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02/11/06 -
Encouraging Investment in Dominica |
Dominica's towering central mountain range, expanses of
forest, waterfalls and offshore reefs have together earned it the name Nature Island of the Caribbean.
Dominica markets its natural beauty to full advantage, attracting eco-tourists to this unspoiled destination. Like
many Caribbean countries, the Nature Island is looking at ways to diversify its economy. It is developing a niche in
eco-tourism and, like many of its neighbours, Dominica has seen the advantages of establishing an offshore financial
centre.
Dominica is watching and learning from the example of other financial services industries in the region. The
re-engineered Economic Citizenship Program, established relatively recently in 1996, is an interesting example of
how Dominica is welcoming quality investors to its paradise while attempting to keep out the snake of international
crime.
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A careful approach
Ms. Lucilla Lewis of Dominica’s International Business Unit (IBU) reports that by December 1998, 173 investors had
successfully applied for economic citizenship in Dominica through the Program and a total of 341 passports have been
issued, showing the popularity of Dominica’s special fee structure for families; a one-time payment to the
Government of US$50,000 qualifies the investor, his or her spouse and their two children (under 18 years old) for
economic citizenship. Another option is purchasing US$75,000 in 15-year bonds and paying additional application
fees.
Mr. Lennox Lawrence of Caribbean Investments Ltd. in Dominica is not surprised by the Program’s success. In his
opinion, the Program is one of the best in the region. He points immediately to three advantages that set it apart:
the low cost to the investor, the absence of any residency requirement, and the family fee structure.
One might think that the family fee structure is simply a perk, a “buy-one-get-three-free” offer. This is not at all
how Mr. Lawrence or his clients see it, however. Mr. Lawrence meets a diverse group of applicants who are, of
course, interested in the fiscal benefits Dominica offers, but are often simply looking for a new experience. Fed up
with government policy in their home countries, or interested in different investment possibilities, Dominica’s new
economic citizens can get a fresh start. Obtaining citizenship in Dominica is part of a lifestyle change, and family
is usually a priority when contemplating such a change. Interestingly, Mr. Lawrence noted that perhaps half of the
applicants he deals with are North American.
With their families, economic citizens who choose to migrate bring to Dominica their professional experience and
their resources; personal, as well as financial. In addition to an international screening of the applicants for
criminal records (Dominica’s IBU notes that the existence of a criminal record is the most common reason for
rejecting an application), each applicant must provide evidence of a successful business background or technical
expertise. This is not a rigid criterion - a professor or a banker could both have the requisite background -
rather, it is an attempt to ensure the quality of accepted applicants. An applicant who has been successful in
business or academia will likely continue to make a positive contribution to the community in Dominica.
Seeking improvement
The Program is under continuous review by the Government of Dominica. Mr. Lawrence commented that one possible
change might be the introduction of a quota system, restricting the number of new economic citizens admitted in a
particular year. The guiding concern of any review would appear to be ensuring that the quality of new citizens
remains high, that they contribute to and do not harm the community. Mr. Lawrence mused that a residency requirement
might be an additional safeguard for the Island. This would allow a longer time period in which to investigate the
applicant before granting a less easily revocable citizenship.
The Dominica IBU is also looking at ways to improve the program. One change currently being contemplated would be
the imposition of a registration fee on agents. Currently, the application procedure for agents is relatively simple
and straight-forward. Prospective agents submit an application form with supporting documentation and a personal
data form. They must also undergo an international check for criminal records. The Government also attempts to
ensure that prospective agents possess the required skills and are able to assist applicants under the Program.
Understandably, being able to offer agency services to clients interested in economic citizenship is popular. It is
thought that a registration fee might help to emphasise, as Ms. Lewis of the IBU puts it, that the government will
not accept “just anyone” as an agent.
Not a back door route
For the most part, new economic citizens of Dominica enjoy the same privileges as natural citizens. They must be
residents for five years before they are allowed to vote, however, and there are certain restrictions on their right
to purchase property above a specified minimum amount.
One definite advantage of citizenship for some applicants is the possibility of visa-free travel to all of the
Commonwealth countries. The issue of visa-free travel seems to go to the heart of what one could call Dominica’s
“economic citizenship philosophy”: new citizens are welcomed, and their contributions to the country are valued and
encouraged, but this is not a refuge for criminals. On the topic of the U.S. visa requirement, Mr. Lawrence said
firmly that “this product is not designed to circumvent U.S. rules”. If someone was not allowed into the U.S.
because of their citizenship and has now established a meaningful connection to Dominica, Mr. Lawrence foresees no
problem in obtaining a visa. If they have not established such a connection, however, Mr. Lawrence quite understands
the refusal; “Dominica is not a back door”, he points out.
Conclusion
Dominica has already embraced the philosophy of sustainable development as its promotion of “eco-tourism”
demonstrates. Economic growth at any cost is not worthwhile and investment without considering its long-term
consequences can do more harm than good. Dominica’s Economic Citizenship Program is seen by the Government as one
aspect of a long-term strategy for economic growth. The Program is being watched carefully and will be under
constant review if necessary to keep out an undesirable criminal element. It seems that the gates to this paradise
can be opened, but they remain well-guarded. |
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