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.
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.
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]
