Europe and the Politics of Migration
As we head towards mid-2017, we continue to see diametrically opposed developments across the European Union in investor, and broader, migration discourse.
On the one hand, migration and nationalism featured prominently in European elections. In the Netherlands and France, centrist victories provided respite from anti-immigration rhetoric. The Dutch election was seen by some as a ‘symbolic Euroscepticism showdown that seems to have split society along the immigration policy divide’. France’s Presidential election too was billed as a battle between a ‘hardline campaign against immigration’ and ‘the progressive, pro-business and socially liberal’. All eyes now turn to Germany and the elections looming in September, with state elections earlier in the year already delivering gains for an anti-immigration party.
The UK’s general election is largely dominated by talk of Brexit and which party will deliver the toughest negotiations for the country, with free movement likely to end but speculation ongoing as to a possibly lengthy transitional phase. It will be important to watch what incentives may be introduced post-Brexit to increase investment into the UK, both from investors and entrepreneurs.
At the same time, positive investor migration developments have been seen in Cyprus, Estonia, France, Italy, Luxembourg and Turkey in the last 12 months.
Cyprus has relaxed the financial thresholds of its Citizenship program, reducing the level to a potential EUR 2,000,000 for those investing in real estate. Also, government bonds can comprise up to EUR 500,000 of a combined investment. Although a requirement to obtain a permanent residence card has been introduced, this can be done simultaneously with the main application thereby causing minimal disruption.
In Estonia, investors are now eligible for a new temporary residence permit if they make a direct investment of at least EUR 1,000,000 into an Estonian company. Previously, investors could only enter Estonia on the basis of an employer-sponsored visa. In France, investors, entrepreneurs or innovators may now be eligible to apply for residence in France for up to 4 years based on a number of possible investments including: direct economic investments of EUR 300,000 or over; entrepreneurial investments of EUR 30,000 or over; and innovative economic projects (no specified minimum investment). Italy too has introduced a new visa category for investors, offering residence for 2 years initially, renewable for 3-year periods. Investment thresholds are set at EUR 500,000 for start up companies, and EUR 1,000,000 for those investing in equity instruments of companies based and operating in Italy. Luxembourg’s investment based residence permit took effect in March of this year.
We recently wrote about Turkey’s vast growth in HNWI population. Interestingly, Turkey introduced its own Citizenship by Investment Program early in the year. Turkey’s program will open citizenship to those meeting investment criteria starting at USD 1,000,000, including: real estate purchases of USD 1,000,000 or more; fixed capital investments of EUR 2,000,000 or more; local bank deposits of EUR 3,000,000 or more; government bond purchases at EUR 3,000,000 or more; or the creation of at least 100 jobs.
Finally, these and other movements in the HNWI migration market have not gone unnoticed by the European Commission, who are poised to conduct a study in 2017 or 2018 of national investor permit schemes in the various member states – documenting trends and challenges in European investment migration.
Author: Christine Sullivan IMCM, Attorney and Manager Worldwide Private Client Practice, Fragomen Worldwide