Investors who buy into any of the investment opportunities, presented at the May 2, SVG Investment Forum 2020 event, would be courted with sundry fiscal and comparative competitive advantages; but Vincentian citizenship would not be on offer.
So affirms Minister of Sustainable Development, I.T., Finance and Economic Planning Camillo Gonsalves. He was, at the time, speaking exclusively with Asbert News Network on the sidelines of Invest SVG’s Investment Forum 2020 media launch event on Tuesday.
So affirms Minister of Sustainable Development, I.T., Finance and Economic Planning Camillo Gonsalves. He was, at the time, speaking exclusively with Asbert News Network on the sidelines of Invest SVG’s Investment Forum 2020 media launch event on Tuesday.
The sundry benefits that would accrue to any of the investors qualified to attend Invest SVG’s Investment Forum 2020 would come through “the fiscal incentives act, the hotel investments act and we have similar acts in the agricultural space,” Minister Gonsalves revealed.
“If your investment is of X value, we are willing to say give you a tax break of a certain number of years. And if you are adding value to a product, to export it for example, and the value added is more than 50% or more than 25% of the overall value of the product we will give you another type of incentive.
If you were to bring in materials as a manufacturer – to build whatever the product is – we will let you bring those things in without duty. Or if you’re building a hotel that has more than 50 rooms, we may give you a concession on some of the costs of importing certain foods or beverages and the like so a lot of it is in legislation.
If an investment is large enough we could always go to Cabinet for additional incentives – to customize but within the spirit of the law that has already been passed,” the Minister told ANN.
If you were to bring in materials as a manufacturer – to build whatever the product is – we will let you bring those things in without duty. Or if you’re building a hotel that has more than 50 rooms, we may give you a concession on some of the costs of importing certain foods or beverages and the like so a lot of it is in legislation.
If an investment is large enough we could always go to Cabinet for additional incentives – to customize but within the spirit of the law that has already been passed,” the Minister told ANN.
This customization, according to Gonsalves who serves as MP for East St. George, may evolve to require a longer tax break period in a particular case where a hypothetical investor’s financial outlay is such that the allotted tax break period may need to be extended to allow for equitable returns on investment. In another example, Minister Gonsalves outlined the potential case of an investor whose human resource recruitment policy may so favorably impact the local unemployment situation that granting the relatively minute percentage of requested work permits for non-Vincentians could be treated as matter of course.
“There are cases where given the size of the investment and how much we believe it’s going to be transformative or the impact it will have on St. Vincent and the Grenadines we’d be willing to consider additional or special type packages to ensure that that investment is secured in St. Vincent and the Grenadines.”
It is Minister Gonsalves who assumes ministerial oversight of Invest SVG, the State’s investment promotion agency. And it is the agency’s vision that would see customized investment packages presented to any of the almost 100 investor leads expected to converge on May 2, 2020 at the Amitabah Luxury Villa on Bequia’s Lower Bay. The net worth of the individual financiers being invited are such that the Finance Minister, though reluctant to commit too firmly to any projected success rate, admitted “I’m not looking for a hundred percent success rate but at the level we’re pitching, even if we get one or two bites it will have a significant effect on the economy.”
The Citizen By Investment program proposal, popularized here by the New Democratic Party – SVG’s main political opposition to the Dr. Ralph Gonsalves led administration – would not be used to entice potential investors. This, Finance Minister Gonsalves affirmed in staunch support of Prime Minister Gonsalves’ (also MP Gonsalves’ father) much heralded opposition of the NDP proposed CBI.
“Never. This government does not sell citizenship.” Minister Gonsalves prefaced his preempted response to an ANN solicited query. “There are certain ways that you can get citizenship in St. Vincent and the Grenadines. You can be born in St. Vincent and the Grenadines, you can be born somewhere else of Vincentians, you can marry a Vincentian or you can establish your residence in St. Vincent and the Grenadines.
And after you have been resident in St. Vincent and the Grenadines for a certain number of years you can be can become a citizen. You can begin applying after you’ve been a resident for 5 years but we tend to ask people to stay a little longer before they get citizenship,” he explained.
And after you have been resident in St. Vincent and the Grenadines for a certain number of years you can be can become a citizen. You can begin applying after you’ve been a resident for 5 years but we tend to ask people to stay a little longer before they get citizenship,” he explained.
Gonsalves quickly added “this government does not sell citizenship. There have been one or two instances where a special sportsperson or somebody like that has been granted citizenship for reasons having nothing to do with money.
