In the latest expansion of the citizenship by investment industry, the much-anticipated Moldova Citizenship by Investment Programme has officially been launched this week at the 12^th Global Residence and Citizenship Conference in Dubai. With its untarnished countryside and internationally-renowned wine industry, the charming landlocked country of Moldova is now looking towards more innovative ways of strengthening its economy.

Speaking at the conference, Moldova’s Minister of Economy and Infrastructure, His Excellency Chiril Gaburici was confident that The Citizenship Acquisition Program, as it is officially known, will propel economic growth, support local industries, as well as aid in the more general development of society. By attracting reputable investors to the country through the programme, the Moldovan government hopes to encourage strategic and sustainable development within the country, while enriching the local pool of talent and wealth. In fact, the Moldova Economic Ministry is determined to generate an accumulative value of €1.3 billion through the Moldova Citizenship by Investment Programme over the next five years.

Investment Requirements for the Moldova Citizenship by Investment Programme

In order for an investment to qualify for the Moldova Citizenship by Investment Programme, a single applicant must make a non-refundable EUR100,000 contribution towards the country’s Public Investment Fund (PIF) for Sustainable Development. Furthermore, a contribution of EUR115,000 is required for a couple, EUR 145,000 for a family of four, and EUR 155,000 for a family of five or more. As the programme consolidates itself, further investment options are also anticipated to be introducing, namely investment options of EUR250,000 in real estate or government bonds.

The Moldova Citizenship by Investment Programme also follows a thorough four-tier due diligence system ensuring the uppermost quality of successful applicants. Due diligence fees stand at EUR6,000 for the main applicant and EUR5,000 each for the spouse and dependent children over the age of 16 and dependent parents. Furthermore, a service fee of EUR35,000 is required with each application. Other government and biometric fees also apply.

Eligibility for the Moldova Citizenship by Investment Programme

In order to be eligible for the Moldova Citizenship by Investment Programme, main applicants must be at least 18 years of age. Eligible dependents include the spouse, dependent children up to 29 years of age, and dependent parents- of both the main applicant and the spouse- who are 55 years of age or older.

All applicants, including dependents, are required to have a clean criminal record. Applicants who have had their assets ordered to be frozen by the EU will not be accepted into the programme, as will not persons who have been denied a visa to countries/territories with which Moldova has visa-free or visa-on-arrival travel arrangements.

Benefits of the Moldova Citizenship by Investment Programme

One of the main draws of the Moldova Citizenship by Investment Programme is the visa-free access to the 121 countries granted to a holder of a Moldovan passport. From access to the Schengen area to Russia, Moldovan citizenship surely offers greater ease of travel to many interested applicants. Moldova’s active pursuit of EU membership also presents significant prospects. The Moldova Citizenship by Investment Programme comes with a quick and efficient application process. The certificate of naturalisation is issued with three months following the submission of the application, provided all the criteria are met and no due diligence issues arise.

Furthermore, no residency requirements are specified in order to obtain Moldovan citizenship through the programme, which is also granted for life and can be transferred to future generations without restriction. Moldova also allows dual citizenship, meaning that any previous citizenships (subject to the countries’ laws) need not be renounced upon the obtainment of Moldovan citizenship.

In the week gearing up to the pivotal mid-term elections, President Donald Trump has reinforced his hard-line immigration rhetoric by striking a blow against US birthright citizenship. Though legally questionable, Trump has made a promise in a new interview to bring an end to US birthright citizenship, whereby children of non-citizens and unauthorized immigrants born in the US are automatically granted US citizenship.

US Birthright Citizenship

US citizenship is primarily governed by the principle of jus soli, or the law of the soil, which was enshrined in the 14^th Amendment of the US constitution some 150 years ago. According to this doctrine, any individual born on US soil is a citizen of the United States. In what is evidently an effort to spear the matter of immigration ahead as a priority in voters’ minds, Trump has promised to end US birthright immigration by executive order- despite Republican and Democratic lawmakers alike stating that this claim is constitutionally unfounded as it is not possible to end birthright citizenship with an executive order. On the contrary, this undertaking would involve a “very, very lengthy” constitutional process, according to Republican House speaker Paul Ryan. In light of the legal doubt around such a claim, Trump’s statement is less of a promise and more a political tool to sow more division on the immigration spectrum.

