How Does Citizenship by Investment Benefit a Country? Part I – The Multiplier Effect
June 15, 2016 - Commentary
The benefits of Citizenship by Investment for Economic Citizens are fairly well documented. From enjoying visa-free travel to hundreds of countries across the world, to opening doors to higher education and a safer future for one’s children, in addition to tax planning and wider business flexibility, the popularity of these programs among HNWIs is recognized proof of its value.
But what do the nations offering these innovative investment programs gain in return?
While most discussions tend to focus on ethical questions relating to birth right and the long-term impact on indigenous populations, it is a fact that for several small nations in the Caribbean and Europe, Citizenship By Investment Programs offer a much-needed injection of foreign direct investment, often in a lump sum that can make a significant developmental difference.
At the inaugural Invest Caribbean Conference held in Antigua and Barbuda last month, the Deputy Governor of the Eastern Caribbean Central Bank Mr. Trevor Brathwaite was one of several speakers to discuss the economic impact of Citizenship by Investment Programs (CIP) on Caribbean nations.
Its contribution to the real estate industry and associated “multiplier effect” in particular was seen as an important change agent for the economies of these countries.
Some of the most striking areas of impact discussed were:
- Large spikes in construction growth and associated impact on local businesses such as heavy machinery providers, etc.
- Liquidity in the total commercial banking system.
- Employment growth.
- Added revenue streams through duties and taxes on certain imported supplies and goods such as lumber, cement, etc.
- Increase in hotel room supply which would result in greater interest in air lift to the country, greater tourism inflows and associated tax and spending benefits.
- Greater demand and improvement in the quality and diversity of required services.
- Helping wean nations off international aid.
In fact, CIP was termed by one speaker as the metaphorical “oil fields” of these small nations who lack revenues from natural resources that can be utilized to fund development.
The CIP programs were also credited with putting these small island nations on the global map – improving their visibility and relevance to individuals and nations thousands of geographical miles away, attracting big-name hotel chains and all the tourism benefits they bring, and giving these islands a much bigger share of voice on the international agenda.
How Does Citizenship by Investment Benefit a Country? Part II will discuss Global Exposure and Skills Upgrades for the Local Population. Stay tuned to the conversation.
Interested in knowing more about Citizenship by Investment in the Caribbean? PassPro is a Government Authorized Agent for the Citizenship by Investment Programs of Antigua and Barbuda, St Kitts and Nevis and Dominica. Email [email protected] for more information.
The inaugural Invest Caribbean conference in Antigua and Barbuda concluded on May 27, 2016 with a consensus that CitizenRead More