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Like many Caribbean islands, Grenada's economy is in transition. The spice industry that gave "the Spice Isle" its name is still a mainstay, but tourism plays an increasingly important role as the outside world comes to Grenada's famous harbour and discovers the charm of its red-roofed buildings. 

With the more recent development of a competitive offshore finance centre, Grenada has found a way to attract greater investment in its agricultural and tourism sectors. Grenada's Economic Citizenship Program, a highly successful element of the financial sector strategy, is a classic example of this type of program.

In existence in its present form since the Grenadian government passed the Citizenship (Amendment) Act in 1997, the Economic Citizenship Program has enjoyed a marked increase in popularity over the past two years.  Grenada has designed a program that responds to the key concerns of its clients, offering a hassle-free application process, a relatively low investment requirement, a favourable fee structure for families, and visa-free travel to a large number of countries.

Increasing numbers

So far in 1999, Grenada has granted 65 economic citizenship requests.  All requests are processed by the Registrar of Offshore Financial Services, Mr. Michael Creft, appointed to this position by the Government of Grenada.  The mandate of the Offshore Financial Services office includes publishing a list of successful applicants in the government Gazette.

Ms. Lisa Taylor, with the law firm of Henry Hudson-Phillips in Grenada, cited the Offshore Financial Services office as an important part of the Program's success.  She remarked that the Government of Grenada has made a commitment to exercising due diligence in all areas of the financial services sector.  The stated function of the Offshore Financial Services office is to protect the program against abuse.
According to Ms. Taylor, there has been an increase in applications from Russia and Asia, an impression confirmed by Mr. Creft.  He said that most requests come from Asia, particularly China and Hong Kong, although the number of Russian applicants has recently been growing.  Ms. Taylor said her office has also noticed interest among Canadian investors.  Overall, Mr. Creft observes a significant increase in interest this year over 1998, when 82 requests were granted.

Role of approved agents

Applications for citizenship are prepared and submitted to the Registrar by government - approved agents.  The approved agents serve to screen the applicants, assisting the Registrar by accelerating the process and resulting in a very small number of rejected applications -- less than one percent according to Mr. Creft.  Mr. Trevor St. Bernard of the law firm Lewis & Renwick, one of the approved agents in Grenada, comments that the whole process is quite efficient: applications can be processed (and a passport issued) within six weeks.

The approved agents are selected for their marketing ability and business expertise. Where agents are not themselves accountants or lawyers, they are required to use the services of an accounting or law firm, which will ensure that the applications submitted to the Government are complete, and include the required documentation for the criminal and medical record checks.  In case of negligence, the use of a professional fiduciary means that recourse can be made to a professional governing body.

Ms. Taylor acknowledged that the approved agent program has helped to foster a feeling of stability around this relatively new program.  "The process of becoming an agent is fairly stringent, and the position still has a certain prestige," she observed.  "The people on the list of approved agents are generally 'high calibre', well-respected individuals and entities."  Grenada hopes that the use of government-approved agents will protect applicants and facilitate the due diligence of the Registrar.
Primary advantages

The majority of applicants secure passports for their family members because the investment requirement and fees are the same for a family (husband and wife with up to three children under 25) as for an individual applicant.  Under Statutory Rules and Orders No. 5 of 1998, the total fee payable for a family (or an individual) was increased to US$60,000 from approximately US$40,000.  The program retains the advantage of offering citizenship to as many as three children under 25 rather than under 18 as in some other jurisdictions.

Grenada's status as a Commonwealth country is often mentioned as an advantage of obtaining a passport from this jurisdiction, normally in connection with the visa-free travel opportunities Commonwealth membership affords a country's citizens.  Ms. Taylor made the interesting observation that for her clients, Commonwealth membership has a significance that goes far beyond visas.  Investors appreciate the similarity in legislation between Commonwealth countries, and the familiarity of jurisprudence that is firmly within the English common law tradition. Membership in the Commonwealth shows a political stability that reassures applicants who might still be concerned about Grenada's political difficulties in the early 1980s.

There is no residency requirement for Grenadian citizenship, and dual nationality is, of course, permitted.  Another advertised advantage of Grenada's program is that it is not necessary to visit the Island to obtain citizenship and a passport, although Ms. Rosalyn Wilkinson, a lawyer and an approved agent in Grenada, notes that many applicants do visit or make plans to visit the Island, and she encourages applicants to make the trip to pick up their passport. It is difficult to believe that the successful applicant would require much convincing.
 

Christopher E.J. Main is a reporter and staff researcher for Offshore Finance Canada magazine. [Copyright 1999 O.F.C. Publications Inc.  This article was published in the July/August 1999 issue of Offshore Finance Canada magazine]