And there’s some autonomy in the Office of the Prime Minister to do that but there are investments and investors in the Eastern Caribbean who are trading in passports. They would build a hotel if they could get 300 passports or they would build a port or a road if they could get 200 passports or 20 passports. We do not do that. We believe that citizenship and nationhood is something that is critical to a sense of self and we believe that you’re not a nation if there’s not something that binds you all together and that citizenship is what binds you together.
A common culture, a common heritage, a common language, common experiences and we cannot – in the view of this particular administration – view ourselves as a nation if anybody with a $100,000 in their pocket can come and claim citizenship in the country.”
And there’s some autonomy in the Office of the Prime Minister to do that but there are investments and investors in the Eastern Caribbean who are trading in passports. They would build a hotel if they could get 300 passports or they would build a port or a road if they could get 200 passports or 20 passports. We do not do that. We believe that citizenship and nationhood is something that is critical to a sense of self and we believe that you’re not a nation if there’s not something that binds you all together and that citizenship is what binds you together.
A common culture, a common heritage, a common language, common experiences and we cannot – in the view of this particular administration – view ourselves as a nation if anybody with a $100,000 in their pocket can come and claim citizenship in the country.”
Even as the incumbent Member of Parliament acknowledge the fact that “there are other entities, other governments, other political parties that have different views,” ANN was obligated to restate the question as originally intended given the recent support shown by the Caribbean Development Bank as reported in regional media.
A SKN Observer attributed article published earlier this week cites the Bank’s president, Dr Warren Smith, as believing “the healthy fiscal surplus of the Federation of St. Kitts and Nevis in 2019” to be the result of the “revenues from the country’s successful Citizenship by Investment (CBI) Programme. During the CDB annual news in Barbados on February 11th, Dr Smith welcomed the reforms implemented by the St Kitts and Nevis government that led to it becoming the best performing islands in the Caribbean whose debt-to-GDP ratio declined by 11.8% last year. Through the CBI Programme, St Kitts and Nevis offers carefully vetted individuals and families around the world the chance to obtain second citizenship in exchange for an investment into its economy.”
ANN, on February 12, carried an Antigua News Room article that highlighted Eastern Caribbean Central Bank Governor Timothy Antoine’s plea that “a coming together of the region’s Citizenship by Investment programmes is needed…. Anthony noted that the CBI programmes are important to countries in the region and a main source of foreign direct investment. Therefore, Antoine said, the bank has an interest in the industry from a position of financial stability, fiscal and debt sustainability as well as growth. The ECCB Governor lamented that as a result of competition the price keeps dropping lower and lower.”
“We object to it viscerally, emotionally as a sense of what it means to be Vincentian but also on an economic level we do not believe that it is sustainable and we’ve seen the signs. The signs are all over that this is not a sustainable model. All you have to do is read the documentation from the International Monetary Fund, from the Eastern Caribbean Central Bank, from the World Bank they are all warning about the stop-risk – the risk that it would stop and the volatility of the Citizen By Investment programmes,” Minister Gonsalves rejoined.
He further explained that one of the weak points with the CBI programmes, as he sees it. “We are not selling something that we are growing or building or making. We are selling access to the European Union because you get Shengheng visa-free waiver. So someone holding the Vincentian passport can go to Europe without a visa or go to another country without a visa. We’re selling access to other countries or we are selling the ability to hide your money from the taxman in other countries. We are not selling anything we grow or make or build here so it is entirely dependent on how long the Europeans continue to give you visa-free access or how long they continue to turn a blind eye.
This thing is making some money now but it is now going to go on forever. It is not sustainable and then what do you do? If you put all your eggs in this basket and you’re paying salaries out of passport money, you’re paying social security out of passport money, you’re paying your loans out of passport money what happens when it stops? And we believe that it is better to base your economy on things that you can build, grow, control, invest in things that are tangible based on the talents and skills of Vincentians.”
This thing is making some money now but it is now going to go on forever. It is not sustainable and then what do you do? If you put all your eggs in this basket and you’re paying salaries out of passport money, you’re paying social security out of passport money, you’re paying your loans out of passport money what happens when it stops? And we believe that it is better to base your economy on things that you can build, grow, control, invest in things that are tangible based on the talents and skills of Vincentians.”
Finance Minister Gonsalves acknowledged that the majority of countries, a group to which SVG subscribes, are on the sidelines of the current CBI fiscal gains bonded by their expressed belief that “it is not a sustainable model” for driving national development. He was however, cognizant of the fact that “other countries were in very, very severe financial straits and felt that they didn’t have an option.”