Research papers

Research Papers

Investment Migration Research Papers are peer-reviewed multidisciplinary working papers of original research in progress dedicated to the analysis of citizenship and residence by investment around the world.

Why some Countries have more Billionaires than Others? Explaining Variety in the Billionaire Intensity of GDP – IMC-RP 2018/3 By Vladimir Popov
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  • Create Date: November 29, 2018
  • Last Updated: November 29, 2018

ABSTRACT

The list of billionaires and their wealth published by Forbes magazine in the US allows computing the number of billionaires per unit of GDP and the ratio of their wealth to GDP for various countries. These measures of billionaire intensity vary greatly – sometimes by one or even two orders of magnitude. The paper offers descriptive statistics of geographical distribution of billionaires and a preliminary analysis of factors determining the country variations of billionaire intensity indicators. Rich and well-developed tax havens, like Monaco, Hong Kong, Guernsey, Cyprus, Lichtenstein, attract a lot of billionaires, but other less developed countries with zero or low personal income taxes (Persian Gulf states – Bahrain, Kuwait, Oman, Qatar, UAE) do not have many billionaires. Unsurprisingly, the happiness index, especially one of its determinants – healthy life expectancy, is a strong predictor of the concentration of wealth in particular countries. Surprisingly, other determinants of the happiness index, such as per capita income and social support, do not matter much, whereas personal freedom does matter, but has the “wrong” sign (the lower personal freedom is, the higher the billionaire intensity). Another unexpected result is the negative relationship between billionaire intensity and inequality of income distribution as measured by the Gini coefficient derived from household surveys: billionaires seem to prefer countries with lower income inequalities. The presence of billionaires, while increasing income inequality at the very top by definition, does not increase general income inequality. Long-term trends in the billionaire intensity also appear to mirror changes in income equality within countries, as measured by the Gini coefficient: an increase before the First World War, followed by a decrease until the 1980s, and subsequently a new rise.

KEYWORDS: Income inequalities, billionaire intensity, tax rates, happiness index, murders

Vladimir Popov Research Director (Economics and Politics), Dialogue of Civilizations Research Institute (DOC-RI). I am grateful to Ekaterina Jarkov, Research Assistant at DOC-RI, for her help with the data processing, and to Dimitry Kochenov and an anonymous referee for helpful comments. Usual disclaimers apply.

Global Mobility of the Wealthy and their Assets: An Overview – IMC-RP 2018/2 By Andrés Solimano
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  • Create Date: August 20, 2018
  • Last Updated: August 20, 2018

ABSTRACT

This paper provides an analytical and empirical overview of the mobility of wealthy individuals and mobility of financial assets (offshore wealth) in a context of economic and geopolitical volatility, increased income inequality and high wealth concentration at the top. Main pulling and pushing factors and patterns of offshore wealth deposits are examined using information from investment banks, wealth management offices, international real estate companies and BIS data. The analysis shows a more direct relationship between inequality in the country of origin and offshore wealth than between inequality and HNWI physical mobility although the data for the latter remains scant. Our results also show that in some group of countries with high taxation (e.g. Scandinavian nations) the wealthy hold relatively low percentages of their wealth abroad, a finding which runs against the claim that high taxes always prompt individuals to send their wealth abroad. The data also shows that the direction of mobility of the wealthy and their assets is not only from the periphery of the world economy (low to middle-income nations) to the core (advanced economies) but also within advanced economies.
KEYWORDS: international mobility of the wealthy; offshore wealth; inequality; taxation; investment migration regimes; globalization; crises.

Andrés Solimano President, International Center for Globalization and Development in Santiago, Chile and External Director of the project “The International Mobility of the Wealthy and Global Inequality” at DOC-RI in Berlin, Germany.

Contact: [email protected] Effective research assistance by Javier Galaz is appreciated. Comments by Dimitry Kochenov, participants at the academic workshop of IMC-Forum 2018 and IMC’s reviewers are greatly appreciated.

