Citizenship Investment Programmes - From Europe to the Caribbean

THE STAR Businessweek OCTOBER 20, 2018

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A Shift for ‘Citizens of the World’ From Europe to the Caribbean?

By Ed Kennedy, STAR Businessweek Correspondent

EU states warned over billions banked through golden visa schemes EU states have banked tens of billions of euros in investment from “golden visa” schemes that open the door to criminals even as the bloc takes a hard public line on corruption, two leading anti-graft campaign groups have warned Page 3

The Caribbean finance sector remains a local lifeblood, but one that is totally global in reach. The region is recognised as an epicentre of offshore banking, for all the challenges (and virtues in other instances) that can come with that. Yet though the offshore banking industry has long been a global concern, the growing pressure from the EU on Citizenship

by Investment Programmes (CIPs) means there are signs the ‘party is coming to an end’ across the European continent. This has implications not just for Europe, but for the Caribbean, as high net worth individuals AKA ‘citizens of the world’ may look anew to this region for buyable passports and offshore financial structures.

Continued on page 4

Malta market shows no signs of slowing Malta, an archipelago nation between Sicily and north Africa, has been a magnet for seafaring empires and merchants for millennia Page 7

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ECCB Chairman sets ambitious agenda

In an exclusive interview with The Star Businessweek, Chairman of the ECCB Monetary Council Dr Keith Mitchell talks risk, resilience and reform

By Catherine Morris, STAR Businessweek Correspondent

The STAR Businessweek

BY Christian Wayne – Editor at Large

It’s difficult to publish a Caribbean-focused business publication without making a reluctant tip of the proverbial hat to the outsized importance of the banking industry in shaping the economic affairs of the Caribbean—for better or for worse. Sure, most financial institutions in the Caribbean leave us with much to be desired when it comes to pretty much every basic tenant of customer service but, nevertheless, we’re better standing with them than against them. Regionally speaking, there are few industries in the Caribbean that have been as laggardly as banks have been in keeping pace with innovation, technology, and—in the case of banks specifically—their national obligations to pursue economic growth in parallel with their individual profits. However, we seem to have hit fever pitch as financial institutions around the region literally cannot afford to be laggards any longer. Echoing these sentiments and charting the path forward for banking in the Eastern Caribbean is Dr. Keith Mitchell, Prime Minister of Grenada and newly-assumed chairman of the Eastern Caribbean Central Bank’s Monetary Council, who recently sat down for an exclusive interview with The STAR Businessweek to discuss the Council’s agenda and the general economic climate of our region.

Not an interview to miss; beginning here on page 2.

Once again, Citizenship By Investment Programmes are back in the headlines with the European Union deciding to reiterate its distaste for golden visa programmes in a report set to be published next month following concerns that citizenship schemes need to be more stringent if they are not to be used as conduits for looted money laundered through banks, property and other investments by dictatorships from African nations and elsewhere (reeks of imperialism but they have a point!). See the Financial Times reporting on page 3 in “EU states warned over billions banked through ‘golden visa’ schemes”.

What’s bad for EU-member citizenship schemes doesn’t necessarily have to mean doom and gloom for Caribbean-based immigrant investor schemes, now does it? STAR Businessweek correspondent Ed Kennedy poses this question in our lead story “A Shift for ‘Citizens of the World’ From Europe to the Caribbean?” starting on page 1.

It’s Nothing Personal. It’s Business.

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Chairmanship of the ECCB Monetary Council was transferred from Prime Minister of Dominica Roosevelt Skerrit to Prime Minister of Grenada Keith Mitchell (pictured) earlier this summer. The Monetary Council is the highest decision making authority in the ECCB and is comprised of the eight Ministers of Finance representing the ECCB member governments

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hen Dr Keith Mitchell assumed the Chairmanship of the Eastern Caribbean Central Bank (ECCB)’s Monetary Council this summer he outlined his priorities as fiscal resilience, regional cooperation and proactive banking.