While birthright citizenship is the main hallmark of US citizenship, there are other ways through which US citizenship may be granted. Notably, there is also the principle of jus sanguinis or citizenship by blood, which entails that an individual born outside the US to at least one parent who holds US citizenship at the time of birth, is granted US citizenship, given also that the US citizen parent has lived in the US prior to the birth. Foreign citizens may also gain US citizenship through the process of naturalisation which is subject to a set of legal requirements, including age, residence, US knowledge, and moral character. Apart from US birthright citizenship, adopted children of a foreign nationality may also acquire US citizenship, as may foreign persons married to US citizens, subject to the relevant legislation.

Trump’s unfounded claim on US birthright citizenship

One other uncorroborated statement Trump made in his interview for “Axios on HBO.” is that is the US is unique in granting birthright citizenship, in that no other country in the world grants citizenship on the basis of birth. On the contrary to this, several countries allow birthright citizenship, notably Canada, most of South America- including Brazil, Peru, Venezuela, and Mexico- and other countries such as Pakistan and Lesotho. In Canada, for instance, a child born on Canadian soil is automatically granted Canadian citizenship as long as one of the parents is a Canadian citizen or permanent resident at the time of birth. The few exceptions to this rule include instances when the child is born to a diplomat or consular officer.

Other countries grant citizenship on the basis of both birth and descent, or otherwise have their citizenship rights based largely around citizenship by descent, yet they still allow birthright citizenship with some restrictions. These countries include France, Belgium, Italy, Australia, the United Kingdom, Ireland, and Portugal- to name a few.

Furthermore, in recent developments within the immigration industry, several countries now also grant a path to citizenship through citizenship by investment programmes. Following heavy due diligence procedures, European countries, such as Malta, Cyprus, and five Caribbean countries- St Kitts and Nevis, Saint Lucia, Antigua and Barbuda, Grenada, and Dominica– all grant citizenship to successful applicants who satisfy investment requirements. Each citizenship by investment programme is unique with its own benefits, eligibility criteria, investment options, catering to the particular needs and resources of different high-net-worth-individuals.

Tranquil island lifestyle in Saint Lucia

Saint Lucia is a small island located in the eastern Caribbean Sea. It boasts a typical island lifestyle of sand, sea, and a laidback attitude. Despite its small size, the island possesses a special diversity when it comes to geography and biodiversity. Living in Saint Lucia comes with the perks of enjoying excellent beaches, scenic waterfalls, mountains, rainforests, and countless exotic flora and fauna. The twin mountain peaks of Les Piton drop dramatically to the water’s edge on the island’s western coast. In the south, one encounters lava pools and vents steaming sulfur-based gases at the Sulphur Springs Volcano. Other points of interest include the Diamond Waterfall and the Mineral Baths.

The turquoise waters that surround the island of Saint Lucia mean that visitors to the island and those living in Saint Lucia can engage in a variety of water activities like fishing, kayaking, scuba diving, snub, sea trekking, snorkelling, and swimming, to their hearts’ content. Those after an adrenaline rush can ride or hike along the coast or up into the mountains; something which can also be performed on horseback. Food lovers can indulge in their food and drink pleasures at several different bars and restaurants, through which one can take a trip down Saint Lucia’s history.

Newcomers living in Saint Lucia are more often than not welcomed with open arms by the charming locals. The island’s history is exemplified in the authentic cultural activities one may choose to partake in when living in Saint Lucia. These include, under the auspices of the local communities, traditional dances and cassava making. The Saint Lucian carnival includes costuming, parades, Calypso contests, queen contests, and other celebrations. There is also the Creole Day, a week-long festival celebrating traditional music, dance, storytelling, costuming, crafts, and the intriguing Creole language. Then there are colourful flower festivals like La Rose and La Marguerite, observed annually in many villages on feast days dedicated to patron saints Saint Rose de Lima and Saint Marguerite d’Youville.

Furthermore, Saint Lucia’s good diplomatic relations with other states and membership of multiple international organisations such as the Commonwealth of Nations, the Caribbean Community (CARICOM), the Organisation of Eastern Caribbean States (OECS), and the International Francophone Organisation ensure that the tiny island is seldom alone on the international plane.

Saint Lucia’s Economy

Agriculture, specifically the banana industry, were historically the main source of income for the Saint Lucian populace. However, the focus on commercial export-driven manufacturing has resulted in consumption of local produce suffering in recent years, leaving it at a paltry 2.9% share of the country’s GDP.

