May 14, 2014
Major stakeholders in the areas of real estate, tourism, banking and politics all threw their support yesterday behind a proposal from attorney Sean McWeeney for the government to implement an investor-citizenship program as a catalyst for growth in the economy.
A top real estate practitioner, George Damianos, said he would be "dancing in the streets" if such a program were implemented.
However, the support was not without caveats, with several proponents suggesting there must be "strict guidelines" involved in who can be granted such rights, and others adding that without other reforms such a program would not achieve the results it might be intended to.
An investor-citizenship program was proposed on Tuesday by McWeeney, a Queen's Counsel and close advisor of Prime Minister Perry Christie, at the Society of Trust and Estate Practitioners (STEP) Caribbean Conference 2014 at Atlantis, as a way of boosting and differentiating the financial services industry and the economy-at-large at a time when the offshore financial sector is facing challenges.
Such programs generally provide for foreign investors to achieve an expedited path to citizenship in the country where they are making their investment, based on meeting a certain investment threshold and other requirements.
McWeeney, a partner at Graham Thompson and Co., said that such a program, which has been pursued in other Caribbean countries such as St Kitts and Nevis, Dominica and Antigua and Barbuda, would be a boon to The Bahamas' capacity to attract quality high net worth individuals to its shores to live and do business.
Presently, those who have obtained permanent residency in the country must wait seven years before they are eligible to apply for citizenship in The Bahamas.
While speeding this process may be appealing to investors, such programs are not without controversy.
In an interview with Guardian Business, one of the country's top realtors, George Damianos of Damianos Sotheby's International Realty, said he was "very happy and impressed" to read McWeeney's comments, and called the proposal "music to my ears".
"I hope he can convince the government. I think it would be a win-win," said Damianos.
Asked what impact he feels such a program could have on real estate sales, the realtor said: "I would be a happy man. I would be dancing in the streets. It would be absolutely wonderful for the country, for the financial services business, and it would really give The Bahamas a big boost.
"We have these wealthy people who come to The Bahamas, they go out for dinner, they hire staff, they build beautiful homes, buy automobiles from local dealers, hire local landscapers; it just goes on and on and on. It just creates business and jobs. This would provide another level of comfort to people who are trying to preserve their wealth."
He said that increasingly, he is seeing clients looking to obtain citizenship of St Kitts and Nevis, another Caribbean country that offers an investor-citizenship program, because they are unable to do so in The Bahamas and wish to experience the benefits, tax, travel or otherwise related, of adopting a new nationality. He said he would support the process for investors to gain citizenship being "as simple as possible", while excluding those with criminal records.
"We've been involved in people getting St Kitts and Nevis passports, and I don't think St Kitts has the same name as The Bahamas," he said.
One local company which is already seeking to take advantage of the appeal offered to potential investors by investor-citizenship programs is Baha Mar.
Robert "Sandy" Sands, senior vice president of external and governmental affairs for the mega-resort developer, confirmed that Baha Mar has been promoting its residences along with an offer to help would-be buyers get citizenship through St Kitts and Nevis through "introductions".
"We support Sean McWeeney's statement advocating an investor citizenship program for The Bahamas," Sands told Guardian Business.
St Kitts and Nevis are possibly the most well-known Caribbean country to offer an investor-citizenship program, given that theirs is recognized as being relatively easy to access.
According to research by Guardian Business, the program offers investors who make a $50,000 investment in the islands citizenship and a passport after three months, without the investor ever having to set foot in the country.
Dual nationality is allowed, and so to is the ability to obtain citizenship for spouses and children, based on further investments of $25,000 per additional person.
The government of St Kitts and Nevis collects $7,500 from applicants to cover the cost of conducting "due diligence" on them, as well as a $250 processing fee, suggesting that the program could be a source of direct government revenue.
McWeeney, in his comments, emphasized that he would not support the St Kitts model for The Bahamas. He said this country should focus on gaining "quality" investors who will contribute to the country by creating a program with a high investment threshold.
Peter Turnquest, opposition minister for finance and MP for East Grand Bahama, said he too "fully supports" the creation of an investor-citizenship program, but only with "strict guidelines".
"I think that Mr. McWeeney outlined a number of the obvious safeguards that need to be put in place to ensure its not exploited," he said.
"However, I also think we have a very much underpopulated country despite the hysteria.
"We need to look very seriously at this issue of economic citizenship, with appropriate safeguards to ensure we are not exploited or used by those with improper motives, so we can encourage people who can come to the country to help us develop our assets and bring new solutions to some of the challenges we have. I think it could benefit us both from an economic and a cultural perspective."
Turnquest said he would still see the need for a long period of residence by the applicant in the country prior to being considered for citizenship, and once they gain citizenship, they should not get the right to vote.
"We would want to make sure people are not here just for convenience," he said.
"We've got to make sure we're not selling the country."
Other reforms necessary
A senior banker, who Guardian Business spoke with on condition of anonymity, said that without certain additional reforms, the goal of attracting individuals who will set up shop in The Bahamas as well as living here will not be fulfilled.
"As a potential catalyst for change, it's a good start...[but investors] are looking for certain services and capabilities, and the question that Sean raised raises the question of how do we provide services these guys can benefit from," the banker said.
"It's one of the limitations of what The Bahamas has been able to do. It's one thing to say lets attract them here, and it's another to say we can provide enough of an infrastructure for them to run their business. Cayman has sourced a huge amount of services into the island, or they are getting them elsewhere.
"Solutions are not a silver bullet issue. Without other things, it will fail."
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