The Re-Invention of Investment Immigration in Canada and Constructions of Canadian Citizenship – MC-RP 2017/2 By Miriam Cohen
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  • Create Date: October 24, 2017
  • Last Updated: August 20, 2018

ABSTRACT

This article discusses the evolution of investment immigration in Canada and its impacts upon constructions of Canadian citizenship. Canada has led the way in providing permanent residency to foreign individuals in exchange for an investment. While investor immigration programs in Canada have gone through some changes over the years since it was first established in 1986, foreign investors have always had to meet certain economic criteria; the common denominator has always been a large sum of investment in exchange for the right to reside in Canada, and eventually become a Canadian citizen. There have been some recent developments in investment immigration in Canada which bring to the fore important questions, including how investment immigration is construed in Canada, how it impacts Canadian citizenship values, and ultimately how immigration laws and policies will shape the future of Canada’s economy and society. While investment immigration has existed in Canada for some time—and is now a global phenomenon—the topic remains under-theorised and understudied in Canada. In light of changes to investment immigration in Canada, this paper examines the circumstances under which investor-type immigration is justifiable, and ultimately desirable, in the Canadian context. Through an examination of the historical evolution of investment immigration in Canada and interdisciplinary scholarship, this article questions the phenomenon and argues that this kind of immigration devalues Canadian citizenship by construing it as a commodity to be traded for the right amount of investment.

Prof. Miriam Cohen PhD (Leiden University); LLM (Harvard Law School); LLM (Cantab); LLM/LLB (Université de Montréal); Member of the Quebec Bar. Assistant Professor, Bora Laskin Faculty of Law, Lakehead University.

New-generation Skilled Migration Policies and the Changing Fabric of Membership: Talent as Output and the Headhunting State – IMC-RP 2016/4 By Francesca Strumia
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  • Create Date: December 22, 2016
  • Last Updated: August 20, 2018

ABSTRACT

That citizenship is getting lighter is not a new idea. How this is occurring and what its implications are for the fabric of communities is however a question with several facets. This article explores one of these facets. It questions how ‘new generation’ skilled migration policies, with which several states around the globe are experimenting, contribute to altering the role of citizenship and immigration law in identifying the members of a polity. New-generation skilled migration policies facilitate the entry, and in some cases the naturalisation, of high net-worth individuals and innovative entrepreneurs. The article evidences two distinguishing features of these schemes: legal requirements for the entry of these new-generation skilled migrants which focus on talent as their ‘output’; and the state’s role in administering immigration and citizenship law becoming, in the context of these policies, that of a headhunter. Through headhunting for migrants who promise an output, states channel the regulation of citizenship and immigration along a novel trajectory parallel but distinct from traditional ones. A dual-track citizenship model emerges as a result: a heavy, culturalised citizenship for ‘traditional’ migrants, and a thin, cosmopolitan one for the new-generation skilled migrants. The article ultimately argues that these transformations prompt a rethink of citizenship as a web of rights and duties
binding different classes of stakeholders and mediated by the state, rather than as a binary relation between individuals and the state.

Francesca Strumia, Lecturer in Law,
University of Sheffield
Email:[email protected]

Global Citizenship 2.0 – The Growth of Citizenship by Investment Programs – IMC-RP 2016/3 By Kristin Surak
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  • Create Date: November 15, 2016
  • Last Updated: August 20, 2018

ABSTRACT

What explains the growth of citizenship by investment programs and what are the implications for citizenship more broadly? This paper investigates an under-studied yet rapidly developing avenue for naturalization: jus pecuniae, or the acquisition of citizenship through financial contribution. The existing literature divides between exuberant economists touting the utility of market mechanisms to control political membership, and cautious political and legal theorists concerned about the effect of investor citizenship on democracy. Adding empirical grounding to these largely theoretical debates, this paper draws on qualitative fieldwork on the citizenship by investment industry and the countries that implement these programs to delineate the  dynamics of jus pecuniae and its implications for citizenship more broadly. The analysis specifies the distinctive properties of citizenship as a commodity: the state plays a dual role as both sole
producer and market regulator, and the use-value of citizenship depends on factors both internal and external to the granting state. It then situates formal citizenship by investment programs within a broader field encompassing immigrant investor visas and discretionary economic citizenship. And it identifies how this field conditioned the development and remarkable spread of these formal programs in recent years, and the role of geopolitical inequalities and industry actors in this transformation. In conclusion, it elaborates four ways in which consideration of jus pecuniae can contribute to our understanding of broader transformations in citizenship, including its relationship to strategic action, territory, inequality, and private actors.