Industry and tourism have consequently risen in importance contributing to 14% and 83% of GDP respectively. This is a result of US and EU trade preferences, and the government’s interest in economic diversification with well-developed manufacturing. The offshore financial services sector is also gaining steam due to its sound regulation. Import and export trade, totalling more than 100% of GDP, are subject to the average tariff rate of 7.8%. However, there are some barriers that impinge on trade due to excessive red tape that acts as a deterrent. The banking sector is also limited, and access to financing can be quite difficult.

Vigorous Real Estate market in Saint Lucia

Because of an increase in tourism and the government’s introduction of the citizenship by investment program, Saint Lucia’s property market is booming. Most buyers come from the US, Canada, and the UK. Aside from an increased interest from foreign property buyers, developers and investors are also starting to turn their eyes towards Saint Lucia. This has diversified the property market from a buyers’ market to a sellers’ one. Residential property prices vary from USD 700,000 to USD 15,000,000. Most luxury homes are in the USD 2,000,000 range. On the lower end of the market, there has been a constant demand and strong property prices, with prices of certain condominiums ranging from USD 200,000 to USD 550,000.

Living in Saint Lucia- Health

Saint Lucia has two public hospitals: St Jude’s Hospital and Victoria Hospital. There are district hospitals at Vieux Fort, Dennery, and Soufriere that offer primary healthcare services and limited secondary healthcare and emergency services.  To the benefit of those living in Saint Lucia, there are also more than thirty smaller health centres. Saint Lucia only has one privately run hospital, besides several other private facilities that provide specialised medical and dental services. The situation however, is improving, with the total expenditure on healthcare being 6.7% of the GDP. This is still relatively low when compared to other states’, nonetheless, the WHO gave Saint Lucia’s healthcare system an upper-middle classification. This is testament to the system’s good standing.  

Living in Saint Lucia- Education

Saint Lucia’s education system is based on its British counterpart, with ample schooling options consisting of 150 preschools, 33 day-care centres, 75 primary schools, 24 secondary schools, 5 special education schools, 7 private primary schools, and 3 private secondary schools. For those living in Saint Lucia, education is compulsory up until the age of 16.

At the end of the seventh grade, students take the Common Entrance Examination (CEE) to determine their placement for additional compulsory schooling. Students choose which secondary school they wish to enrol at, and the higher the CEE scores, the wider their choice of schools is.

Many students continue at the Sir Arthur Lewis Community College which offers two-year certificated degrees in several areas. The University of the West Indies has a branch in Saint Lucia which provides for the first two years of a degree program. Afterwards, students can complete their studies at the main campuses in either Jamaica or Barbados.

Security in Saint Lucia

Corruption is not rampant in Saint Lucia’s justice system. In fact, it sits at 48th place out of 180 in Transparency International’s 2017 Corruption Perceptions Index (CPI). However, there is a serious backlog of ongoing cases. Such delays exacerbate prison overcrowding, with almost half of detainees on remand or being detained pending trial. In the security sector, while the police force enjoys a high public confidence, there are some concerns about police abuse. When combined with the judiciary’s inefficiencies, these have hindered Saint Lucia’s efforts to tackle crime. To the government’s credit, the police force is undergoing modernisation, with improvements to police conduct, vetting procedures, and assisting measures to cut the judicial backlog. These are all aimed at the improvement of institutional capacities.

As one of the most prominent islands within the Caribbean, Saint Lucia offers the ideal location for both onshore and offshore business. Through its cultural treasures, its warm and charming reputation a well as its natural beauty, various foreign investors have expressed interest in the island through economic contribution. Investing in Saint Lucia comes with numerous incentives, including fiscal ones, which have been introduced with the aim of promoting the island as the ideal jurisdiction for setting up businesses, or purchasing property.

Companies Investing in Saint Lucia

The law in St Lucia distinguishes between local companies and companies which will conduct international business in Saint Lucia. Local companies investing in the jurisdiction may subsequently be identified as Private Limited Companies or Public Limited Companies.

Private Limited Companies in Saint Lucia

Investing in Saint Lucia through private limited companies entails the formatting and ownership of a company by individuals other than the general public, and therefore cannot the public cannot buy shares or debentures within the company. Such a company must consist of a minimum of 2 directors or shareholders. Private companies may furthermore fall under the following categories:

1. Private Company Limited by Shares;

This type of company is formed for the purpose of carrying on business to derive a profit. It must not have more than 50 shareholders, and can enter into any type of legal activity, provided it is not restricted by the Articles of Association of that company. If the company winds up and the assets are insufficient to cover the liabilities, the shareholders will be liable to the amount unpaid in relation to their shares.

