World Investment News (WI): As an introduction for our readers, what can you tell us about St. Kitts and Nevis' Citizenship by Investment Programme and its direct and indirect impact and contribution to the country's socioeconomic development?
Mr. Les Khan (LK): St. Kitts and Nevis' Citizenship by Investment Programme is the oldest and most established in the world. The whole industry originates here, when we started our Programme in 1984. All the other programmes, for example, Austria, Cyprus, Montenegro, etc. are spin offs of the St. Kitts and Nevis Programme.
Being the oldest means we have the most experience in this industry, and have established many best practices. Over the last four years in particular, we have really concentrated on being the best, which has led to us being known as the Platinum brand. This is primarily down to our efficiency, our due diligence, and the multiple investment options we offer. These factors are extremely important for clients, who want to know they are participating in a trusted and long-established programme. Indeed, our Programme is ranked number one for due diligence in the Financial Times' wealth management CBI Index.
Our Programme offers clients different options, depending on what they are looking for. Many apply to gain security for their families, particularly in these uncertain geopolitical times. Another popular reason is for a better quality of life, for example, access to education and healthcare, for medical tourism, or to expand their businesses. And many apply to gain greater freedom of travel, as St. Kitts and Nevis has visa-free access to over a 155 countries. This is more than any other nation in the Eastern Caribbean.
Our most popular investment option is our Government donation fund, the Sustainable Growth Fund. Applicants make a one-time investment, free from any additional contract fees, directly to the Fund. and, in doing so, contribute to the development of our nation. Because it is so simple, the Fund is the fastest route to second citizenship: we typically approve applications in three months or less. The Fund is also the most economic, particularly for families.
If clients desire an even faster service, we offer the Accelerated Application Process. This guarantees that applicants will receive approval, or otherwise, within 60 days. This is a record for the industry, and no other programme has this. We are able to achieve this turnaround time thanks to our modern system and our strong relationship with our due diligence providers.
With respect to our real estate option, we are different from other citizenship programmes in terms of the number of real estate projects a client can invest in. For example, we are the only Caribbean programme that has five branded hotels as part of their CBI programme. We also have a number of boutique hotels, such as the luxury Ramada Resort, the T-Loft development, which is a Wyndham Hotel project, and the luxury five-star Koi Resort, which opens this year.
The Programme has significant benefits for St. Kitts and Nevis' socioeconomic development, both directly and indirectly. Directly, the monies invested by Programme applicants, particularly under the Fund, are used to develop our economy and social progress. We invest in socioeconomic initiatives in both islands, public infrastructure, healthcare, education, and sustainability projects.
Indirectly, the growth in our tourism sector as a result of applicants travelling and/or investing in the real estate has benefitted local residents. The growth has led to more projects and consequently more jobs in the tourism and construction sectors for St. Kitts and Nevis citizens. For example, when the luxury Ramada Resort opens, we expect this will create jobs for approximately 300 locals.
Overall, it is safe to say that we are leaders in this industry. Just looking at the number of applications we've had over the years, it is over 12,000. Around 60 percent of these applications come from China, so the Chinese market is extremely important to us. Other countries from which we receive applications include Asian countries such as the Philippines, countries in the Middle East, Eastern and Western European countries like Russia and France, and the Americas.
WI: How would you assess the program's results and what are your expectations for 2019?
LK: Well, as I say above, overall interest for our Programme is very high. In recent years this has only been growing as we have improved it. 2018 was a good year for us. We had a temporary fund which was devised to help St. Kitts and Nevis move on from Hurricane Irma and was very popular with investors, the Hurricane Relief Fund. Similarly, when we launched the Sustainable Growth Fund in April 2018, that brought great excitement from individuals and families looking to get second citizenship.
We expect 2019 to be another good year. I expect application numbers to be driven in particular by the new and innovative projects we are bringing to market. For example, we are introducing a high-class hotel by Baccarat. This will be similar to the five-star one in Manhattan, except it will be seven-star - a first for the Baccarat company and for St. Kitts and Nevis. The first phase of the project will be renovating the building and then and we will expand with additional villas etc.
The Seaview Gardens Hotel is another luxury retreat being built. Recently, we updated our relationship with the developers, and so four buildings will be built before the resort goes on the market. This ensures we can check the developments as they are built, and ensure they are built to the highest standard.
Like I say, 2019 will be a very interesting year. I also have a further few initiatives up my sleeve, which I know are going to be a hit with investors. It may be a competitive industry, but we are confident applicants will continue to realise the benefits of our Programme compared to any other one. So far, we are hitting every one of my monthly targets for 2019.
WI: We've talked a little bit about the competition that exists between the different programs not only in the region but throughout the world. What collaboration exists between the different programmes?