Dr Mitchell, Prime Minister and Minister of Finance for Grenada, is eager to tackle longstanding challenges during his tenure and will be aided by a favourable financial climate. The global economy expanded by 3.9 per cent this year and is expected to continue this rate of growth into 2019. The Eastern Caribbean Currency Union (ECCU) is also on an upward trend, recording 2 per cent growth this year and projecting 3.5 per cent for 2019.

“The banking system is stable,” says Mitchell. “The licensed financial institutions are generally solvent, banks continue to meet their clearings obligations in a timely and efficient manner [and], most importantly, the public continues to demonstrate confidence in the financial system.”

Preparing for shocks

Banking in the Eastern Caribbean may be stable, but there is plenty to keep the ECCB busy. Mitchell says one of the most pressing issues is credit risk. With Brexit on the horizon, fluctuating oil prices and a volatile geopolitical scene, regional banks need to maintain their ability to absorb shocks. This is threatened, however, by their large volume of non-performing loans (NPLs). By the end of June 2018 NPLs totalled

$1.4bn or 11.4 per cent of banks’ loan portfolios.

Assisting banks in developing better risk management is a raft of legislation. This year the International Financial Reporting Standards (IFRS) 9 came into force, requiring banks to adopt more provisions for loss and introduce more effective safeguards. The ECCB is also working with a Basel implementation team to ensure banks in the region are up to date with Basel II and Basel III. The Basel framework requires banks to have sufficient liquid assets to be able to withstand loss of funding for at least a month.

A more resilient sector will not only be able to survive external shocks, but also overcome challenges at the regional and national level, such as the threat of de-risking. Loss of Correspondent Banking Relationships (CBRs) is an ongoing problem in the Caribbean as the region’s reputation becomes tarnished by international tax regulators. Mitchell says mitigating the impact of de-risking is a “top priority” for the ECCB and adds: “Member governments continue to explore policy options, including the need for more intervention on the political level and the need for greater responsibilities by authorities at the jurisdictional level.

“All stakeholders have a role to play, specifically in terms of increasing transparency, focusing on exactly what is required to maintain CBRs and understanding exactly what the risks are.”

The ECCB has been advocating for the industry on the international stage, meeting with representatives in the UK, Canada and the United States. At the country level, the ECCB is calling for a culture of compliance throughout its member Continued on page 5

Money Laundering

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EU states warned over billions banked through golden visa schemes Campaign groups say such deals can open doors of Europe to criminals Michael Peel and Mehreen Khan FT Correspondents in Brussels

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U states have banked tens of billions of euros in investment from “golden visa” schemes that open the door to criminals even as the bloc takes a hard public line on corruption, two leading anti-graft campaign groups have warned.

At least 6,000 passports and almost 100,000 residence permits have been granted in the past decade under programmes that are sometimes laxly supervised, according to research published on Wednesday jointly by Global Witness and Transparency International.

The paper stokes concerns that the widespread money-for-status schemes offer kleptocrat cronies and criminal gangs a foothold in Europe. Brussels has said it plans tougher scrutiny of “citizenship for sale” schemes in eight EU member states, including Malta and Cyprus.

Naomi Hirst, a senior campaigner at Global Witness, said: “If you have a lot of money that you acquired through dubious means, securing a new place to call home far away from the place you stole from isn’t just appealing, it’s sensible.

“Golden visa schemes offer a safe haven from authorities who might be looking to seize your stolen assets, and the freedom to travel without raising suspicion.”

The EU’s 28 member states have won about 25bn Euros of foreign direct investment over the past 10 years from schemes that offer residence rights or full citizenship in exchange, the report says.

Countries that offer golden visa schemes say they are a source of needed investment and are subject to proper due diligence checks © Reuters

Cyprus has generated 4.8bn Euros since 2013 and Malta about 718m Euros since 2014, while Portugal and the UK appear to earn between 500m Euros and almost 1bn Euros per year. Spain, Hungary, Latvia, Portugal and the UK have all granted residence rights in more than 10,000 cases.

Cyprus and Portugal “do not seem to question applicants’ source of wealth”, while Malta accepts even convicted criminals and targets of investigations in “special circumstances”, the report alleges.

