Saint Lucia has seen modest economic growth in many areas throughout 2019. While its Citizenship by Investment Programme (CIP) remains relatively new, it’s regarded as an increasingly important part of the nation’s revenue. Nearing the end of this decade, now is a good time to review how the country’s CIP has performed since its inception and which nations are emerging as strong competitors for Saint Lucia’s share of the CIP audience.
An Overview of Saint Lucia’s CIP
In comparison to a CIP like that of St Kitts and Nevis, with decades of operation behind it, Saint Lucia’s CIP is young, having been introduced just a few years ago, in 2015. The brevity of this timeframe notwithstanding, Saint Lucia’s experience with its CIP offering has been eventful.
In 2018 CEO of Saint Lucia’s Citizenship by Investment Unit, Nestor Alfred, dished up a big headline. As reported in IMI Daily, an industry trade publication, Mr Nestor declared that some CIP applications had “been pending for as much as 260 days”. That a Saint Lucian CIP could take some nine months to obtain, represented a clear gulf from other regional CIPs where it’s held they can be in-hand within just a few weeks of filing the paperwork.
Mr Alfred underscored that this approach was deliberate and was in place to specifically guard against the risk of approving someone for a CIP who may not be of good character. While this announcement perhaps deterred some applicants keen on a regional CIP with a speedy approval, the 2017-2018 fiscal year overall did not see demand diminish. In fact it saw a ten-fold increase with the lodging of 345 applications, whereas the previous fiscal year had brought just 36.
This progress comes in complement to positive economic news generally for the nation, with the 2019 IMF Article IV report forecasting favourable conditions in the near term owing to a number of infrastructure investments, and strong tourism growth which has seen multiple records broken over the past two years.
So, although economic conditions are far from perfect, overall 2019 has been a positive economic chapter for the island. It would be a mistake, however, to ignore the rapidly growing global competition from other CIPs.
Comparing the Competition
Arguably 2019 has seen the biggest competition within the CIP industry emerge not in the Caribbean, but the Middle East North Africa (MENA) region. In recent months several CIPs within MENA have become big stories in their own right, and collectively represent a growing regional challenge to the booming business many Caribbean nations do as CIP providers.
Many people who envision daily life in the United Arab Emirates will commonly think of its famous metropolis Dubai, its towering Burj Khalifa and the nation’s popular identity for producing a number of globe-trotting business owners and professionals. The news earlier this year that the UAE would launch its ‘Golden Card’ affirmed the government’s longstanding efforts to attract foreigners and bolster the strong expat communities that already exist. In this regard, the Golden Card can be seen as a logical step forward. It promises to be extremely profitable for the UAE, with the first group of investors numbering 6,800, and set to inject US$ 27bn.
Turkey launched a CIP in 2016 but the past year has seen a substantial spike in demand. A key factor is the reduction of the CIP’s cost, initially US$ 1mn and since reduced to a starting amount of US$ 250,000. Although Turkey has experienced some notable flashpoints of civil unrest, the nation remains attractive to investors owing to its sizeable domestic market, easy access to the wider MENA region and the absence of barriers found elsewhere for FDI, among other benefits.
Then there’s Cyprus. Long held to offer one of the world’s most attractive CIPs, in August a new range of restrictions was announced by the Cypriot government. Among them, anyone who is a defendant in a criminal investigation, even if not yet convicted, or who is subject to UN sanctions will not be eligible to apply. The tightening of controls comes after ongoing pressure from the European Union and at a time when the Cypriot government is seeking admission to the EU’s Schengen Area.
Global Applicants, Global Demand
The distance between the Caribbean and MENA is significant when it comes to someone deciding where to work, study or holiday. It’s not necessarily a key consideration for a High Net Worth Individual (HNWI) who can easily relocate or who may not even have any intentions of relocating in the first place. Bear in mind that most Caribbean CIPs do not require the applicant to have even visited the country.
A HNWI intent on a Caribbean CIP will no doubt consider Saint Lucia’s offering alongside others but someone seeking a CIP exclusively as a backup option may not fret over where in the world a CIP nation is located. This is why the growing competition of the MENA region in the CIP space needs to be keenly observed.
For now, Saint Lucia’s CIP is one of the world’s most inexpensive, at US$ 100,000 for a main applicant, and allows for dual citizenship, Although Mr Alfred’s comments indicate that anyone who applies should be prepared for a significant waiting time, the CIP has been advertised among multiple agents as having a processing time of around 90 days, suggesting those with simple applications that won’t complicate the vetting process can expect an outcome sooner.
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