Dr Kristin Surak, Associate Professor of Politics at SOAS, University of London
Email:[email protected]

‘Internal’ Investment Migration: The Case of Investment Migration from Mainland China to Hong Kong – IMC-RP 2016/2 By Qishi Fu
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  • Create Date: September 12, 2016
  • Last Updated: August 20, 2018

ABSTRACT

China is a major source country for immigrant investors. Hong Kong, a special administrative region of China, operates one of the most popular investment migration programmes. The Hong Kong ‘Capital Investment Entrant Scheme’ (CIES) was launched in 2003 and has granted residence rights to over 28,000 individuals, until its suspension in 2015. Notably, CIES had a nationality requirement which precluded mainland Chinese from applying. However, an exception was made for those mainland Chinese who have obtained a permanent resident status in a foreign country. This paper argues that the nationality and foreign residence requirements of the CIES are due to the jurisdictional grey area between Hong Kong and the central Chinese government in the area of immigration. Despite the nationality restriction, mainland Chinese constitute the principal applicant group for the CIES nonetheless, due to convenient permanent residence-by-investment programmes offered by West African and Pacific Island states.

Quishi Fu, Global Migration Programme, Department of Geography, University College London.
Email: [email protected].

Investment Migration and State Autonomy: A Quest for the Relevant Link – IMC-RP 2019/4 By Matjaž Tratnik and Petra Weingerl
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  • Create Date: 23-09-2019
  • Last Updated: 23-09-2019

Abstract

The paper explores limitations imposed on State autonomy in matters of nationality by international law and EU law and its implications for investment migration. State autonomy is in international law to a large extent unlimited, although it may not encroach upon international obligations in the area of protection of human rights. In the EU, Member States are (by their nationality rules) gatekeepers to the EU citizenship. When exercising their national autonomy they must observe EU law, most notably the principle of proportionality and the principle of sincere cooperation. The principle of proportionality plays a more important role in cases of loss than in cases of acquisition of nationality, as the cases Rottmann, Kaur and Tjebbes have demonstrated. Yet, the role of EU law is very limited. The principle of sincere cooperation may play an important role as regards defining the grounds for the acquisition of Member State nationality, and thus also for the investment migration. If a Member State lays down rules that enable citizenship by investment, the EU institutions might react, as the Maltese example shows. So far only the political institutions have reacted in this matter, without sensible legal arguments, though. Most recently, the Commission in its 2019 Report deployed a genuine link-based narrative that is at odds with established principles of international and EU law and highly problematic from the viewpoint of the principle of sincere cooperation. When and if the matter reaches the CJEU, the Court should be very restrained when assessing national investment migration rules. To this end, bringing a ‘romantic’ 19th century genuine link-like criteria into the realm of EU law is not desired.

KEYWORDS: EU Citizenship, Nationality, National Autonomy, Proportionality Principle, Principle of Sincere Cooperation, Genuine Link, Relevant Link, Investment Migration

Matjaž Tratnik, PhD, Professor of International, EU and Comparative Law, University of Maribor, Faculty, Faculty of Law.

Petra Weingerl, DPhil (Oxon), MJur (Oxon), Assistant Professor of the Department of European and International Law and International Cooperation, University of Maribor, Faculty of Law.

The Sale of Conditional EU Citizenship: The Cyprus Investment Programme under the Lens of EU Law – IMC-RP 2019/3 By Sofya Kudryashova
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  • Create Date: 11-2-2019
  • Last Updated: 06-06-2019

Abstract

This article focuses on the consequences of the acquisition of Cypriot citizenship through Cyprus’s new Investment Programme, adopted in 2013. One of the criteria for the acquisition of citizenship is the investment of EUR two million in Cypriot banks, immovable property or companies which must be retained on Cypriot territory for at least three years. However, immovable residential property to a value of EUR 500,000 must be retained in Cyprus indefinitely or there is a risk of citizenship being revoked. These criteria raise concerns, particularly in light of EU law on citizenship and the free movement of capital. This article analyses the possible violations of EU law in this context and argues against the conditional nature of the citizenship provided by the Programme, which results in violation of the free movement of capital and restricts the genuine enjoyment of the status of EU citizenship. Case law by the European Court of Justice and academic literature analysing the right to the free movement of capital and revocation of citizenship in an EU context will be examined to determine the repercussions of the Cyprus Programme. This topic is extremely relevant today, as it sheds light on the developing nature of EU citizenship and the relationship between EU citizenship rights weighed against the national interests of the Member States.

KEYWORDS: investment migration, EU citizenship, free movement of capital, non-discrimination, Cyprus Investment Programme

Sofya Kudryashova, Corporate Administrator at PHC Tsangarides LLC. [email protected] I would like to express my gratitude to Professor Dimitry Kochenov for his guidance and encouragement throughout the entire process of writing this paper.