Success rates of more than 90 per cent for golden visa candidates in Latvia, Hungary and the UK raise further doubts over how stiff the background checks are in those countries, the campaign groups argue.

Countries that offer golden visa schemes say

they are a source of needed investment and are subject to proper due diligence checks.

Cases such as the 200bn Euros money laundering scandal at Danske Bank, Denmark’s biggest lender, have exposed how EU members have been used as havens for suspect money from Russia and other states where corruption flourishes.

The problem has even deeper roots in the decades-old role played by European countries as conduits for looted money laundered through banks, property and other investments by dictatorships from African nations and elsewhere.

The European Commission will publish a report on citizenship schemes next month, following concerns that EU governments need to carry out more stringent vetting for

passport applicants.

Vera Jourova, EU Commissioner for Justice, told the FT in August that Brussels wanted to pressure governments to reject questionable candidates, after recent money laundering scandals linked to Russia.

In cases of any doubt, a person “should not have the privilege of citizenship”, Ms Jourova said. “We have no power to ban such a practice but we have an obligation to put high requirements on the member states to be careful. They are granting citizenship for the whole of Europe.”

The commission’s report will be the first time Brussels has scrutinised golden visa schemes.

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A Shift for ‘Citizens of the World’ From Europe to the Caribbean?

Continued from page 1

The Relationship of CIPs and Offshore Banking

Offshore banking and CIPs are separate but related issues within the Caribbean and beyond. While the industries can exist without one another, just as the local region’s two biggest industries of tourism and finance find many common ties, so too do offshore banking and CIPs. That’s why the news out of the European Union on Tuesday of increasing pressure on the so called ‘Golden Passports’ issued

by EU nations is notable not only for European nations, but all around the world.

Vera Jourova, the EU justice commissioner, described existing CIPs in Europe as “problematic” and “unfair”, also citing the security risks they pose as anyone who acquires citizenship from one nation in the Schengen Area can thereafter travel throughout the EU. This was also accompanied by the publication of the OECD’s analysis of 100+ territories that offer CIPs (and/ or residence by investment) to foreign residents. The report held that a number of nations in Europe and the Caribbean, including Antigua and Barbuda, Barbados, Dominica, Grenada, Saint Kitts and Nevis, and Saint Lucia, potentially pose a high risk to the integrity of the OECD/G20 Common Reporting Standard (CRS).

The CRS, established in 2014, looks to foster the automatic exchange of financial information between different jurisdictions, and see this done annually. In tandem with the publication of this list, the OECD has also published new guidelines offering

directions to financial institutions, enabling them to better identify and prevent clients who seek to avoid the CRS.

Why the Latest EU and OECD News Matters for the Caribbean

Though each nation pursues its own CIP independently, there are always considerations beyond one state’s borders alone. For example, citizens of CARICOM nations can travel between local nations via a CARICOM passport, and citizenship — whether obtained by birth, a long naturalisation process, or a quicker CIP route — once granted, cannot (except in extreme cases) be revoked.

The same dynamic applies to the EU. News of increasing pressure on its CIPs may cheer some locals in the Caribbean who savour the prospect of an increase in business for the local CIP industry.

But it could also mean that those who EU intelligence agencies have deemed a security risk, could look anew at a Caribbean CIP in the event that one from an EU nation proves too hard or too laborious to obtain.

Local and Global

The story of the Panama Papers and Paradise Papers and their fallout is ultimately one that is a global issue; just like the Trump phenomenon in Washington, Brexit and the growing tensions within the South China Sea due to Beijing’s building of artificial islands are global in impact.

Any expectation within the region that

it, and it alone, can administer this debate or resolve these issues locally and totally by itself would be wrong. Not only is the debate global in nature, but ultimately there remain many jurisdictions around the world that have seen controversies arise surrounding their banking and finance industries.

That’s why anyone in Europe who does wish to see the odorous elements of offshore

banking stamped out, needs to think carefully about how reform occurs; so that, in a global economy, global results are seen and not merely the ‘shutting up shop’ in one region that may see a spread of the issues to another region.

