Sustainability of the OECS Citizenship by Investment Programs

THREE (3) DECADES OF SOCIETAL, SOVEREIGN AND INVESTOR VALUE CREATION

Over the past 3 decades, numerous sovereign states set up and actively marketed citizenship-by-investment programs. HNWI Investors gained a return of enhanced global mobility. And sovereign states enjoyed a remarkably valuable sovereign fund raising / economic diversification platform.

That these programs have been a success is undoubted. $billions of sovereign and societal value have been created. FDI has flowed into economies that would have gone elsewhere, were it not for citizenship-by-investment. Governments have been able to invest in infrastructure with enhanced monetary autonomy. Employment has been created across the socio-economic spectrum.

Within the Organisation of the Eastern Caribbean States, citizenship-by-investment has helped to enable the transfer from a sugar/banana-based economy to one focused on tourism, leisure and financial services. It has also proved invaluable in terms of disaster relief and support – both Antigua & Barbuda and Dominica used CBI revenues to help rebuild their countries following hurricane damage.

CHALLENGES TO THE MODEL – VOLUME AND COMMODITISATION AND THEIR CONSEQUENCES

Saint Lucia hosts the newest program in the Caribbean. We are lucky in that we have had time to study the market and the potential consequences of long-term CBI operations. We have identified a number of challenges to the potential sustainability of long-term CBI programs.

1.       Commoditization - The initial approach to marketing citizenship-by-investment has led to one of its major challenges. CBI was marketed as a commoditized, physical, luxury item. There was little emphasis on the investment process or traditional positioning of ROI. The physical item, the passport, was front and centre – along with the wider accoutrements of luxury lifestyle. Put simply, it was “passport sales”.

2.       Volume - We have seen multiple sovereign states aggressively market their CBI Programs and incentivise global intermediary and real estate firms to focus clients on their projects in a deeply competitive market. The value of CBI to the wider economy has become more and more important, moving from being a catalyst for sustainable growth, to being the primary driver of economic stability.

The phrase “Dutch Disease” is used to describe the challenges of over reliance on a specific industry. If one industry is all powerful, then questions are asked about whether potentially dangerous compromises will occur. This concern is matched by negative perception regarding the (undoubtedly successful) “passport sales” approach, where a sophisticated investment process is reduced to the status of a handbag or automobile. 

When combined, these two challenges create major risks for the sustainability of citizenship-by-investment as a form of sovereign finance. This is why CIP Saint Lucia is different. We promise our investors life long yield. And we can only do this if we are truly sustainable.

CIP SAINT LUCIA: INVESTMENT MIGRATION 2.0

From the start of CIP Saint Lucia, and now at the forefront of our offering to international investors, we are committed to transparency. We do not sell passports. We offer sovereign investment opportunities to global HNWI investors.

Saint Lucia CIP is a sovereign investment with multiple forms of ROI:

·       Enhanced physical mobility

·       Ability to invest and build new global wealth structures

·       Capture new value and enjoy life long yield

·       Hedge against localised volatility

CIP Saint Lucia does not focus entirely on volume. We exist to create sustainable value for Saint Lucia and our people. We want a future where CIP Saint Lucia will continue to be a catalyst for strategic economic diversification and growth.

How do we guarantee this? Our absolute commitment to transparency, governance and due diligence.

We don’t need to compete with other islands because CIP is not Saint Lucia’s crude oil. It is not the primary liquidity that will drive growth. It is a catalyst for sustainable economic growth. We don’t have overly ambitious volume targets. We don’t have to put our standards under pressure.

Massive global wealth creation growth means that there is more than sufficient liquidity for CIP Saint Lucia. We want to attract sophisticated investors that understand our commitment to governance and transparency is what underwrites their life long yield. 

CIP SAINT LUCIA – AT THE FOREFRONT OF INNOVATION

Our commitment to governance does not mean we are afraid of innovation. Both our COVID Relief Bond and our inhouse application, payment and processing platform are unique features that cannot be found in another CBI program.

Even more excitingly, in the post COVID environment, what was previously a passive investment can now be far more engaging. In a new digitally nomadic world, Saint Lucia’s upgraded infrastructure and highly attractive corporate HQ policy means that our new citizens are considering Saint Lucia as a physical base as well as an investment destination. Unlike many other CBI Programs, we want our new citizens to become valuable and (semi) permanent members of our society.

CONCLUSION

As we have learned from others, and we hope others will learn from us. We believe our commitment to good governance and transparency, when combined with our unique innovations, will have two outcomes. The first is long term sustainability for CIP Saint Lucia as a positive driver of societal and sovereign value. The second is the growing understanding that CIP Saint Lucia is the “AAA stable” for the cream of international HNWI investors.