Investment Migration Council

Author: Niu Ltd

  • French is Ranked as World’s Best Nationality for the EIGHTH Year Running

    The ramifications of a ‘hard’ Brexit could see the United Kingdom plummet out of the world’s top ten best nationalities to 56th globally, according to new research.

    Britain is currently the eighth best nationality in the world, according to the research – but is tenth in the rankings due to some countries being in joint position.

    France on the other hand, is set to see its nationality ranked best in the world once again, followed by Germany, the Netherlands and Denmark.

    This is according to the latest findings of the Kälin and Kochenov’s Quality of Nationality Index (QNI), which ranks the merit of nationalities worldwide.

    It does this by looking at data to assess the quality of life and opportunities for personal growth within a country – giving it a percentage out of 100.

    The Kälin and Kochenov's Quality of Nationality Index ranks the merit of nationalities worldwide (pictured, a map showing the quality of nationalities across the world)

    The Kälin and Kochenov’s Quality of Nationality Index ranks the merit of nationalities worldwide (pictured, a map showing the quality of nationalities across the world)

    What factors are assessed in compiling the Kälin and Kochenov's Quality of Nationality Index

    The index also looks at the external value of nationality, and how influential it is on giving people opportunities outside their country of origin.

    Areas including the level of expected welfare, education, healthcare, life chances, and global travel and settlement are assessed in order compile the rankings.

    This year, France is set to hold on to the top spot for the eighth consecutive time, earning a score of 83.5 per cent out of a possible 100 per cent.

    It is less than one percentage point ahead of Germany and the Netherlands, which sit in joint-second place with 82.8 per cent.

    While the difference between the quality of French and Dutch and German nationalities is relatively narrow, France’s comparative advantage lies in its greater settlement freedom.

    In the top 10 on this year’s index, Denmark finds itself in third place with a score of 81.7 per cent, while Norway and Sweden hold joint-fourth spot with 81.5 per cent.

    How France (light blue) and the United Kingdom (dark blue) compare under the factors assessed to compile the nationality ranking

     

    Factors including 'weight of travel freedom', 'human development', 'peace and stability' and ' economic strength' are all analysed in the nationality ranking (pictured, how France and Somalia compare)

    Positions five to ten are held by Iceland (81.4 per cent), Finland (81.2 per cent), Italy (80.7 per cent), the UK (80.3 per cent), Ireland (80.2 per cent), and Spain (80.0 per cent), in that order.

    But the UK could see its position plummet should it pursue a ‘hard’ Brexit, according to the research, compiled by Prof. Dr. Dimitry Kochenov, a law professor and author of Citizenship in the Netherlands, and Dr. Christian H Kaelin, a Swiss lawyer and author.

    EU countries generally perform extremely well on the QNI, largely due to the liberal degree of settlement freedom permitted between member states, as well as the stand-out quality of many of the nationalities in and of themselves.

    However, the UK could become the exception to this rule, with its current eighth position potentially in jeopardy if it crashes out of the EU without a deal in place.

    Prof. Kochenov explains: ‘The UK may be about to establish a world record in terms of profoundly undermining the quality of its nationality without going through any violent conflict.

    ‘Depending on the still-to-be determined outcome of Brexit, the UK could see itself falling from the elite group of ‘very high quality’ nationalities into the ‘high quality’ bracket.

    ‘A truly “hard” Brexit would result in the UK having a nationality that does not grant Britons settlement or work rights in any of the EU jurisdictions or Switzerland, Norway, and Iceland: a collection of the most highly developed places on earth, greatly diminishing the quality of its own nationality in an irrevocable manner: either you have such rights, or not – and in such a scenario UK citizens won’t have them.’

    Although unlikely, in the worst-case scenario and depending on the economic downturn caused by Brexit, the UK could possibly fall even further and into the ‘medium quality’ tier alongside China and Russia.

    Elsewhere in the world, the US occupies 25th place on the QNI with a score of 70 per cent. The country’s relatively poor standing is primarily due to its low settlement freedom compared to EU member states.

    China ranks 56th — a four-place improvement on last year, and the Russian Federation climbs up two positions to 62nd place.

    The UAE has attained its highest rank ever, securing 42nd place.

