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Mehul Choksi in Antigua: Why Indian fugitives feel safer in Caribbean?

Mehul Choksi is not the only Indian fugitive diamantaire who has found refuge in the Caribbean.

Karan Dhar        Last Updated: July 30, 2018  | 14:28 IST
Mehul Choksi in Antigua: Why Indian fugitives feel safer in Caribbean islands?

Mehul Choksi is not the only Indian fugitive diamantaire who has found refuge in the Caribbean. A few years ago, Winsome Diamonds promoter Jatin Mehta, who owes around Rs 7,000 crore to Indian banks, gave up his citizenship to become a citizen of St. Kitts and Nevis. Mehta took his wife Sonia along. Even former IPL czar Lalit Modi was once vying for citizenship of Saint Lucia but it was a bit too late.

The islands in the Caribbean have been a perfect getaway for scamsters fleeing the Indian law. Saint Kitts and Nevis was the first to launch its controversial paid citizenship program in 1984, a year after it won independence from the UK. The business started booming when passport-holders of tiny island nation were granted visa-free travel to the 26-nation Schengen zone.

Following St. Kitts and Nevis, countries like St. Lucia, Dominica, Grenada and Antigua & Barbuda began their citizenship-by-investment programs or CIPs. For runaway frauds, who plan their escape well in advance, these islands not only provide a safe haven but also offer a complimentary benefit of getting some of the most coveted passports in the world. It can help them save time at immigration counters and travel with ease across the world.

For example, the passport holders of the Antigua and Barbuda, enjoy visa-free travel to approximately 132 countries, including the UK, Singapore and countries in the Schengen area which covers most of the Europe. Also if you don't want to live in a far off island, you can still retain your citizenship by spending just 5 days in Antigua and Barbuda over a period of five years.

Enlisting in citizenship-by-investment programs can also shore up your fortune. If you have a few more bucks, instead of donating to a sovereign fund of these countries, one can invest in real estate and reap the returns later on. You are not only getting some of the most sought after passports but also making money while doing so.

And with benefits such as no direct tax, no tax on inheritance and capital gains, zero tax on dividends - shifting base to one of these countries makes a lot of sense financially.

Besides, these programs give their uber rich clientele a ticket out of trouble. It works as a reliable back up plan if things go south. Also, when your home country is facing sanctions, this could be an insurance policy. It's no wonder these passports have become must-haves for the likes of Choksi and Mehta.

But in order to get these passports, one has to have a clean slate in crime records, at least until your application is processed. Before a citizenship is granted, stringent vetting of applicants takes place. This may also include verification of records with the INTERPOL.

However, for both Choksi and Mehta, the timing of application fell perfectly in place. They acquired these citizenship months before cases were registered.

Lack of extradition treaties have made these islands a safe haven for fugitives. Since 2014, 28 Indians have applied for citizenship in Antigua & Barbuda. Seven requests for citizenship were received in the period between January 1 and June 30, 2017. The 6-monthly report of Antigua CIU reveals that India constitutes 2.50 per cent of the 1,121 foreign nationals' applications for citizenship since the inception of the program.

The report also reveals that, out of the seven applications, three Indian applications were processed simultaneously on June 21, 2017, with investments of $200,000 each. Whether these applications belong to the Choksi family remains unclear.

There are also 42 Bangladeshi nationals, along with 28 Pakistani and 478 Chinese nationals who sought citizenship in Antigua & Barbuda. 

The Price

The cost of buying these passports depends on where you want to live, work and travel.

Those looking for cheaper options can choose citizenship programs offered by Dominica and St. Lucia which offer a passport for just $100,000 (Rs 68 lakh) to a single investor. If you want to take your spouse along, you'll have to shell out $165,000 in St. Lucia and $175,000 in Dominica.

If your business interests are in China, one can opt for citizenship-by-investment program of Grenada. For just $200,000, you get visa-free access to most of the Europe and China.

But majority of these programs don't offer hassle-free visa to US. One can spend a few more bucks to get a Maltese citizenship which gives you the powerful EU passport. With this, you can easily access over 166 countries including EU, USA, Canada. Besides, you'll be legally allowed to live, work, study in any of the 28 EU countries, Norway, Iceland, Switzerland & Liechtenstein. To qualify for Maltese citizenship, the main applicant is required to make a contribution of at least 650,000 euros.

For ultra high net worth individuals who prefer idyllic climes of Mediterranean, the Golden Visa program of Cyprus is also an option. A citizenship of this EU member state will set you back by 2 million euros. However, this will be in the form of investment in real estate and you'll end up owning something.

If you are not in a hurry and don't want to rush things, Cyprus also offers permanent residency under residency-via-investment processes. To get Permanent Residency, applicants are required to invest 300,000 euros plus VAT in real estate. One is entitled to apply for naturalization and obtain a Cyprus passport after seven years.

For both Cypriot permanent residency and citizenship, one has to spend at least 60 days a year in Cyprus and less than 183 days in any other country. Real estate tycoon Surendra Hiranandani made headlines earlier this year when he gave up his Indian citizenship to become a citizen of Cyprus.

India saw the second largest number of millionaire outflow globally after China, with 7,000 high net worth individuals changing their domicile during 2017. According to a report by New World Wealth, 7,000 ultra-rich Indians moved abroad in 2017. In 2016, the figure stood at 6,000, while in 2015, as many as 4,000 millionaires shifted base.

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