Just the same, if it’s accepted that people and nations further afield have a right to call for change within the region via international channels, so too do Caribbean

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this present debate is not just about global finance, but also about old world nations seeking to stamp their authority once more on new world states; new world nations who, in so many instances, retain painful memories of colonisation and foreign domination, and have no wish to revisit them.

The Winds of Change Growing

EU Justice Commissioner Vera Jourova told German newspaper Die Welt that “the granting of citizenship poses a serious security risk because it gives beneficiaries all the rights of EU citizens and allows them to move freely throughout the Union”. The Czech politician continued that the Commission is “extremely concerned” about the escalation of “golden passports,” being offered

nations have a right to respond, seeking to ensure the conversation truly is global; one that sees that any reforms and change locally are mirrored elsewhere, whether the impetus for them is driven from locals or from petitions abroad.

Indeed, if it is expected that the Caribbean delivers landmark change where no other nations do, it reinforces perceptions held by some locals that

Recent weeks and months have shown a new momentum building to address existing issues surrounding offshore banking and illegal tax practices (clear evasion against law over minimisation alone), and also to combat criminal activity that is taking advantage of opaque banking and buyable passports. No fair citizen of a Caribbean nation or beyond could decry progress in these areas that are possible, practical and set to deliver enduring results.

It’s just also true that there remains within this debate a number of regular citizens and local jobs that depend on the existing finance industry. Just the same as their nations depend on their own to voice outcry when it’s perceived they are not being treated fairly but are being pushed by larger entities.

Among these members of the Caribbean family many different views can be found on the existing regional finance industry, and how it operates from nation to nation, and as a whole. But all could agree on the shared desire to see a global push for change accompanied by global reforms.

That’s why the recent news out of the EU will be watched with interest, not only for what it may mean for the Caribbean, but also because it may lead to global dialogue that could see a truly international campaign for reform find greater momentum than all that has occurred so far.

OCTOBER 20, 2018

ECCB Chairman sets ambitious agenda Continued from page 2

states, and urges all banks to address any gaps in their AML/CFT framework. A collaborative approach will help the region reframe the discussion, according to Mitchell who says: “It is imperative that Central Banks and regulatory agencies act more collectively for greater impact. There is a need for greater representation in all global forums [and] a need to develop and implement a communications strategy to redefine the image of the region from that of a high-risk tax haven to highly responsible and compliant jurisdictions.”

Encouraging entrepreneurs

As the Eastern Caribbean banking system strives to become more resilient, many financial institutions have taken a hardline approach to lending practices, often leaving Small and Medium-sized Enterprises (SMEs) out in the cold.

In many cases, would-be entrepreneurs are thwarted by a lack of access to finance, usually because they do not have the necessary collateral. “Inadequate access to finance remains a major impediment to SME investment and undermines their importance to contributing to economic growth, employment and development,” says Mitchell who stresses, however, that banks cannot bear sole responsibility for the dampening of entrepreneurial growth. “The development of SMEs has to transcend financing and embrace a holistic view of an enabling business ecosystem.

The infrastructure for financial services has to be built on the premise that profit orientation and economic development are not mutually exclusive. The goal must be to promote enterprise development and growth by helping businesses gain access to finance, build skills and help them add value to their activities.”

The ECCB aims to launch the Eastern Caribbean Partial Credit Guarantee Corporation by the end of the year. This agency will provide a partial guarantee on loans made by approved financial institutions to small businesses in the ECCU and work with providers to help these fledgling companies boost their skills and financial know-how.

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Leveraging technology

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The ECCB isn’t just interested in equipping SMEs with the necessary skills and knowledge; it also wants to reach individuals who are excluded from the financial infrastructure.

Bringing the unbanked into the existing economic framework can deliver benefits that ripple out to positively impact others.

Mitchell says: “Financial inclusion may facilitate the poor as it will enable them to build savings which can give them access to credit. Access to credit can assist them in increasing their productive capacity which can enable them to create job opportunities thereby generating employment within their respective communities.”

