18K (other government fees, ex DD, processing, CON etc.). Totalling roughly US $155K all in. Normally the same applicant would have to pay US $273k. These days many prospects are getting offers as low US 145k all-inclusive (including professional fees) for a family of four.”

The entire episode of scam brings clarity on the reality that in some cases the investors or clients think they are investing in a fund option, but agents change the course to Real Estate. “We saw a prime example of this type of application last year in one of the Caribbean island where the client was under the impression he had opted for the donation option but in fact, the agent had filed his application under real estate option.” Said Sam Bayat. The incident surfaced when a CBI agent altered the government letter discounting in CBI Programme.

Another Canada based lawyer on condition of anonymity raised an alarming issue of incomplete Real-Estate projects in the Caribbean. Surprisingly, the projects were used to provide client citizenship with a discounted amount under Real-Estate option and later those projects were abandoned, which surely leaves a client/investor in a vulnerable position.

Quebec (Canada)-licensed attorney Sam Bayat added “This would put the applicant at a high risk of losing their citizenship as they would have knowingly not paid the required investment by law. As an applicant should know how much they need to pay or to invest. As we all know, the ignorance of the law is not a defence, in this case, correct payments, especially when government websites are clear in describing the process and cost/fees.”

Mr Bayat also suggested a remedy to make developers accountable for these frauds. “Go after the paper trail of payments by applicants to the project developer. I am sure if an auditor was to review all past real estate applications, many will fail the complete payment test.”

Recently, St Kitts and Nevis CBI unit launched a limited time offer where they discounted the Sustainable Growth Fund (SGF) for a family of four to $150,000 from $195,000. In feedback to WIC News, Managing Director of Hong Kong-based Varinda Marketing & Impex Limited, Sanjay Kumar extolled the initiative and said this would bring more funds towards the development of a nation. “The quickest and safest option to obtain Citizenship by Investment is a contribution towards donation or fund option. However, several agents recommend Real Estate option due to high commissions as an agent get about USD $40,000 commission for each application.”

Majority of agents said that fund option is the safest and most secure option to obtain Citizenship by Investment. London based immigration consultant firm on condition of anonymity also decorated the fund option as most secure. Managing Director said that in unlike Real-Estate, in fund option all the investment goes directly to the government of the nation. Which means there are very low chances of any error.

“We see a lot of applicants suffering under Real Estate option because the whole investment is funded to the third-party developer. Our agenda is to provide the best advice to the applicant, so mostly we recommend Fund Option which is not only safest, but it also offers quicker processing period as compared to any other option under Citizenship by Investment. It might take only 60 days for an applicant to attain citizenship of a Caribbean nation.” He added.