St Kitts and Nevis Citizenship by Investment Programme – Developments in 2023
Joseph Rowe, Attorneys-at-Law discusses the citizenship by investment programme in St Kitts and Nevis, and relevant changes to the real estate industry.
The Citizenship by Investment Programme
The investment migration industry, also known as citizenship by investment (CBI), is fluid and dynamic. St Kitts and Nevis boasts the longest running CBI programme in the world. As an industry leader, the government of St Kitts and Nevis has a track record of engaging in continuous assessment of its CBI programme to secure the longevity and success of the programme. In the current turbulent global climate, such reassessment and adaptation are critical for small island nations like the Federation of St Kitts and Nevis.
To that end, the government of St Kitts and Nevis has published new CBI regulations that took effect on 9 February 2023. Due to certain transitional provisions, full implementation was effective on 10 March 2023.
The Real Estate Option
Real estate development has always formed a key component of the St Kitts and Nevis CBI programme. The real estate investment option allows CBI applicants to acquire citizenship by making a minimum investment of USD200,000 in a real property designated by the government as an approved development.
The minimum investment of USD200,000 does not include due diligence fees, CBI application processing fees, government approval fees, returns on investment, agent fees or any other commissions and fees, all of which must be paid in addition to the minimum investment amount.
Over the years, several real estate developments have been approved for CBI, but commencement of their construction, progression and completion has faced significant delays. Under the new 2023 regulations, all previously approved developers were required to reapply to the CBI board of governors directly for redesignation as an approved development on or before 10 March 2023. By doing this, the government has sought to ensure that only active and compliant real estate development projects form part of the projects available to individuals for investment under the St Kitts and Nevis CBI programme. This is undoubtedly a positive step in raising the quality and integrity of the real estate offerings for CBI.
“There remain several intriguing sites, both in St Kitts and in Nevis, that have the potential to be prime opportunities for real estate development.”
New real estate developers are welcome to apply for approval under the 2023 CBI regulations. Upon approval, developers can access funds received as investments in the approved development from CBI applicants. This is quite an opportunity, as traditional financing is often unavailable or on less attractive terms for such projects in the Caribbean region. Thus, CBI financing can mitigate a developer’s risks while facilitating accelerated completion of real estate development plans, if structured prudently.
The following changes were made to the real estate investment route:
- a real estate unit of an approved development which is the subject of a CBI application submitted after 10 March 2023 cannot be resold until a period of seven years has elapsed after the issuance of the formal document conferring legal ownership of the property on the main applicant;
- a purchaser’s right to sell real estate units issued between 1 January 2012 and 10 March 2023 is preserved; and
- a real estate unit of an approved development issued after 10 March 2023 cannot be resold to another CBI applicant unless substantial further investment (approved by the Cabinet) has been injected into the real estate unit by way of further construction, renovation or other means.
Private Home Sales
With the publication of the 2023 CBI regulations, the government of St Kitts and Nevis confirmed that the private home sales investment option will be retained as a permanent investment option under the CBI programme.
Where any citizen of St Kitts and Nevis owns land held by certificate of title on which a private single-family home is constructed, and wishes to sell the property, the homeowner can apply for that property to be designated as an approved private home to a purchaser interested in acquiring citizenship by investment.
The private home sales investment option allows CBI applicants to acquire citizenship by making a minimum investment of USD400,000 in a private home or a single-family condominium unit designated as an approved private home. Importantly, two or more CBI applicants can make a joint investment in the same approved private home, but only if each of them contributes a minimum investment of USD400,000.
The 2023 CBI regulations also introduced meaningful changes to the previous structure for the private home sales investment option under the St Kitts and Nevis CBI programme:
- the minimum holding period of an approved private home was reduced from seven to five years;
- resale of an approved private home previously purchased by a CBI applicant is not allowed, except where the purchaser applies for the re-designation of the property as an approved private home again; and
- as with pre-2023 approved projects, persons who previously had a private home or condominium approved by the government of St Kitts and Nevis as an approved private home were required to apply to the CBI board of governors for re-designation as an approved private home on or before 10 March 2023, failing which it would no longer qualify under the private home sales option.
