St Kitts and Nevis takes action against ghost projects with new regulations: CIU

St Kitts and Nevis takes action against ghost projects with new regulations: CIU
St Kitts and Nevis takes action against ghost projects with new regulations: CIU

The Government of St Kitts and Nevis released a special statement surrounding the recent false information related to the 2023 Regulations issued by citizenship by investment unit. The authorities added that the new guidelines specifically target problematic financing practices and ghost projects associated with the Programme’s Real Estate Option (REO).

As per the Government, the 2023 Regulations aim to enhance the programme’s integrity and ensure transparency in its operations.

The press release emphasized that the Government introduced a new multi-faceted real estate development application and approval process to eliminate any loopholes and ghost projects. As per the officials, this new process improves the programme and brings credibility to enhance the value of the Citizenship by Investment Programme.

“The improved real estate development project approval requirements were designed with careful consideration and consultation to strengthen the legislative and administrative framework of the Programme,” the Government emphasized.

St Kitts and Nevis government also added that the improved measures were also necessary to retain the integrity of the CBI programme so that it remains one of the most trusted, safe and transparent programmes of its kind.

The government also cleared the air related to the CBI applications under the real estate option and added that the 2023 regulations have not reduced the number of genuine real estate development options available to investors.

“Government have ushered in a more rigorous evaluation process, guaranteeing that every real estate project selected for the programme aligns with the high standards of quality, sustainability and long-term value creation,”.

The Government & Citizenship by Investment Unit reassured all stakeholders that 2023 Regulations are not created to hinder investment, but to foster an environment of trust, and stability for all involved.

CIU also noted that the new regulations process help exclude poor-quality real estate developments which only tarnished the programme as well as the country as a whole.

“Improvements to the real estate development project approval process were significant to ensure that the St Kitts and Nevis CBI Programme approves legitimate real estate development projects which bring actual investment to the country and also offers resale value for investors,” the release further noted.

The Citizenship by Investment Unit added that developers of “ghost projects” were illegally offering discounting and held applicant’s investment funds offshore.

“This type of improper financial conduct undermined the ability of legitimate developers to engage in meaningful competition in the local real estate market,”.

CIU added that there are multiple reasons for decreased “approved development projects”, adding that under 2023 Regulations, existing developments are now required to apply for re-designation as “approved developments”.

“In addition to the rejection of applications from poor-quality real estate projects which do not bring any legitimate investment into the country, but only devalue local real estate, several previous developers have elected not to re-apply for Approved Development status of their projects, as well as several applications remaining under consideration by the CBI Board of Governors,”.

Citizenship by Investment Unit said called the claims of depriving real estate developers of paying commission as agent fees false and misleading. Clearing the air on it, CIU added that approved development may pay commissions & fee to their agent out of any amount of the real estate investment fund in excess of US$ 200,000. It added that there is no bar on the payment of commission provided that the minimum investment is received in the escrow account so that the developer can build a property that is able to sustain its market value.