Grenada reaches out to wealthy with Citizenship By Investment programme
Grenada’s Citizenship By Investment programme, which encourages prospective citizens to invest in the island, is slowly paying off, but the money must now be put to work
Every time she reminds potential investors that her beloved island nation finds itself “south of the hurricane belt”, there is a slight sigh of relief from Grenada’s minister responsible for Citizenship By Investment (CBI) Alexandra Otway, currently visiting Europe’s financial centres to promote her programme.
This has been launched into a storm of fierce competition, not just from other Caribbean centres, but also European hubs including Malta, as well as the US. The idea is for prospective citizens to make substantial contributions to a country’s economy, investing in agriculture, tourism or alternative energy, in return for a fast track to citizenship.
“CBI is important to us, and our due diligence is very strict,” says Ms Otway. “But it is not the only thing we focus on,” drawing attention to a 4.4 per cent annual growth rate and a shrinking debt to GDP ratio, benefiting from a restructuring programme worked out with the World Bank and IMF.
But despite these economic improvements under the government of Keith Mitchell, whose party won all 15 seats in the 2013 election, with a “mandate to fix this country”, Ms Otway admits the CBI scheme, which has given rise to a mini building boom for luxury properties, is the “icing on the cake”.
“More than half of our CBI projects are now under construction. We have created demand, so now we need the supply,” she says, also intensely proud of the “lush rain forests” growing on the “spice island of the Caribbean”.
One of the areas to which she hopes the CBI process will channel investments is the hotel sector, which boasts “1500 rooms on a good day”, with Ms Otway saying she “would be happier with 3,500”.
Interest from wealthy families has been boosted by events such as celebrity singer Justin Bieber’s 21st birthday party, held on the neighbouring Calivigny private island, owned by entrepreneur Georges Cohen.
The Laluna resort on Portici beach regularly hosts big-name photoshoots, for the likes of Californian luxury swimwear label Sauvage and New York department store Bloomingdales. A five-bedroom villa custom built for UK Formula One racing driver Lewis Hamilton, whose family originates from a Grenadian village, is now reported to be up for sale after his split with Pussycat Dolls singer Nicole Scherzinger. Morgan Freeman and Oprah Winfrey also own properties locally.
“There is a big need to increase rooms and also for investment in infrastructure,” says Ms Otway. “When the Emir of Qatar recently sailed through, his yacht was too big for the marina, so we had to put him in the container port.”
Examples of recent investments include a major deal with Egyptian billionaire Naguib Sawiris, who is investing millions of dollars in tourism and hospitality, having “fallen in love with Grenada”. His project is set for completion by the end of 2016.
We are not trying to appeal to a mass market. We take our sovereignty seriously and are trying to protect it
The Grenada Resort Complex, a project being built for Chinese investor Charles Liu, who acquired Grenadian citizenship under the CBI programme, is going ahead despite an ongoing investigation of Mr Liu by the US Securities and Exchange Commission.
“We want to hear the outcome of that before we make any rash decisions,” says Ms Otway. “The CBI programme has been running for two years and there are many programmes in the region and the world. We are not trying to appeal to a mass market. We take our sovereignty seriously and are trying to protect it.”
There is a strong conviction in government circles that things must be done very much by the book, if Grenada is to succeed in a region previously associated with money laundering, tax evasion and other financial malpractices.
A modernisation drive is also part of the strategy, with Prime Minister Mitchell taking the chair of the region’s infotech committee. “The Caribbean in the old days used to be archaic,” admits Ms Otway. “Now we are at the cutting edge of technology, with the installation of fibre optic cables.”
Her recent meetings in Switzerland have spurred more interest from family offices, looking for a safe alternative jurisdiction for their base.
“High net worth investors are seeking new hubs,” says Micha Emmett, group managing director of CS Global Partners, a London law firm focused on residence and citizenship. “There is an opportunity for a country like Grenada to become a second home for wealthy families.”
