The Hidden Risks of Caribbean Citizenship-by-Investment Programs: What Investors Need to Know
- Tex Ogun
- Apr 1
- 7 min read
Historically, many CARICOM countries (like St. Kitts & Nevis, Antigua & Barbuda, Dominica, and others) were monoculture economies, heavily reliant on sugar production as their main export crop. As global sugar prices fell and preferential trade terms were dismantled in the late 20th and early 21st centuries, these countries faced serious economic and fiscal crises. Faced with these challenges, several CARICOM nations turned to Citizenship-by-Investment (CBI) programs starting in the 1980s (notably St. Kitts & Nevis in 1984) and expanded them in the 2000s as an alternative revenue stream.
Over the past two decades, CBI programs colloquially known as “golden passports” have been promoted across several CARICOM states as innovative pathways to development finance. For small, open economies with narrow production bases, the prospect of attracting foreign capital through the sale of citizenship seemed like a geopolitical lifeline. But beneath the glossy rhetoric lies a murkier reality: these schemes have delivered far fewer socio-economic benefits than originally promised, while introducing substantial governance risks and undermining national sovereignty. Yet ultimately the reliance on these schemes has made them analogous to the monocrop reliance on sugar which they were meant to ameliorate.
From Hope to Hollow Promise
The original justification for CBI programs was simple; by offering citizenship in exchange for investment, small states could attract much-needed capital inflows that would diversify their economies, fund critical infrastructure, and stimulate job creation. In practice, this has proven to be a fiction, or at least a heavily embellished aspiration.
Across CARICOM countries like Dominica, St. Kitts and Nevis, Antigua and Barbuda, Grenada, and St. Lucia, CBI revenues have often been used to plug fiscal deficits or finance recurrent expenditure not long-term development or transformative capital projects. There is a distinct lack of transparency around where the money goes, and little to no empirical data has been presented to show that these funds have catalysed structural economic change.
Portugal’s Wake-Up Call
For perspective, consider Portugal often cited as a success story in golden visa discourse. Since launching its golden visa program in 2012, Portugal attracted over €6 billion in foreign capital. Yet, by 2022, the Portuguese government itself admitted that the program had largely failed to produce productive investment or meaningful economic externalities beyond real estate speculation. Rising property prices driven by foreign buyers contributed to a housing affordability crisis in Lisbon and Porto, fuelling public resentment. In 2023, Portugal officially ended its golden visa program, recognising that the societal costs outweighed the modest economic gains.
If a diversified EU country like Portugal replete with regulatory capacity, independent oversight, and a robust property market found itself unable to channel golden visa funds into long-term productive investment, how much more vulnerable are CARICOM states with weaker governance and thinner institutional buffers?
The Phantom of Investment
At the heart of the CBI promise lies a semantic deception that the funds exchanged for citizenship constitute “investment.” In conventional economic terms, investment implies a commitment of capital that yields future income or productive capacity: think factories, tech startups, infrastructure, or human capital development. But in most Caribbean CBI programs, this is simply not what occurs.
The vast majority of applicants opt for the donation route, a one-time, non-refundable contribution to a government-controlled fund often called a “National Development Fund” or equivalent. These funds are generally absorbed into consolidated revenue and used for recurrent expenditure such as public salaries, social programs, or debt service. This is, in effect, fiscal patchwork, not structural transformation. It temporarily relieves fiscal pressure but leaves no lasting capital base.
Where there is a mandated “investment” usually in real estate , it tends to be highly speculative, restricted to pre-approved projects linked to a small number of politically connected developers. These developments are typically in the tourism sector: luxury resorts, condominiums, or villas with limited local linkages. The result? A proliferation of under-occupied or incomplete real estate developments that are used more as passport-qualifying assets than revenue-generating enterprises. In Grenada and Antigua, for example, several so-called CBI resorts have become “zombie projects” built just enough to qualify for citizenship but left to languish afterward with little benefit to local workers or suppliers. In Nevis, Tamarind Cove is a cold a stark reminder of such like project.
Moreover, the Caribbean model has encouraged “investment stacking”, a practice where one property is sold multiple times to different citizenship applicants, raising serious concerns about valuation fraud, regulatory oversight, and financial crime. In contrast to traditional Foreign Direct Investment (FDI), which typically brings technical expertise, employment, and long-term capital commitment, CBI inflows are passive, non-anchored, and highly mobile. Once the passport is issued, there is no obligation for the investor to remain engaged with the country in any way. In short, these are not investments, they are transactions. The economic benefit is shallow, short-term, and increasingly unreliable.
Governance Gaps and Reputational Risk
CARICOM’s CBI programs not only generate questionable economic returns they also introduce dangerous vulnerabilities in governance, institutional integrity, and international relations. One of the primary concerns is weak due diligence. Though governments claim to vet applicants thoroughly, the speed and commercial pressures involved in these programs often undermine that process. In practice, due diligence is often outsourced to third-party firms and the checks vary widely in quality and rigour. Investigative reporting and leaks (including the 2021 Pandora Papers) have revealed how politically exposed persons (PEPs), fugitives, and individuals with questionable backgrounds have used Caribbean CBI programs to obtain second passports and obscure their financial dealings.
