Investment in Saint Lucia CIP Doubled in FY2021-22 Thanks to Sharp Increase in Real Estate-Based Applications

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The Board of Saint Lucia’s Citizenship by Investment Program – the world’s second most transparent according to the CBI Transparency Index – this week released its much-anticipated Annual Report, covering the 2021-22 fiscal year. The 70-page report provides an extensive overview of the program’s performance, as well as audited financial records. This year’s report reveals the program saw record performance in terms of applications, approvals, and funds raised.

In 2021-22, the program received 583 applications, a 43% increase from the preceding year. During the same period, it approved 433 applications, a 38% improvement, and rejected nine.

The increase is overwhelmingly due to the program's real estate option, which saw a 184% year-on-year growth rate in applications. While NEF contributions remained the largest single qualifying category also in 2021-22 (46% of all applications), real estate-based applications saw their proportion of the total rise from 20% in 2020-21 to 40% in 2021-22. The number of applications filed under the bond investment options also rose, albeit more modestly, from 65 applications in 2020-21 to 81 in 2021-22.

Measured in dollars rather than applications, however, real estate investment is now the largest financial contributor to the program. Note that, as of this year's report, Saint Lucia no longer discloses the amounts invested through real estate. We have therefore had to estimate the dollar amounts raised through this route by multiplying the US$300,000 investment requirement by the 233 applications received in this category and subtracting 10% to account for possible denials and for files received late in 2021-22 not receiving approvals until the subsequent fiscal year. On that basis, real estate-based applications contributed roughly US$63 million worth of investments to the program in 2021-22.

For NEF contributions and bond investments, however, the report contains precise figures: Applicants donated US$51.8 million to the country's National Economic Fund and bought bonds to the tune of US$44.9 million.

Overall, CBI applicants invested or donated a total of about US$160 million in the program in FY 2021-22, roughly double the figure for the year prior.

Saint Lucia also publishes detailed accounts of the CIU's internal financial performance. In FY 2021-22, total revenues rose to EC$54.2 million, a 62% increase on the previous year. The largest contributors to the CIU's budget were, in order of magnitude, administrative fees, due diligence fees, and fees derived from the CIU's 20% cut in NEF contributions.

Expenditure, naturally, also rose, though not by the same proportion as revenues: The CIU spent EC$25.7 million in 2021-22, some 43% more than in the previous year. Two expense items stand out by together accounting for 85% of all expenses, in roughly equal measure: Due diligence expenses and commissions paid to agents and promoters.

The net result shows that 2021-22 was the CIU's most profitable year on record:

The CIU reported it had seen an average processing time of 75 days during the period. Notwithstanding processing times already being well within the statutory 90-day maximum, Chairman Theophilus says his board has "given the Unit the mandate to process compliant applications within 50 days, at no extra processing fee cost to the applicant." This, he said, was "guaranteed to increase the attractiveness of CIP Saint Lucia to potential applicants."

CEO of the Saint Lucia CIU, Mc Claude Emmanuel, commented that "recent turmoil in Eastern Europe has crystallized the need to diversify the Unit's efforts while continuously improving on our already robust due diligence." Noting that the global CBI industry was "highly competitive", he characterized the keeping of processing efficiency as "imperative".

Watch our interview with Mc Claude Emmanuel in the IMI Pro Members Lounge.

We note that, in a departure from convention, Saint Lucia's CIP Board - which states that its four core principles are integrity, efficiency, accountability, and transparency - has discontinued two publication practices that previously contributed to transparency: It no longer publishes the amounts invested in real estate and no longer provides any data on applicant nationalities. This change could cost Saint Lucia the second place in the CBI Transparency Index. In 2022, Saint Lucia's CIP ranked only slightly above Grenada, which does not publish nationality data. Now that Saint Lucia has also stopped publishing this data, Grenada's CIP could well displace that of Saint Lucia as the Caribbean's most transparent.

The real records are being set in 2023

The figures in the annual report released this week provide a snapshot of the program's performance from 12-24 months ago as they cover only the April 1st, 2021, to March 31st, 2022 period. To get a real-time picture of how the program is doing, therefore, we rely on the anecdotal reports of those working with the program on a day-to-day basis:

Speaking to IMI, Geoffrey DuBoulay - Managing Partner at Saint Lucia-based law firm Floissac, DuBoulay & Thomas, as well as Managing Director of Polaris Citizenship, an accredited agent for the CIP - says application volumes have grown sharply over the last six months.

"Just to give you an idea: In the 2019-20 fiscal year, the program received 193 applications in total. In 2023, that number was surpassed already by the first quarter - by a single agent."

Though hesitant to attribute the precipitous rise in interest in the Saint Lucia CIP to a specific factor, DuBoulay indicates uncertainty surrounding the real estate options of other islands may have contributed.

We will only know the true extent of Saint Lucia's positive trend when the FY 2022-23 report is published a year from now.

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