    The bottom three nationalities on this year’s QNI are South Sudan (157th), Afghanistan (158th), and Somalia (159th), with respective scores of 15.9 per cent, 15.4 per cent, and 13.8 per cent.

    Dr. Kaelin says the index is highly relevant to both individuals and governments.

    ‘It’s clear that our nationalities have a direct impact on our opportunities and on our freedom to travel, do business, and live longer, healthier, and more rewarding lives.

    ‘The reality that the QNI describes is, in many respects, unfair and regrettable: in the majority of circumstances, our nationality plays an important role in establishing a highly irrational ceiling for our aspirations.’

    Prof. Kochenov adds: ‘The QNI is a clear illustration of the simple fact that speaking of the different nationalities of the world as equal, or even comparable, is misleading.

    ‘We see that some nationalities offer bundles of rights, while others, quite clearly, are painful liabilities, dragging down the holders.’

     

    Source: dailymail.co.uk
    Published: 20 November 2019

     

  • State Autonomy in Matters of Nationality

    A new Investment Migration Research Paper with the title ‘Investment Migration and State Autonomy: A Quest for the Relevant Link’ was published in October 2019. The paper explores limitations imposed on State autonomy in matters of nationality by international law and EU law and its implications for investment migration. In so doing, it examines the Commission’s 2019 Report on investor citizenship and residence schemes in the EU, which deploys a genuine link-based narrative in its assessment of investment migration schemes.

    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 Court of Justice of the EU’s 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. Importantly, there is no genuine link requirement imposed by EU law, as it was disregarded by the CJEU already in its first decision in the field of nationality in the Micheletti case, decided in 1990.

    The paper concludes that the Commission’s reliance  on a genuine link-based narrative is at odds with established principles of international and EU law. When and if investment migration matters reach 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.

    To read full report, click here

    Authors:
    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.

  • Financial Incentives for Overseas Investors

    Globalization allowed investment funds and businesses to move beyond domestic markets, and investors to acquire assets abroad with less limitations.

    Important factors that affect foreign investment are the expected return on interest (ROI) and the current conditions in the jurisdiction of choice: whether there is an attractive and safe environment to invest in, a stable economy, political stability, and industries which can provide a platform for profit and growth. Beyond the political and economic background of a country, investors who wish to relocate abroad are affected by additional crucial factors such as education and medical facilities, life-style, criminality rates and the climate.

    Investors also take into consideration the imposed taxation and the overall cost.  Any additional incentives provided by the public or private industries can make the prospective investment even more lucrative and hence more appealing. Indeed, countries which provide such incentives for investment, including tax, employment and immigration incentives, are often preferred over others.

    Cyprus has become a popular destination for foreign investment in recent years. The country ranked 8th out of the top 20 countries globally in the Global Finance magazine’s “FDI Superstars 2018” for Foreign Direct Investments (FDI) performance and appeal. Cyprus is attracting significant inflows of foreign investments from the US, Asia, Russia and the Middle East.

    The country has long been established as an international business centre due to the low tax rates and the business-friendly environment. Setting up a Cyprus company is quite popular within the European Union (EU), as well as outside the EU, due to the low set-up and maintenance cost, office rental rates and labour cost. The provision of professional legal and accounting services is highly affordable. In addition to these advantages, the regulatory regime is in full compliance with the requirements of the EU and OECD, and the AML Directives. Administrative procedures for registering a company are simplified, while Cyprus companies can be entirely owned by foreigners. Share capital can be in any currency and there is no minimum paid-up share capital.

    In addition to the benefit of low corporate tax, investors often enjoy the perk of low personal tax and an advantageous Non-Dom status. Investors who choose to become tax-residents of Cyprus by spending 183 days or 60 days (if they are not tax-residents in any other country) in Cyprus within one calendar year, enjoy a beneficial Non-Dom status for new tax-residents with significant tax deductions on their income and tax exemptions on dividends and interest, for 17 years. The Non-Dom status is attractive to investors who wish to relocate to Cyprus, either through the Cyprus Investment Program, or by applying for a Cyprus Permanent Residence or a Work Permit.

