What to Consider Before Investing in Caribbean Real Estate (Written by a Local Lawyer)

The Caribbean is a coveted destination for high-net-worth individuals seeking second citizenship and real estate investment opportunities.

Pristine beaches, favourable tax regimes, and stable political environments make the island region an attractive proposition – both for real estate investment and your second residence.

This blog aims to guide investors through the consideration factors when investing in real estate in the Caribbean, focusing on Antigua & Barbuda, Dominica, Grenada, St. Kitts & Nevis, and St. Lucia.

But Why Invest in Caribbean Real Estate?

Investing in Caribbean real estate offers several benefits.

First, many countries in the Caribbean offer citizenship for real estate investments above a certain threshold. Continue reading for more information about their programs and why you should invest in real estate over each program’s more affordable donation option. Why invest in a second citizenship? A passport portfolio gives you more travel access around the world, more optionality in case you want to leave your home country, more privacy in banking and investing, and many more benefits.

Second, the region is gorgeous. Sun-soaked beaches. Jungle-draped volcanoes. If you’re a nature junkie, you will find what you are looking for in the Caribbean.

Third, several Caribbean island countries offer favourable tax regulation. Antigua & Barbuda, and St. Kitts & Nevis all do not levy taxes on personal income, no matter where it is earned.

Fourth, these Caribbean countries are economically and politically sound. Often the main industries are tourism and financial services. Caribbean countries prosper when the global and local economies there prosper.

Sounds good, right? So how do you invest in commercial or residential real estate in the Caribbean islands?

Understanding the Caribbean Real Estate Market

Foreign real estate investment is typically more straightforward than our clients assume it is.

If you are familiar with real estate investing in your home country or other foreign countries, investing in Caribbean real estate will not be too unfamiliar of a process. It may include a few extra steps, but again, is relatively straightforward.

Liquidity is an important consideration, as well as market trends and forecasts. After the initial market downturn during the pandemic in 2020, the real estate market – both commercial and residential, especially the luxury, high-end, vacation-home market – in the Caribbean has exploded.

This marked increase has been driven largely by foreign investment in the region.

Stay informed about local trends and market turns in the Caribbean if you are interested in investing both capital and time in the region. But as the data points out, the market is poised for more growth as Caribbean citizenship programs become more popular and the islands attract more foreign-direct investment.

Identifying Prime Investment Areas

Choosing the right location for your real estate investment is paramount. Are you aware that several Caribbean island nations may also grant you citizenship if you invest in property in their country?

Antigua & Barbuda, Dominica, Grenada, Saint Kitts & Nevis, and Saint Lucia all have citizenship by investment programs. Each country has approved properties and projects for investment as part of the program.

If you want to invest outside of the program, you may still qualify for citizenship. But consult your legal team and/or boots-on-the-ground sources to confirm before investing any capital.

In terms of location on these islands for your real estate investment, property values largely align with tourist activity, infrastructure development, and future growth potential. Depending on whether you prefer a residential or commercial real estate investment, your desired location may vary.

Here’s a look at some prime investment regions in each country:

• Antigua & Barbuda — Known for its luxury resorts and private villas, this country offers excellent investment opportunities in tourism-centric areas. St. John’s is the capital, where significant real estate projects have flourished. English Harbour is also a popular destination for luxury residential property.
• Dominica — Dominica’s natural beauty and eco-tourism appeal make it a unique investment destination. The capital city Roseau and the second largest Portsmouth are experiencing growth in eco-friendly and luxury developments.
• Grenada — With its robust tourism industry and growing infrastructure, Grenada offers a range of investment options from beachfront properties to commercial real estate. Grand Anse and capital city St. George’s are popular for high-end resorts and luxury villas.
• St. Kitts & Nevis — This twin-island nation is 1) home to JH Marlin and 2) famous for its high-end resorts and real estate developments, attracting investors looking for luxury properties. Capital city Basseterre and Christophe Harbour, located in the southeastern peninsula of St. Kitts, are top investment spots for superyacht owners and high-net-worth individuals. In Nevis, Oualie, Jessups and the Golden Rock area are often top choices. 
• St. Lucia — St. Lucia combines beautiful landscapes with growing real estate developments, making it an attractive choice for investors. If you are seeking property investment in St. Lucia, we would recommend exploring the capital of Castries and Rodney Bay.

