The Government of Grenada is further tightening the CBI scheme under real estate option against non-performing property developers.
According to an amendment to the Grenada Citizenship by Investment (CBI) regulations, signed by Prime Minister Dr Keith Mitchell: “For the purposes of approval of a project under section 11 (1) of the Act, a minimum equity of 20 percent of the total cost of construction as proposed shall be invested into the project prior to approval.”
This new legislation will provide much much need confidence and protection to CBI applicants investing under real estate option.
Property Developers who cannot invest 20% into the project wont be able to sell shares to CBI investors for $220,000 .
Last month, Grenada amended the citizenship by investment regulations 2019 reducing the real estate investment to $220,000 per share provided two or more individuals jointly invested $440,000 are eligible for citizenship. Previously the required was $350,000
- Purchase of a unit in an Approved Project Investment under Section 11 in the Tourism Accommodation priority sector, by two or more individuals and valued at a total minimum of USD$440,000
- Minimum of: $220,000 (for each share in the unit)
‘The new 20 percent rule, combined with the escrow account monitoring, is great news and in line with international standards,’ said Jean-Francois Harvey, worldwide managing partner of Harvey Law Group. ‘You will find the same key variables in programs like EB-5, for example.
According to SRO 28 of Grenada Citizenship by Investment (Approved Projects Investment) Regulations
Any developer who received qualifying investment amounts for the purpose of an Approved project and who has not established a project escrow account is required to–
- Account to the Committee for monies received and spent;
- Open a project escrow account in accordance with Regulation 5; and
- Deposit the qualifying investment amounts that have been received.
and due diligence checks to be carried out on the shareholders and directors of developers of an Approved project.
Developers who no longer satisfy the provisions of the CBI Act or breach of these regulations can be decertified by the committee.
The CIU’s Project Escrow Management Framework (PEMF) to effectively implement Statutory Rules and Orders No. 28 of 2017 protecting CBI investors with more government oversight of the use of investor funds, while maintaining high integrity of the scheme
Last month the Government amended CBI Program which eased the conditions to make the CBI program more competitive such as
- Remove the requirements for dependent children between the ages of 18 and 30 to be enrolled at an institution of higher learning and for parents or grandparents over 55 years to be fully supported.
- Removal of permanent residence as a pre-requisite for citizenship.
- Increased the investment holding period to five years from three years.
PM Mitchell announced last month that Grenada does not compromise on security and CBI programme must be continuously reviewed to ensure that it remains competitive.
The Grenada Citizenship by investment scheme has been as the gold standard in the Caribbean by IMF last year.
The Current Head of Citizenship by Investment Unit, Mr. Thomas Anthony was praised for taking initiatives in strengthening the integrity of CBI scheme in Grenada
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