Gregor Nassief’s Open Response To Lennox Linton

The Good.  When Dominica instituted the Real Estate option in 2014, if differentiated itself in a number of ways.  First, the approval process is arduous.  Second, it requires that all investment monies destined to a real estate project are deposited into a developer’s escrow account which the Government has control over as a signatory, and even though that money belongs to the developer, it is only released to the developer if there is correlating progress in the project.  In other words, if the developer sells and receives 20% of the total investment, the Government does not allow the release of those funds until the developer shows 20% progress on construction.  This requires the investor to financially front-load the investment – meaning to provide their own financing ahead of receiving any funds from escrow such that construction advances.  I have heard developers seemingly on the edge of a nervous breakdown because the Financial Secretary will not sign off on releasing their money to their project.  But this prevents a developer from receiving money and not putting it into construction, something that has happened repeatedly in another jurisdictions.  Also, the Government has deliberately kept the funnel of CBI real estate projects “tight” (so only a few projects at a time) thus increasing the probability of each project completing.  Look at Dominica’s pipeline of projects vs. other jurisdictions: https://www.imidaily.com/cbi-real-estate-watch/  It’s smart policy and increases each developer’s probability of success.  And lastly, but certainly not least, Agents and Applicants alike laud Dominica’s CBI unit for its efficiency and speed of processing while maintaining very high due diligence standards.

The Bad & The Ugly.  The regional CBI programs are extremely vulnerable and one major failure in due diligence could begin to derail it.  This requires an unrelenting effort to ensure the best and most comprehensive due diligence process, and to further enhance that, Dominica needs to implement biometric passports, a move that is, in my opinion, long overdue.  The industry also needs much tighter regulations – there are unscrupulous agents and developers making a mess of things for everyone else offering what are known as “special deals”, completely undercutting the market and undermining the entire program and the respective Governments are not cracking down.  The special hybrid Housing offering, while beneficial to Dominica, creates a serious challenge for the program to the point that some agents are now refusing to offer Dominica because they cannot compete with the Housing option.  The banking process of receiving funds from economic citizens is frustrating at best, and more needs to be done to increase efficiency and customer service while applying the necessary due diligence requirements.  In summary, the five participating Caribbean CBI countries need to establish uniform regulations and guidelines, inclusive of severe penalties for those developers and agents engaged in unethical and illegal practices.  Such regulations should also include minimum transparency and accountability requirements for the programs.   And as a final note, we are building many, many hotels, but these projects will not deliver on the promise of a sustainable economic impact if we are unable to fill the rooms and attract many more visitors to the island, an imminent challenge that requires a lot more focus and action.