    Besides the Non-Dom, an array of incentives is provided by the government. Notably, immovable property tax was abolished for investments in real estate on 01/01/2017; while the transfer fees to be paid are reduced to 50%. New properties which are subject to VAT are exempt from transfer fees. In Cyprus there is no wealth tax, inheritance tax or gift tax. There is no capital gains tax from the disposal of assets and securities (exception: 20% capital gains tax on capital from the disposal of immovable property located in Cyprus). Investments in innovative companies and start-ups can be deducted from taxable income, up to an annual limit of EUR 150.000. At the same time, a Notional Interest Deduction (NID) will be granted for new capital introduced in a Cyprus tax resident company and used in the business for the production of income.

    Most importantly, investors can expand their international business activities in Cyprus and gain full access to the European Markets and beyond through the EU Trade Agreements. Cyprus operates as a platform to the EU being a full member of the EU since 2004, as well as due to the strategic geographical location of the island.

    The Cyprus economy traditionally excels in sectors such as tourism, real estate, professional services and shipping, hence providing significant potentials for companies which operate in these industries.

    A modern and adaptable free-market economy, Cyprus has enjoyed consecutive credit rating upgrades by international rating agencies, which led to the country achieving an investment grade rating in September 2018. The island’s prudent fiscal policy, in combination with a GDP growth of 3.9% in 2017 reflect its promising economic outlook.

    Cyprus aims at further diversifying its economy by developing new sectors with high potential, such as energy, start-ups, filming, education, technology, innovation and investment funds. A number of tax and other incentives is provided in these sectors.

    Olivewood, the country’s filming industry is a new sector which the Cyprus government aims to promote. To that end, a number of incentives are granted to interested persons through the Cyprus Filming Scheme. Production companies which opt to film in Cyprus will be able to enjoy a cash rebate of up to 25%-35% on eligible expenditure incurred in Cyprus or tax credit up to 35% and can also benefit from tax discounts on investments made on equipment and infrastructure, and VAT returns on expenditure. This scheme has already attracted Hollywood movie stars and producers for the production of two international films.

    The various investment options in the island provide a stable return on investment (ROI) which varies depending on the investment option.

    The Cyprus Investment Program, which may allow investors to apply for Cyprus citizenship under certain conditions, has proven to be attractive to investors coming from all parts of the world. Even though the recorded investment through this scheme is highly related to investment in real estate, investors have a selection of different options in the country’s various industries, including funds, shipping, and any business which is operating in the country.

    Tourism is one of Cyprus’ most resilient and strong economic sectors with a significant contribution to the country’s GDP. Almost four million tourists visited Cyprus in 2018, while the tourist offerings are being constantly upgraded.

    Cyprus is considered as one of the most reliable and competitive shipping centres in the world in terms of services, registration fees and taxes. The country is the third largest merchant fleet in the EU and among the largest merchant fleets worldwide.

    In the education sector, Cyprus offers a large variety of advanced and fully accredited undergraduate and postgraduate programmes, at affordable costs. With a booming industry comprising 3 public and 5 private universities and more than 40 public and private higher education institutions enjoying international academic and scientific recognition, the island attracts thousands of international students every year.

    The recent gas findings are promising and some of the big names in the industry have already set up operations on the island. These include not only the well-known operators but many of the industry’s support services providers who are looking to set up regional headquarters for servicing their clients in the wider region of the eastern Mediterranean, Middle East and Africa.

    A number of multinational companies have already chosen Cyprus for their business operations and have either expanded their presence in Cyprus or have relocated their headquarters. There is a bright future for Cyprus in attracting even more FDI which can have a real impact on the economy. For many years, Cyprus has been identified as an ideal location to establish business presence, offering an enviable combination of climate, business and culture with many key benefits to foreign investors and their family members.

    Author: Eleni Drakou, Senior Associate and Director of Business Development of MICHAEL KYPRIANOU & CO. LLC

  • This Caribbean Island is on Track to Become the World’s First “Hurricane-Proof” Country

    It started in the evening on September 18, two years ago. The winds picked up; waves began crashing ashore with intensity; the skies darkened.

    Unbeknownst to the people of Dominica, Hurricane Maria was slowly gathering the strength it needed to destroy over 90 percent of the island’s structures, cripple its economy, and force a small country that did little to cause climate change to reckon with its consequences.