To promote financial inclusion, the ECCB is tackling consumer concerns. “The significant increase in bank fees over the past years and the practice of banks to have account holders maintain a minimum balance, combined with people’s discomfort and intimidation in using commercial bank services have increased the size of the unbanked population,” says Mitchell. Following consultation with industry, the ECCB intends to implement the Prudential Standards on Fees and Charges for Financial Institutions by the end of the year. It is also looking at modernising the payment system through electronic wallets and “e-money” to make banking easier and more convenient.

In March the ECCB partnered with FinTech firm Bitt Inc to launch a pilot project aimed at creating a digital version of the EC dollar and a blockchain system to support digital payments and transfers. The initiative is expected to begin before the end of 2018 and last up to 19 months. Mitchell says the aim is to “deepen financial inclusion and advance economic growth, resilience and competitiveness.”

The ECCB is celebrating its 35th anniversary this year. Looking ahead to the future, the bank is confident it can keep up with the changing times and maintain stability. As of this month, the EC dollar remains strong, with 98 cents in each dollar backed by foreign reserves. During his tenure as Chairman, Mitchell says he wants to continue delivering on the bank’s strategic goals as laid out in its 2017-2021 Strategic Plan and adds: “By working together with other regional institutions and social partners we can transform our region.”

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OCTOBER 20, 2018

Public-Private Partnerships

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Norman Manley Airport Divested

The government has divested the operation of the Norman Manley International Airport (NMIA) to Mexican entity, Grupo Aeroportuario del Pacifico S.A.B. De C.V. (GAP)

By Jamaica Gleaner

Prime Minister, Andrew Holness (left, standing) and Transport and Mining Minister, Robert Montague (middle, standing), observe as Chief Executive Officer of Mexican entity, Grupo Aeroportuario del Pacifico S.A.B. De C.V. (GAP), Raul Revuelta Musalem (2nd right, seated) signs the 25-year Norman Manley International Airport concession agreement

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25-year concession agreement was signed on Wednesday at the Office of the Prime Minister by Chairman of the Airports Authority of Jamaica, which owns the NMIA, William Shagoury, President and Chief Executive Officer, Audley Deidrick, and GAP’s Chief Executive Officer, Raul Revuelta Musalem, and Head of the entity’s subsidiary, PAC Kingston Airport Limited, Saul Villarreal Garcia.

The formalities were witnessed by Prime Minister Andrew Holness and Transport and Mining Minister, Robert Montague.

Under the agreement, GAP will be responsible for improving the airport’s land and air operational efficiency, and financing and completing a modernisation programme, at an estimated cost of over US$110 million.

Additionally, the government will receive a guaranteed percentage of the airport’s gross revenues. The entity has the option to extend the arrangements by an additional five years.

The GAP emerged the preferred of three bidders, which included two consortia of foreign and local investors.

The selection followed the public opening and evaluation and Cabinet’s subsequent approval in September of the three bid submissions received by the Development Bank of Jamaica (DBJ) in July.

The transaction value for GAP’s bid totals over US$2 billion.

Holness said the transaction represents another successful public-private partnership deal, coming on the heels of similar arrangements with the Kingston Container Terminal and the North-South Highway.

“The successful outcome of this public-private partnership attests to the transparency and equity of the process as

well as the professionalism, accountability, and integrity of all stakeholders involved,” he said.

Holness argued that this type of investment modality is critical to the government’s economic growth strategy, adding, “It is evident that PPPs are excellent vehicles for unlocking the value of assets, reducing debt and mobilising local and foreign investment in our economy.”

In his remarks, Montague noted that NMIA has played a critical role in Jamaica’s economic development for many years.

He said the aviation sector’s critical role to tourism and the services sector “made clear the need for [the] modernisation and development of our airports”.

“Through a thorough analysis, the government decided that privatisation was the best available option for mobilising the considerable resources that would be required to achieve our objective,” the Minister noted.

Montague said the transfer of financing and operational responsibilities to GAP now enables the AAJ to focus on managing the concessions at NMIA and the Sangster International Airport in Montego Bay, which the Mexican entity manages through the subsidiary company, Desarollo de Concesiones Aeroportuaris.

