While Bermuda government coffer revenues continue to inexorably decrease, the rhetoric here grows increasingly shrill. Paraphrasing headlines and various individual statements regarding proposals to open our doors wider to foreign investments, we witness constant mantras: “Bermuda for Bermudians”, “taking away our birth right”, “allowing foreigners in to dilute our votes and occupy our real estate”, “it’s not fair”, “we deserve more”, and on and on.

Truth is, we Bermuda residents don’t deserve anything.

We have to earn our keep. And right now, it seems that other small islands and municipalities are outstripping us in earnings and marketing power. Do we even get it? Are we still conducting business as if we are the privileged ones doing those foreigners a favour?

Let’s discuss those (read interpreted as wealthy) foreigners. How many of “those foreigners” have married into your own family over time, even generations (yes, count them), acquired Bermuda status after decades of contributions to Bermuda’s economic model? Those “foreigners” now assimilated, have already diluted that “vote” on - both sides of the political spectrum.

Haven’t we long ago opened the gate to foreigners? Or, should we now pass legislation outlawing marriage to “foreigners”?

Not possible. Bermuda is in the middle of the global village. Bermuda needs direct foreign investments, as basic economic textbooks have stated forever, to conduct trade and grow our natural Bermuda product into the future.

How are we going to do that? Raise taxes? Hope new business walks off a dock? Lots of talk about that, too. All these proposed plans (and they are just that, only proposals) assume that the “new” money will just roll in, unsolicited, from unknown sources, cause we in Bermuda are just so terrific! Are we?

How does any state, province, country create new jobs? You provide incentives to foreign companies by smoothing payroll tax and other levies, allow individuals to establish businesses, or purchase foreign real estate — all linked to specific investment benefits for the country itself. Everyone needs to feel they are getting a deal, and most importantly, that their business is wanted and valued.

Craig Christensen, a Morgan’s Point developer in his observations about the difficulty of obtaining funding from foreign investors is spot on. “Bermuda is a hard sell”, Royal Gazette, November 20, 2013. “The islands south of us are booming — they’ve figured it out.” Mr. Christensen further proposed considering a cap of 1,500 foreign investor solicitations with specific Bermudian jobs performance conditions here.

How are other countries foreign investor friendly? The United States has had a successful Immigrant Investment programme for foreigners linked to long-term viable commercial business models for more than 20 years. The EB-5 programme comes with a strict set of financial conditions, but for those wanting to achieve US citizenship and permanent residency, it is the American dream.

Foreign business investors into the United States must invest (and show audited financial evidence of the fact) $1 million into a new (or qualifying existing) for-profit commercial enterprise. The investors must create at least 10 full-time positions, distinctly separate from themselves or family members, and be actively involved in the day-to-day management of the enterprise. The jobs must be maintained for at least two years. Subsequently, at which point, the investor and immediate family conditional period residence status will be removed and Lawful Permanent Resident Certificates (Green Card Holders) leading to United States citizenship (and passports) will be authorised.

As at late 2010, Canada was (and appears to be still) operating a highly successful International Immigrant Programme (IIP) with guidelines and restrictions similar to the United States. The foreign investor provides a five-year zero interest loan to the Government of Canada, who then distributes the funds to participating provinces (Nova Scotia among them) and territories to fund economic development and job creation.

The programme is an important source of investment capital, while immigrant investors must also make significant contributions by investing in business in Canada. The reward again is economic growth, guaranteed repayment of their loans, and upfront permanent resident status in Canada. As recently seen with the appointment of Stephen Lund, CEO, Bermuda Business Development Corporation, and former CEO of Nova Scotia Business since 2001, those Nova Scotia initiatives (combined with specific province-focused marketing programmes for increasing foreign investments) have become hugely economically successful, attracting some of the top companies in the world.

Malta, a small municipality with limited natural resources. The United States is not the only country aggressively encouraging performance-conditioned foreign investments linked to citizenship. Malta recently signed a new double tax agreement with the United States that is flexible, forceful, financially astute based along the OECD model convention lines, but also includes a very progressive executive beneficial plan that provides generous exemptions and incentives for investing in the country. Malta has raised the global bar to increase direct foreign investment. Multinational corporations and investors have noticed. One local Bermuda firm recently announced relocation of their headquarters to Malta.

The Bottom Line. Real revenue. Calculate — for Bermuda, 1,500 new foreign investors (a mere pittance compared to the 6,000-10,000 foreign workers estimated to have left Bermuda since the recession began almost five years ago) times $1 million apiece equals $1.5 billion dollars upfront. Each investor must employ 5 Bermudians (close to 7,500 Bermudians – almost the entire Civil Service) at an average of $80,000 salary each for at least 3-5 years. That’s another $600 million dollars into this economy – each year. Do the maths. Think about it.

Let’s get real here. We are tired to total fatigue of opinionators and their war of words on what should have been done, or what they can do.

Planning is great, but where are the real dollars. We need action, not more words.

We can continue to chastise each other for missing the gravy train, wasting more and more precious economic rebuilding time, or we can move forward with concrete proactive initiatives NOW to jumpstart this deplorable financial morass.

Ministers. Less rhetoric, more results. We need to get in the game now.

Sources: US Citizenship and Immigration Services – EB-5 Immigrant Investor Process; Canadian IIP programme; Malta / US Double Tax Treaty.

Martha Harris Myron JP CPA PFS CFP is a Bermudian journalist and a cross border financial planning specialist. Offshore financial perspectives for international citizens living, working, crossing borders, and straddling ponds in the North Atlantic Quadrangle: United States, Canada, United Kingdom, Europe, and the island of Bermuda, the premier international finance centre.

President of Pondstraddler? Life™ Consultancy.

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