Crisis in Caribbean CBI: Racketeering Lawsuit and Potential Mass Revocations

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Investment Migration This Week

Summaries prepared by James Nuveen

Speaking to IMI during Global Citizen Week in Cairo last month, international tax and immigration expert David Lesperance highlighted that US clients, particularly high-net-worth and ultra-high-net-worth individuals, are preparing exit plans ahead of the US election in November and the Supreme Court's expected decision on the taxation of unrealized capital gains (the Moore case).

Some are concerned about potential tax hikes under a Biden or Warren administration, while others worry about political polarization and social issues. Lesperance expects a surge in US expatriations regardless of the outcome of both the election and the Moore case. In the interview, he also discusses which countries and tax regimes may attract wealthy American and UK expatriates seeking to relocate.

In a bid to drum up tourism revenues, Thailand has launched a new digital nomad visa at a highly competitive price point. To qualify, applicants must prove financial reserves of around $14,500, a lower threshold compared to similar visas in other Asian countries. The visa costs approximately $280 and allows legal dependents to accompany the holder. The visa is valid for five years, and allows foreigners to remain in the Kingdom for up to a year at a time.

The Prime Minister of Saint Kitts & Nevis, Dr. Terrance Drew, has indicated he is closely monitoring the MSR lawsuit and is prepared to revoke citizenships obtained fraudulently, based on facts and evidence, to protect the country's reputation.

Joined by the Prime Minister of Dominica, Drew is the second regional PM in a week to say he is ready to revoke citizenships obtained through illegal discounting practices. Revoking potentially thousands of citizenships could severely damage the program's reputation and demand, while not revoking them could undermine the program's integrity and security, jeopardizing visa-free travel to the Schengen area.

MSR Media has filed a RICO lawsuit in the US against Caribbean Galaxy, the former government of Saint Kitts & Nevis, and the current Citizenship by Investment Unit in Saint Lucia, among others, alleging an international scam involving underselling of citizenship shares and corruption.

The company has also sought a judicial review of applications in Saint Kitts that would oblige the government to revoke citizenships granted through the controversial prison project, where applicants allegedly paid less than the legal price. Additionally, Whatsapp messages appear to show the Kittitian Attorney General knew high-ranking officials had received several million dollars in kickbacks from the prison project.

Saint Lucia has announced its intention to sign the Memorandum of Agreement (MOA) that establishes a common price, standards, and regulations for Citizenship by Investment Programs across the Organisation of Eastern Caribbean States (OECS), despite initial hesitation.

This move comes amidst a federal RICO lawsuit filed by MSR Media against several regional CBI stakeholders, including Saint Lucia's CIU head McClaude Emmanuel and Caribbean Galaxy, alleging collusion to defraud investors.

Saint Lucia's government has distanced itself from the issue, saying it had "no business with Philippe Martinez ," defending its CIU's operations, and vowing to protect itself against what it calls "false and malicious attacks" related to the lawsuit.

Dubai's General Directorate of Residency and Foreigners Affairs issued 158,000 golden visas in 2023, nearly double the number issued in 2022 and more than triple the 2021 figure.

Buoyed by Russian nationals who have invested an estimated $6.3 billion in Dubai real estate since early 2022, the substantial increase in golden visa issuances is part of Dubai's drive to attract wealthy and talented individuals across various sectors.

The surge in luxury property investment and the recent removal of the minimum down payment requirement for the real estate investment route are likely contributing factors to the rising popularity of the golden visa program.

Egypt's Citizenship by Investment Program has received around 1,000 applications so far, according to the country's CIU. Half of the applicants have already paid the US$10,000 administration fee, and half of those have received Egyptian citizenship.

Syrians constitute about three-quarters of the applicants, with typical processing times ranging from six to nine months. The real estate investment option, particularly residential property with a lowered threshold of US$300,000, has been the most popular investment route so far.

Investment migration people in the news this week included:

• Jean-Francois Harvey of Harvey Law Group (HLG)
• Alex Lawry-White and Nathan Hadlock of Pela Terra
• Micha-Rose Emmett of CS Global Partners - Government Citizenship Solutions?
• Veronica Cotdemiey of Citizenship Invest
• Zaid Al-Hindi of Imperial Citizenship
• Armand Arton of Arton Capital - Empowering Global Citizenship?
• Investment Migration Council
• David Lesperance of Lesperance & Associates
• Jeremy Savory of Savory & Partners

Graph of the week