    Yet despite the ominous signs befalling Dominica, many residents say they were no more worried than usual. The tiny Caribbean island, after all, is no stranger to hurricanes. Situated in the eastern Caribbean, Dominica sits just over 500 miles northeast of Caracas, Venezuela and among a string of islands that stich the Caribbean Sea to the Atlantic Ocean. And though the soon-to-end 2019 hurricane season spared the nation, it may not be so lucky next year, or the year after.

    In the span of a single night, Dominica was torn apart. But from the devastation, the tiny country forged a new goal: to become the world’s first climate-resilient nation, capable of prospering despite a new era of storms made worse by climate change.

    The storm approaches

    As Maria approached land, the island’s residents quickly realized the storm would be much worse than they had anticipated.

    “We kept listening to the radio to figure out what was going on,” says Ann Aeevieal, a local cook at the Tamarind Tree Hotel. “They said it was a Category 2, and then a Category 3.”

    As we continue pumping greenhouse gases into the atmosphere, warming the planet, hurricanes like Maria are expected to grow in number and intensity. Studies have shown that the Atlantic Ocean is heating up, causing storms to become more common, intense, and long-lasting.

    Warm ocean water is fuel to a hurricane, powering it like an engine. The warmer the water, the more the engine revs, growing faster, larger, and capable of dumping more water. As Maria neared the Caribbean Sea, it burst to life, a process meteorologists describe as “rapid intensification.”

    Stephanie Astaphan, an employee at the island’s Secret Bay hotel, says, “When you’re living in the hurricane belt, you get desensitized. And then Anderson Cooper said, ‘The island of Dominica is about to get a Category 5’ and I had this out-of-body experience.”

    Then the storm hit. Local baker Sheila Jelviel lives in Scott’s Head, a southeastern neighborhood where the hurricane struck the hardest. Just after nightfall on September 18, the sea rushed into her home. A small skiff rammed itself through her front door. “We had to go out the window in the back to escape,” she recalls.

    The push for resilience

    Though Maria was the worst storm to ever strike Dominica, the country’s economy has been shaken several times over the past decade, absorbing major hurricanes and tropical storms in 2015, 2013, and 2010.

    Hurricane Erika wiped out an estimated 90 percent of Dominica’s GDP in 2015. By comparison, the World Trade Organization estimates that Hurricane Maria cost Dominica just over two years’ worth of economic output. Financial experts anticipate it will be roughly three more years before Dominica can return to its pre-hurricane state.

    Five days after the storm hit, Dominica’s Prime Minister Roosevelt Skerrit addressed the United Nations General Assembly.

    “I come to you straight from the front line of the war on climate change,” Skerrit said in his address. “In the past, we would prepare for one heavy storm a year. Now, thousands of storms form on a breeze in the mid-Atlantic and line up to pound us with maximum force and fury.”

    Skerrit’s impassioned speech was a plea for the funds to make Dominica into the world’s first fully climate resilient nation. It requires not replacing what was lost, but building for a future where climate change all but guarantees a storm of Maria’s scale will strike again. Dominica is striving to construct not only hurricane-proof buildings but also a diverse economy, including a tourism sector that attracts more high-end spenders and an agricultural system that grows a variety of fruits and vegetables eaten locally, rather than primarily exporting bananas.

    The island also needs to appear pristine. While Dominica’s economy has grown from selling agricultural goods and timber, the island itself is the product it sells to the world. In an area only slightly larger than Austin, Texas, Dominica contains 365 rivers, enough to swim in a new one every day for a year, locals like to point out. There are active volcanoes, lush rainforests, stunning coral reefs, and black sand beaches. On travel websites, it’s billed as the Nature Island, a destination for the athletic adventurer or the affluent yogi in search of retreat.

    “The challenges are not just related to infrastructure. Resilience in our view is how vulnerable you are in the first place,” says Pepe Bardouille, CEO of the government’s Climate Resilience Execution Agency of Dominica (CREAD).

    Amid new policies and regulations, Bardouille says there’s a new collective consciousness now preparing for future hurricanes like Maria.

    “It’s incumbent on every citizen to know what they need to do for themselves,” she says. “Making decisions about what they’re building, whether they’re getting insurance, those are individual decisions—not things a government can do.”