This work has been defended as a thesis at the University of Groningen and does not in any way reflect the views of the IMC or the author’s current employer. The final polished version of it is due to appear in the European Papers (2018).

EU Competence and the Attribution of Nationality in Member States – IMC-RP 2019/2 By Daniel Sarmiento
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  • Create Date: 23-01-2019
  • Last Updated: 23-01-2019

Abstract

The EU’s limited competences in the field of immigration introduce significant limits on the EU’s ability to harmonize or introduce uniform rules in the laws of nationality of its Member States. This paper will portray the EU’s competences in the field, as well as the Court of Justice’s position in the matter. It will be argued that the cases in which EU law can interfere in Member State’s laws on nationality concern cases of restrictions of EU rights, but not cases in which the attribution of nationality is a source of EU rights for the individual. It will be argued that the EU can only introduce measures in this area of national law on the grounds of Article 352 TFEU, and even in this case it must comply with strict requirements, such as the existence of a genuine need to improve the goals in the Treaties, as well as a unanimous vote in the Council.

KEYWORDS: Nationality, EU competence, Micheletti, Rottmann, EU citizenship, Immigration

Daniel Sarmiento, Professor of EU Law, Universidad Complutense de Madrid. Former legal secretary at the Court of Justice.

Wealth Influx, Wealth Exodus: Investment Migration from China to Portugal – IMC-RP 2018/1 By Luuk van der Baaren and Hanwei Li
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  • Create Date: 25-05-2018
  • Last Updated: 20-08-2018

Abstract

China is one of the largest origin countries for investor migrants. For the Portuguese investment programme, the abundant majority of investors is of Chinese origin. As the one country’s wealth influx can be the other country’s wealth exodus, this paper aims to study investment migration from China to Portugal from the perspectives of both emigration and immigration. After describing the structure of the Portuguese investment programme and how it has worked out in practice, it is concluded that the programme has delivered significant economic contributions, but in a different way than the Portuguese government had originally intended. The paper continues by outlining the key drivers of Chinese investor emigration, concluding that the low residence requirements, gaining access to the Schengen Area and the option to invest in real estate are likely to attract Chinese investors to the Portuguese programme. Rather than emigrating instantly, the Chinese investors seem to participate in the Portuguese investment programme as a household-level strategy to ensure a ‘backup plan’ and be ready to emigrate at any time, creating an intriguing form of ‘quasi-migration’. The Chinese government mainly perceives investment programmes as a risk and has implemented measures which aim to curb the outflow of capital. Meanwhile, the real ‘winners’ remain the investor migrants themselves, as investment programmes enable them to become part of a global and mobile elite.
KEYWORDS: Migration; investment migration; Portugal; China; golden visa

Luuk van der Baaren is a doctoral researcher at the University of Liege and Maastricht University.

Hanwei Li is a doctoral researcher at the University of Tampere and Bielefeld University.

The authors would like to thank Prof. Dr. Jack Barbalet (Hong Kong University), Prof. Dr. Patrícia Jeronimo Vink (University of Minho), Prof. Dr. Xiang Biao (University of Oxford), two anonymous interviewees and the anonymous reviewers for their valuable assistance.

Investment Residence and the Concept of Residence in EU Law: Interactions, Tensions, and Opportunities – IMC-RP 2017/1 By Martijn van den Brink
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  • Create Date: 27-03-2017
  • Last Updated: 20-08-2018

Abstract

Immigration regimes around the world are increasingly tailored to attract highly desired individuals. A number of Member States have offered preferential access to the ultrarich. Certain Member States have tried to attract high net-worth individuals by offering them privileged residence rather than citizenship. This paper examines investment residence from the perspective of EU law and examines what benefits under EU law are available to persons
who have acquired residence through investment. Do residence regimes raise the same issues, again from an EU perspective, as those schemes which offer citizenship in exchange for money? Contrary to what has been suggested by certain law firms, this paper explains that the EU rights investors in residence are able to benefit from are relatively modest.

