By NEIL HARTNELL
Tribune Business Editor
A former attorney general has called for The Bahamas to increase the real estate investment threshold for economic permanent residency to $1m, and asserted: “It should never have been lower than that.
While acknowledging that there are many who will likely disagree with him, John Delaney said raising the bar from the present $750,000 qualifying threshold would enable The Bahamas to “get more out of persons choosing to be here” by attracting “a higher financial calibre” of investor to this nation.
This would also bring the real estate investment threshold in line with the $1m minimum that the government is eyeing for persons seeking to qualify for economic permanent residency via contributions to sporting, cultural, arts and social development causes - a reform that Mr Delaney hailed as “timely” given The Bahamas’ urgent need to reflate the economy, and attract investment and foreign exchange earnings, post-COVID.
“It’s certainly timely that the government revisit the threshold figure of $750,000, which was set as a matter of policy. Before that it was $500,000,” the Delaney Partners principal said. “I know others feel it should be brought down for various reasons, but in my view it should never have been lower than that.”
Mr Delaney pointed out that the last Ingraham administration in 2011 established a policy whereby investors who made a real estate purchase valued at $1.5m or above would be accepted for so-called “accelerated” consideration of their permanent residency application.
The $750,000 threshold to qualify for non-accelerated permanent residency was raised as recently as 2018, having been left at $500,000 for some time, due to increasing concerns that the latter figure was resulting in overseas investors competing with middle class Bahamians for real estate. And Mr Delaney said a further increase in the threshold to $1m would also help to improve government tax yields.
“I would be in favour of increasing that real estate threshold because it means we get more out of persons choosing to be here, and it serves to select a higher financial calibre of persons coming to The Bahamas who are able to further contribute to The Bahamas,” he added.
“It should be no less than $1m in terms of realty. If there are going to be other mechanisms and other avenues to qualify [for economic permanent residency], I think starting at $1m should be the threshold entry point, and there could be others up to $1.5m. That’s not an unknown level for us as we’ve have been there from ten years ago.
“In my opinion, we have to be more concerned with achieving a certain level of economic impact, whether it comes from real estate investments or something else. I would say that $1m is a good level of economic impact that indicates the person will be a beneficial contributor to the economy.”
Mr Delaney, meanwhile, backed the Government’s plans to reform the Immigration Act and expand the routes by which persons can qualify for economic permanent residency beyond just real estate purchases. He added that it would strengthen the “framework” supporting the financial services sector and supporting industries by making it more attractive for their high net worth clients to domicile in The Bahamas.
“We need to reflate the economy, and attracting persons to come in and make a substantial level of investment in the economy by way of economic permanent residency is an excellent way to quickly reflate the economy and get jobs - good paying jobs - back online,” the former attorney general added.
“When these people come here they want all the things people of that wherewithal want to enjoy and consume. It’s a good move. We ought to be looking at how we improve the economic permanent residency product. There are many European countries doing this for a very long time. Portugal has an excellent programme. We’re in good company. The UK has a form of it.
“Any effort required to make The Bahamas more a choice for persons to relocate to should be done,” Mr Delaney continued. “It’s not costing us anything to do this. We’re in the business of welcoming people to come here. We’ve done this for generations, welcoming people to come here. It’s our principle industry, and inviting these people to come here is tourism on steroids.
“All this is doing is leveraging what we already have to get more out of persons coming here and making greater investments as opposed to simply room nights in a hotel.”
Mr Delaney told this newspaper that a more flexible, and enhanced, economic permanent residency product “especially goes hand in hand” with the economic substance requirements that The Bahamas has embraced in response to European Union (EU) pressures as well as the potential 15 percent minimum global corporate tax that is now being pushed by G-7 members.
He added that The Bahamas could use permanent residency, and its substance regime, as a tool to ensure investors went beyond just their “mere presence” in the jurisdiction to establishing physical businesses that employ locals and contribute annually to national gross domestic product (GDP).
“It’s timely that we as a jurisdiction, as a country, as a government, take a second look at this,” Mr Delaney said.