A real estate firm is raising eyebrows by helping buyers of its villas gain citizenship in a Caribbean nation.
Ajman, United Arab Emirates –
“Buy villa in UAE, get family citizenship in Antigua & Barbuda,” the advertisements scream.
It may seem a strange proposition, but for the majority of the United Arab Emirates’ population – who enjoy visa-free travel to only a few dozen countries – attaining a passport with fewer visa restrictions is an attractive idea.
Passports issued by Antigua and Barbuda, a twin-island nation in the Caribbean, allow one to travel to 132 countries visa-free or visa-on-arrival, including the UK and Canada. In comparison, an Indian passport enables that ease of access to just 52 countries; for Emirati passports, the number is 77.
A Henley & Partners report issued last year ranks the Antiguan and Barbudan passport 24th worldwide in terms of visa restrictions.
Now, for the sum of “just” 1.4m Emirati dirhams ($380,000), UAE property developers Sweet Homes will sell a two-bedroom villa in the emirate of Ajman and include complementary Antigua and Barbuda passports for the buyer, his or her spouse, dependent children and parents over the age of 65.
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The Ajman-based developer, whose offer applies to 600 units within the 1,500-villa Ajman Uptown development, signed an implementation agreement with the Antiguan and Barbudan government last November, and has begun to aggressively promote the deal.
“Ajman Uptown is the first project of its kind in the GCC region that allows the buyers … to be eligible for citizenship, subject to due diligence and approval from [the] government of Antigua and Barbuda,” Sweet Homes CEO Fahad Dero told Al Jazeera.
Those who qualify for the scheme never even have to set foot in the tiny Caribbean nation, which is home to just over 90,000 people. Tourism has long been Antigua and Barbuda’s major export, accounting for 63 percent of the country’s approximately $1.2bn gross domestic product (GDP) in 2013. According to the World Travel and Tourism Council, Antigua and Barbuda ranks sixth in the world in terms of the tourism sector’s contribution to GDP.
But with competition from a slew of other island resort destinations, tourism has slowed. That, combined with the fallout from an awkward relationship with the collapsed Stanford Financial Group, has meant that Antigua and Barbuda has had to become inventive in its capital-raising.
“On coming to power, the newly elected government of Antigua and Barbuda realised that it had been left in a precarious financial position,” explained Henley & Partners’ Caribbean managing partner, Christopher Willis. “To fill the many critical budgetary gaps, it has been aggressively creative in finding new sources of revenue.”
Henley & Partners designed the country’s Citizenship-by-Investment Programme (CIP) under government mandate in 2013, he said. “[It] was one of the tools available, and to jump-start investment in the programme the government experimented with ways to increase applications, [like] offering economic citizenship as an incentive to potential investors in other projects, such as the Ajman development.”
Sweet Homes has had cash-flow problems of its own. The global financial crisis hit the rapidly developing United Arab Emirates hard, halting the progress of dozens of major real estate projects and sending many property firms belly-up.
Sweet Homes has endured, but not without hardship. One of its Ajman developments, Emirates City, was due for completion in 2008 but is still limping along seven years later, with only one-quarter of the planned 12 towers completed – and these have not yet been handed over to upset investors.
The company recently claimed that money coming in from new investments like Ajman Uptown will enable it to complete old projects, which stalled partly because the original investors stopped making their payments.
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Although investment for citizenship schemes are common in many debt-saddled countries, as well as in the Caribbean, Antigua and Barbuda also offers citizenship for those who contribute $200,000 to the country’s National Development Fund (NDF), even if they do not buy property within the country.
Sweet Homes has included the cost of this $200,000 contribution in the price of its villas. Short-term hits on profit would lead to long-term gains, claimed Dero. “The $200,000 is [included in] the cost … What I’m doing is [sacrificing] profits in order to put my company and Ajman on the world map.”
Dero would not reveal the size of the profit he was making, or the financial terms of the company’s agreement with the Antiguan government. But he said that in the 10 days since the scheme became operational, he had received in excess of 1,000 “strong leads”, and 20 applications had already entered the pipeline.
The promotion only applies to 600 units in two types of villas – the 1.4m-dirham ($380,000), two-bedroom “Erica” villas and 1.9m-dirham ($517,000), four-bedroom “Camellia” villas. The company may later expand the promotion to the other units, Dero said.
While Ajman Uptown has suffered from long delays – it was originally scheduled for delivery in 2011 – Dero said the first units would be ready for handover in six months.
Antigua and Barbuda Prime Minister Gaston Browne has come out in defence of the company, amid
that the campaign was misleading. The Antigua Observer quoted one UAE-based lawyer who argued that the offer “downgrades the whole citizenship process” for Antigua and Barbuda.
For his part, Browne told Al Jazeera that Sweet Homes was essentially a supplier to the country’s citizenship by investment programme, recommending “wealthy citizens of the highest standard of integrity”. For their troubles, he said, the companies receive 10 percent of each $200,000 contribution in commission.
The prime minister commended Sweet Homes’ marketing strategy. “The marginal cost to promote the Antiguan NDF is insignificant, but this has given them greater promotional reach in the UAE than existing suppliers. The uproar is, in essence, a competition issue which will resolve itself as the other competitors find innovative and creative responses.”
Browne added that the arrangement did not compromise the integrity of Antiguan passports, because the final decision on whether to grant citizenship still rests with his government.
“We have informed in writing several of our allied countries [including] the USA, Canada and the UK about this initiative and have reassured them of the integrity of our programme and the safeguards we have introduced to protect their national security interests,” he said.