Martijn van den Brink is PhD Researcher at the European University Institute, Florence.
[email protected]

Re-thinking Immigrant Investment Funds – IMC-RP 2016/1 By Alan Gamlen, Chris Kutarna, and Ashby Monk
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  • Create Date: 12-09-2016
  • Last Updated: 20-08-2018

Abstract

The idea of selling membership into society is not new, but it has taken on new life with the recent proliferation globally of Immigrant Investor Programs (IIPs). These programs involve the sale of national membership privileges to wealthy foreigners. They are justified by attractive policy objectives: to stimulate economic development and attract engaged investor-migrants. But they are often plagued by failures to achieve either of these two goals. This paper surveys the universe of IIPs, reviews their objectives, activities and performance, and explores how they might be improved. We develop a two-dimensional typology for distinguishing IIPs according to types of criteria they impose on program applicants: (i) wealth criteria and (ii) engagement criteria. We map out four distinct immigrant investor strategies that emerge out of these different IIP criteria: Aspiring Astronauts, Absent Oligarchs, Migrant Mayors and Pioneer Patrons. By analyzing which IIP criteria encourage which strategies, we highlight common mismatches between stated objectives and embedded incentives, helping to explain why many IIPs report poor economic and immigration policy outcomes. We also contemplate solutions. In particular, we observe that the success of an IIP depends upon the coming-together of expertise from two domains—migration policy and investment management—and we draw upon insights from successful Sovereign Development Funds (SDFs), which likewise must simultaneously achieve public policy and financial goals. We propose a set of principles to guide the emergence of a new type of SDF: Immigrant Investment Funds (IIFs). We also indicate how such vehicles might help address urgent issues around migration and refugees, for example by investing in refugee and migrant entrepreneurship and in the infrastructures needed to incorporate newcomers, thereby demonstrating the public value of immigration at a time when anti-immigrant rhetoric has become a serious irritant in world politics.

Alan Gamlen is Director, Australian Population and Migration Research Centre, University of Adelaide / Visiting Scholar, Stanford University.
Corresponding Author: [email protected]

Christopher Kutarna is Fellow, Oxford Martin School, University of Oxford / Advisor, Dundee Securities.

Ashby Monk Executive Director, Global Projects Centre, Faculty of Civil and Environmental Engineering, Stanford University.

Nottebohm and ‘Genuine Link’: Anatomy of a Jurisprudential Illusion – IMC-RP 2019/1 By Peter J. Spiro
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  • Create Date: January 23, 2019
  • Last Updated: January 23, 2019

ABSTRACT

The ICJ’s 1955 decision in the Nottebohm Case famously set forth an aspirational conception of nationality requiring a “genuine link” between an individual and a state for purposes of international law. The formulation was controversial from its inception as a departure from the prevailing rule that states enjoy sovereign discretion over nationality practices. At no time has “genuine link” represented a general rule of international law. The putative doctrine has a poor track record in subsequent international proceedings (including before the European Court of Justice), effectively limited to supplying secondary support for the “dominant nationality” approach in the narrow context of international claims involving dual nationals. “Genuine link” is even less appropriately applied in the wake of globalisation, in which states have increasingly enabled the conferment of nationality to individuals with tenuous connections to the state, for example, through ancestral descent. Although some political theorists have deployed the “genuine link” label to advance a liberal nationalist agenda, Nottebohm has been rejected by a growing consensus of legal scholars.

KEYWORDS: nationality, citizenship, international law, Nottebohm, naturalization, dual nationality

Peter J. Spiro, Charles R. Weiner Professor of Law, Temple Law School.

Policy Briefs

Investment Migration Policy Briefs are peer-reviewed multidisciplinary working papers dedicated to specific policy aspects of programmes of citizenship and residence by investment around the globe. They can include country profiles, legal commentaries, short research notes on particular policies and reports from practitioners.

Investment Residence in the UK: Past and Future By Alina Tryfonidou
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  • Create Date: 15-02-2017
  • Last Updated: 15-02-2017

Abstract

In 2008, the UK introduced its (current) golden visa programme, officially known as the ‘Tier 1 (Investor)’ route, replacing the previous ‘Investor Immigrant’ category, firstly introduced in 1994. Despite the fact that golden visa programmes are not as controversial as golden passport programmes, which, at the moment, are operative in a handful of countries, the UK programme has been criticised mainly for its lack of transparency, for its inability to return any benefits to UK residents, and for creating the danger of transforming the UK into a safe haven for money launderers. These criticisms have, in fact, formed the main rationale behind the amendments effected to the programme
in recent years, and (possibly) for the proposals for the abolition of this programme, which have been very recently laid on the table. The aim of this article is to trace the development of the UK’s (current) golden visa programme, from the moment of its inception in June 2008 to today. An assessment of the strengths and weaknesses of this programme is also offered, as well as a consideration of the possibilities for its development (or abolition) in the future.

Dr Alina Tryfonidou is Associate Professor in EU Law, School of Law, University of Reading.