CaribbeanPolicy Updates

Big Changes to St. Kitts CIP: Donation Discount, Real Estate Projects to Lose Approval and Made to Re-Qualify

Christian Henrik Nesheim ,  ,  ,  ,  ,  , 
Editor
Christian Henrik Nesheim

Barely two weeks after his appointment as the new CEO of Saint Kitts & Nevis’ Citizenship by Investment Unity (CIU), Mr. Michael Martin is delivering the set of sweeping changes he had indicated the program would see under his leadership. In a CIU circular, Martin has introduced new, stricter set of rules for approved real estate developments, each of which will need to re-qualify for such designation from the new year, significant discounts for the SGF contribution option, a new fee schedule, and new investment options.

Changes to real estate development approval terms

“From January 2023 onwards,” reads the CIU’s statement, “only Approved Developments will be eligible for the Real Estate Investment Option under the new CBI regime. All real estate properties previously designated as Approved Projects will lose their designation upon the coming into effect of the new CBI Regulations. Developers of these properties are required to apply to the Board of Governors of the CIU to have them designated as an Approved Development.”

In a move no doubt aimed at tackling the problematic practices of “financing” and ghost projects under the program’s real estate option, the new CIU board is emphasizing that the US$200,000 minimum investment does not include:

  • International Marketing Agent commissions;                                    
  • Authorized agent fees;                               
  • Advances to the main applicant or dependents of any nature;
  • Financial returns, guaranteed returns, advances or any type of payments to the main applicant or dependents of any nature;                        
  • Due diligence background check fees;                    
  • CBI application fees; 
  • CBI application form fees; 
  • Any other commissions of any nature; and 
  • Any other related fees listed in regulation 35. 

The above-listed new conditions will have wide ramifications for some developers that have routinely paid commissions and agent fees out of the principal investment amount.

The CIU circular also states that the government, upon designating a property as an approved development, will designate the number of real estate units to be sold, as well as determine the construction completion schedule and corresponding escrow drawdown process. Moreover, the CIU is introducing the following penalties to “any person or entity who circumvents or attempts to circumvent the payment of the legally prescribed minimum investment amount”:

  • Fine on summary conviction;
  • Suspension or revocation of the Approved Development status;
  • Removal of Authorized Agent license; or
  • Blacklisting on CBI website as a person or entity not authorized to submit any CBI application

New contribution option minimums

The new management team is introducing a Limited Time Offer (LTO) – effectively a US$25,000 discount in the donation amount in most cases – for the program’s Sustainable Growth Fund (SGF) option. The following changes will be effective in the first six months of 2023.

  • US$125,000 – Main applicant alone
  • US$150,000 – Main applicant and a spouse
  • US$170,000 – Main applicant, spouse and two dependents
  • US$10,000 – Each additional dependent under 18
  • US$25,000 – Each additional dependent over 18

New Investment Options

The CIU is also replacing the relatively new Alternative Investment Option with the Public Good Investment Option, which will have a minimum investment of US$175,000 in an Approved Public Good Project. Also for this investment category, the CIU has specified that any commissions or fees are payable in addition to – rather than included in – the minimum amount. Such fees and commissions include:

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  • International Marketing Agent commissions;
  • Authorized agent fees;
  • Advances to the main applicant or dependents of any nature;
  • Financial returns, guaranteed returns, advances or any type of payments to the main applicant or dependents of any nature;
  • Due diligence background check fees;
  • CBI application fees;
  • CBI application form fees;
  • Any other commissions of any nature; and
  • Any other related fees listed in regulation 35.

Projects previously approved as an Alternative Investment Option will now lose that designation but may be designated as Approved Public Good Projects subject to the approval of a new application to the Board of Governors of the CIU.

The above terms will also apply to the US$400,000 Private Home Sale Investment option, which the CIU has decided to retain.

New Fee Schedules

The CIU has also set out a new schedule of application-related fees. Starting in the new year, the following government fees will apply to non-fast-track applications under the real estate, private home sale, and public good investment options:

  • Main applicant: US$25,000
  • Spouse: US$15,000
  • Each dependent child or qualified dependent under 18: US$10,000
  • Each dependent child aged 18 or above or qualified dependent: US$15,000

For fast-track (“accelerated”) applications, the corresponding fees will apply:

  • Main applicant: US$42,500
  • Spouse: US$32,500
  • Each dependant child or other qualified dependent under 18: US$22,500
  • Each dependant child aged 18 or above or qualified dependent: US$32,500

For the post-hoc addition of new family-members to an already-approved application, the following fees will apply (in the case of non-accelerated applications):

  • Addition of spouse: US$20,000
  • Addition of a minor born after approval-in-principle but before citizenship is granted: US$10,000

For accelerated applications, meanwhile, the corresponding fees are as follows:

  • Addition of spouse or other qualified dependant: US37,500
  • Addition of a minor born after approval-in-principle but before citizenship is granted to the main applicant: US$22,500