In one notable case, Dominica was found to have issued passports to individuals allegedly involved in organized crime and sanctioned regimes. Similarly, reports emerged that St. Kitts and Nevis had granted citizenship to Iranian nationals during sanctions periods, resulting in Canada revoking visa-free access for St. Kitts passport holders in 2014.
The reputational fallout is significant. International partners particularly the United States and the European Union view lax CBI regimes as soft spots in the global security architecture. U.S. senators, including Marco Rubio, the new Secretary of State, have raised red flags about these programs becoming “vectors for transnational crime, sanctions evasion, and espionage.” There have been discussions in Washington about suspending visa waivers or introducing targeted restrictions on Caribbean nationals from countries that persist in selling passports.
This is more than symbolic.
Many CARICOM states depend on their passports enjoying visa-free access to Schengen and U.S. zones for business, tourism, and diaspora connectivity. A tarnished passport directly reduces the value proposition of citizenship for both genuine citizens and CBI applicants alike.
To that extent these programs are inherently flawed in their overreliance on the goodwill and immigration policies of external jurisdictions. Their appeal lies largely in the visa-free access they grant to powerful blocs like the EU Schengen Zone, the United Kingdom, and implies preferred access to Canada and the United States. However, these benefits are not guaranteed and are entirely dependent on external diplomatic relationships and perceived program integrity. For example, African nationals particularly high-net-worth individuals have increasingly acquired Caribbean CBI passports as a gateway to global mobility and access to international banking and education systems. Yet, any inevitable unilateral policy change by the EU or US—such as imposing visa restrictions due to perceived lax due diligence will instantly erode the value of these passports, making the investment far less attractive and meaning Africans would have simply wasted their money.
Internally, CBI programs often distort domestic politics. Given the large sums of money at stake, these schemes invite corruption, political patronage, and opacity from the parties in power. Many lacking any oversight or independent audits, and where key contracts (such as those with marketing agents) are shrouded in secrecy. This undermines public trust in government and breeds resentment among citizens who feel their nationality is being auctioned off to the highest bidder.
Furthermore, sovereignty itself becomes compromised. When decisions about who gets to be a citizen are effectively outsourced to global intermediaries and commercial interests, the state loses control over one of its most fundamental attributes, its people. More recently, U.S. officials have raised alarm about the use of Caribbean passports by nationals from countries such as China and Russia, prompting discussions of potential visa restrictions on CARICOM states. The writing appears to be on the wall with the new Trump administration who view Caribbean passports as potentially compromised and the diplomatic fallout will far outweigh any short-term revenue gain and make it difficult for citizens of those Caribbean nations and hapless CBI investors who had drunk the ‘cool aide’.
A Race to the Bottom?
One of the most perverse aspects of the Caribbean CBI market is its competitive structure. With multiple countries offering similar products, the only real levers of competition are price and laxity of standards. This has created a race to the bottom where countries cut fees, reduce vetting times, and offer bulk passport deals to agents and intermediaries to stay competitive. This commodification of sovereignty erodes the integrity of citizenship itself.
The latest trend among CBI agents has been the bundling of Caribbean passports with cryptocurrencies, offshore accounts, and global mobility packages, a dystopian mix of financial arbitrage, digital nomadism, and state-enabled statelessness.
Alternatives Exist
It is clear that the development promise of CBI programs has been overstated and poorly evidenced. The idea that selling passports would translate into broad-based prosperity has not materialised in either the Caribbean or Europe.
Instead of relying on the morally and economically fraught sale of citizenship, CARICOM states should invest in regional economic cooperation, climate finance, renewable energy partnerships, and the digital services economy. These offer more durable paths to development and do not compromise the sanctity of national identity or geopolitical trust.
Conclusion: Time to Rethink the Model
The CARICOM CBI model is broken and is now at a point of inflection. As the United States rethinks its visa policy and as international scrutiny intensifies, the window for these schemes to operate in their current form is closing fast and some have suggested 2025 spells the beginning of the inevitable end for these schemes. It is hoped that this was at the forefront of the Prime Minister of St Kitts recent visit to Nigeria where it is said that he engaged with President Bola Tinubu to pursue strengthened bilateral ties with Nigeria, particularly in agriculture, food security, energy, logistics, and trade and the visit was not, as some have suggested, cover to sell hapless Nigerians CBI passports.
Rather than clinging to a flawed CBI development tool, Caricom regional leaders must engage in honest appraisal and consider whether the sale of sovereignty and passports is a price worth paying for ephemeral gains. Because when citizenship becomes a commodity, the nation itself becomes collateral.
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