    Dominica strong

    CREAD was established in early 2018 to ensure that every sector building back after Maria was keeping climate resilience in mind. Uniform building codes, varied agricultural products, new geothermal energy plants, improved healthcare facilities, reliable transportation infrastructure on land and at sea—it’s CREAD’s job to figure out how to hurricane-proof everything as much as possible.

    “How to keep a society and economy in a small country with a limited tax base and a huge number of climactic challenges running on a shoestring. Those are the challenges,” Bardouille says.

    One component of Dominica’s plan to become climate resilient involves banning plastic. The reasoning for the ban boils down to infrastructure. Dominica’s waste collection system, run by the government-created, privately run Dominica Waste Management Corporation, collects trash that goes into a single, already-stuffed landfill. But what if residents could instead individually compost their single-use items in the hot, humid conditions of the Caribbean? Might they lessen, or avoid altogether, the need for recycling machines that may not hold up during the next version of Hurricane Maria?

    In resorts and national parks, Dominica lives up to its Nature Island title. It’s hard to find litter of any kind. But venture into the island’s cities, drive along its roads, or peek inside a drainage ditch, and plastic trash is everywhere.

    Less visible trash would make Dominica look cleaner, and a pristine Caribbean island is a place where tourists want to visit and spend money.

    “It would be very simplistic to say this is just about building back,” says Bardouille.

    “I think there’s a serious underestimation of the amount of trauma and post-traumatic stress, and the impact it had on the fabric of our society. We have to now look at the economic strength of our nation,” she says.

    In 2018, Dominica passed the Climate Resilience Act, which fully came into effect on the first day of 2019, and in a budget address delivered last July the prime minister highlighted how far the country had come. The economy has grown by 9 percent. Tourism is on the rise. All schools are open. A new state-of-the-art hospital welcomed patients in August. Five hundred new homes have been built and more than 1,000 are under construction.

    The government expects banana production to return to pre-Maria levels, and, to ensure food security, distributed seeds to farmers for other staple crops like dasheen, yams, potatoes, and passion fruit, which are are sold locally.

    Progress and stagnation

    It’s Easter weekend in Scott’s Head, and the sky is free of clouds. The ocean laps the shore with meditative regularity; the wind barely moves. It’s difficult to imagine the chaos that ripped this neighborhood to shreds and left the island so destroyed that it was repeatedly described as a war zone.

    Jelviel, whose home was rammed by a boat during the hurricane, shows me her house, now mostly rebuilt. The government assisted her with two windows and a door, but the 64-year-old mostly credits her neighbors with helping restore her home. The community in Scott’s Head is tightly knit, she says, and they took care of each other after the storm.

    Just two blocks south, Hidjes Adams, the public relations officer at a local fishing co-op, leans against a pumping station for fishing boats, holding back tears as he recalls the days following Maria.

    “It was a monster,” he says of the hurricane. “The damages are still existing. I saw starvation, people grasping, fighting for food and for water. There are still people without roofs as we speak.”

    This is where citizens and government sometimes clash. Rebuilding is expensive, and reconstructing a home or a business that can weather a Category 5 hurricane is even costlier. Many luxury hotels and resorts have benefited from the country’s Citizenship by Investment Program, which gives a second passport to foreigners who significantly invest in local businesses.

    Others living in small, low-income communities like Scott’s Head feel left behind. Jelviel says that with some help she could buy a bigger stove and bake more bread every morning. She would earn more money and be better able to fortify her home, she says.

    “We cannot rebuild,” she says of her neighborhood, “but there is a lot of potential.”

    What unites the country, however, is a sense of patriotism forged from shared trauma. Embroidered on t-shirts and painted on buildings is the mantra “Dominica strong.”

    It’s how every citizen seems to describe their country—strong in the wake of disaster.

    “People are taking things more seriously. They’re building much stronger,” says Aeevieal from the Tamarind Tree Hotel. “I think it’s a good comeback. We did a good job.”

    Revival

    Nature, too, is healing its own scars.

    When Hurricane Maria blew through Dominica in 2017, the winds were so intense that leaves were stripped from trees.

    It worried Bertrand Jno Baptiste, or Dr. Birdy, the island’s foremost bird expert. Would the forests still be hospitable to the imperial parrot, called the sisserou locally, a large, multi-colored bird with bright, lime-green feathers? The country’s national bird is endangered and found only on the island. Baptiste spent hours searching for it, listening for its loud call and trying to spot its graceful flights.

