Islands Business - Business: MARIANAS TO SELL ‘RESIDENCY’ TO INVESTORS

New revenue-making project

Criselda B. Hernandez
Foreign businessmen who are willing to invest US$200,000 to US$250,000 in the Commonwealth of the Northern Mariana Islands (CNMI) may soon be granted “residency” status as the government shifts to revenue enhancement projects after successfully reducing expenses.

Governor Benigno Fitial (right)... selling residency to investors to boost government’s coffers.

Governor Benigno R. Fitial, in a media conference, said the government will be selling residency only to investors. He said the US$200,000 to US$250,000 investment threshold, which was recommended by his economic think tank back in September, is not final yet.

While the CNMI is a U.S. commonwealth, it controls its own labour and immigration. Thus, it does not need the approval of the United States government before it re-enacts the CNMI Residency Act, which was suspended in 1981 due to its failure to bring economic gains to the islands.

The Fitial administration’s proposal is similar to the U.S. immigrant investor programme which requires a minimum of US$500,000 investment for targeted employment areas, or US$1 million elsewhere, in exchange for permanent resident alien status, more commonly known as “green card.”

Neighbouring Guam also requires at least US$500,000 investment, among other requirements.

Attorney-General Matthew T. Gregory, during the same media conference, said the residency programme, which would be established through legislation, includes having a government-approved planned zone for immigrant investors to minimise impacts on infrastructure and resources.

The CNMI’s Residency Act or Public Law 5-11 was enacted during the Trust Territory by the Marianas District Legislature in 1978 to establish permanent residency in the Northern Mariana Islands.

It was later repealed by the CNMI’s first governor, Carlos Camacho, on April 23, 1981.

The governor said the intent of the first Residency Act was to grow the population because the District Legislature believed in an economy of scale. “Unfortunately, the (resulting) mix of population was not conducive to promoting the economy of scale, so they repealed it,” Fitial told reporters.

The first Residency Act benefited mostly foreign workers who were granted permanent residency on the condition they live in the islands at least five years immediately prior to their application for permanent residence status.

The governor said the administration would also want to make a condition that there should be reinvestment to avoid fly-by-night investors.

Selling residency to investors, however, is just one of the revenue-enhancement projects initiated by the Fitial administration, including the enactment of Public Law 15-20, which allows foreign investors to have permanent or long-term interests in condominium units in the CNMI.

The new law covers only condominium units located “above the first floor” of the building, which should be located on privately-owned land.

Recently, however, the administration announced refining the Condominium Act because of provisions that are “too vague.”

The Fitial administration is also pushing for the enactment of two legislative initiatives that would extend the current 55-year term limit for leasehold interests.

Article 12 of the CNMI Constitution prohibits land ownership to those who are not of Northern Marianas descent.

The administration’s target of having 1 million tourists to come to the CNMI in a year is predicated on enticing more airlines to service the Northern Marianas while simultaneously enhancing the attractions to entice more tourists to come to the islands.

Another area that the Fitial administration is working on to boost its sagging economy especially in light of the closure of 10 garment factories since January 2005 is the amendment of Headnote 3(a) of the U.S. Tariff Code, to allow Saipan garment factories to use more imported raw materials for their products.

The U.S. Senate is expected to act on Senate Bill S. 1954 or the Insular Possessions Act of 2005 after the November 7 mid-term election.