The immigrant investor industry has proven to be a highly lucrative business bringing billions of pounds to governments for investment, particularly in infrastructure and real estate. Sovereign nations are becoming ever more competitive, with each country offering ever more attractive terms and conditions to entice ultra-high-net-worth individuals to apply for residency programmes.
New entrant
Jamaica is shaping up to enter the fray and aiming to lure wealthy investors and financial services firms by modernising its arcane investment legislation that dates as far back as the 1830s. This will make it easier for international companies to establish corporations, trusts and partnerships, and Jamaica hopes to attract these firms to its shores by providing incentives including lower or no taxes.
Jamaica's main investment vehicle, Jamaican Promotions Corporation, confirmed in March that the government planned a citizenship or/and residency by investment programme. Anthony Hylton, Jamaica’s Minister of Industry, Investment and Commerce, has suggested that proposals could be approved by parliament this summer. Details are scarce and the cost of citizenship has not been declared but could range from $250,000 to $500,000.
Hylton has stated that Jamaica has been and will remain “bullish” in its quest to attract increased foreign investment. Also, that in its goal to lure high-net-worth individuals, Jamaica will comply fully with foreign tax regulations, including the US Foreign Account Tax Compliance Act.
Re-opening
Also keen to attract wealthy individuals is Canada, which has re-opened its Immigrant Investor Venture Capital (IIVC) pilot programme capped at 500 applications. The government randomly selected 60 applications for the IIVC, which aims to raise C$120 million to be invested in domestic start-ups with high growth potential in Toronto, Halifax, Thunder Bay, Vancouver and Victoria.
By early June, 16 principal applicants had been approved for permanent residency, helping eight businesses.
Under the new programme, would-be immigrants must have a net worth of at least C$10 million and will have to invest a minimum of C$2 million for a 15-year period, with no guarantee of the return of capital. Additional requirements include mandatory language testing and proof of completed Canadian post-secondary education of at least one year, or proof of a foreign educational equivalent. Education assessment can be exempted for applicants with a personal net worth of C$50 million.
Canada froze its previous immigrant investor programme in 2012 as officials scrambled to clear the backlog after being swamped by applications from ethnic Chinese investors — first from Hong Kong and Taiwan, and later from mainland China — many of whom were attracted predominantly to Vancouver with its proximity to the Asia-Pacific region. Canada officially cancelled this, as well as an entrepreneur programme last year.
On a provincial level, the Quebec Investor Program (QIP) was initiated in January with a cap of 1,750 accepted for assessment and a maximum of 1,200 applications made by applicants from any one country. QIP has less onerous financial requirements than the federal programme, for instance, potential applicants must have a minimum net worth of C$1.6 million and invest C$800,000. Francophones and those who can demonstrate advanced-intermediate French proficiency are not subject to the cap.
Chinese influence
The Chinese represent a growing and increasingly coveted source of high-spending investors for destination countries. Chinese interest in relocating to the United States is growing as more are expected to apply for the US’ EB-5 investor immigrant visa this year, prompted by an expanded immigrant quota and promising business opportunities. The US announced last year that it would increase the number of green cards for immigrant investors from about 10,000 a year to 14,000.
US commercial real estate services firm Savills Studley states that over 6,400 people are on the waiting list for an EB-5 visa and expects 2015’s allotment for Chinese applicants to be reached by September, compared with late August last year. Among the 10,692 investor immigrant visas issued by the US in 2014 — a 25% increase from 2013— mainland Chinese received 85% of them, a whopping 9,128, which represented 46% more than in 2013.
The visa, with no age limits or language requirements, grants US citizenship to foreigners willing to invest at least$500,000 in high-unemployment or rural areas, or $1 million in other regions, and create ten full-time jobs in the US.
The Chinese are also dominating demand for Portugal’s Golden Visa, which has raised €1.27 billion of investment in two years. Non-EU citizens can qualify for Portuguese residency if they purchase a property worth €500,000 or more and they become eligible to apply for citizenship after six years of residency.
By the end of February, the Portuguese government said that 2,203 non-nationals had successfully applied for the Golden Visa programme and of the 2,088 who had sought visas through property purchase, 1,777 were Chinese.
UK demand
A record number of wealthy Chinese and Russian nationals were granted UK Tier 1 investor visas last year. The UK government issued 357 investor visas to Chinese nationals over the year ending September 30, almost double the 178 visas issued over the previous 12 months. The number of visas issued to Russian investors increased by 57% over the same period. According to government figures, 43% of all investor visas issued by the UK now go to Chinese nationals, up from 10% just five years ago.
To qualify for a Tier 1 investor visa, an applicant must have at least £2 million of their own funds and must invest at least 75% of this into government bonds, share capital or loan capital in UK-registered companies within three months of arrival. The minimum required investment was doubled from £1 million to £2 million in October 2014. Unlike other categories of visa, applicants need not meet an English language requirement and are able to bring spouses and dependents to the UK to work or study.
According to a study last year, law firm Pinsent Masons projected that £30 billion of Chinese investment could flow into the UK annually by 2025, predominantly in infrastructure.
