Along with air miles and an agenda, a passport was probably the least useful accessory of 2020. For those of us as familiar with business lounges as we were with sun loungers, this has been an unusual year. But the signs, for passports at least, are that they are back in popularity, and covid-19 is part of the reason. The government of Grenada, for example, has just announced a 25% increase in successful citizenship applications in the first half of this year, with more than 500 granted between January and June, with an even bigger increase forecast for the second half of the year. The reason?
First, people who had become accustomed to travelling the world without restrictions suddenly found that they were persona non grata. At the beginning of the year, according to The Economist, an American passport entitled its holder to travel to 185 countries without first securing a visa. That number has since shrunk to fewer than 75. It appears that success at dealing with covid-19 is a boost to a country’s passport. New Zealand has just been crowned as possessing the most powerful passport in the world, according to the Passport Index.
About a dozen countries offer citizenship by investment programmes, in which an investor takes a stake in a property development, and provided they qualify, receives as well as their shares a new passport, with all the benefits that confers. They have been hugely successful, and brought investment to places where banks traditionally would not venture. Countries with such schemes include Antigua and Barbuda, Dominica, Grenada, Saint Kitts and Nevis, and St Lucia, all in the Caribbean and taking advantage of a quirk that allows passport holders access to the Commonwealth countries and Schengen area of Europe, Jordan, Turkey, Vanuatu and, within the European Union, Austria, Bulgaria and Malta.
The citizenship-by-investment industry has become so successful that few eastern Caribbean islands could survive without it
Cyprus boasted the most expensive scheme of all, demanding a property investment of more than €2m, but in exchange investors earned the right to live anywhere in the EU. However, a sting by Al Jazeera, a Qatar-based television channel, filmed Cypriot politicians apparently willing to sell their country’s passport to a fictitious Chinese businessman, despite his apparent conviction on money laundering charges. The government of Cyprus announced its intention to suspend the programme in October.
The citizenship-by-investment industry began in 1984 in the Caribbean island state of Saint Kitts and Nevis. Other islands took note of the success of the scheme and introduced their own copycat programmes. The biggest number of investors come from China, followed by the Middle East, India, Russia, and then the rest of the world. A second passport seems to be increasingly in demand during times of political or economic unrest. America is the most popular destination for Chinese investment migrants. But the waiting-list for Chinese applicants to America’s EB-5 long-term visa programme is 10-15 years. The number one reason cited by Chinese investors is access to education for their children. Second is the attraction of a Plan B should the political or economic climate in China change for the worst.
It is not just Cyprus that has struggled with credibility issues. Malta’s programme had been bitterly criticised by Daphne Caruana Galizia in the months before she was killed by a car bomb, and various EU leaders are calling for the schemes to be scrapped. At times, other countries in the Caribbean have been accused of various machinations, but the industry has become so successful that few eastern Caribbean islands could survive without it. It helped Dominica recover from the ravages of Hurricane Maria in 2017, and this year the citizenship-by-investment programme was forecast to provide 25% of the country’s GDP.
While some Caribbean islands have responded with price cuts to counter any levelling off, Grenada has maintained its pricing. Experts say it can afford to do this because it is the only country offering visa free travel to China and the opportunity of living in the US through its E2 visa programme.
This year the citizenship-by-investment programme was forecast to provide 25% of Dominica’s GDP
Investors say that they welcome the degree of scrutiny from the government of Grenada, which roots out rogue developers who try to play with the laws. In July, the citizenship-by-investment office issued a circular with a stern warning that it would not tolerate such activity. Because the application process is fully digitised, there were no delays to applications.
Range Developments is the leading citizenship-by-investment developer in the region, having successfully built the Park Hyatt St Kitts and the Cabrits Resort Kempinski Dominica. It is now embarking on the Six Senses, La Sagesse in Grenada. Investors can obtain citizenship of Grenada through an investment in the Six Senses development for US$220,000. Initial sales momentum has been strong, with investors recognising the capital growth and income generation potential of the resort, in addition to the benefits that citizenship of Grenada provides. The development is scheduled to be completed in Q4 2022.
Range Developments founder and managing director Mohammed Asaria, a Brit living in Dubai, said: “The covid-19 pandemic has shown glaring differences between both the countries offering a quality product as well as the developers. There has been a flight to quality. Notwithstanding global challenges, Six Senses has become the market leading Grenada citizenship-by-investment product. We have shown our commitment in these turbulent times and appointed our structural contractor.”
The industry, once seen as the epitome of ‘shady deals in sunny places’ is now becoming mainstream, with investor interest growing in Africa, particularly in Nigeria and Kenya. In Britain, interest in a second passport has been increasing ever since the Brexit referendum in 2016. Those without Irish grandparents or Swedish wives will now have to buy property in the Caribbean to allow them to travel unencumbered by visas or time limits.
