2022, The Big Picture
An article written by the IM Yearbook 2023 Editorial Team and Fragomen for the IM Yearbook 2023
The IM Yearbook travels with Fragomen around the world to update you on policy changes and developments in the most important investment migration markets. Based in more than 50 offices worldwide, Fragomen’s team is well placed to share some key observations.
The EB-5 Immigrant Investor Visa Regional Centre Programme has returned, and for the first time in its history it has seen some form of longer-term authorisation. In March 2022, the US government re-authorised the popular programme until 2027, which allows prospective foreign investors to invest capital into a government-approved regional centre in order to receive permanent residency for themselves and any qualifying family members.
The Regional Centre Programme has been increasingly popular since its inception in 1992; however, it had historically been authorised by Congress in short-term increments. The programme lapsed in June 2021 and was not immediately renewed by Congress. The entire programme was put on hold, bar investors who had already received their initial green card.
The reauthorisation is important, especially for prospective investors in the APAC region, including China and India, who can take advantage of quicker green card processing times in comparison to other employment-based permanent residency options.
Further, new investors are also able to invest in the programme, at a lower investment amount than the previous minimum, and with greater protections and benefits afforded to them. In addition, the reauthorisation of the programme enhances benefits for foreign investors; in certain cases, permitting investors and their family members to receive unrestricted work authorisation and international travel permission while waiting for their permanent residency to be granted, having a major positive practical benefit for investors and their families.
While the Regional Centre Programme was on hold, many investors resorted to pursuing direct investment opportunities. But we now see a renewed trend toward passive investment through the quicker and cheaper Regional Centre option building up, which will likely yield a surge in investment migration into the US over the coming months and years.
Investors from the APAC region interested in the US continue to take advantage of Caribbean citizenship programmes due to their quick and relatively low-cost options, with a focus on visa-free travel and access to the US and Canada. The most popular programmes in the Caribbean include Antigua, Dominica, St. Kitts and Nevis, Grenada, and St. Lucia. Meanwhile, investors from the US remain interested in many of the European options, with particular emphasis on Portugal’s Golden Visa Programme. Canada is also an attractive option.
Future election will likely have a major role to play in shaping the landscape of investment migration – the popularity of residency and citizenship is often a result of the political landscape of the country. However, given the reauthorisation of the EB-5 Regional Centre Programme as well as continued interest in other investment options, including the E-Visa Treaty Investor and Treaty Trader non-immigrant visa options, the interest for investment migration in the United States has the foundation to continue to attract foreign investors in the coming years.
In Europe, we are seeing a global big-picture trend of movement away from purely passive investment migration routes, towards residence programmes which require a tangible economic benefit to be generated by applicants.
The conflict in Russia has also seen every jurisdiction in Europe exclude Russian and Belarussian applicants from their investment migration routes. The Turkish CBI programme is the outlier, continuing to accept Russian applicants, and seeing very large numbers of applicants since the start of the year.
In the UK, the Tier 1 Investor visa closed to new applicants in February 2022. It seems certain that we will not see a like-for-like replacement for the investor visa.
The first half of 2022 also saw the UK’s Global Talent visa for tech leaders receive its highest number of applicants and successful endorsements, illustrating the continued growth of the UK’s tech sector. The UK is likely to continue to heavily market its global talent visa to maintain the status of its tech sector, but there remains a critical need for a sector agnostic investment migration route to replace the existing restrictive innovator route, which we hope to see in the coming months.
Meanwhile, Portugal’s Golden Visa saw some important changes in January 2022, prohibiting qualifying investments in property in the most popular areas – such as Lisbon, Porto and many coastal towns – with the Portuguese government aiming to drive investment in less affluent inland regions.
While property investment remains an attractive option for many clients, we are increasingly seeing investors consider the other options under the programme – such as an investment in a Portuguese company or an approved investment fund.
Elsewhere, the Montenegro citizenship by investment pathway, which has attracted a significant number of applicants given the country’s proposed accession to the EU by 2025, will close at the end of 2022. The programme was initially scheduled to terminate at the end of 2021, but the government made a last-minute U-turn.
EU countries face a challenge in terms of the European Commission’s approach to citizenship and residence by investment pathways. In April 2022, the Commission issued a recommendation urging EU member states to repeal CBI programmes, with a specific reasoned opinion against Malta’s programme. In March 2022, Malta suspended its CBI programme for Russian and Belarusian nationals but continues to operate the programme for all other nationals and has not announced a formal suspension. In September 2022, the matter was referred to the EU Court of Justice over what Brussels says violates EU law.
There is often an unfair perception that investment migration sits outside the standard framework of investment and immigration policy. Given the European Commission’s approach, there is an opportunity now for EU countries to look at how they can use investment migration as part of their foreign direct investment policy and for this narrative to be re-aligned.
Meanwhile, we are seeing increased prevalence of digital nomad visa options in Europe driven by the change in working patterns which emerged during the pandemic – with Italy and Spain the latest countries confirming they plan to introduce such a route.
African countries also want to jump on the bandwagon of remote working and start-up visas. On the back of this trend, the investment migration landscape will grow but mainly in countries like Mauritius and South Africa. Other countries thus far fail to succeed due to poor marketing and delivery, and, lastly, due to a lack of appetite for these programmes in the region.
Both Australia and Singapore continue to attract large number of high-net-worth individuals, mainly from the rest of Asia. New World Wealth estimates that in 2022, the net inflow is expected to be 3,500 millionaires to Australia and approximately 2,800 individuals are expected in Singapore. The consistently high inflows are partly due to Australia’s points- based immigration system, which favours wealthy individuals, business owners and professionals. Notably, Singapore is emerging as Asia’s top wealth management centre, which should assist in attracting many more affluent individuals to relocate there in future through the Global Investor Programme (GIP).
Meanwhile, China’s extremely strict Covid-19 travel restrictions are creating a new economic sphere tethered to the political landscape. High-net-worth individuals tired of lockdowns are leaving the country. These individuals, however, are generally seeking to move to countries that have remained on good terms with China, such as Singapore and Ireland, rather than traditionally popular destinations such as the US and Canada. The most popular programme Indian and Pakistani investors and entrepreneurs are enquiring about is the Portugal Golden Residence Permit Programme, followed by Canada.
Throughout the past two to three years, we have seen a sharp increase in emigration from Hong Kong Chinese, mainly to traditional countries like Australia, Canada, the US and the UK. Due to the relaxation of the UK government’s policy on British National Overseas (BNO) passport holders, in terms of residency as well as a path to citizenship, we have seen a spike of BNO passport holders settling in the UK. It is estimated that more than three million Hong Kong Chinese are eligible for BNO passports. Restrictive health policies in Asia are waning, and most countries will have a new focus on economic sustainability and healthcare equality. The economic downturn and talent competition will also likely play a part in the way migration policy evolves in the next 12 to 19 months.