PM Harris, during his Budget speech 2019, announced Citizenship by Investment program (CBI) was the most significant component of Non- Tax Revenue contributing 67.5% ($159 million). A total of $221.3 million was generated from Non-Tax Revenue for 2017.
Budget Summary
- CBI was the most significant component of Non- Tax Revenue contributing 67.5% ($159 million)
- Increased investor confidence in CBI and more hotel developments.
- Financial institutions to ascertain tax residencies of clients as result of OECD measures
- Government to seek the support of the relevant law enforcement authorities on malicious letters originated from Citizenship by investment unit.
- CIU will maintain highest standards of behaviour and conduct
The Prime Minister announced the following during his speech:
1. Increased investor confidence
Increased investor confidence in our stable economy, a platinum Citizenship by Investment Programme and a world-class tourism product have resulted in an increased number of hotel and condominium developers showing keen interest and establishing properties in St. Kitts and Nevis. The Ritz Carlton has chosen to expand its brand in the region to the shores of St. Kitts on the lush South-East Peninsula with a one hundred and twenty-five (125) suite resort which will include twenty-five (25) branded villas and residences, a luxury spa, swimming pools and, in-door and out-door dining facilities. It is expected to generate significant employment during the construction phase. Upon completion, there will be opportunities for permanent employment as well as individuals and businesses providing ancillary goods and services. The new developments will serve to complement the expanding room stock which will be provided by more advanced investments such as the Ramada Hotel, Koi Resort, the Kings Pavilion Hotel located in the heart of Basseterre and the Royal Mist Hotel in Sea View Gardens. The successful completion of these projects would ensure that the destination is ready to welcome the increased number of stay-over visitors as we continue to expand our airlift and marketing campaigns.
2. OECD listing St Kitts and Nevis
In October of this year, the OECD published a list of jurisdictions with Citizenship and/or Residence by Investment Schemes that are deemed to potentially pose a high risk to the integrity of the CRS. Most unfortunately, our Federation was placed on this list. The OECD is of the view that documentation obtained through Citizenship and Residence by Investment Programmes could be used by persons to misrepresent the country or countries for which they are a tax resident and consequently a means by which such persons could hide their assets in a foreign country in order to pay less taxes in the rightful jurisdictions. Mr. Speaker, St. Kitts and Nevis is not a country that encourages illegal practices. Our Federation has been a long standing supporter of the work of the Global Forum and has complied with its established standards as evidenced by our Largely Compliant ratings. We do not wish for the name of our country to be tarnished and as such I strongly encourage our Financial Institutions to ensure that their due diligence procedures are sufficiently robust to accurately ascertain the tax residences of their clients.
3. Market Leader and Incredible success of CBI program
In 2019, a further set of policies and legislative developments will further bolster our brand. Our Citizenship by Investment (CBI) programme continues to be a market leader, renowned for its integrity. The incredible success of our CBI programme that has provided the fiscal space for us to pay a double salary and introduce our poverty alleviation programme.
4. Citizenship by Investment Unit
The Citizenship by Investment Unit continues to address matters thoughtfully and in the best interest of our Country. A series of meetings has been spearheaded by the CEO with agents, developers, etc to remind and warn persons to maintain highest standards of behaviour and conduct.
5. New Hotels and FDI inflows
The prospect for growth in Foreign Direct Investment remains very optimistic for 2019 and beyond as investor confidence in our Citizenship by Investment Programme remains high. Our FDI inflows, which largely comprise investment in the Real Estate Sector, continue to be a significant contributor to the country’s economic growth and overall development. A number of projects were approved in 2018 including:
- The Royal Mist Hotel in Sea View Gardens,
- Sea View Heights Resort and Residences in Mattingley Heights,
- Era Development in Hermitage Estate, Cayon,
- Belmont Gardens in Pinney’s Estate in Nevis,
- Wyndham Hotel in Nevis and Ottley’s Plantation Inn renovation and expansion.
These projects account for a combined total investment in excess of US$300.0 million.
In addition to these initiatives, there are several large scale projects currently under review and would be added to the pipeline in due course. The Restaurant Sector continued to experience strong growth in 2018 with a number of investors capitalizing on the incentives under the Stand Alone Restaurant Duty Free Scheme to establish their businesses. These new restaurants represent a total investment in the region of $5.0 million. The sustained investment in the above named projects can be attributed to the hard work undertaken by this Team Unity Government through the St. Kitts Investment Promotion Agency (SKIPA) as we work continuously to present St. Kitts and Nevis as the ideal place to invest and do business.
6. Integrity of the CBI program
We are very pleased about the transformation we have brought to the CBI programme. These transformations have led to more professional management systems, the most robust due diligence programme anywhere and cooperation with international partners. Every challenge in the industry we confront responsibly with a view to maintain the integrity of the programme and consolidate the socio-economic development of our Country. Wherever evidence has been provided regarding unacceptable behaviour we have acted appropriately. When persons sought to sell below programme statutory thresholds, we have taken quick action to dissuade and to have them cease and desist. When persons maliciously generated letters purporting to come from our Citizenship by Investment Unit bearing false information, we have acted, including to seek the support of the relevant law enforcement authorities. We welcome those service providers who were implicated in any way in these spurious letters to come forward, so advise the Unit and be prepared to bring full, definitive and factual evidence of such malpractice and fraud so that such matters can be fully addressed and corrective action taken. CAPIS and BASSE, through its principals, has come forward and indicated an interest to help to deal with this matter.
Read the full report here