For his part, Musalem said GAP welcomed the opportunity afforded to manage the NMIA’s operations.

“You can be assured that the group I represent will contribute to the achievement of Jamaica’s Vision 2030 [of] transforming the country into the place of choice to live, work, raise families and do business,” he added.

GAP has concession management agreements, some totalling 50 years, for 13 airports in Mexico.

The entity has been managing the Sangster International Airport operations since 2003.

The Saint Lucia Registry of Companies & Intellectual Property Company Incorporations Name: Bugaboos Inc.

Name: Blanco and Sons Company Ltd.

Description: Property holding company

Description: Landscaping and farming

Directors: Laurent Poyen

Directors: Nicholas Blanchard

Date Incorporated: 24-Sep-18

Date Incorporated: 27-Sep-18

Chamber: Chong & Co. Chambers, Saint Lucia

Chamber: Alberton Richelieu Chambers, Saint Lucia

Name: Better Living Health Ministry Inc.

Name: Jédonni Farms Ltd.

Description: Health store

Description: Agricultural production

Directors: Taylor Evariste; Marguerite Evariste

Directors: Jeshurun Andrew

Date Incorporated: 25-Sep-18

Date Incorporated: 27-Sep-18

Chamber: SEDU, Saint Lucia

Chamber: SEDU, Saint Lucia

Global Property Markets

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Malta market shows no signs of slowing The island’s strong economy and state incentives are driving demand for limited space

By George Hammond, FT Property Correspondent

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alta, an archipelago nation between Sicily and north Africa, has been a magnet for seafaring empires and merchants for millennia.

Phoenicians, Greeks, Romans and most recently the British have landed their fleets on the Mediterranean country’s shores, using Malta as a base for conquest and commerce.

Arrivals in the capital Valletta today are seeking the spoils of peace rather than war. Since the country gained independence from the UK in 1964, Malta’s economy has gradually been reshaped — and has flourished since the country’s accession to the EU in 2004.

Since joining the bloc, property prices have also been on a steep incline, underpinned by a strong economy and government incentives. “During the period of our existence there has never been any one year where we did not register year-on-year growth,” says Kevin Buttigieg, chief executive of RE/MAX Malta, an estate agent established in 2004.

Between 2000 and 2007, Malta’s house price index rose almost 80 per cent (53 per cent when adjusted for inflation), according to property data provider Global Property Guide.

Following the financial crisis, prices were more volatile between 2009 and 2013 but have been increasing steadily over the past five years.

Supply is, and will probably remain, tight. Malta is the 10th-smallest nation by area in the world — behind city states such as Monaco and the Vatican City — covering just 320 square

Saint Julian’s, looking towards Sliema, both popular areas with developers

kilometres. The country is a fifth of the size of London, and Valletta could comfortably fit inside the UK capital’s Hyde Park.

Opportunities to develop on new sites are therefore limited.

“Perhaps the most ambitious [projects] now are the skyscrapers being developed in the Saint Julian’s or Sliema areas, with completion dates set for the end of 2020.

Valletta is also a very much sought-after location but property there is very limited and prices have now reached historical highs,” says Buttigieg, whose agency has a lengthy waiting list for property in the capital.

In part because of the limited space for new-builds, “the government has announced a number of incentives with the purpose of encouraging the restoration and reuse of scheduled property and tax incentives for clients purchasing properties in urban conservation areas” says Robert Spiteri Paris, co-managing director of Perry, an estate agent with three offices in Malta.

Buyers in these areas are only required to pay half the stamp duty, normally charged at 5 per cent of the purchase price.

The government has also granted special designated area status to several new developments, meaning “both EU and non-

EU nationals can purchase property in Malta with the same acquisition rights as Maltese citizens”, according to Spiteri Paris.

Foreign buyers are a growing contingent, he adds, estimating that expats now make up 90 per cent of Perry’s clients looking for rental property and half of those looking to purchase.