But of course, depending on your criteria and preferences for potential investment, the perfect investment area may vary.

Criteria for Selecting the Right Real Estate Property

Before you invest time and capital into the process, you must determine what is most important to your potential investment. Take this inclusive list of criteria for example:

• Financial considerations
  • Appreciation potential
  • Cash flow
  • Financing
  • Transaction costs
  • Potential ROI
  • Price
  • Property tax and other taxes
  • Rental yield
• Property considerations
  • Climate
  • Condition of property
  • Inspection reports
  • Neighborhood quality
  • Property rights
  • Proximity to an airport
  • Purpose of investment
  • Type of property
  • Zoning laws
• Macroeconomic considerations
  • Economic and political stability
  • Future development
  • Market trends
• Personal considerations
  • Desire for citizenship or residency
  • Liquidity
  • Ownership structure
  • Risk tolerance
  • Short-term vs. long-term

Of course, you may add other considerations to this list.

Working with local real estate agents and legal advisors can facilitate this process, ensuring compliance with local laws and regulations. That’s why JH Marlin has worked with so many high-net-worth individuals in the region.

We are accredited lawyers in the Caribbean. Not only can we help you apply for citizenship, we can help you find and invest in real estate property here as well.

Documentation and Legal Requirements for Purchasing Real Estate in the Caribbean

As mentioned above, check the local laws and requirements before investing any capital into the region. But generally, you will need some documentation and legal footing to purchase property in the Caribbean.

Key documents include the property deed, purchase agreements, central bank confirmation of funds, and proof of identity (citizenship or residency). In some cases, both the government and the seller of your property will perform due diligence on your investor profile in order to close the sale.

Do not wait until you have an agreement on the property for this step of the process. Collect the necessary documentation before you need to transfer the property into your name.

If you are investing in property as part of your citizenship application, work hand-in-hand, lock-step with your legal team to ensure you follow the rules set out by the government’s citizenship by investment unit. They may differ from other real estate investment processes not involving a citizenship application.

The OECS/CARICOM Advantage

As we have written about previously, all of the aforementioned Caribbean island nations that offer citizenship by investment in real estate are member states of both the 11-member state Organization of Eastern Caribbean States (OECS) and the 20-member state Caribbean Community (CARICOM).

Citizenship in one member state in these organizations provides significant benefits for investors. Not only would you have residency rights in all other member countries outside your own, you may also invest and live in other member countries.

This flexibility offers investors and high-net-worth individuals incredible mobility, business opportunities, and personal residency preferences across the region.

Challenges and Risks of Investing in Caribbean Real Estate

Investing in real estate in developing regions has its risks. The Caribbean is not alone in this challenge.

Common pitfalls for investors include property overvaluation, climate, general bureacracy and speed of processes, maintenance costs, and market fluctuations.

To mitigate these risks, conduct thorough market research, perform due diligence on your desired property, collect your proper documentation, and seek legal guidance by working with an experienced, localized team of lawyers, accountants, and realtors.

Here are a few more tips to reduce risk:

• Understand financing options — Each country in the Caribbean differs in their financing rules and regulations. Make sure you understand these rules before investing time and capital into the process. You may find financing options available through local and international banks to leverage your investment.
• Consider long-term potential — With the amount of capital and attention flowing into the Caribbean, JH Marlin is bullish on investment in the region. However, consider your investment goals and thesis. Is property investment the right move for you? If so, focus on property with strong long-term growth potential rather than short-term gains.

Investing in Caribbean real estate offers a unique opportunity to obtain second citizenship and benefit from the region’s attractive real estate investment climate – both commercial and residential property.

By understanding the market, identifying prime investment areas, navigating legal requirements, and working with local, on-the-ground legal experts, you can mitigate risk and make informed decisions that pay off for you and your family.

For personalized guidance and support in the Caribbean or to obtain citizenship in the region before prices double in 2024, contact JH Marlin to get started.