Buying a Second Passport--St. Kitts and Nevis
“Economic Citizenship” is the name for a procedure in St. Kitts by which an investor, through fees paid and money invested in an approved real estate investment, can receive a passport and second citizenship in St. Kitts and Nevis. The benefits of such citizenship would be easier traveling through some countries, a possibly lower profile of travel (than, say, traveling with a U.S. passport) in some countries, and a “backup” home country to which one could escape if one’s own country became inhospitable.
By purchasing a piece of “approved” real estate property (i.e., one which has been officially declared “investment property” by the Federation Government of St. Kitts and Nevis), an individual can qualify. The approved property will consist of a condominium or villa, but not raw land. According to Mr. Rawlings, this is because the government desires to encourage the development of residential and tourism projects. The property also must sell for at least $350,000 (changed as of one month ago from $250,000) in U.S. dollars. In addition to purchasing the property, the applicant must also pay a one-time fee of $35,000 for one person (more for a couple or family, though they can all be qualified by one property purchase).
In addition, there will be some other incidental costs that add up, such as transfer tax fees which, though technically set as a seller’s cost, will as a practical matter raise the price of the property (a 12 percent tax), and attorney’s fees. According to my calculations, the cost for purchasing a piece of property for one person would be, at a minimum, about $420,000 US.
One positive note, however, is that the citizenship rule places no restriction on how long an investor must hold a property. This means that an individual could, conceivably, purchase the property, obtain his citizenship, and immediately resell it the next day.
Also, the property can only be used as an investment property once, meaning that once you’ve purchased it as an investment property, you cannot re-sell it to someone else also as a qualified investment property.
There has been talk in the past about Nevis seceding from St. Kitts, and Mr. Rawlins informed me that if this indeed happened, Nevis would have the right, in its constitution, to decide who to recognize as a citizen, meaning theoretically that if you purchased your citizenship for the purpose of living on Nevis, its status could be changed if Nevis ever seceded. Mr. Rawlings, however, believes secession to be unlikely, saying that there have been concessions made with Nevis giving it more autonomy such that the threat of secession has been reduced.
In addition, we discussed banking privacy with Mr. Rawlings, who states that the Federation’s laws have been made stricter such that privacy is respected and, for the government to be able to inquire into a private account, it bears the burden of showing cause.
Mr. Rawlins informed us that St. Kitts and Nevis allowed offshore corporations with relative low cost and expense. Basically, a company could be set up in the Federation that isn’t taxed, so long as it doesn’t transact business in the Federation (other than incidentally). For a $900 attorney’s fee, a $200 registration fee, and small annual fees, an investor could set up a St. Kitts offshore corporation.
Finally, we discussed the purchase of real estate in the country. Apparently, the country has two concurrent systems of real estate registration: typical conveyance registration, common to most English common law countries and U.S. states, and the “title” system of registration.
The conveyance system is the traditional system of recorded deeds, and “checking title” (i.e. looking through outconveyances for a period of years) to determine any encumbrances thereto. The “title system” however, is more similar to a state’s vehicular title registration method. The document is a title, and lists on its face and back all items that encumber it—restrictions, liens and any other matters. Banks generally require properties used as collateral to be titled. The process, apparently, requires notice to be published in the paper and to neighboring property owners that requires anyone objecting to the title (i.e., claiming an encumbrance, right of way or overlap) to respond. Upon hearing no response, the government will allow the property to be titled. As you can see, the process of titling likely does quite a bit to clean up old encumbrances of record, such as uncanceled judgments, rights of way, and other defects.
My traveling buddy and I, however, did further investigation of the real estate market, and have come up with these conclusions:
Upon research and consideration, the passport program might not be such a great deal as is touted. The theory is that you buy a piece of qualified property, pay a fee on top of it, and, for the cost of the $35,000 fee, you’ve got a passport and for the price of the real estate a newly developed home or condominium. Our own inspections reveal that the investment-applicable properties are priced higher than similarly built non-applicable properties. Furthermore, associated lawyer’s fees and transfer taxes (whether paid by the buyer or built into seller’s purchase price) can add another ten percent or more. Therefore, the reality is that if you bought a minimum-level investment property ($350,000), in our estimation, you’ve really bought a $250,000 or $275,000 property with a $75,000-$100,000 premium added, and in addition to the $50,000 government fee have expended another $20,000-$30,000. Given that, you might want to consider Panama’s different investor and passport programs, which don’t appear to require so many costs.