This was announced by the head of department Percival Clouden in an official circular dated July 22, 2020.
Why is the offer illegal?
Under the terms of Grenada program, the investor, who chose the option to buy real estate, must invest at least $220 thousand and can sell the object not earlier than 5 years.
The agreement, which the developer in Grenada distributed to agents, offered an immediate buyout of shares in the property from investors as soon as the application was approved. Such an offer is in direct violation of the laws of Grenada.
At the same time, the developer promised the agents a $110,000 discounted ransom to offer its clients – investors who wanted to acquire Grenada citizenship – the agents had to decide for themselves.
A representative of the developer announced the action on camera during a webinar for Chinese audience. The video appeared on social networks, and a few weeks later the program department announced an investigation.
We pay attention to investors! Offers of early redemption under any citizenship program and residence permit for investment are illegal.
We get all the information about possible changes and suggestions to the Grenada program firsthand – from the department of the program. Our lawyers are ready to advise you on all terms of the program and to provide explanations on the legality of a particular proposal.
The meaning of any citizenship or residence permit program is to attract investments into the economy of the country for a certain period of time and at least a certain amount. All parameters of the programs – minimum amounts, terms – are enshrined in the law.
It is likely that the developer’s object, in which shares were sold at reduced prices, will be excluded from the program. It is not yet clear what will happen to the citizenship of the investors who invested in this object.
Why is the government against early redemption?
There are two reasons for the strict attitude towards shares with early redemption from developers.
- Reducing the budget for construction of the object
The budget of projects approved for investment under the programme is based on investor contributions. If the developer returns part of the funds immediately, he reduces the budget.
That way, there’s not enough money to build. The object will either not be erected, or will be built from poor quality materials with violation of technology. Which in the end is a deception of the state, that is a criminal offence.
- Reducing interest in the option with a contribution to the state fund
Grenada’s program has another investment option – a non-refundable contribution to the National Transformation Fund (NTF). This option is cheaper than real estate investment in a standard situation.
The funds are used to develop the Grenadian economy, so it is important for the Government to be competitive with the subsidy option. Proposals for early redemption from developers stimulate demand for real estate, reducing the popularity of contributions to the state fund.
Benefits under the law
As already mentioned, there is a category of benefits that have legal status – they can and should be used. These are discounts, which are provided by the government. The program departments send out the appropriate forms to licensed agents.
The last example is a wave of discounts to compensate for government budget losses from the crisis by attracting large investments.
- Saint Lucia has halved its minimum investment in bonds by the end of 2020.
- Kitts and Nevis has reduced the amount of subsidies to the state fund for families to 4 people – until December 31, 2020 they invest the same amount as single investors.
- Dominica gave a discount of $25 thousand to families of 4 people.