“The world is becoming borderless in many respects. There are parts of the world that are less peaceful than others. People who take up new citizenship in stable and peaceful places are taking advantage of opportunities that will give them peace of mind for future generations.”
These were the words of Dominica’s Prime Minister Mr. Roosevelt Skerrit during a recent visit to Asia as he travelled with a delegation of business leaders, lawyers and investment specialists from Harvey Law Group (HLG) attending fundraising activities to help the Caribbean nation’s rebuilding efforts in the aftermath of the devastation caused by tropical storm Erika. He was also promoting the latest offerings included in the “Citizenship Investment Programme” which is an economic citizenship programme offered by his country as well as in the neighbouring Caribbean nation of St. Kitts.
Economic citizenship programmes are nothing new. The United States has their Green Card programme starting at USD$500 – USD$1 Million and the United Kingdom has their UK Tier 1 Investment Programme starting at a minimum of £2 million. Programmes such as these however usually require many hoops to be jumped through and several years to pass before citizenship can even be considered.
Dominica itself has had its economic citizenship programme since 1993. What makes the latest offerings of Dominica and St. Kitts interesting now is that it is now one of the most affordable in the world and a Dominican passport which according to Prime Minister Skerrit can be obtained even as fast as 32 days after submission of the initial application.
Dominica allows dual citizenship and holders of Dominican passports get instant access to over 100 countries including the United Kingdom, Hong Kong, South Korea, China, Singapore and most British Commonwealth countries. For those countries where a visa is still required, you normally can obtain it with minimum formalities within a couple of days. The Prime Minister said that he is yet to hear of anyone traveling on a Dominican passport obtained through the Citizenship Investment Programme that has been refused entry to the United States or Canada.
Given the current political and economic instability in many places around the world, and mass migrations out of unstable areas around the globe into Europe, the United States, Australia and other countries that are renowned for their stability and quality of life, citizenship programmes like the Dominican Citizenship Investment Programme may look all the more attractive to certain demographics.
The recent policies of the United States, particularly in the area of FATCA (Foreign Account Tax Compliance Act) have led to a record number of US citizens renouncing their citizenship in order to attempt to step out of the shadow of the hand of the United States’ Internal Revenue Service (IRS).
Dominica pronounced ‘/ˌdɒm.ɪˈniː.kə/’ with stress on the third syllable , not to be confused with the Spanish speaking Dominican Republic is an English speaking Commonwealth Caribbean and is known as the “Nature Island of the Caribbean”. It is located between the French territories of Guadeloupe and Martinique and in 1998 had it’s Morne Trois Pitons National Park declared as a World Heritage site. The population is 70,000, in comparison to neighbouring St. Kitts’ population of around 40,000. Companies such as Colgate Palmolive contribute considerably to the island nation’s economy and now hotel giants including Hilton and Kempinski are investing in the country.
What’s the Cost and How Does Hotel Investment Come Into It?
The Citizenship Investment Programme allows investors to gain citizenship through one of two routes. Investors can either invest USD$100,000 in a development fund which goes to help build the country’s economy, or investors can participate in one of several property investment programmes that are being run by several local and international companies.
Hotelintel.co spoke with one prominent developer in Dominica Mr. John Zuliani who is the owner of the Royal Dominica Hotel development that is underway in Dominica. Zuliani and his family have run several other projects in St. Kitts including the Royal St. Kitts Hotel that has recently been upgraded to a remarkable 4-star property on the island renowned for their water sport activities and natural attractions.
Zuliani outlined several investment choices that would qualify investors and their dependents for citizenship to either Dominica or St. Kitts.
Full Freehold Title Deeds
While in St. Kitts the minimum investment to qualify for citizenship is USD$400,000, the minimum investment in Dominica is still only USD$200,000. This USD$200,000 could be the outright purchase of a studio hotel room at his property, or as a joint shareholder in either a larger suite or even larger villa in the property.
The thing that makes the offerings of both the Royal Dominica Hotel and Royal St. Kitts Hotel investment extremely attractive is that rather than offering the ability to own shares in a company that has subsequently invested in real estate, Dominica is in the process of changing its laws to allow full freehold title deeds to the property purchased. The investor then has the option of keeping their investment for themselves, or they can hand their room, suite or villa back to the management arm of the company and pay a small management fee and make a 3% return on their investment.
That means that with an investment of USD$200,000 + application / due diligence fees, you will get citizenship for yourself and your spouse, along with one dependent under 18 years of age. Each additional dependent requires an extra USD$50,000 of investment.
Prime Minister Skerrit said that as long as the due diligence was done in a timely manner, an investor could have a new citizenship and passport within 32 days of application.
The investment must be held for a minimum of five years. Once you have citizenship however, the citizenship stays for life and will continue on to all subsequent family members that are born to Dominican citizens.
John Zuliani said that should someone invest USD$200,000 now, they can get the 3% return on investment over the next five years through the management of the investment property, and then after five years that same property can be sold at an estimated 50% – 70% markup to another person who can then benefit from the Citizenship Investment Programme on that same property.
25 Year Tax Holiday
Prime Minister Skerrit said that some of the other incentives to get Hotel Investors to start investing in Dominica include very generous tax incentives – including up to a 25 years tax holiday. There are no taxes or import duties on construction materials, furnishings and fixtures for properties being developed and there are also no limitation on repatriation of profits.
On top of that, the government will work with developers and enable to bring in foreign workers to fill in any labour gaps.
Government Partnering with Hotel Chains to Capitalise on Marketing Power
While developed countries like the US, UK and Australia have large budgets that can be thrown at marketing to increase tourism, developing countries like Dominica and St. Kitts are limited in what budget they have to put towards marketing. New partnerships with large chains like Hilton and Kempinski who will be starting construction in the first quarter of 2016 will provide marketing channels that will help not only the individual properties, but the country as a whole.
All in all, the Citizenship Investment Programme looks like a very attractive and affordable option for qualified people looking for new life options.