It’s been a long time coming.
After nearly a decade of vilifying the citizenship by investment (CBI) programs of five Caribbean countries, the US government has made a remarkable admission: these initiatives provide a much needed and legitimate source of revenue for these jurisdictions.
And the announcement, which was made on March 6, was especially sweet for me, as I learned of it while visiting Saint Kitts & Nevis. I’m here with my business partner Trey Wyatt to deal with matters relating to the company we jointly own here, Fortress Trust Ltd.
Last month, delegations from five Caribbean CBI jurisdictions led by their respective prime ministers met with US officials from the Treasury and State Departments. The meeting concluded that:
Caribbean CBI programs provide a legitimate service and have assisted in the survival of the participating economies by providing revenues, particularly considering the existential threat to our vulnerable small island states – emanating from the climate emergency – and the onslaught of recent adverse external shocks, including the ongoing war in Ukraine.
The agreement is the first time that we’re aware of Uncle Sam even hinting that CBI programs have a valid role to play in the economies of these five jurisdictions – Antigua & Barbuda, the Commonwealth of Dominica, Grenada, the Federation of Saint Kitts & Nevis, and Saint Lucia.
After all, it’s only been nine years since Uncle Sam launched a fusillade against the Saint Kitts & Nevis CBI program. In 2014, the Treasury’s Financial Crime Enforcement Network (FinCEN) issued an Advisory that warned banks worldwide to apply special scrutiny to individuals identifying themselves as citizens of St. Kitts & Nevis.
And that wasn’t the first time that Saint Kitts & Nevis came under the stern gaze of its powerful northern neighbor. In 2000, FinCEN warned US financial institutions to give:
enhanced scrutiny to all financial transactions originating in or routed to or through the Federation of Saint Kitts and Nevis, or involving entities organized or domiciled, or persons maintaining accounts, in Saint Kitts and Nevis.
At that time, FinCEN was concerned because an obscure non-governmental organization, the Financial Action Task Force (FATF) had identified Saint Kitts & Nevis as being “non-cooperative in the fight against money laundering.” Unsurprisingly, Saint Kitts & Nevis didn’t appreciate being singled out as a haven for financial criminality. After all, every serious study of money laundering had concluded that most of it is conducted in the world’s largest financial centers: New York City and London, to be exact.
Despite the reeking hypocrisy, Saint Kitts & Nevis obligingly enacted stringent anti-laundering laws later that year. In response, not long after FinCEN issued its 2000 Advisory, it was withdrawn.
But it took much longer for Uncle Sam to warm to the CBI programs of Saint Kitts & Nevis and its neighbors. In the years following the 2014 Advisory, US officials stationed in the Caribbean repeatedly warned that despite economic challenges caused by (among other factors) catastrophic hurricanes, Caribbean states had to be cautious with their CBI programs.
However, we sensed change might be in the air in 2016, when the International Monetary Fund credited Saint Kitts & Nevis for the “dramatic improvements” it had made to its CBI program.
But it still took another seven years for the turnaround to be complete. And it’s a legitimate question why it finally occurred. The “external shock” resulting from the war in Ukraine was one reason cited in the agreement signed by the United States and the five Caribbean CBI governments. But we believe there could be an equally or even more important reason that Uncle Sam finally concluded CBI programs are permissible: the People’s Republic of China.
In the last 20 years, China has made remarkable inroads in the Caribbean. For instance, China has persuaded Dominica and Grenada to establish diplomatic relations with it. Previously, these countries recognized Taiwan, which China considers an integral part of its territory.
China has also rewarded the countries that have given it diplomatic recognition with substantial amounts of foreign aid. For instance, much of Dominica’s road system had to be rebuilt after it was destroyed by Hurricane Maria in 2017. Chinese money paid for a significant portion of the repairs. China also built a sports stadium and the presidential palace in Dominica’s capital, Roseau. And only last week, a Chinese official announced that the country was “willing and ready” to assist countries in the Caribbean region in transitioning to renewable energy.
The threat of Chinese hegemony in America’s backyard, in our view, was the unspoken driver in the decision to recognize Caribbean CBI programs as legitimate. And that decision will give these programs staying power in the years ahead.
Of the five Caribbean CBI programs, the ones we favor are the ones that are the oldest and most established: Saint Kitts & Nevis (1984) and Dominica (1995). We discussed Dominica’s program in last week’s Notes. The Saint Kitts & Nevis CBI program is slightly more expensive for single applicants but offers an even larger number of countries you can visit visa-free, or with minimal visa formalities: 157 versus 143 for Dominica.
The two most popular options are a donation to the Sustainable Growth Fund (SGF) or an investment in real estate:
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SGF option. Currently, there’s a limited time offer (LTO) in effect so that the cost for an individual applicant is $125,000; $150,000 for a married couple; and $170,000 for a family of four. When the LTO expires on June 30, 2023, the cost will increase to $150,000 for an individual; $175,000 for a married couple; and $195,000 for a family of four.
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Real estate option. An investment of $200,000 into an approved real estate project qualifies you for citizenship. You can sell this investment after seven years and retain your citizenship. Investments of $400,000 or more may be sold after five years.
The Nestmann Group has been involved with Caribbean CBI programs for more than a decade. In that time, we’ve helped dozens of clients acquire citizenship by investment in Dominica and Saint Kitts & Nevis. Contact us at for more information on our services.
