Vanuatu set to expand its CBI program to include real estate option in 2020
While many other Citizenship By Investment Programs (CBIs) have seen a drop in demand, the Vanuatu Economic Citizenship Program has registered a record performance, year to date, in 2020.
According to the new Chairman of Vanuatu’s Citizenship Commission, the program has recorded a whopping VT6 billion (approximately US$59 million) in revenues between January and May 2020. The program has therefore hit its annual revenue target in the first 20 weeks of 2020 alone, setting the scheme up to bring in total of VT15 billion (approximately US$126 million) in total by the end of 2020.
Given the recent impact of the devastating Cyclone Harold and Covid-19 lockdowns on the country’s tourism revenues, the unencumbered contribution to Vanuatu’s fiscus could not have come at a better time: Vanuatu’s CBI revenue has enabled its government to extend a VT4 billion economic stimulus package to distressed businesses and employees in the country.
The program’s successes makes the Vanuatu CBI a prime example of how investment citizenship programs can have a significant impact on the ability of small, resource constrained countries to support their citizens during times of crisis.
Whereas Caribbean countries such as Grenada, Dominica and St Lucia have had to reach out to the IMF for financial aid, it appears as if Vanuatu will be able to weather the storm without incurring additional sovereign debt.
Dominica and St Lucia have both taken steps to discount the cost of their CBI programs, and it seems likely that the Grenada CBI may follow suit; perhaps through the introduction of a Covid-19 Relief Fund.
Vanuatu’s Citizenship Commission Chairman is on record as saying that the country will not stop the program, but continue to expand it to include a Citizenship Tourism Investment Program (CTIP). This investment option will enable investors to invest in the country, thus obtaining second citizenship while also contributing meaningfully to job creation for Ni-Vanuatu nationals.
It is expected that this program extension may well take the form of investment opportunities in new hotel and tourism related property developments. If the program were to follow the example of the Caribbean CBI programs, this may well see the minimum property investment threshold set marginally higher than the cost of the government donation option.
According to the Chairman, it is hoped that this investment avenue will serve to foster real connections between CBI investors and Vanuatu, rather than second citizenship applications being based on a once-off donation.
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