The Sustainable Growth Fund Option
For clients interested in the CBI programme and all the benefits that St Kitts and Nevis citizenship has to offer, but who are not immediately desirous of investing in real estate, a viable alternative exists: contributing to the government’s Sustainable Growth Fund (SGF).
The Citizenship by Investment Unit (CIU) has reintroduced the SGF Limited Time Offer (LTO). The LTO reduced contributions are as follows:
- single applicant – USD125,000;
- main applicant and a spouse – USD150,000;
- main applicant and up to three dependants – USD170,000;
- each additional dependant under 18 – USD10,000; and
- each additional dependant aged 18 and over – USD25,000.
Applications that are submitted under the LTO will qualify for the accelerated application process (AAP) with a faster processing timeframe, reduced from 90 days to 60 days, at no additional cost.
After the LTO expires, the fees will increase as follows:
- single applicant – USD150,000;
- main applicant and spouse – USD175,000;
- main applicant and up to three dependants – USD195,000;
- each additional dependant under 18 – USD10,000; and
- each additional dependant aged 18 and over – USD25,000.
The usual 90 days processing time will take effect after the LTO expires.
The government of St Kitts and Nevis continues to show its support for the CBI programme. The 2023 regulations saw increased incentives offered to stakeholders. One such example is the commissions to international marketing agents (IMA). Under the new CBI regulations, the commissions payable by the government on successful SGF CBI applications were increased from USD15,000 to USD20,000. Applications to become an IMA must be submitted under these new CBI regulations. This can be done directly or with the assistance of a local law firm.
The Public Benefit Option
The alternative investment option (AIO) was replaced by the newly introduced public benefit option (PBO). Like the AIO, the PBO is geared towards privately funded development initiatives, whereby an approved public benefactor develops a specified industry in St Kitts and Nevis or constructs government-approved infrastructure.
The following should be noted:
- the minimum investment per public good CBI application is USD175,000;
- all developments previously designated as AIO projects lost such designation after 30 days of the coming into effect of the new CBI regulations unless they reapplied to be approved as a PBO; and
- the CBI Unit stopped accepting CBI AIO applications after 10 March 2023.
The Accelerated Application Process
The CIU has revised the application processing period. Instead of the usual 90 days processing period, under the accelerated application process a client’s application will be processed within 60 calendar days from the date the application is submitted.
The fees for the accelerated application process are as follows:
- main applicant – USD42,500;
- spouse – USD32,500;
- dependent child under 18 – USD22,500; and
- dependent child/other dependant over 18 – USD37,500.
Some general changes to note include the following:
- dependent children of the main applicant or the main applicant’s spouse must now be 25 years old or younger (reduced from 30 years old or younger);
- dependent children between 18 and 25 must be in full-time attendance at a recognised secondary or tertiary-level institution of learning and fully supported by the main applicant;
- approved CBI applicants’ right to resell units purchased after 2012 and prior to 2023 is preserved; and
- dependent parents and grandparents of the main applicant or the spouse of the main applicant must be 55 years old or older – such dependent parents and grandparents must be living with the main applicant or the main applicant’s spouse, and can be fully supported by them.
The 2023 CBI Regulations have reiterated that failure to comply with minimum investment requirements set therein may result in financial and disciplinary penalties for persons involved. Therefore, it is very important that all persons interested in participating in the CBI programme of St Kitts and Nevis take care in choosing the right investment option and reputable service providers to secure the best investment for global mobility, security and any other personal benefits capable of being obtained through citizenship of St Kitts and Nevis.
There remain several intriguing sites, both in St Kitts and in Nevis, that have the potential to be prime opportunities for real estate development.
From the charming but neglected boutique hotels of yesteryear to modern eco-friendly large-scale mixed-use properties, potential investors are likely to find a gem. It is still a buyer’s market, but this will not be the case for long.
The tide is changing, as more and more people find reasons to “seize the day” and purchase their own slice of paradise.
For those who are not considering citizenship at this time, purchasing real estate in St Kitts and Nevis can be quite seamless, even for non-nationals. The process for obtaining an alien landholding licence is straightforward and a licence can be obtained in a reasonable timeframe. Additionally, certain areas in St Kitts have been exempted from the alien landholding licence requirement. As a result, people who wish to purchase real estate in those special zones can become owners of real estate without any requirement to apply or pay for an alien landholding licence.