2. Private Company Limited by Guarantee;

This company does not have a share capital and is not incorporated to make a profit. Rather, it is formed to help the community benefit from a particular project. Most of the time, foundations and trusts are formed under this type of private company. At the time of formation, the members must sign a declaration of guarantee, which will specify the amount to be contributed if the company winds up. If the company winds up and the assets are insufficient, the members will be liable to cover the amount guaranteed.

3. Unlimited Company

This private company has a share capital. Its members are liable in an unlimited manner for any debts arising from the company, therefore, all that is incurred by the company is considered incurred by its members.

Public Limited Companies in Saint Lucia

Investing in Saint Lucia through public limited companies on the other hand, involves inviting the public to buy the company’s shares by listing them within the Stock Exchange. The company’s activity is only restricted by what is upheld within the Article of Association regulating the company.

If it is the case that the company winds up, and its assets are insufficient to cover such liabilities, the shareholders will be liable to the amount left unpaid in relation to their shares. The name of the company must always end in the term ‘Public Limited Company’, or its abbreviation ‘PLC’.

International Business Companies in Saint Lucia

The aforementioned are all types of local companies incorporated in St Lucia, however, individuals may be interested in investing in Saint Lucia through an offshore company. This company will conduct international business outside of Saint Lucia, and will, therefore, be regulated by the International Business Companies Act of St Lucia.

There is no limitation for the maximum number of directors allowed to form this type of company, however, normally the standard allows a minimum of 1 director and a maximum of 7 directors. The type of directors involved, their appointment, and the shares they each hold are to be specified within the Articles of Association regulating the company. The law in Saint Lucia allows for the identity of the shareholders, directors and officers within an IBC to be kept strictly confidential. Only the identity of the registered office and the registered agent are required.

It is important that the IBC does not carry out business with persons who are resident in Saint Lucia. This includes persons who have an interest in real estate in Saint Lucia; or carry out activities relating to banking, trusts, insurance or re-insurance in St Lucia, without a specific licence to do so. Interestingly, Saint Lucia International Business Companies (IBCs) may be exempt from taxation and withholding tax in St Lucia, however they will be taxed on any local transactions.  

Offshore companies have gained significant popularity in Saint Lucia as a result of the structural adaptability, asset protection, privacy and tax exemption being offered to such companies. When investing in Saint Lucia through such companies, there are no specific minimum or maximum capital requirements imposed, and the incorporation fee is not proportionate to the capital. This flexibility has proven to be quite advantageous with clients, preserving Saint Lucia’s growth within the foreign direct investment industry.

Required Permits or Licences for Investing in Saint Lucia

Foreign individuals who are investing in Saint Lucia by setting up a business and own more than 49% of the company’s shares, must have a trade licence issued by the Ministry of Commerce, Industry and Consumer Affairs. Once all the documentation has been successfully submitted, the application process typically takes 6-8 weeks. The licence will be issued on an annual basis and expires on the 31^st of December of every year. Once the licence has been granted, the applicant may be subject to certain fiscal incentives.

Non-nationals may also be required to hold a work permit, which is issued by the Labour Department of the Minister of Legal Affairs, Home Affairs and Labour. This permit is also issued annually, even if the individual has resident status. The application should be filed at least two months before employment in Saint Lucia begins. Until the permit has been issued, the applicant should not engage in any employment.

Taxation for Businesses Investing in Saint Lucia

Companies resident in Saint Lucia are taxed on their worldwide income, whilst non-resident companies are taxed only on the income they derive or source from St Lucia. Both will be subject to Corporate Tax, which, currently, is set at the rate of 30%.

Companies investing in Saint Lucia will also be subject to other forms of tax within the State, including Value Added Tax. VAT is charged on the sale of goods and services from St Lucia or the importation of goods into St Lucia. The standard rate is 12.5%, however particular goods or services may be subject to reduced VAT rates, zero-rates or complete VAT exemption. This depends on the service or goods which are being offered or imported.

Corporations are also responsible for paying social security contributions on behalf of the employee, where the rate is 5% of the employee’s earning, however this must be capped at XCD (East Caribbean Dollars) 5000 per month.

