Resort Islands Now Offering Cash-and-Carry Citizenship

The hottest product on the market these days in the cash-strapped resort islands of the West Indies has nothing to do with their sandy beaches or lush volcanic rain forests.

And it doesn’t involve their booming offshore industry, which attracts millions of dollars from Americans--ranging from overburdened middle-class taxpayers to Internet casino gamblers--who pour their cash into companies that operate legally here free of most taxes and regulation.

No, the most lucrative item for sale by the governments of these island states, which are struggling to survive in a world with limited foreign aid, is far more basic.

It’s their nationality.

A mere $50,000 in cash, for example, can buy a passport and lifelong citizenship in Dominica. The island nation is almost hidden between Guadeloupe and Martinique. But in the last year it has sold 68 passports--for $3.5 million--to new citizens from points as diverse as Moscow and Miami, Libya and Los Angeles.

It’ll cost $250,000 to be a Kittsian, up from $100,000 a year ago--but at least you’ll own a house there. The new “Citizenship by Investment” law in the two-island nation of St. Kitts and Nevis requires that amount as a minimum “real estate investment” to get a new nationality.

Most other West Indian states offer passport packages that fall somewhere in between.

Why are they doing it?

“It’s simple: Our governments need the income,” said Joseph Escher, a Swiss-born offshore financial analyst who heads St. Kitts and Nevis’ new International Financial Center. “The time when you could go and beg for money from England or the United States is gone. We’ve got to have some kind of income to live on.”

What’s in it for the buyer? The reasons are almost as varied as the nations they come from, most of which permit dual citizenship.

Escher and other offshore analysts said most Americans invest in a second nationality as a way to reduce or avoid U.S. taxes. Wealthy Russian business people invest, they said, principally to keep their global movements and investments secret from immigration officials in Russia.

Most others--including many mainland Chinese and Taiwanese--carry passports that are either barred or subject to strict visa requirements in the West, the analysts said. Those nationals view their new citizenship as a gateway to the world.

Nearly half of Dominica’s new citizens are from the former Soviet Union, according to a review of the country’s public records in the year since it began putting its nationality up for sale. Nearly two dozen others were from China or Taiwan. Another dozen were Americans. The rest were from Libya, Iran, Canada or Cuba.

So popular is the nationality market that Escher said St. Kitts more than doubled its fee earlier this year “to make it more difficult to get it.”

“The problem is you have 40,000 inhabitants of this country,” he said. “And countries like the U.S. give only so many visas to each country. Suddenly, we have 1,000 guys buying passports. There was a fear there would be fewer visas for native Kittsians.”

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Nationality for Sale

Most West Indian island nations offer some type of citizenship-by-investment package.