Grenada is the latest entrant to the $2 billion cash-for-citizenship sweepstakes, touting its pristine beaches, friendly locals and luxury real estate industry as an ideal match for wealthy investors looking for a second passport. How does the Caribbean nation stack up against other passport schemes?
Officials from Grenada are selling second citizenships to wealthy individuals as part of a plan to bolster the Caribbean island’s empty coffers.
Second passports have until now been the domain of the super-rich, typically from less politically secure and stable countries, who are seeking to bring part or all of their assets outside their home. A wealth-friendly tax system, burgeoning real estate investment industry, and easy access to the U.K. and China.
For Grenada’s government, the program offers a welcome boost to their battered finances. The country has spent heavily to rebuild its infrastructure after two devastating hurricanes two years running, and its modest economic growth is based largely on tourism, a university in capital St. George, and exports of spices such as nutmeg.
Grenada is attempting to expand its economy to services like call centers, to renewable energy and to health tourism. Until these newer avenues render a profit, Grenada has reopened an existing citizenship program from 2014 to raise money.
The country is also seeking investment into real estate, mainly luxury residential and tourism projects.
Government minister Alexandra Otway-Noel has traveled to wealth hubs like London and Zurich in recent weeks to make the country’s pitch to the coterie of helpers that wealthy people deal with: tax lawyers, private bankers and accountants. Her push underscores the fact that private bankers no longer simply cater to the financial affairs of the wealthy; their role can extend to that of lifestyle consultant as well.
Acquiring another passport is an increasingly common device employed by the wealthy for a variety of reasons: lowering their tax bill, building a nest egg in safety if their home is politically unpredictable, or as a base if their children are being educated at prestigious schools such as in the U.S. or U.K.
For all its South Caribbean charms, Grenada doesn’t rate highly among those in the market for another passport. Grenada just shades it into the top-100 most attractive citizenships at 91st place, according to a “quality of nationality” index compiled by Henley & Partners which rates the attractiveness of citizenships.
The most desirable passports are German, Danish or Finnish.
So what does the island nation, most closely identified with beach tourism, have to offer? How Does Grenada Stack Up?
Not badly, it turns out, at least financially. Grenada represents an exceedingly affordable option in the world of bought passports: a family of four can be naturalised for a mere $200,000. By contrast, desirable European Union passports like Portugal or Malta are far pricier, and are often linked to direct investments in the country – and they are also controversial in the bloc.
Grenada’s biggest draw is a way into the U.S. and U.K. through the backdoor. As part of the Commonwealth realm, those from Grenada can travel to the U.K. without a visa. And with “substantial” investment, Grenadians can live and work in the U.S. via a so-called E-2 visa, which can be renewed in the U.S. Infinitely.
Otway-Noel, Grenada’s minister of implementation, said her target is 100 to 150 applications per year, which are subject to a due diligence process.
Grenada is offering a decidedly faster track to a second passport than other nations – indeed, applicants can become Grenadian without ever setting foot on the island. There is no requirement to buy a home, reside, or make any financial investments, though a budding luxury real estate industry is hoping many choose to anyway. Grenada doesn’t levy income, capital gains or inheritance on its new citizens, Otway-Noel said.
Perhaps most interesting for an English-language nation, Grenada won’t require new citizens to actually speak its language. This is sure to make the island an extremely popular choice with affluent Russians and Chinese, where foreign languages are less commonly spoken than in Europe.
Grenadian passport-holders can also travel to China without a visa. It can also be expected that Americans, who are giving up their citizenship in droves to escape U.S. taxation, would opt for Grenada based on its affordability, common language, and proximity – capital St. George is a flight of three and a half hours from Miami.
With its fast-track application process and an opaque vetting scheme, Grenada is destined to attract ill-gotten money looking for a haven.
Otway-Noel insisted that Grenada does not want to “play games with our freedoms and diplomatic credibility” in pursuing the passport scheme.
A recent example from Grenada’s neighbour in the Caribbean, St. Kitts, shows how an adopted homeland isn’t a get-out-of-jail-free card. St. Kitts revoked an American lawyer’s passport after he was accused of pilfering funds to buy it, the FT reported.
Otway-Noel hinted heavily that Grenada would take a similar line: “Those with a shady past need not apply”, she told finews.ch at a recent event in Zurich. She didn’t rule out revoking the passports of citizens should dirty dealings emerge later.