World Investment News (WI): As an introduction for our readers, what can you tell us about the Citizenship by Investment Programme (CBI) and its direct and indirect impact and contribution to the country's socioeconomic development?
Mr. Percival Clouden (PC): The CBI program is significantly important for the economic development of our country and its people. It also plays an important part in the country's foreign relations, from a cultural and social aspect. We educate our people showing the benefits the Programme has to offer; and the results speak for themselves, we have seen increased employment and a higher quality and standard of living for Grenadians.
This is the direction we want to follow, we want the benefits of our Programme to impact positively the life of our fellow Grenadians. We have a National Transformation Fund (NTF), exists, which receives revenues from the Programme to develop critical projects in different areas such as health, education, infrastructure improvement, etc. Thanks to these projects, job opportunities have been created and people in the rural areas now have better infrastructures, access to water, etc. They are directly benefiting from the CBI.
(WI): What can you tell us about the Programme and the average processing time and procedures?
PC: We are now trying to fine tune and streamline the process in order to reduce turnaround time to approximately 60 to 90 days. We have a very active Board that meets regularly, at least twice a month, and this is one of our main focuses at the moment. We have to shorten the turnaround time without affecting the due diligence process, which is key for an efficient and effective Programme. In order to accomplish this, we have expanded from two to four the number of companies who assist us on due diligence. We also have a local Financial Intelligence Unit (FIU) that assists us in the process; we therefore work with up to five companies in the due diligence process, which has helped us reduce our turnaround time without affecting due diligence.
Grenada is recognized for its transparent, strong and serious due diligence process, and we are completely conscious that this process can affect the time we take to answer to applicants. Before the applicant gets a response from us, there are various due diligence layers and stages through which his application has to go through. As explained, we work with several providers as well as our local active provider.
We make sure that this vetting process is done in a very tight and rigorous manner. After the application has passed through these different stages and scrutiny, we finally have a Committee that reviews the application and analyses our reports, and they can of course deny an application. After this Committee, Cabinet reviews the application again.
This long and necessary process can affect the timeframe of our responses, but we are not going to jeopardize or compromise our due diligence for speed. We are improving the timeframe through the streamlining of the process; this will ensure that we have a rigid, but very efficient process.
WI: The Programme's expectations for 2019 targets 500 applications, which is almost a 50 percent increase from the previous year; is this realistic and how do you plan to accomplish these numbers?
PC: Yes, this is an ambitious but realistic target. We are working with various new companies in this regard.
One of these companies has indicated that they have a pool of 200 applications, another has a pool of 25 applications, and a third company has an additional 30 applications. These three companies would bring half of our expected target.
In addition to our normal trend, we have these new 255 applications coming in. We are also in conversations with other companies that can bring us more applications, and they are not included in our estimates; so as you can see, the target is ambitious, but feasible.
WI: What are some of the competitive advantages your Programme presents over neighbouring CBI's?
PC: Grenada sets itself apart from other Citizenship by Investment Programmes by allowing entire families to become citizens in a single application. We have introduced a new law that allows siblings to be included in the Programme without having to be registered in a University here.
If you are considering applying for a Grenadian citizenship, you will be happy to know that your family may also become Grenadian citizens, including your spouse, dependent parents, siblings, and children. In 2018, Grenada increased the maximum age of dependent children from 25 to 30 and then removed the age requirement entirely. We also removed the requirement that parents be financially dependent on the main applicant, they only need to be a minimum of 55 years of age, which is younger than the age requirement for most of the other economic citizenship programs.
Siblings of the main applicant can also become citizens provided they are unmarried and have no kids. This is quite unique, as siblings are not eligible in most of the other economic citizenship countries. These additions to the scope obviously encourage more applications.
