Scott Ragsdale, chairman of Dubai-based deal international facilitation firm, Naseba, explains the reasons behind the trend for individuals in the region acquiring a second passport via 'citizenship by investment' programmes.
“We received a video message from one of our clients, a Syrian national. He sent the video from one of the main airports in London, UK and in it, he actually started to cry with relief that he was at last able to simply travel with his new passport. To him, it represented freedom, normality and I believe, a kind of humanity,” explains Scott Ragsdale, Chairman of Dubai-based global business facilitation firm, Naseba, one of the lead investment partners and promotors of the Citizenship by Investment Programme of the St Kitts & Nevis Government.
With Queen Elizabeth II as its Head of State, The Federation of St Kitts & Nevis is an active participant in the Commonwealth, as well as having the oldest Citizenship by Investment Programme in the world.
The trend for acquiring a second passport is being driven by not just by individual and family quality of life, but also for tax purposes, investment returns, freedom of travel and the resultant business opportunities, as Ragsdale explains in our interview.
What is citizenship by investment?
A citizenship by investment programme is the opportunity to legally acquire a new citizenship quickly and simply, without any disruptions to your life. Many governments around the work offer the scope to acquire citizenship in exchange for investment that helps to build the country’s economy.
Why is this rising in popularity now?
The current political turmoil in Yemen, Syria and Iraq naturally pushes these citizens and citizens of neighbouring countries such as Lebanon, Egypt and Jordan to consider their alternatives, or at least a second choice of passport in case worrying events political beyond their control occur.
Businesses increasingly rely on exports or entering new markets to increase their revenue and/or value to investors. Unfortunately weak passports are often a reason that businesses can fail. What if you must meet a potential new client within a short time period in Paris? What if you must attend a tradeshow in Europe to sell your services? What if you must participate to a board meeting in Canada? How about meeting a key supplier in Thailand? All of these non-travel scenarios will affect businesses negatively.
From a family point of view – another major motivator for acquiring a second citizenship and passport, increasing numbers of parents feel the need to educate their children abroad to give them a better chance in life and allow them to learn the universal business language of English.
How does a second passport benefit investors and business people in this region?
There are many benefits, which include:
• Global Mobility: Free access to more than 155 countries worldwide, including most of the developed nations of the world
• Security: Getting an irrevocable second passport and citizenship gives the individual and their family tremendous peace of mind, especially in troubled times
• Business: The ability to do business in your host country and St. Kitts & Nevis and travel freely with visa-free access to the world
• Tax management: As a citizen of St Kitts & Nevis you do not pay any tax on worldwide income
• Family: Dependent children up to the age of 30 and parents and grandparents over the age of 55 are included
• Healthcare - Get access to one of the best healthcare systems in the world.
• Education: As a St Kitts & Nevis citizen (a Commonwealth citizen), they receive certain preferential treatment in the United Kingdom. Children may enter the UK to study without first having to apply for student visas. After studying, they may work in the UK for two years without needing a work permit.
What is the trend for people from this region making this kind of investment?
Traditionally Chinese and Russians have been the biggest buyers of second passports, however due to turmoil in the Middle East and tax uncertainty in India and Pakistan, and the added necessity to take businesses global, this region has shown a great increase in second passport buyers.
This region however has misconceptions about second passport programmes, as some people believe that these programmes are for high net worth individuals (HNWIs) only. The fact is that anyone from the middle income bracket can afford citizenship by investment and enjoy the life-long benefits to them and their children, as long as they set their priorities right.
Which regional nationalities can benefit the most?
• Syrians, Iraqis and Yemenis, for obvious reasons, have pressing needs and reap huge benefits
• Pakistanis, as they hold the second weakest passport in the world, yet they have some of the most powerful businessmen in this region
• Jordanians and Lebanese nationals, because they often see themselves as geographically unsecured
• Indians, as they face uncertainty back home over tax and currency issues
• Egyptians for increase of mobility and the opportunity to hold USD currency assets
• Gulf countries, although they are not legally allowed to hold a second nationality, some see it as great opportunity.
What is the approximate cost of obtaining a second passport?
There are two ways to achieve this via our direct tie-in and relationship with the Government of St Kitts & Nevis. The first is a direct donation to the country’s Sugar Industry Diversification Foundation (SIDF), a charity setup by Saint Kitts Nevis Government to raise funds for the displaced sugar industry workers. The minimum contribution about is $250,000 per person and is non-refundable by the government once passport is granted.
The second method is making a real estate investment in St Kitts & Nevis, which costs $400K, plus the government and processing fees of $80K. This investment option offers a healthy ROI and a contractual buy-back option after five years, at 10% guaranteed annual returns.
How did you become involved in providing this service?
Naseba is a business facilitation firm that has offices around the world and a global client base. One of the methods that we facilitate deals is by regular dialogue to find out what the precise interests of investors are – including which sectors interest them, their ticket size, intended investment timeframes, desired ROI and geographies. We then arrange one-to-one meetings between investors and business cases that match, and also between willing buyers and willing sellers. It was during the course of our relationships that we were asked more and more frequently whether we could help with finding solutions to the severe and restrictive problems some of our clients have with travel. As we do work closely with several governments, we were already well-placed to offer to help solve problems via citizenship by investment solutions.
What kind of real estate investment is involved?
The government have approved a number of projects, including the one we represent, Tamarind Cove Marina Village, is a 138-residence and hotel complex, with its own marina. We chose to partner with this development, as Phase 1 is 85% complete, which means that we don’t have the construction and therefore commercial risk of the project not completing,” explains Ragsdale. He added that amongst the catastrophic damage that the recent Hurricane Irma visited upon the Caribbean, St Kitts & Nevis was untouched by the devastating high winds.
The government’s Citizenship by Investment Programme determines the level of investment required to avail of a second passport, but we do have a very close relationship with them and have arranged over 300 second passports as part of the Programme.
Within what kind of timeframe can your clients expect a second passport to be processed?
We deliver passports within 90 days of investment, however, our personal record is 45 days.
How do you see the future of this kind of investment?
A second passport is already becoming an essential investment for life and business and with the Schengen space under tremendous pressure, it has become even more difficult to be granted a Schengen visa.
Nowadays, average households spend the majority of their income on accommodation, education and transportation. I see second citizenship – a second passport with open travel to over 150 countries - as a commodity that will become a priority in household spending. And given the feedback I’ve seen through my company, Naseba, I also see the provision of second passports as very much a human issue that helps people to work more flexibly, live the lives they want, and enables them to do more for their families and their future in these increasingly uncertain times.