(BBN Bloomberg)- Canadians are increasingly exploring citizenships through real estate investment – not for better visa access but for lifestyle, flexibility and future security, according to experts.
Five countries in the eastern Caribbean are no longer marketing their endless beaches as the only selling point. Instead, the drive to get citizens abroad to purchase a home or make a donation in exchange for a passport has been a popular trend.
Islands that offer citizenship by investment (CBI) programmes include Antigua and Barbuda, Dominica, St. Kitts and Nevis, St. Lucia and Grenada.
Eric Major, CEO of Latitude Consultancy, a U.K.-based global firm that specializes in citizenship and residency-by-investment, explained to CTVNews.ca that the Caribbean’s CBI programme first launched in St. Kitts and Nevis in the mid-1980s and has matured into pathways for acquiring second citizenship.
These programmes typically allow applicants to either invest in government-approved real estate or make a donation to a national fund.
“Canadians and Americans seem to be favouring the real estate route,” said Major. “It’s actually a place they wouldn’t mind spending time in.”
According to Major, clients have to disclose a lot of information about them. “You have to hire a licenced firm like ours,” he explained. “The application is four inches thick. It includes (a) medical exam, background checks, proof of funds and now even an interview to confirm identity.”
Major said the government takes three to nine months to review before making a decision to approve or deny an application. In this process, a due diligence firm is hired to validate the applicant’s information.
Once approved, applicants must complete their investment – which usually has a minimum threshold and ranges between US$270,000 to US$300,000 for real estate – before receiving their certificate of registration and ultimately a passport.
While there have been concerns with the idea of “buying citizenship,” Major said these programs are a vital economic tool for small island nations. “In some cases, it accounts for as much as 50 per cent of their GDP,” he noted.
“The reality of these islands is that, other than tourism, there’s very few things that they could offer to generate economic activity,” Major said.
For most global applicants, this process results in a better passport. Major said most of the applicants for these programs come from countries with poor passports in terms of visa-free travel.
“The Caribbean passports offer visa-free travel to 150-plus countries, including the EU, U.K. and Singapore,” Major said. “That’s appealing if you’re from countries like Nigeria, Pakistan or Vietnam.”
But Canadians are different. “Canadians already have strong passports,” Major said. “So, their motivations are usually one of three things: lifestyle, tax planning or a Plan B (like) security if things become unstable at home or abroad.”
Jennifer Harding-Marlin, a licenced citizenship-by-investment lawyer with JH Marlin Law based in St. Kitts and Nevis, said, “There’s a lot of Canadians and Americans that are looking to get another citizenship. More people are looking for a holiday destination that’s outside of traditional Florida or Cuba. Countries in eastern Caribbean are becoming more popular.”
No legal red tape
For Canadians considering CBI programmes in the Caribbean, there’s no legal red tape when it comes to holding multiple passports. In fact, Canadian law permits dual and multiple citizenships without restrictions.
Major said the federal government doesn’t limit the number of nationalities a citizen can acquire, which makes programmes like those offered by these five Caribbean nations appealing for Canadians looking for a lifestyle upgrade, an offshore home or a backup plan in uncertain times.
Where Canada does take notice is the realm of taxation, Major said.
“Having a passport doesn’t make you a taxable person. What makes me liable for tax in Canada is if I spend a certain amount of time there, typically six months or more.”
Red flags might be raised by the federal government if individuals maintain bank accounts, driver’s licences or other personal ties in the country, Major explained.
Harding-Marlin said citizenship by investment and residency by investment are two different routes.
Residency by investment (RBI), also known as “golden visas,” allows foreign nationals to obtain legal residence status, not full citizenship, in a country by investing in real estate, businesses or government bonds.
“It’s important to get proper tax advice when deciding to relocate or changing your tax status,” she said.
New Caribbean measures
According to the Eastern Caribbean Citizenship by Investment Regulatory Authority (ECCIRA), a new draft legislative framework proposes a minimum 30-day physical presence requirement for successful applicants within the first five years of acquiring their citizenship.
The rule, released July 1, would apply to all five participating countries.
If an applicant or citizen does not meet the 30-day requirement without a valid reason, the country can charge them a fine of up to 10 per cent of their investment amount and start the process to take away their passport following that country’s laws, the proposal said.
Canada’s investment immigration
Major said Canada should look into bringing back investment-based citizenship programs.
“With this world of visas, including passports, golden visas and investment visas, there’s a lot of developments happening there,” he said referencing Caribbean programs. “We’re hopeful that Prime Minister Carney is going to revitalize the old Canadian Immigrant Investor Program.”
The programme, which allowed wealthy individuals to gain permanent residency in exchange for significant financial investment, was scrapped in 2014 under a previous government.
But Major believes renewed interest in the wake of geopolitical alliances, trade tensions and economic uncertainty could put pressure on Ottawa to re-enter the space.
Major added that the demand for second citizenships is no longer driven by emerging markets. “Our number one source of market for second citizenship is Americans,” he said, calling the sector “a growing industry (with) lots of interesting developments.”
Harding-Marlin said it could bring in revenue and attract wealthy individuals, business owners and experts in their fields.
“Canada could potentially seek the benefits that other countries are seeing through their citizenship investment programmes,” she said.