Tax Incentives for Companies Investing in St Lucia

The Caribbean Island has introduced various tax credits and incentives for local companies and International Business Companies who are interested in investing in St Lucia. The following are merely a few of those currently being offered in relation to the setting up of businesses investing in St Lucia:

• Manufacturing companies, who intend on improving the manufacturing base of Saint Lucia, its level of exports, and use of local materials and labour are given special attention. These companies will be able to benefit from a tax holiday of maximum 15 years if approved. The length of the tax holiday is determined on the basis of the amount of local value added.
• As a way of promoting investment within Saint Lucia, various investment incentives have been introduced. The applicable incentives will take into consideration the business’ impact on local employment, exports and the foreign exchange earnings generated.
• IBCs can specify whether they would like to be exempt from income tax completely, or be liable to income tax on their profits or gains at a rate of 1%. This type of company will be not be liable for stamp duty on the transfer of any property, assets, shares, debt obligation and other securities. It will also benefit from no withholding taxes on the remittance of dividends, distributions, royalties, interest, management fees, fees, and other income paid to persons outside of St Lucia. The supplies which are provided by IBCs will be subject to a rate of 0% VAT.

Real Estate investment in Saint Lucia

Saint Lucia is the perfect location for individual who would like to live within a laid-back tropical paradise. Being able to enjoy views of calm beaches, rainforests and mountains, the island is much less densely developed and less expensive in comparison with the other Caribbean Islands. Development and investment within the real-estate industry is highly encouraged through various tax incentives and exemptions.

Once the individual has decided which property to purchase, the process of transferring ownership of the property will begin, which is relatively simple and quick. Saint Lucia allows property to be purchased by natural persons, or legal persons, including local companies or international companies. A contract will be drawn up between the vendor and the buyer stating the conditions of purchase and the price negotiated. The buyer is then expected to put down a deposit of 10% of the purchase price upon signing the contract.

Non-nationals purchasing property may be required to acquire an Alien Landholding Licence from the Ministry of Planning, Development, Environment and Housing. The licence is permanent and property-specific. Once the licence has been granted, the transfer may take place. The remaining balance must be settled and paid, including any government duties.

The Saint Lucia Citizenship by Investment Programme

As a politically and economically stable country, Saint Lucia has been experiencing significant success in attracting foreign investment through its Citizenship by Investment Programme. As one of the latest Caribbean countries to introduce a CBI Programme, investors have the opportunity of becoming citizens of Saint Lucia through various investment or contribution options.

The main applicant must satisfy the following characteristics to be eligible for the programme:

• Must be at least 18 years of age;
• Has committed himself to a particular contribution or investment, providing the necessary evidence as may be required;
• Meets the application requirements;
• Has disclosed all pertinent matters within the application;
• Has a clean police conduct;
• Has an excellent health record;
• Satisfies the fit and proper test, ensuring the applicant is of good standing;
• Has provided evidence of his high personal net worth and
• Has satisfied the nationality requirements, which specifically upholds that individuals from Iran, Afghanistan, Yemen and Nigeria cannot apply.

Dependents of the main applicant are also eligible to benefit from this programme, where the following persons are recognised: dependent children under the age of 25; dependent parents above the age of 65 currently residing with the applicant; and mentally/physically challenged children or parents.

There are four main investment/contribution options available for investors:

1. A contribution of US$ 100,000 to St Lucia’s National Economic Fund, which will be directed towards national projects aimed at strengthening of the economy of the country. The contribution will increase if other dependents are also included with the application of the main applicant.
2. An investment of US$300,000 in real estate, in which the property must be kept for a minimum of 5 years;
3. An investment of US$500,000 in government bonds, which must be kept for a minimum of 5 years, or an investment of US$3.5 million within an approved enterprise project;
4. A joint-investment option, where 6 individuals may contribute US$1 million each through a joint-investment.

The programme has proven to be quite beneficial to investors- besides offering a wide variety of investment options, the Saint Lucia Citizenship by Investment programme does not require applicants to physically reside or travel to the state during the application process. With a processing time of merely 3 months, applicants are not expected to have any educational or managerial experience, nor are they required to attend an interview. Once they have become citizens of Saint Lucia, such individuals will not be taxed on their worldwide income.