LK: The programmes in the Caribbean collaborate in many different ways. If you look at the application requirements and forms for the Eastern Caribbean programmes, we have a shared approach. For instance, the paperwork and format of others' programmes is quite similar to ours, which is not surprising as they are descendants from St. Kitts and Nevis' Programme.
We want to build on this shared outlook, and, as a region, we are currently working on the sharing of information between the nations. This will enable us to reject unwanted clients even faster. For instance, each country will immediately be able to see if a client does not get approved in a nation, in order to reject them faster. We can do this now but it takes more time. Information-sharing will make us stronger as a region.
Some people talk about a race to the bottom, but this is not happening. It may be a competitive market, but we are collaborating, and St. Kitts and Nevis has shown ourselves to not engage in such type of behaviour.
In the future, perhaps it would be interesting to have a governing regulatory body for the various programmes in the Eastern Caribbean region. For now though, we expect greater information-sharing to bring increased strength and benefits to the region.
WI: With regards to the processes' competitive and comparative advantages, what can you tell us?
LK: The comparative advantages of our processes is that we place due diligence - which is the security process all applications undergo - at the centre of our entire Programme. Our due diligence is the strongest in the industry and follows a multi-jurisdictional four-step process. It is the cornerstone of our Programme.
When applications get to us, they have already gone through some initial due diligence by our agents overseas and by our local service providers on the ground. We require every provider supplies an in-depth report for each client. However, the majority of the due diligence is conducted by us and by our Citizenship by Investment Unit agents, all of whom are trained in detecting financial crime, such as money laundering and fraud. We also send every application to international law enforcement bodies, such as Interpol, and check national and international wanted lists. A final report is handed back to the Unit, who makes the final decision as to whether it will be approved.
As we are continually looking for ways to modernise our Programme, we recently decided to introduce a biometrics system, which means that fingerprints will also be required for every application. The system is currently being developed.
Part of our role as industry pioneers is to always be at the forefront of the industry and drive change. That is why we continue to review and, if beneficial, modify our processes. This is why we were the first programme to have an automated, more efficient system and the first to devise the role of an overseas agent.
As well as these, another comparative strength of the St Kitts and Nevis Programme is that we own our software. This means we are able to work directly with the developers to oversee and update it, unlike others.
WI: What can you tell us about your marketing and promotion approach and what role does China play within this strategy?
LK: CS Global Partners is our official Government Advisor and Marketing Promoter and they market our Sustainable Growth Fund. They are very active, and create much media exposure, press, and social media activity around the Sustainable Growth Fund and St. Kitts and Nevis in general.
Regarding the real estate projects, the developers take on this role themselves.
Also, when I joined the Unit permanently in 2016, I brought a new marketing approach. I realised that, alongside CS Global Partners, I should participate in promotion, as I am responsible for the Programme as a whole. One way I did this was establishing partnerships with the real estate developers. For example, one developer, Galaxy Real Estate, was actively marketing in China. They were promoting not only their project, but the island as a whole. We decided to engage them and promote the benefits of St. Kitts and Nevis, alongside the Programme.
Another part of our marketing and promotion approach involves attending conferences and road shows with CS Global Partners. Of course, both the Unit and CS Global Partners are very selective which conferences we attend, which is why both we spend so much time in China. China is a very important market for both of us. At 60% of all applications it is our biggest market, and growing. Thus, China is a key part of our marketing strategy. However, at the end of the day, our nation and CS Global Partners attract clients simply because the Programme is so good and unique within the market.
WI: What was your biggest challenge when coming into office?
LK: Changing I would say changing the perception that some people may have which is that the citizenship by investment industry facilitates tax evasion. Of course, this is not the case in any way. Unfortunately, there's a lot of misinformation and lobbying on this topic. However, we have a strategy to address it and are constantly working to provide people with the correct information.
WI: What message would you like to convey to the 14.6 million readers of the South China Morning Post?
LK: St. Kitts and Nevis Citizenship by Investment Programme is the strongest, oldest, and most established there is. St Kitts and Nevis citizenship provides access to a 155 visa-free or visa-on-arrival countries, to greater education, lifestyle and medical tourism opportunities, and to a stable, secure, and safe political environment. On top of this, our economy is growing, and has been doing so for years. Our legal system is one of the strongest in the region and we have just been ranked in the top 30 jurisdictions worldwide for a strong rule of law.
We continue to modify our Programme to provide greater benefits and protection to our clients, of which I have given numerous examples above. Again, we are the fastest route to second citizenship, particularly through the Sustainable Growth Fund. Even without the fast track process, we can process applications where the forms and information are complete within 60 to 90 days.
In addition, in St. Kitts and Nevis you can truly see the benefits your investment brings to the country's socio-economic development. Investors know what is done with the money, and how it is helps others.
Finally, I would say that St. Kitts and Nevis is the best option you have for economic citizenship. Most important is the quality of the programme, and that is where we stand out.