The recent call from an international service provider of St Kitts and Nevis’ Citizenship by Investment Programme, for the Federation to protect its real estate market, has drawn a nod of approval from others connected to the programme, reports WINN FM.
Dwyer Astaphan – who this year chose not to renew his ISP license – was involved in the Citizenship by Investment programme from its inception over 30 years ago. He says the Group Managing Director with CS Global Partners Micha-Rose Emmet, is right on target.
“If you price point a unit…at US$400,000 and you are still able to pay someone a $50,000 commission and you have other closing expenses, the question has to be asked, ‘What is the real value of that unit in the market?’ Has the arithmetic been given some steroids to get it up to the threshold to qualify it as an asset that can be sold in exchange for the grant of citizenship?” Astaphan questions.
The former government Minister turned social activist, says the authorities must ensure that price points are realistic for today and in the future.
“The real estate competent suffers, and real estate values particularly in that area of our economy suffer, the Citizenship by Investment programme suffers, so it’s a lose, lose, lose for us.”
Established in 1984, St Kitts and Nevis CBI first offered citizenship through direct investment in a business or the property of a particular value.
In 2006 the Sugar Industry Diversification Foundation (SIDF) component of the CBI programme was established which allows for a cash contribution to be made in exchange for qualification to apply for citizenship.
Sebastian Mottram is a St Kitts-based service provider for the real estate option. He too is concerned about the risks of over-valuing property. He tells WINN FM that the priority has to be to ensure that the client who is investing in St Kitts and Nevis, has property that is worth the dollar that they are paying.
“There are concerns not only from service providers who are encouraging overseas investors to buy property in St. Kitts, but also the government here recognize that they need to maintain and improve the integrity of the Citizenship by Investment product,” Mottram said.
“Silver Reef for instance, we’re selling 1600 square foot, two bedroom apartments for the same price that you might be able to find a 500 square foot, unfurnished apartment in some of the…new properties which are put on the market at the moment, but they’re not out of the ground.”
He is heartened that action is being taken to address concerns about the CBI, but is somewhat concerned about the pace.
“All the time that…the government are putting this house in order, our competitors are stealing the march, and creeping into the market…so time will tell.”
He emphasized however, that integrity is key to a successful Citizenship by Investment programme and in that regard he felt that the government was heading in the right direction.
St. Kitts and Nevis’ programme has been under heavy scrutiny from international governments for the past couple of years over concerns about lax security controls.
The US treasury Department last year issued advisories about the programme purportedly being used by illicit actors to circumvent US financial regulations. Canada meanwhile, rescinded the visa-free status of St. Kitts and Nevis citizens, also citing concerns about security.
The government has been taking steps to shore up the CBI, which include hiring consulting firm IPSA to review the programme, and the hosting of the stakeholder consultations.