    “I did not think it was going to come back. It was so bad,” he says. But after 13 hours of watching, one appeared, and then more, and now the birds are routinely spotted flying above the rainforest canopy.

    The trees at the edge of the rainforest still show the scars of Maria. Bare branches face the ocean, still struggling to regrow what was ripped off in an instant.

    “There’s no one who doesn’t think this won’t happen again,” says Baptiste.

    Like their famous parrot and rainforests, Dominica is coming back to life, albeit with the scars to remind Dominicans that hurricanes of such magnitude will always be part of their reality. To become truly hurricane proof is to function like the country’s tropical ecosystem, capable of recovering—even thriving—in the wake of disaster.

    Source: nationalgeographic.com
    Published: 19 November 2019

  • CMB Announces the New EB-5 Immigrant Investor Program Modernization Regulations Have Taken Effect, What Does That Mean?

    The new EB-5 Immigrant Investor Program Modernization Regulations are effective. Although there are many changes to the EB-5 program that are included in the new regulations, the biggest changes are: increased minimum investment amounts, new targeted employment area (TEA) definitions, and designating authority of TEAs is taken away from the State and the United States Citizenship and Immigration Services (USCIS) will now be directly responsible for verifying the project is located in a qualified TEA.

    First, the EB-5 investment amounts have increased from $500,000 to $900,000 if the project is located in a TEA, and from $1 million to $1.8 million for a project not located in a TEA. Since the investment amounts have not changed since the program’s inception an inflation study was conducted by the Department of Homeland Security (DHS) consulting with the Departments of State and Labor. The federal agencies determined that the increase will reflect the present-day dollar value of the original investment amount set in 1990 by the U.S. Congress. They have also added that every fifth year there will be an inflation correction to the dollar amount.

    Additionally, the new regulations outline what is required to qualify a project as a TEA and requires that the USCIS will make the determination, not the individual states. Prior to the new regulations, a regional center could simply request a TEA letter from the state, county or city government where the project was located (depending on the state). This will not be the process anymore, since the USCIS will adjudicate all TEA requests. This will improve integrity within the EB-5 program since the regional center operators will not be able to gerrymander their projects into qualifying as a TEA when they do not.

    CMB Regional Centers (CMB) will continue to offer quality investment opportunities for any investor that was unable to move forward with an EB-5 investment prior to the new regulations taking effect. As a leader in the industry CMB’s in-house project development team, business attorneys, economists and financial advisors have already underwritten new projects that will comply with the new EB-5 regulations and will be available for subscription in the near future.

     

    Source: globenewswire.com
    Published: 21 November 2019

  • Clings to ‘Golden Passports’ Bonanza Despite Scandal

    When Jho Low splashed out on a €5m property in the resort town of Ayia Napa in 2015, there was an additional benefit for the Malaysian financier: a Cypriot passport.

    Now Mr Low’s alleged role in a multibillion-dollar international corruption scandal has triggered a national outcry in the Mediterranean island nation, raising searching questions for the government in Nicosia, the Cypriot church leader who lobbied on his behalf and the firms that handle such transactions.

    The case has led to renewed scrutiny of what the European Commission brands the “inherent risks” of the schemes in EU member states that offer citizenship or visas to the international super-rich. Brussels has set up a group to propose extra safeguards by the end of the year.

    But critics say the response is inadequate to the task of stopping suspect money and characters flowing into the EU.

    “This approach will probably have little respect from member states, and much tougher legal action is required to force states to end these dodgy schemes,” said Tina Mlinaric of Global Witness, a non-governmental group.

    Most EU member states, including France and the UK, offer “golden visas” that grant a right of residence to the wealthy. Cyprus was one of three — along with Bulgaria and Malta — that offered citizenship in exchange for investment, according to a commission report this year.

    Nicosia has for decades specialised in providing residence permits and legal services to wealthy businesspeople from outside the EU. When the island suffered financial collapse in 2013, president Nicos Anastasiades went further and offered nationality to foreigners prepared to pay at least €2m for a property.

    “Selling golden passports made sense for a government struggling to rebuild the economy,” said Antonis Ellinas, a political scientist at the University of Cyprus. “But the scheme has always lacked the necessary political oversight.”