Acquiring Saint Lucia citizenship has proven to be truly beneficial to applicants and their families, who are able to benefit from visa-free travel to over 142 countries all over the world. As a member of the Commonwealth of Nations, the Caribbean Community, the Organisation of Eastern Caribbean States and the International Organisation of La Francophonie, the state holds excellent relations with various countries around the globe. The political stability, numerous fiscal incentives, and welcoming atmosphere have rendered Saint Lucia the ideal location for investors from

Saint Lucia is an island nation located in the Windward Island Chain, an archipelago of the Caribbean Sea. With its strategic position in the centre of the Caribbean islands, the Saint Lucian economy is the ideal place to access key regional, near shore and international markets. Moreover, as an active member state of the Commonwealth of Nations and a party of numerous trade agreements with the Caribbean Community (CARICOM) member states, the US, Canada and Europe, the island holds its ground as one of the best places to do business amongst the Caribbean English-speaking countries. Saint Lucia has in fact been consistently ranked as such by the World Bank’s Annual “Ease of Doing Business Survey”, due to comparative advantages in areas of regulation, starting a business, market accessibility, incentives, taxation and quality of life.

In 2017, vulnerability was a central topic for the Caribbean region economies, as severe natural disasters affected several countries, resulting in significant economic and social damages losses. However, thanks to the buoyant tourism sector and an increase in construction activities, Saint Lucia proved itself as one of the most resilient counties amongst the Lesser Antilles area.

Key Indicators for the Saint Lucian Economy

Saint Lucia GDP growth

According to the Eastern Caribbean Central Bank (ECCB), provisional data suggest that activity in the Saint Lucian economy accelerated 2017. The ECCB has estimated that real GDP is estimated to have expanded by 2.7%, following a 1.7% growth on an annual basis. The expansion was led by improved performances from the hotel and construction sectors: in the fiscal year 2017, the hotel sector in fact increased by 4.73%, whereas the construction sector increased at a significant average growth rate of 9.06% between fiscal years 2015 and 2017. Such progress may be attributed to several initiatives enacted by the local government aiming to enhance infrastructural development, which is set to continue over the next 10 years.

The expansion of economic activity was also driven by improvements of other major contributions to real output, such as restaurants, wholesale and retail trade as well as transport, communications and storage. Data concerning the value added by hotels and restaurants sectors, suggests that the tourism sector is a stronghold and main contributor to the island nation’s economy, along with agriculture and manufacturing sectors.

Saint Lucia Employment

The World bank estimated that the total labour force comprised of 99,136 jobs in 2017. The major contributors to employment were respectively the Services sector, which accounted for 67.36%, the Industry Sector with 17.30% and the Agricultural sector with 15.34% of total employment. Another study published by the World Travel Tourism Council provided further information regarding the contribution to the total employment of the Services sector. According to the study, in 2017 the Travel and Tourism sector supported 20,000 jobs directly and 38,500 indirect jobs. The figures are set to rise respectively by 6.0% and 5.5% in 2018. These figures suggest that the sector has undeniably had a high impact on the island’s economy and growth.

In 2017, Saint Lucia recorded an unemployment rate of 20.2%, down from 21.3% at the end of 2016. Although it may appear to be a high rate by international and European standards, it is actually the country’s lowest unemployment rate since 2007. The youth unemployment rate declined marginally to an estimated 38.5%, partly due to an increase in the number of construction-related jobs and several key provisions enacted and geared by the government towards developing the young labour force participation, such as the National Apprenticeship Program.

Saint Lucia Inflation

Prices of goods and services in the Saint Lucian economy are estimated to have risen by 2% during 2017 on an end of period basis, as indicated by upward movements in the consumer price index. This out-turn contrasts a deflation rate of 2.8% recorded during 2016 and was mainly a result of an increase of house rental and oil prices.

Saint Lucia Fiscal Operations

As stated by the ECCB, the central government’s operations resulted in a positive outturn, mainly due to a positive development on the current account which recorded a surplus for the fifth consecutive year. This improvement was largely the result of an expansion in current revenue (+2.7%), supported by a fall in current expenditure. Such growth was influenced by increases in both tax and non-tax revenue yields. An increase of 25.1% ($12.5m) was noted for non-tax revenue, associated largely with receipts from the Citizenship by Investment Programs (CIP).

Despite the Government’s efforts to handle the public debt, the debt-to-GDP ratio for the Saint Lucian economy is still high. The ECCB’s estimations suggest that it was equal to 67.5% by the end of 2017, thus increasing by 0.5% from 2016. The overall growth of the public debt expenditure is attributable to an increase in borrowing from the Central Bank.

In its 2017 Budget proposal, the government planned several initiatives which are projected to affect the island’s taxation structure.  

The Prime Minister announced the implementation of the excise on fuel. The inflow generated by the new tax would be directed exclusively to finance a program of road enhancement thus ameliorating the island’s infrastructure with positive effects on transports, trade and tourism. However, the general increase in international oil prices negatively affected the provision, which did not achieve the target; indeed, the actual excise tax rate on gasoline has been below the aimed XCD$4.00 per gallon. Thus, the government proposed to remove the cap on fuel prices to finalize the measure.

