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Can commercial immigration work for Bermuda?

Welcome investment: This file photograph shows Alexander and Andrew Green after the Green family bought the Hamilton Princess & Beach Club, Bermuda’s oldest hotel from Global Hospitality Investments. Bermuda has benefited from being home to the Green family

Bermuda can count itself fortunate to be home to the Green family. Their purchase of the Hamilton Princess & Beach Club, the $90 million makeover that has followed, the development of the hotel’s beach club on the site of the former Sonesta hotel in Southampton and the addition of 200 employees to the hotel’s payroll this year are collectively an enormous contribution to the Island’s economic wellbeing.

Not only was the money they invested of value to Bermuda, but also the confidence in the future of the Island that it signalled, coming in the midst of a bleak recession and a prolonged downturn in the tourism industry.

Just last week came a reminder of their generosity. Eleven applicants received awards from the Green Family Scholarship, which provides between $5,000 and $10,000 per year for up to four years of post-secondary education on a needs-based basis. Since 2007, it has helped more than 100 students to obtain further education. This was widely welcomed in the community and all of the ten people who commented under the online version of the story on The Royal Gazette website offered praise and thanks to family.

In Cayman, the Dart family is making an even more enormous impact on another small island group. The Darts, whose wealth came originally from the manufacture of styrofoam cups in the United States, count among their investments the Kimpton Hotel and Camana Bay, a spectacular 500-acre development comprising offices, stores, restaurants and schools. It has been estimated that Dart family companies own more than a fifth of Caymanian real estate and it cannot be disputed that their investments have spurred great economic activity.

Both families have an outsize beneficial impact because they are investing large amounts of money in small communities. Their stories are supportive of the case for some form of “commercial immigration”, a notion put forward by the Bermuda Government two years ago, but since put on the back burner because, according to Michael Fahy, the Minister for Home Affairs, the Government “does not have the appetite” to pursue it at this time.

Commercial immigration is a sensitive issue and the political heat generated by even the mention of it inhibits cool-headed discussion of options that might actually be palatable to the community as well as economically beneficial.

Last week Don Mills, the CEO of Corporate Research Associates, which has for many years helped to produce economic surveys in Bermuda, described the Government’s shelving of its commercial immigration plans as a “missed opportunity”. Mr Mills suggested that the arrival of 100 wealthy individuals, each investing $5 million in Bermuda, would have a huge impact on the economy. He is absolutely correct. Quoted in the same article in this newspaper, Sir John Swan said commercial immigration would “rile a lot of Bermudians”. He is also undeniably correct.

So does there exist a sweet spot that would serve to attract the targeted wealthy individuals and produce meaningful benefit to the economy, while being acceptable to the majority of Bermudians? Acceptability may well be the most difficult requirement to meet.

The United States has its own immigrant investor programme, known as EB-5, which provides a visa permitting residency for qualified individuals who invest $1 million in a local business ($500,000 if it’s in an area deemed economically disadvantaged) and create at least ten jobs. If the business proves successful, this can be a path to citizenship for the investors. The programme, which is due to expire at the end of this month and which is being considered for an extension by the US Congress, has directly created 85,500 full-time jobs and attracted $5 billion in direct investment in the 25 years or it has been running, according to a report by the Brookings Institution. This is a drop in the bucket in terms of the huge US economy, of course, and it has been criticised by some for its vulnerability to fraud and exploitation, especially when it is difficult to ascertain the source of an individual’s wealth.

To work in Bermuda, commercial immigration would need to focus more on quality than quantity. It would require a much higher investment threshold than EB-5. Mr Mills’s suggestion of $5 million is nearer the mark, but inviting 100 people, with their families, might prove too large a number of paid-for citizenships to prove publicly acceptable. It would also be bureaucratically challenging, given the due diligence necessary to ensure we were not welcoming corrupt or criminal types.

Raising the investment bar very high — well into the tens of millions of dollars — and limiting entry to a handful of extremely wealthy families is a version of commercial immigration that would perhaps be more suitable for Bermuda. It would not take many billionaires choosing to settle in Bermuda, putting some of their millions to work in the community and creating jobs, to unleash a multiplier effect rippling through the community. Imagine the shot in the arm that Bermuda’s economy could get from five or six Green families?

It’s worth a thought, especially as the Island faces an urgent need to reinvigorate and diversify an economy battered by six years of recession and not being helped by a wave of consolidation in our key insurance industry, not to mention an ageing population.

However, while attracting a small number of extremely wealthy families with the offer of citizenship in exchange for sizeable investment might well be possible, finding such people with the genuine, long-lasting commitment to their new home that the Greens have displayed over time would require attributes that go well beyond the financial.