On another note, the Government of Grenada has enacted an amendment to regulations under the Grenada Citizenship by Investment Act No. 15 of 2013 to provide a new price option for investments qualified as Approved Projects. Under this new price option, Section 11 Approved Projects in the Tourism Accommodation sector may offer investors a new qualifying option that permits developers to sell each unit to two or more applicants, with each applicant paying a purchase price of no less than 220.000 USD plus the usual government contribution of at least 50.000 USD. This new price option will encourage more investments in the sector.
Investments in Section 11 Approved Projects that are not in the Tourism Accommodation sector, or for those investors who prefer to achieve full ownership of a unit, the minimum purchase price is 350.000 USD plus the usual government contribution of 50.000 USD, which of course still remains.
I just want to point out that the Unit and the Government is not interested in competing on prices, we do not wish to see a price war. What really sets us apart is the uniqueness of the premium products we offer; we are attracting a very particular calibre of persons and investors under the three avenues we offer: the National Transformation Fund, the Approved Projects, and Significant Investments.
I want to make clear that we are not selling passports. We are promoting an alternative migration destination. Grenada is a unique location to migrate to because it presents several advantages. Quality of life is one of them, international mobility (Grenadian citizens can travel without visa restrictions to more than 115 countries), or business advantages (Grenada has no foreign income, wealth, gift, inheritance or capital gains tax; there is no restriction of profits and imported capital, corporate tax incentives, full exemption from import duties, etc.).
All improvements and changes in the Programme are made to attract investment and increase applications, so that this additional wealth and revenue can benefit the country and its people. Once the real estate projects become operational, you can see the multiplying and trickledown effect they have on the economy and the communities. The Programme contributes about five percent to our national Gross Domestic Product.
WI: Can you tell us a bit more about the three options that exist?
PC: We have three major channels to come into the Programme. The first option is to make a contribution to the country's National Transformation Fund. This option requires a one-time payment of 200.000 USD (for a family of four applicants) or 150.000 USD (for an individual applicant). The payment is only made upon approval of the application, and the contributions are then used for key projects in critical areas such as education, agriculture or infrastructure.
The second avenue into the Programme is through an investment in Approved real estate Projects. It requires making an investment of at least 220.000 USD in a pre-approved real estate project. When you present a real estate project it has to be approved, and once it is approved, the developer can market his project under the Programme in order to raise funds for the development of the project. Many people choose to obtain economic citizenship through this channel. The biggest benefit this option presents to investors is that a significant amount of the investment can be recovered within five years. With regards to this option, the majority of the projects have to be in the tourism sector, and the Committee is well aware of this. For this reason, we are encouraging more projects outside of tourism, and into other strategic areas of the economy such as manufacturing, agribusiness, ICT or energy.
The third option is to make a Significant Investment that is of considerable benefit to the Grenadian economy and will help create employment opportunities for local citizens. This third option is the newest and is still at a virgin state. In this option, the investor presents his project, and the government will decide if it falls under the significant investment option.
WI: How would you evaluate the importance of the Chinese market, and do you think this trend will continue to grow?
PC: Yes, it is an extremely important market for us and it adds value to the Programme. I do think this will trend will continue; Chinese are looking into new migration destinations, and they are used to sending their children to study abroad, to English language universities in many cases. I say this because Grenada is renowned for its University and for the excellence of our medical and veterinarian studies. We have people who come from all over the world to study in St. George's University, which is second to none within the region.
WI: What final message would you like to convey to the 14.6 million readers of the South China Morning Post?
PC: The Grenada Citizenship by Investment Programme is one of high quality, transparency, enhanced due diligence and seriousness. I would like to take this opportunity to send a message of gratefulness to our Chinese investors and applicants, which comprise over 90 percent of our CBI applicants. As we have seen, the program is key for the socioeconomic development of Grenada, so we sincerely appreciate the ties that have been established between both nations.
As a conclusion, I would like to underline that we are promoting an alternative migration destination; we believe that Grenada has a lot of to offer and we want to maintain a premium product, a strong and healthy Programme based on integrity, enhanced due diligence and transparency.