In part that is thanks to government incentives aimed at attracting foreign buyers, most recently a citizenshipby-investment scheme called the Malta Individual Investor Programme, aimed at non-EU buyers. The scheme has “generated property sales and rentals, as well as an assured income to the country” says Buttigieg. Rental yields in Malta, which attracts tourists throughout the year, are around 4.4 per cent gross, according to Global Property Guide.

Following five consecutive years of record sales volumes, local estate agents are optimistic. Buttigieg describes Malta as “a sellers’ market” and Spiteri Paris anticipates “continuing demand for quality property in the year ahead”. Space seems to be the only constraint. Spiteri Paris identifies a lack of available stock as a challenge. At the last census, in 2011, the population density in Malta was 1,320 people per square kilometre, against an EU average of 116.6. Those seeking an escape to solitude, therefore, might be advised to look elsewhere.

Photographs: Getty Images; Getty Images/iStockphoto; Dreamstime; Getty Images/Robert Harding

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Canadian Company To Acquire Majority Shares In Barbados-Based SOL Investments Limited

Parkland Fuel Corporation’s President and CEO, Bob Espey, said, “Together, Parkland and SOL create a significant North American and Caribbean growth platform.”

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anada’s largest independent marketer of fuel and petroleum products, Parkland Fuel Corporation (Parkland), has announced that it has entered into an agreement with the Barbados-based SOL Investments Limited (SIL) to acquire 75 per cent of its operations.

SOL, a privately-held company, owned by the Simpson Group, is the largest independent fuel marketer in the Caribbean, with SIL being a whollyowned subsidiary of SOL Limited.

SOL supplies and markets a total of 4.8 billion litres of fuel volume, annually, across 23 countries in the Caribbean, and generated US$215 million in adjusted earnings before taxes, depreciation and amortization in the 12-month period ending June 2018.

According to a statement, the transaction will result in Parkland acquiring 75 per cent of the issued and outstanding shares, in the capital of SIL, for an estimated US$1.21 billion, plus customary post-closing adjustments on a cash-free and debt-free basis.

SOL Limited will acquire 12.16 million common shares in the capital of Parkland.

“Upon closing, the Simpson Group, through its ownership in SOL Limited, will own approximately 9.9 percent of the issued and outstanding shares in Parkland, and its intention is to remain a long-term investor in Parkland,” Parkland said in a statement.

The statement added that the remaining 25 per cent of the shares outstanding in SIL are subject to the Minority Purchase/Sale Right, to which Parkland may elect to acquire, or SOL Limited may elect to sell, the remaining shares in the capital of SIL. “The addition of SOL will extend our global supply reach and enable us to continue to build our supply advantage to benefit our entire business,” said Parkland’s president and chief executive officer, Bob Espey.

“With its integrated supply chain, backed by an extensive distribution network, fortress assets, a premier brand portfolio and an exceptional team, SOL has built a strong market position with unparalleled regional scale. Together, Parkland and SOL create a significant North American and Caribbean growth platform,” he said.

“We are delighted to partner with the Simpson Group, and welcome the opportunity to work with SOL’s strong management team, to optimize and grow SOL’s industry-leading retail and supply network, through our combined scale and expertise,” the CEO added.

The founder of SOL, Sir Kyffin Simpson, said he was “exceptionally pleased to announce the coming together of Parkland and SOL, which will ensure an exciting and dynamic future for everyone”.

“With a desire to continue to develop and grow the business, through expansion in new areas, I am extremely blessed to bring in our good friends Parkland of Canada to the Caribbean.

“I have long admired Parkland, as a company, with their futuristic vision and energy, and I have been tremendously impressed with Bob Espey’s strong leadership, along with his exceptional management team,” Sir Kyffin added.

He said that he is “truly confident that this coming together with the fantastic team at SOL will be a complementary blend of cultures, ideas, technology and innovation”.

“I am convinced that Parkland and SOL are perfectly matched to develop new and exciting opportunities, with renewed energy that will provide excellent avenues for the development of our people that will, in turn, enhance our customer experience and open new doors for great synergies and improved logistics,” he added.

“With 43 million people and a gross domestic product of more than US$200 billion, this is the perfect time to take advantage of the tremendous opportunities that abound in the Caribbean.”

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