Caribbean Governments Move to Protect CBI Programmes

Citizenship by investment (CBI) is an essential source of foreign investment for a handful of small island nations in the Caribbean. In Dominica and St Kitts and Nevis in particular, CBI has been fundamental in helping the countries survive in times of crisis. In St Kitts and Nevis, CBI drove the country forward despite the collapse of its sugar industry in 2005. In Dominica, CBI was the driving force behind the country’s speedy recovery from the 2017 hurricane season.

It is disappointing therefore that in a sea of legitimate agents and developers, there are still the rogue few willing to cheat the Governments of these small Caribbean countries out of vital foreign direct investment. Despite witnessing the importance of CBI first-hand, a handful of agents and developers have been intentionally underselling the cost of real estate investments under Caribbean CBI Programmes.

To take Dominica as an example, the Commonwealth of Dominica Citizenship by Investment Regulations specify an actual minimum investment requirement of US$200,000 under the real estate arm of the Programme, compared to a one-time contribution of US$100,000 for a single applicant applying under the fund option. Under the real estate arm of St Kitts and Nevis’ CBI Programme, the St Christopher and Nevis Citizenship by Investment Regulations specify an actual minimum investment requirement of US$400,000 for a sole investment and US$200,000 for a joint investment. Under the fund option, a single applicant must make a one-time contribution of US$150,000.

Nonetheless, shameful attempts to misrepresent the costs of real estate investments are pursued in contempt of the Regulations governing both Programmes. Certain promotions even go as far as making the real estate investment option seem more affordable than the donation route. Thereby, removing the incentive for applicants to invest directly into the growth and development of Dominica and St Kitts and Nevis.

Such practices are also carried out by agents and developers in the CBI countries of Antigua and Barbuda, Grenada and St Lucia. Not only are such practices of false advertisement abhorrent, they are illegal and defy the will of the Governments of these countries.

Cognisant of the need to protect investors and the integrity of their programmes, the Governments of Dominica and St Kitts and Nevis have moved to clamp down on adverse advertising in recent years. On the official website of Dominica’s Citizenship by Investment Unit for example, it is explicitly stated that “all costs and fees are mandated by law” and that “all information to the contrary is false and must not be trusted.”

For agents and developers found to be undercutting costs, penalties are severe and can include hefty fines, as well as the suspension or revocation of an agent’s license or approval for a given real estate project. As false promotion can have a significant detrimental effect on the perceived integrity of CBI Programmes, severe penalties may also be imposed on the unsuspecting investor.

Although there are of course many agents and developers who adhere stringently to the letter of the law, the few that do not are a risk to Governments and investors alike. Such adverse promotional practices are hampering the recovery and economic development of Caribbean countries like Dominica and St Kitts and Nevis and should not go unchecked. For potential investors, a list of legitimate agents can be found on the official websites of the Citizenship by Investment Units of Dominica and St Kitts and Nevis.

How trickery duo of agent and developer scam government

As given above Citizenship of most of the Caribbean countries can be obtained following two routes, Fund Option and Real Estate. Some fraudulent developers offer surprising undercut in the price of Citizenship under Real Estate option than Fund Option. According to reliable sources. It was revealed that with the help of different agents the developers take a written agreement from the investor that the property he/she is purchasing at the price of $200,000 (example price) will be taken back from him after given period of 3 to 5 years by the government. Therefore, the actual price to investor will be less than $150,000 dollars offered under fund option (Which is illegal under law).

This deal might look incredible, but wait, this is entirely illegal and person obtaining citizenship following this route can be punished under law. So, the question arises why some agents ask investors to take citizenship by this fraudulent route. The answer is simple, developers give away heavy commissions to the agents for giving cheaper and illegal offers to the investors.

How some developers are benefiting from this scam. Developer will just show on papers that the person (investor) has received the possession of the property, yet, the investor will not receive any property. After 3 or 5 years, developer using those papers will purchases back the property from the investor which was still under his/her possession since past 3 or 5 years, now this property can be used again to scam the CBI Programme.

WIC News reached out to the people who were offered the same deal by CBI agents in various regions of the world. A potential client, Ahamad Mahamad said that the same deal was offered to him by an agent. “At first, I made myself to go for this deal which seemed to be cheaper to obtain citizenship of St Kitts and Nevis. But following thorough exploration, I came to realise that going through this route my Citizenship can be revoked in future and more over I could end up behind the bars. For the sake of my family’s better future I am purchasing Second Citizenship and I can not take any risk. So, I went for the Fund option to give secure future to my coming generations.”

Following the lead of Ahamad Mahamad, WIC News correspondent reached out to another client who exposed the shady offer of some agents in middle east. On the condition of anonymity, a client from Dubai said that he received the offer to purchase Citizenship of St Kitts and Nevis under Real Estate option, which included the fake purchase of the property and has undercut price given by the government. “In first instance, I realised that this offer is not real. Taking suggestions from several agents proved that this offer will certainly take a person to St Kitts and Nevis, but in jail. So, I chose the legal Real Estate option and purchased a condominium, which is more easier, short and reliable.