As of 2017, Saint Lucia is no longer included in the EU Black list of tax heavens.  This will surely improve the island’s reputation and trustability, as being included in the Black list represented a threat to potential foreign investments in the country.

Following the success of the Citizenship by Investment program, and subsequent high competition from the other Caribbean programmes, the Government has proposed the introduction of a residency program in order to attract High Net Worth Individuals (HNWIs) who wish to relocate to Saint Lucia but who do not necessarily require a Saint Lucian passport. This option will encourage HNWIs to stay in the country, thus generating possible positive effects on consumption of goods, arrivals and transportation. Nevertheless, the residency programme does not require the physical presence of the applicant as it does not ask the individual to establish a domicile status, but merely to establish residency. In such cases, the HNWI will be subject to taxation only for the income remitted in the country. 

Core sectors in the Saint Lucian Economy

Albeit being traditionally reliant on agriculture, over the past decade Saint Lucia has been able to change pace and attract foreign business and investments, particularly in its offshore banking and tourism industry. As mentioned earlier, tourism is the largest contributor to the island’s GDP and the main source for foreign exchange earnings. The manufacturing sector is also relevant in the Saint Lucian economy and it is one of the most varied in the Eastern Caribbean islands. The production of crops such as tropical fruits and avocado is still growing at a steady pace, supported also by external demand. In 2017, the main sectors were namely Services which counted 82.8% of GDP, the Industrial sector with 14.2% of GDP and Agriculture contributing 2.9% of GDP.

Saint Lucia Tourism Sector

The tourism Sector in Saint Lucia is vibrant and enjoys a robust growth. The positive trend reflects an increase in arrivals, both cruise ship passengers and stay-overs, which has gone up by 10.9% compared to the preceding year. The largest contribution to such growth can be attributed to cruise ship passengers, whose number increased by 13.7%. The reason for the expansion of the number of cruise passengers is reflective of bigger vessels and the overall number of ships berthing which have increased from 381 to 432 on an annual basis. The upsurge of stay-overs (+11%) was supported by an increase of airlifts from all the source markets including the USA, Europe, the Caribbean and Canada.  International airline companies such as Air Canada, American Airlines, Delta, British Airways, Virgin Atlantic, Sun Wing, JetBlue and United Airlines are planning to expand their operations between the end of 2018 and beginning of 2019, which will presumably lead to a further expansion of visitor arrivals and stay overs from North America for the last quarter of 2018 and Q1 of 2019.

The impact of Tourism on the Saint Lucian economy is thus set to grow steadily.  According to the WTTC, the total contribution of the sector to the gross domestic product was equal to 41.8%. It is forecast to rise by 5.7% pa to 54.9% of GDP by 2028. This also includes wider effects from investments, the supply chain and induced income which primarily reflects the economic activity generated by tourism-related industries such as hotels, travel agents, airlines and other passenger transportation businesses that are directly supported by tourists.

Saint Lucia Construction Sector

The construction sector is one of the drivers of the island’s economic growth. Construction activity is led by a highly anticipated increase in the various productive sectors, but is mostly driven by the Tourism industry.  Several tourism-related development plans are in fact foreseen to take place over the coming years, which will involve many international hotel chains such as Royalton Property, the Harbour Club Hotel, the Coconut Bay Resort, the Sandals Resort and the Pearl of the Caribbean resort. Moreover, Saint Lucia has envisaged a few more projects in the pipeline which will start under the Citizenship by Investment Programme (CBI). Contribution to growth will be supported also from a few private residential and commercial buildings, coupled with infrastructural development from the public sector.

Saint Lucia Manufacturing Sector

Estimations from the ECCB suggest that Manufacturing has continued to grow, albeit at a slower pace than what was recorded in the past year. Value added in that sector rose by 1.7 per cent in 2017, less than a half of the growth of 3.8% achieved in the past year.

The overall manufactured goods output recorded an expansion in production, supported by an increase of 2.1% in output of miscellaneous manufactured articles. Over the years Saint Lucia’s manufacturing sector has been able to create opportunities in various other areas of the Saint Lucian economy, such as agro-processing, textiles, electronic assembly, beverage brewing, bottling and distilling, carbon fibre high speed boats, and green technology innovations thus keeping abreast with the international trends and external demand. However, despite the increase in activity, the sector’s contribution to overall GDP declined marginally to 5.5% from 5.6% in 2016.

