The government authorities of Dominica, Malta and St Kitts and Nevis has put their whole focus on the due-diligence process of the Citizenship by Investment Programmes. These nations are already making extensive efforts to uplift the background checks.
Dominica, Malta and St Kitts and Nevis have been considered to have the best “CBI Programme Due Diligence Process” in the CBI Index released by the PWM Magazine of Financial Times.
Dominica and St Kitts and Nevis are considered two significant countries offering Citizenship by Investment Programmes in the Caribbean region. They are using the income of economic Citizenship to grease the impact caused by natural calamities in the region.
Dominica, which has started its Citizenship by Investment Programme back in 1993, has been ranked as the ”number one CBI initiative for five consecutive years by the CBI Index published by the Financial Times’s Professional Wealth Management (PWM) magazine.
At the same time, St Kitts and Nevis Citizenship by Investment Programme is considered the oldest and most trusted, successful Programme of its kind since 1984.
Malta, which earlier charged €7500 due diligence fees by the investors under the IIP, now has two foreign due diligence companies instead of one and also charging €15,000 price to ensure an entire process.
This information was shared by a news Press Editorials based in Belgium. They have covered it thoroughly by highlighting all the considerable reports that have been inclined with the Citizenship by Investment Programme and due diligence processes administered. In contrast, the highlighted reports have been published by several renowned agencies or firms dealing with CBI Programmes of several recognized nations.
According to the CBI-Index-2021, which has been released by Financial Times’ Professional Wealth Management (PWM) magazine, shows that Dominica, Malta and St Kitts and Nevis have considered the changes and updates that have been made to the application vetting and due diligence processes.
The Index report further noted that these three Caribbean nations are putting continuous efforts into polishing the integrity of their Citizenship by Investment Programme and maintaining their due diligence standards.
The CBI Index Report further stated that Dominica, Malta, St Kitts, and Nevis authorities are showing their concerns towards national and international security by ensuring a detailed due-diligence process.
According to an agent from Dubai, who has been authorized for assisting applicants who are investing in Citizenship by Investment Programme stated, “St Kitts and Nevis, Dominica rejects applicants that fail in complying with the background checks; as due-diligence processes of these nations are comprehensive and detailed.”
On the other hand, while praising the due-diligence process of these Caribbean nations, one of the other agents said that “the strategized plans set up by these nations ensure that no illicit person is granted citizenship, which makes these nations more safe and secure.”
According to a report released by Smith and Williamson (Citizenship-vs-Residency) stated that “The Commonwealth of Dominica performs increasing due-diligence checks on all applicants who are applying for economic citizenship using CBI Programme, intending to discourage ”illicit person” from applying for the Programme.”
At the same time, a report released by the prestigious PricewaterhouseCoopers (PwC) stated that “Dominica has undertaken several initiatives to ensure the sustainability and growth of the Programme, including a due diligence framework.”
The PWC report further added that the “due-diligence process is conducted by autonomous professional companies that specialize in investigating individuals and firms. Due Diligence is mandated by rules and conditions to be fulfilled for all the applicants who are 16-years-old or above.”
Importance of due Diligence in CBI Programmes:
“Due Diligence” is one of the most common words with the people seeking or investing in any economic citizenship investment programme of any nation. It is entirely responsible for the success or failure of any CBI Programme.
The due-diligence research and assessment of international and regional organizations ensure that no illicit person is getting Citizenship via CBI Programme.
According to the CBI-Index Report stated, the high-end due diligence process is expensive, “An industry-wide, federated, permissioned blockchain could streamline some of the vetting processes by allowing access to immutable know-your-client (KYC) data records on investors stored on the blockchain by financial actors.”
Due Diligence ensures that the CBI Programme launched by each nation remains transparent and effective at evaluating potential candidates for Citizenship. The ability of the governments to get information on and from applicants, such as by the performance of internal and external due diligence checks, shoes their sense of responsibility.
Meanwhile, under a detailed due-diligence process, an applicant is required to show a police certificate, requirements-including the number of countries from which a certificate must be provided- and requests for fingerprints or biometric data.
In addition, strict anti-terrorism and anti-money laundering laws have inspired some governments to exclude persons of certain nationalities from their programmes or restrict funds transferred from specific jurisdictions to ensure compliance with international sanctions.
Report by multinational accounting firm Ernst and Young (EY)-
As per the report by multinational accounting firm Ernst and Young (EY), the CBI Programmes being run by Dominica, St Kitts, and Nevis does not assist tax avoidance and evasion. The report noted that the programmes provide Citizenship by nature, but Citizenship is not based on a person’s tax duty. Instead, tax residence- a concept which typically revolves around the degree of personal socio-economic linkages with a nation”- administers the responsibility to pay tax.
Meanwhile, those who apply under these programmes do not automatically become tax residents when they get Citizenship of Dominica. Despite this, they must have to prove their physical presence by providing a “permanent place of accommodation” in Dominica or in St Kitts and Nevis.
At the same time, EY provides four primary tests to set tax residency, pulling from the OECD Model Tax Convention on Income and Capital.