Saint Lucia: the government bond option back in the spotlight

Saint Lucia grants its citizenship in return for a contribution to the national economic fund, a real estate investment, a subscription to government bonds or an approved business project.

The contribution to the national economic fund stands at from $240,000¹ for the main applicant and up to a certain number of dependants.

The minimum real estate investment stands at from $300,000², regardless of the number of dependants.

We do not publish the amount of the bond subscription, its holding period or any yield: they do not appear in the official sources we were able to verify. They must be established with the Saint Lucian unit in charge of the programme.

The Saint Lucian passport gives visa-free access to about 147³ destinations, in line with the average for Caribbean programmes.

A contribution to a fund is lost for good: it has no asset counterpart. A bond subscription is a loan to the State, repayable at maturity.

The real cost is therefore not measured by the amount subscribed but by the return forgone during the holding period, plus the programme fees.

This difference is considerable. Capital of several hundred thousand dollars tied up for five to seven years without remuneration costs, in lost earnings, only a fraction of the equivalent contribution.

In return, the buyer bears sovereign risk: the risk that the issuing State, a small island economy, does not repay at maturity. This risk is real and cannot be hedged.

They also bear liquidity risk: these securities are not traded on a secondary market, and early exit is in practice impossible.

A point of method is essential to compare two options of the same programme seriously. A lost contribution and tied-up capital cannot be compared at face value: the latter must be reduced to its opportunity cost, that is, the return this capital would have generated elsewhere during the lock-in period.

Once this calculation is done, the bond option often appears less costly than the contribution — provided sovereign risk is treated as negligible, which requires a judgement on the solvency of a small island economy over five to seven years.

Citizenship by investment does not change tax residency. A French national who acquires it without leaving France remains taxable there on all their income.

Benefiting from these States' tax systems requires becoming a tax resident there, and therefore living there. Saint Lucia uses a threshold of 183 days⁴ of annual presence.

Finally, the passport's value rests on visa-free access that third States can withdraw, as shown by the case of Vanuatu, whose passport fell to about 95⁵ destinations.

Due diligence fees, invoiced separately, are not refundable in the event of refusal, and the procedure must go through an authorised agent.

These five programmes have also raised their thresholds in a convergent manner under European and American pressure, which ended the price competition that used to characterise them.

1. The real cost of each option: lost contribution versus lost earnings on tied-up capital.
2. The lock-in period and the absence of a secondary market for the securities subscribed.
3. The sovereign risk of the issuing State, which does not exist in the contribution option.
4. Ancillary costs — due diligence, agent, passport — which apply in all cases.
5. The actual purpose sought: mobility, a fallback option, or specific access to a third country.

For a French national, the mobility gain is nil: the French passport opens more destinations than any of the Caribbean programmes. The benefit, where there is one, lies in diversifying nationalities or in a fallback option — and this analysis must come before choosing between a contribution and a subscription.