Saint Lucia Citizenship by Investment Programme and the Economics of Citizenship

In order attract foreign investments and raise funds for large-scale development projects, Saint Lucia decided in 2015 to follow its neighbours’ footsteps and introduce its first Citizenship by Investment Programme. The island nation claims to offer to its prospective new citizens the most varied options of investments currently offered by any other country in the Caribbean, as well as a swift three-month process to acquire the citizenship.

Moreover, following the amendment of the regulation enacted in 2016, the government introduced remarkable changes in the Saint Lucia Citizenship by Investment Programme concerning the qualifying requirements for the investments in National Economic Fund with the aim to make the programme more appealing for potential applicants. Indeed, Saint Lucia’s citizenship by investment programme is undoubtedly one of the largest and successful programmes in the Caribbean, and is leaving its mark on the Saint Lucian economy: figures divulged by the head of the CEO of Saint Lucia’s CIP Unit, Nestor Alfred, revealed that they have received 279 applications since opening.

Benefits:

• Visa free travel to over 142 countries worldwide, including EU Schengen member states;
• The inclusion of family members;
• A favourable tax system;
• Right to live and work in St Lucia and other CARICOM (Caribbean Community) countries.
• No residency requirements;
• Rights and privileges of citizenship of a Commonwealth country in the UK and other Commonwealth countries.

Eligibility:

To qualify for the Saint Lucian Citizenship, applicants have to meet certain requirements stated by the Saint Lucian law.  Saint Lucia’s Citizenship by Investment Program was brought into force via the Citizenship by Investment Act No. 14 of 2015 and the eligibility requirements for the program were delineated in the Citizenship by Investment Saint Lucia Regulations S.I. 89 of 2015. As mentioned earlier, the eligibility requirements have been subsequently revised in the Citizenship by Investment Amendment Saint Lucia Regulations S.I. No. 3 of 2016, in order to enhance competitiveness with other countries offering similar programs.

As stated by Law, a prospective applicant must:

• Be at least 18 years old;
• Undergo a Fit and Proper test and prove that they can make the investments required by Law;
• Have a clean criminal record and be in good health;
• The programme can be extended to the main applicant’s dependants, who may include the spouse, children and parents;

Requirements:

Unlike other Caribbean programmes that offer between two and three possibilities of investment, the Saint Lucia citizenship by investment programme proposes up to four options which the prospective applicant may choose from:

• Minimum Contribution of 100,000 USD to Saint Lucia’s National Economic Fund;
• Minimum purchase in the real estate of 300,000 USD, which must be kept at least for five years;
• Investment of 500,000 USD in government bonds;
• An investment into an Approved Enterprise Project. This option is the most flexible, as it can be done either by an individual or by joint investors. The sole applicant minimum investment amount is of 3,500,000 USD; Joint investors minimum investment amount is 6,000,000 USD, with each applicant contributing a minimum of $1,000,000 USD.

According to the Prime Minister, since the Saint Lucia Citizenship by Investment programme’s launch, the island has attracted four major hotel developments with a combined investment value of over US$ 1 billion. According to the International Monetary Fund’s latest report, in 2017 the citizenship by investment programme was the largest contributor to GDP (0.9%) for Non-tax revenues, and predictions suggest that the programme will continue to represent a relevant source for Saint Lucia’s economy also in the upcoming five years. 

Saint Lucia Economic Outlook

The Caribbean area was recently scourged by natural disasters: however, its local population managed to make a virtue out of necessity. The post-hurricane reconstruction, robust tourism, and supportive commodity prices are in fact expected to have stimulated significant growth by the end of 2018.

Data suggests that the island’s economy has expanded by 2.7% further compared to a growth of 1.7% from the previous year. Although the dynamics suggest an overall positive outlook for the Saint Lucian economy in the short term, it must be highlighted that there are still risks in the medium term, including external shocks given by financial market developments as well as unexpected increase in inflation, due to for instance a further increase of oil prices. Besides external factors, the Saint Lucian economy expansion is also threatened by domestic challenges, amongst all, the high dependency on the tourism industry.

Nevertheless, according to the Caribank report, GDP is set to grow by 3.1% in 2018. Construction output is expected to be supported by private sector activities and buoyed by tourism, which are likely to be strengthened and boosted by upcoming projects implemented under the Citizenship by Investment Programme.