Property developers in the Caribbean Island of St Kitts are benefiting from rising demand from Middle East investors seeking visa-free travel perks.
Demand has been rising since the start of the Arab Spring as more investors seek to park their money in overseas property with the added benefit of citizenship in a country that is allowed visa-free travel to 125 countries.
The profile of buyers on the two-island country of St Kitts and Nevis includes wealthy individuals, business owners and executives.
“The freedom to travel the world visa-free is a key element,” said Armand Arton, the president and chief executive of Arton Capital, a financial advisory company that specialises in immigrant investor programmes for Canada, Bulgaria, the United Kingdom and St Kitts. The programme is also “an insurance for security for the family and extended reach of their business”.
St Kitts citizenship comes with visa-free travel to 125 countries, including Europe’s Schengen zone, Canada, Hong Kong and Singapore, and a passport can be issued in four months. It does not give visa-free access to the US.
A passport from the United Kingdom, another country that offers citizenship for investment, allows visa-free travel to 195 countries. Hungary and Bulgaria, which also offers such programmes, give visa-free travel to 160 countries.
“The number of investors from the region has doubled in the last years for such ‘global citizen’ programmes,” Mr Arton said. He said he expects his company, based in Montreal and Dubai, to handle more than 10,000 families per year by 2015 participating in such citizenship-by-investment programmes.
The interest in citizenship programmes is also shifting away from traditional countries such as Canada and the United States to Europe with a focus on Bulgaria, Cyprus, Hungary and Portugal, who are trying to attract wealthy investors from the region, Mr Arton said.
In St Kitts, the programme is helping to attract investment to a country with a national debt at 100 per cent of its GDP. The country has, however, banned Iranians and Afghans from investing in the programme.
“It has induced a large amount of investment into the country,” said Val Kempadoo, a Trinidad-based businessman who is developing property in St Kitts. “Less than 5 per cent of all people who have applied for the passport live in the country, so we do not have an influx of people.”
For those from the Middle East, the programme allows a convenient travel document and offers safety and security to the family allowing for quick exits, he said.
At his Kittitian Hill resort project almost a quarter of the sales for 200 units have come from the Middle East through his Dubai agents, said Mr Kempadoo. The 160-hectare project is his first luxury property development in St Kitts.
Kittitian Hill units start at US$400,000 for cottages and can go up to $4 million for villas, and these can be put back into a rental scheme.
Confidence in such schemes seems to ride on the upbeat tourism market.
“Tourism took a dip in 2008, but has now recovered,” Mr Kempadoo said.
About 39 per cent of investors in the Dubai-based Range Developments’ Park Hyatt St Kitts project are from the Middle East, said Munaf Ali, the chief executive.
The country’s citizenship-by-investment programme “is particularly beneficial for individuals who are affected by political or economic uncertainties in their home countries, which has become more common in light of the Arab Spring”, he said. “We have seen a 30 per cent increase in interest from clients in the Middle East region.”
The company is offering 375 shares for US$400,000 each in the Park Hyatt project, expected to be completed in the last quarter of 2015.
Investors can earn a percentage of the hotel’s operating income once it is complete and earn 2 per cent interest on their investment until then.
Both Kittitian Hill and Park Hyatt St Kitts are among 34 projects approved by the St Kitts government for its citizenship-by-investment programme.