Grenada's 'golden passport' comes with tax benefits and makes travel easier — but only if you invest $150,000 in the country first

• Grenada's citizenship-by-investment, or CBI, program has accepted 1,500 residents yearly since 2013.
• Gaining Grenada citizenship takes about three months and is less costly than other CBI programs.

"Golden visa" programs gained popularity during the pandemic as countries like Portugal and Austria attracted wealthy individuals seeking temporary residency outside of their home countries.

But these days, as European Union countries crack down on some initiatives because of accusations of corruption, a different kind of international residency is edging into the spotlight: citizenship by investment, or a "golden passport."

The unsexy term, called CBI to those in the know, offers exactly what it sounds like: full citizenship and a second passport in exchange for an investment in the country's real estate or infrastructure.

The Caribbean island country of Grenada, nestled between St. Lucia and Trinidad and Tobago, about a 3.5-hour flight southeast of Miami, is one of five Caribbean countries to offer CBI.

The so-called "Island of Spice," known for its nutmeg and mace crops, doles out about 1,500 citizenships a year, according to Richard Hallam, who helped the country develop the program in 2013 and now works as director of CBI for resort developer Ora Caribbean.

Grenada's golden passport is particularly appealing right now not only for the status it affords its holders, but also for the long-term benefits like ease of travel to countries with which America may have more hostile relations.

There are two roads to Grenadian citizenship

Grenada, which has a population of about 113,000, has two routes to citizenship through investment: The first is based on a $150,000 donation to a fund that helps the country fix up and maintain its roads, bridges, and hospitals.

The second kind is based on investment in certain real-estate projects approved for the program by the government. Prices start at $220,000 for a share of a hotel or resort and top out at $350,000-plus for fractional or full ownership of non-hotel properties like condos and villas.

(As a comparison, right now $500,000 buys a one-bedroom, two-bathroom apartment with an ocean view in the Grenada capital of St. George's. This building is not, however, on the government's approved list.)

Hallam estimated that about 60% of the CBI applicants in Grenada choose the donation route, while the remaining 40% opt for real-estate investment.

"There are people for whom $150,000 or $200,000 for a family unit isn't a significant amount of money," said Hallam. "They would rather just donate the money, have it go to good use, get their citizenships, and move on with their lives without having to worry about annual returns or visitation or anything like that."

The perks of a Grenadian passport include taxes and global mobility

The country's citizenship-by-investment program doesn't require citizens to live in the country for any amount of time, but it does come with some perks if you do.

For one, Grenada's tax policies are more lenient than the United States'. Hallam explains that in Grenada, individuals and companies only pay income tax on income derived from within the country and its tax rates are generally considered favorable compared to other countries'.

(In the United States, foreign income is taxed unless the filer is eligible for a foreign housing exclusion or earns under a certain threshold that's adjusted annually for inflation by the IRS.)

Grenada also has no withholding or inheritance tax, meaning funds aren't withheld from paychecks for taxes and assets can be passed down at no cost. Grenada also doesn't tax capital gains, including the profit from a sale of a property or investment.

To be a Grenadian tax resident, the country requires 183 days of residence on the island a year. Companies are considered a tax resident corporation if it's incorporated or centrally managed there.

While the tax perks are more appealing for Grenada residents who renounce their American citizenship, there are still perks for Americans seeking a dual passport from Grenada.

"Depending on what countries one travels to, a U.S. passport can be seen as a liability," said Reaz Jafri, counsel to private client law firm Withers Worldwide.

"For example, if an American flies into part of the world where the U.S. has tensions — China, for example — an American passport might draw too much attention." Jafri added that with a Grenadian passport, a traveler doesn't need a visa to travel to China. "Strangely enough, it's sometimes a better travel document than a U.S. passport," he said.

CBI is a potentially profitable investment

In Grenada, buyers must hold their real estate investment for five years to get citizenship. But unlike with the donation route, the investment option begets an asset you can sell and potentially profit off of (with no capital gains taxes).

Plus, investors can usually visit the condos, hotels, and villas they're investing in during the holding period, Hallam said.

It's not just any property that gets international buyers citizenship.

The Grenadian government approves projects, like Ora Caribbean's Silversands resorts. Prices there range from $220,000 for a share of its Beach House property to $7 million-plus for ownership of one of the 5,000-square-foot turn-key villas.

The government works with developers of hotels, resorts, villas, condos, and other real-estate projects in public-private partnerships. The investment in hotel and resort projects costs less than other kinds of real-estate development to help drive tourism to the country, Hallam explained.

More hotels and resorts means more heads in beds, he added.

One down side of living in Grenada is that its import duties on consumer goods are high, upping the cost of living, according to Hallam.

But sandy shores, crystal blue waters, and perpetual sun during the winter just might be enough to forget the few downsides of life in Grenada.