The forum of the world’s richest nations has placed Barbados on a blacklist of 21 countries whose so-called “golden passport” schemes are deemed a threat to efforts to combat tax evasion.
While Barbados does not have a citizenship-by-investment (CBI) programme, this country was placed on the list because of its provisions for a Special Entry and Residence Permit, according to the report.
The Freundel Stuart administration had offered High Net Worth Individuals the option to be granted indefinite Special Entry Permits. The Special Entry Permits allow non-nationals to enter and depart from the island as they wish, as well as stay for indefinite periods of time.
According to several offshore finance and expatriate advisory websites promoting the initiative, non-nationals with a net worth of over US $5 million were to find “making a living, working and retiring in Barbados easy”.
“A high net worth individual (HNWI) may apply for a Special Entry Permit (SEP) which gives him/her the right to reside, but not to work in Barbados,” according to local advice website, businessbarbados.com.
The Immigration Department has Special Entries listed among its services on its website but makes no mention of what the holder is entitled to.
In the list released on Tuesday, Barbados is among seven Caribbean territories, with the remainder comprising European and South American countries running with citizenship by investment or residency by investment (CBI/RBI) schemes.
Among the neighbours listed are Antigua and Barbuda, Bahamas, Dominica, Grenada, St Lucia, and St Kitts and Nevis, which has sold 16,000 passports since relaunching its programme in 2006.
The Paris-based organization analyzed the residence and citizenship schemes operated by 100 countries and named those jurisdictions that they believe attract investors by offering low personal tax rates on income from foreign financial assets, while also not requiring an individual to spend a significant amount of time in the country.
Those wishing to “hide assets held abroad” could misuse these passports, the OECD argued.
Pointing out that citizenship by investment scheme had ballooned into a US$3 billion industry, the OECD warned that the ease with which the wealthiest individuals can obtain another nationality is undermining information sharing.
“Identity Cards and other documentation obtained through CBI/RBI schemes can potentially be misused to misrepresent an individual’s jurisdiction(s) of tax residence.
Potentially high-risk CBI/RBI schemes are those that give access to a low personal income tax rate on offshore financial assets and do not require an individual to spend a significant amount of time in the location offering the scheme,” the OECD explained.
Minister of Home Affairs Edmund Hinkson, who holds the responsibility for the Immigration Department, promised to provide a response after investigating the development, he told Barbados TODAY.
Over the years Barbados has remained vehemently opposed to the citizenship by investment programme. As recently as last year, then Prime Minister Freundel Stuart raised concerns that its occurrence placed pressure on the freedom of movement among CARICOM nationals.
Stuart reported that nationals of non-Caribbean countries took advantage of a Citizenship by Investment programme offered in a CARICOM member country to obtain passports of that territory and exercised their right to remain in Barbados for least six months without question as guaranteed under the CARICOM freedom of movement provisions.
But he made comment on the impact that multiple entry visas afforded by Barbados own programme for rich non-nationals might or might not have had on the issue.
At the time, Stuart spoke of the powerless position that the immigration authority found itself in when two such persons had opted to remain on the island after the United States Embassy for Barbados and the Eastern Caribbean, refused their applications for visas to travel to the US.
“The American Embassy turned down the applications for the visas, but the persons involved said ‘we are not going back to where we came from, we have a right to six months stay in Barbados and we want to stay here under our six months stay under the freedom of movement regime,’” Stuart said.
The former Pirme Minister said that the distress brought upon Barbados because of the uncertainty of the motive of these two CARICOM ‘nationals’ who are not welcomed in the United States is precisely what he was fighting against when in the past he objected to the citizenship based on investment programmes offered by sister territories.
“I have fought them [heads of governments] at CARICOM over those programmes … because I say to them, when you grant these people citizenship of your country and Barbados is not a part of the transaction, those people become CARICOM citizens and have, based on our freedom of movement arrangements, the right to come into Barbados when they like and how they like although we don’t know them,” he said at the time.