    Cyprus has acquired almost 4,000 citizens under the arrangement and raised about €6bn from real estate sales. Mr Anastasiades’ former law firm offers services to investors applying for golden passports, although officials say the president severed all ties to avoid the perception of a potential conflict of interest. He has previously rejected calls for Cyprus to cancel the golden passport scheme, which he says has been unfairly criticised.

    In May, the Cypriot government tightened rules for granting nationality, increasing the level of due diligence and requiring applicants to have a valid visa for travelling in the EU’s free-travel zone. Advertising the passport scheme was also banned, since when applications have fallen sharply.

    Yet past cases have come back to haunt Nicosia. A Reuters investigation in October found that Cyprus had given nationality to eight relatives and associates of Hun Sen, the authoritarian prime minister of Cambodia for 35 years. The Cyprus news organisation Politis revealed soon after that Mr Low made a two-day trip to Nicosia in September 2015 to pick up his passport.

    Mr Low was given nationality even though allegations had surfaced online months earlier of his involvement in the misappropriation of hundreds of millions of dollars from Malaysia’s 1MDB state investment fund. The US last year indicted Mr Low over an alleged plot to misappropriate more than $2.7bn from 1MDB. He has denied any wrongdoing.

    The affair was still more embarrassing for Nicosia because Mr Low was given access to a fast-track process for granting citizenship that required cabinet approval. His case was even backed by Archbishop Chrysostomos, head of the Eastern Orthodox church of Cyprus. Chrysostomos told local media that Mr Low had also given €300,000 towards a theological school and that he had previously intervened on behalf of other passport applicants.

    The Cyprus government responded to the storm over Mr Low’s case by announcing it would strip citizenship from 26 people because of “mistakes” in the award process. Officials say this includes Mr Low and the Cambodian octet, as well as nationals from Russia, China, Kenya and Iran. Mr Low’s spokesperson urged that the government “should not yield to external political pressures, which seek to breach the fundamental human rights of Cypriot citizens”.

    The Low affair has also focused attention on the intermediaries in golden passport and visa schemes.

    A fee of €650,000 relating to the sale of the Low property was paid to a company named Henley Estates, according to an invoice seen by the Financial Times. Henley Estates was acquired some months before by UK-based Henley & Partners, which describes itself as the “global leader in residence and citizenship planning”.

    Henley & Partners told the FT that the payment was a fee from a Cypriot developer under a pre-existing agreement for Henley Estates to provide “marketing support services”, and the money did not originate from any entity linked to Mr Low or his associates.

    Juerg Steffen, H&P chief executive, said the payment should nonetheless not have been taken, since his company had previously rejected Mr Low as a client following due diligence checks.

    Mr Steffen said the case had helped trigger an overhaul of governance standards in the Henley companies. “Hindsight is a wonderful thing,” he said.

     

    Source: ft.com
    Published: 24 November 2019

  • The New EB-5 Regulations: Effective On November 21, 2019 to 2024

    Under a  new rule published by the U.S. Department of Homeland Security, the EB-5 Immigrant Investor Program had the following changes: click here to view

     

    Source: regulations.gov
    Published: 2019

  • French Nationality Remains Best in the World, While Brexit Britain Risks a Dramatic Decline

    French citizens can take satisfaction that their nationality has once again been ranked as the best in the world, while for citizens of the UK, the ramifications of a ‘hard’ Brexit could well sink the quality of their nationality from 8th globally, to 56th (the current position of China). This is according to the latest findings of the Kälin and Kochenov’s Quality of Nationality Index (QNI), which is the only ranking that objectively measures and ranks all the world’s nationalities as legal statuses.

    Holding the top spot for eight consecutive years, France earned a score of 83.5% out of a possible 100% — less than one percentage point ahead of Germany and the Netherlands, which sit in joint-2nd place with 82.8%. While the difference between the quality of French and Dutch and German nationalities is relatively narrow, France’s comparative advantage lies in its greater settlement freedom (attributable mainly to the country’s former colonial empire).

    In the top 10 on this year’s index, Denmark finds itself in 3rd place with a score of 81.7%, while Norway and Sweden hold joint-4th spot with 81.5%. Positions 5-10 are held by Iceland (81.4%), