BASSETERRE, St. Kitts, CMC -The St. Kitts-Nevis government says it remains committed to ensuring that all real estate investments under the island’s Citizenship by Investment Programme (CBI) bring substantial value to both investors and the population as it seeks to address what it termed “several unfounded claims” regarding an aspect of the program.
Under the CBI, foreign investors are granted citizenship of the twin island Federation in return for making a substantial investment in the country’s socioeconomic development. St. Kitts-Nevis is among a handful of Caribbean Community (CARICOM) countries with such a program.
In a statement, the government said it wanted to address the “several unfounded claims” regarding the real estate investment option of the CBI, noting that together with the Citizenship by Investment Unit (CIU), several updates have been made aimed at tackling “problematic financing practices and ghost projects under the Programme’s Real Estate Option (REO).”
The statement said that the government introduced the new multi-faceted real estate development application and approval process to remove loopholes and ensure stricter enforcement of escrow and project milestone requirements.
“The government wishes to emphasize that the purpose of these process improvements was to bring credibility and enhance value to the program and the development of our nation by providing excellent prospects for our investors.
” The improved real estate development project approval requirements were designed with careful consideration and consultation to strengthen the legislative and administrative framework of the program.
“These improvement measures were crucial for retaining the integrity of our esteemed CBI Programme, ensuring that it remains one of its most valuable, well-regulated, and transparent programs.”
The government said contrary to the various aspersions, the 2023 Regulations had not reduced the number of genuine real estate development options available to investors. “Instead, they have ushered in a more rigorous evaluation process, guaranteeing that every real estate project selected for the program aligns with the high standards of quality, sustainability, and long-term value creation.”
The Dr. Terrence Drew government said it recognized the importance of maintaining confidence in the CBI program. It wanted to “reassure all stakeholders that the 2023 Regulations are not meant to hinder investment, but rather to foster an environment of trust, stability, and prosperity for all parties involved”.
The government said by the 2023 Regulations. Real estate projects will be constructed and completed according to a pre-defined schedule and with the implementation of a designated escrow drawdown process.
” The CIU must emphasize that the aim of the improved real estate project approval process is to exclude poor-quality real estate developments which only served to tarnish the program and the country as a whole.
“Improvements to the real estate development project approval process were vital to ensure that the St. Kitts Nevis CBI program only approves legitimate real estate development projects which bring actual investment in the country and offer resale value for investors.”
The statement said that these poor-quality real estate developments include those involving any deceitful, fraudulent, or otherwise unacceptable financial conduct and stagnant and inactive real estate developments commonly referred to as “ghost” projects.
The CIU said it discovered that many developers of these projects were illegally offering discounting by holding applicants’ investment funds offshore. This type of improper financial conduct undermined the ability of legitimate developers to engage in meaningful competition in the local real estate market.
The statement also dismissed reports that the 2023 Regulations deprive real estate developers of their ability to pay commission and agent fees to their marketing agents and local agents, significantly lowering the attractiveness of the REO under the program.
” On a proper construction of sub-regulations 29(11) to 29(13), a developer of an Approved Development may pay commissions and fees to their agent out of any amount of the real estate investment fund over US$200,000.
” There is no bar on commission payment provided the minimum investment threshold is received in the escrow account, and the developer can deliver a property that can sustain its true market value,” the statement added.
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