Investment Pitfalls: The Risks Behind St. Lucia's Passport Revealed, Must Know the Risks Before Choosing a Second Citizenship
St. Lucia, a tropical paradise located in the Eastern Caribbean, has attracted many tourists from Europe and the United States with its beautiful scenery. More and more investors are looking toCitizenship by Investment ProgramObtaining a Second Passport. However, the little-known Section 38 of the St. Lucia Citizenship by Investment Act (CIBA) has a hidden agenda that could result in the loss of citizenship in the country! In this article, we lift the veil of secrecy and explain in detail how a St. Lucian passport mayNot the most reliable citizenship optionThe reasons for this will help you to avoid the advantages and avoid the disadvantages when choosing a second nationality and to deal with it in a prudent manner.
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Real life case, St. Lucia revokes citizenship of man suspected of fraud
On December 14, 2021, the Government of Saint Lucia took the step of Revocation of Citizenship (Revocation of Citizenship) of its naturalized citizens (through the Citizenship by Investment program), with a document issued by Minister Ernest Hilarie stating that. A "Summons" and a "Revocation Order" for the revocation of St. Lucia's citizenship were issued "pursuant to the provisions of Sections 38(1) and 39 of the Citizenship by Investment Act". The order stated, "In view of the Minister's opinion that the person in question, Odenigbo Boniface Amandineze, has committed acts likely to bring disgrace to Saint Lucia, his citizenship of Saint Lucia is hereby revoked." The order was signed by the Minister on December 3rd.
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I. In-depth analysis of section 38 of the St. Lucia Citizenship by Investment Act
The St. Lucia Citizenship by Investment Citizenship Act was introduced in 2016, only seven years ago now. Under Section 38 of the Act, the government can revoke your citizenship for three reasons: misrepresentation, fraud, willful concealment of a material fact; conviction of a criminal act; and commission of any other act likely to bring discredit on Saint Lucia. The Minister may revoke citizenship on this basis upon conviction for "any offense" or in the matter of his "opinion", subject to review by the High Court. However, once revoked, there is little chance of redemption. Citizenship can be revoked by the Minister with only 30 days' notice. In contrast, the long-established Dominica (1993) and St. Kitts and Nevis (1984) Citizenship by Investment programs do not have similar provisions. The following can be revoked by the MinisterRevocation of citizenship acquired by investment(Revocation of citizenship by investment)The conditions of the
- False representation or fraud or wilful concealment of material facts; or
- The person has been convicted of an offense; or
- The person has performed any other act which, within the opinion of the Minister, has the potential to bring disrepute to Saint Lucia (the person has done any other act which, in the opinion of the Minister, has a potential adverse effect on the reputation of Saint Lucia has the potential to bring disrepute to Saint Lucia.) .
II. Potential Risks of St. Lucia's Naturalization Program, Loss of Citizenship and Passport
Loss of citizenship will result in an individual no longer enjoying the protection of the State, passports and travel documents will be invalidated, and the various entitlements you rely on with your passport, such as foreign residency, offshore bank accounts, work visas, and real estate will also be severely affected. In fact, the Government of St. Lucia has already revoked the citizenship of six persons who were granted citizenship through the Citizenship by Investment Program, and the same could happen to anyone.
Constitutional protections for St. Lucia's status are weak and there have been a number of revocations
Investors in the Saint Lucia Citizenship by Investment Program face weak constitutional protections, and despite the fact that the program has been in existence for less than seven years, there have been a number of revocations. The Article 38 revocation clause alone is enough to make one rethink whether or not to choose St. Lucia to acquire a second citizenship. In addition, if you plan to acquire citizenship by purchasing St. Lucia government bonds, you should also carefully consider the risk of losing your investment and the government defaulting on your loan.
St. Lucia Government Bond Default Risk
According to the latest statistics from the Eastern Caribbean Central Bank (ECCB) (refer to Figure 1), the countries in the Eastern Caribbean (Antigua, Dominica, St. Kitts, St. Lucia, Grenada, St. Vincent, and the British Overseas Territories of Anguilla and Montserrat) that have the highest combined public and central government debt are St. Lucia, with a total debt of 8,854 million Caribbean dollars, or about $3.2 billion, and an average debt of $17,639 per person; its higher debt amount is second only to St. Kitts' $17,639.91 (St. Kitts has a population of only 54,000 people). Therefore, if you plan to acquire citizenship by purchasing St. Lucia government bonds, you should also carefully consider the risk of investment loss and government default. By purchasing St. Lucia government bonds, the government will grant you a new passport and at the end of the 5-7 year holding period, the government will redeem the bonds and you will get your investment money back while retaining your citizenship in perpetuity (assuming the citizenship hasn't already been revoked.) At first glance, this may seem like a safe investment, however, have you considered the risk of the government defaulting on your investment? Saint Lucia has a debt to GDP ratio of 85.61 TP3T, with the country's debt to GDP ranging from 901 TP3T to 1,201 TP3T for all recorded government defaults from 2010 to the present (refer to Chart 2); this is a very high level of risk for a country that relies heavily on the tourism industry and the Citizenship by Investment Program (CIP) to sustain its economy. In the event of a government default, your investment funds could be lost along with your passport.
III. Ideal second nationality floor
- Enjoy the same benefits as local citizens: including education, medical care, social security and other rights and benefits, ensuring that investors can enjoy the same treatment as local residents when living in the new country.
- More stable than the original nationality: the political, economic and social environment is stable, providing a safe haven for investors and their families. One of the main objectives of applying for a second citizenship is to be free from the restrictions of the original nationality; to have more flexibility in business operation and risk management, without having to worry about the expansion of political and judicial risks abroad, and no longer relying solely on the original nationality.
- Full citizenship, which can be passed on unconditionally to future generations: Ensuring that the investor's children can also become citizens of the country without additional conditions or formalities. For example, Dominica allows an investor's children to inherit their parents' Dominican citizenship, regardless of where they were born.
- Facilitated travel and business opportunities: Second citizenship should provide investors with a wider range of travel and business opportunities, including visa-free or visa-on-arrival policies, and economic cooperation with other countries and regions.
V. Comparison and Conclusion of the Advantages of Other Naturalization Programs
Investors should carefully weigh the risks before choosing a St. Lucia naturalization program. You may be attracted to the low barriers to citizenship in St. Lucia, but the consequences of a hasty decision can be disastrous,...In the long run, you'll cost more than any one-step civic programThe
Compared to St. Lucia.Dominica and Saint Kitts and NevisWell-established naturalization programs such as these offer investors stronger constitutional protections. Those seeking an offshore identity can consider other more secure naturalization programs, such as the Dominica Citizenship Program. Launched in 1993, the program has been in operation for 30 years and has been recognized as the "Best Naturalization Program for Investors" for six consecutive years. Once you pass the naturalization program, you become a permanent citizen of Dominica, and although the government does not offer a government bond option, Dominica is one of the more respected citizenship by investment countries, offering a selection ofReal Estate Investment ProjectsIn addition to receiving a return on your assets, you can also receive citizenship from it. You can also sell the property at the end of the holding period while retaining your citizenship in perpetuity. There is no risk of government default or out-of-pocket expenses during the holding period.
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