Citizenship-by-Investment: If It Sounds Too Good to Be True…

Citizenship-by-Investment: If It Sounds Too Good to Be True…

Having spent half my life in the tropics, I appreciate island life. I’m especially fond of the introspective mindset. Something about living on a small patch of land surrounded by ocean seems to lead to fruitful contemplation of life’s mysteries.

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For example, during a trip to investigate citizenship-by-investment programs in the Caribbean, I once spent a sunset on the quay of the Dominican capital of Roseau in conversation with a weathered old gentleman named Jim. As devotees of the sport tend to do, our conversation turned to cricket — specifically, an incident in the late 1950s when the selectors chose an inexperienced white player over acclaimed black Barbadian batsman Frank Worrell to captain the West Indian test side. At the time, black West Indians weren’t upset with the white player … they booed the black cricket administrators instead.

Jim remembered the incident well. “That’s the way with island politics. We don’t hate foreigners or white skins. We hate those of our own that make money off foreigners without thinking of us.”

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Indeed, the residents of the Caribbean islands welcome immigrants with a smile. But they get most upset when their political leaders cheat at the citizenship-by-investment game.

Citizenship-by-Investment Opportunities

The island nations of the Caribbean basin were founded on plantation agriculture. Sugarcane and its offspring, rum, made plantation owners fabulously wealthy in the 18th and 19th centuries. The cane industry survived even when slavery was abolished throughout the British Empire in the 1830s. But it was decimated by the loss of colonial tariff protection in the 1960s.


Tourism helped to fill part of the gap, but many of the smaller islands have been chronically cash-strapped ever since. Starting in the 1980s with St. Kitts and Nevis, island governments began “citizenship-by-investment” programs — basically, selling citizenship in exchange for a cash contribution and/or a real estate or business investment. In addition to St. Kitts, passport-vendors now include Antigua and Barbuda, as well as Dominica and Grenada.

As my own on-the-ground research reveals, these programs are generally aboveboard. They give new citizens visa-free access to many countries, including the European Union (EU). This is especially attractive to people from places like China, Russia and the Middle East, who don’t enjoy that privilege.

And since most of the islands don’t levy income tax, their passports have become popular with many Americans, too.

Citizenship-by-Investment Trouble in Paradise

Nevertheless, you have to shop carefully for a Caribbean passport. Antigua is a case in point.

Owing to its popularity with tourists, Antigua is significantly more “developed” than the other islands, with more paved roads, more hotels and restaurants, and a vibrant nightlife. Many celebrities, such as Oprah Winfrey and Eric Clapton, have holiday homes there. Antiguans tend to see themselves as a cut above the rest of the islands.

But the country got into serious trouble a while back when U.S. fraudster Allen Stanford was busted for a $7 billion Ponzi scheme operated from Antigua. The island’s government and banking system was riddled with corruption centered on Stanford.

Subsequent elections and reforms cleaned up most of that mess. But the resulting hole in the island’s public finances led to a rapid expansion of its Citizenship by Investment Programme (CIP). After elections in 2014, the new ruling party “went ballistic,” according to one observer, issuing hundreds of passports, mainly to Chinese and Middle Eastern individuals. The government also stopped releasing the names of new citizens as well as the financial records of the program.

There are apparently now at least three “secret” levels of the CIP, including waivers on visas into Antigua, temporary residency status and inclusion of family members without separate due diligence. The government has also been accused of “giving” 120 passports to a Chinese company in return for investment on the island. The disposition of those passports is unknown.

These shenanigans have caught the attention of the U.S. government. Several weeks ago, Rep. Michael McCaul (R-TX), Chairman of the House Committee on Homeland Security, accused Antigua of hosting two human-trafficking rings, one dealing with Cubans and the other involving Syrians seeking entry into the U.S. He also said that the U.S. will be investigating a group of Syrians that illegally “jumped” to the U.S. Virgin Islands after obtaining backdoor visas to Antigua.

Citizenship-by-Investment Look Before You Leap

The always-lively Caribbean press has also noted Antigua’s recent passport shenanigans. Like my friend Jim, the locals are not at all happy that a program that was supposed to benefit all islanders is being abused by government leaders. Accusations of corruption are made almost daily. The temperature is rising, and Antigua’s program may be at risk, both at home and in the U.S. and EU, where visa-free access is jealously guarded.

Antigua illustrates a critical fact about Caribbean citizenship-by-investment programs: Things are constantly changing. If you’re looking for a Plan B in these islands, you need an unbiased source of information.

So before you fork over your money for a passport to paradise, be sure to check with me to make sure it isn’t going to land you somewhere else entirely.

How to Hold Gold Offshore Citizenship-by-Investment

Kind regards,

Ted Bauman
Offshore and Asset Protection Editor

The post Citizenship-by-Investment If It Sounds Too Good to Be True… appeared first on The Sovereign Investor.


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