Citizenship for Sale: St. Kitts and Nevis, Plus Seasteading

St. Kitts and Nevis is one of only two nations, along with the island of Dominica, that formally sell citizenship ("citizenship-by-investment"). As tax consultants Henley & Partners points out, these West Indies locales are very enticing for libertarians:

The Government grants tax breaks, guaranteed repatriation of profits and concessions on import duties. There are no income or capital gains taxes, no net wealth taxes and no inheritance or gift taxes in St. Kitts & Nevis.

Plus, unlike the Free State Project in frigid New Hampshire, St. Kitts and Nevis are islands in the Caribbean.  And Lysander Spooner fans can rejoice: There's even a secession movement for Nevis to split away from St. Kitts.

To become a full-fledged Kittian, future citizens have two options: You can 1) donate at least $250,000 to the Sugar Industry Diversification Fund (a program that assists retired and displaced sugar workers) or 2) buy upwards of $400,000 worth of real estate on those islands. After filing a bit of paperwork and waiting as little as three months, you become a citizen of St. Kitts.

Meanwhile, Dominica has a basic investment price of $75,000, but its passport is less valuable for international travel. In addition, Austria, the home of Hayek, Mises, Schumpeter, and Bruno, has a similar, albeit unofficial citizenship-by-investment program. Austrian citizenship has been offered to those of  "extraordinary merit," which can include investing over $10 million in Österreich. But Henley's CEO cautions:

The candidate has to have all the right trimmings…It's been done, it's possible, but it's fairly rare.

In addition to the minimal tax burden, Kittian citizenship is surprisingly useful for globetrotting. Henley & Partners have a Visa Restriction List, which ranks the countries where citizens can travel visa-free.  On that list, Austria is 6th, St. Kitts and Nevis is 28th, and Dominica is 54th. (Meanwhile, Denmark, Sweden, and Finland are tied for first, with the United States and Ireland in fifth.) So while Kittians can travel visa-free to fewer countries than Americans, they can still travel to the E.U. and Canada and even visit Cuba for up to three months without a visa.

Since the United States is the only industrialized country that taxes income earned abroad, more Americans are beginning to renounce their citizenship. In the words of one offshore tax attorney:

It's not enough to just move your assets anymore…Today, you have to move your ass.

Back in 2011, 1,788 Americans renounced their citizenship—a sevenfold increase from 2008. However, even those who renounced their American citizenship might still have to pay taxes. (Yes, the IRS is that powerful. Needless to say, always consult an attorney before doing anything that might provoke the wrath of the United States government.)

All this has some intriguing implications for seasteading. Currently in the planning stage, seasteads are ocean-based, self-governing communities popular among libertarians and Peter Thiel. Set in international waters, one goal is to escape the regulatory clutches of the state and experiment with polycentric law. Yet unless American-born seasteaders renounce their citizenship, they would still be liable to pay taxes to the United States. By investing in Kittian or Dominican citizenship, sovereign individuals could obtain some much needed legal protection. (Being completely stateless can be a real burden.)

If there's actually a surge in anarcho-capitalist Kittians, this would be a double irony: Thomas Jefferson's rival and national bank advocate Alexander Hamilton was born on Nevis, while St. Kitts and Nevis are technically still governed by the Queen of England.

Reason on seasteading. The Seasteading Institute on why it won't become Rapture.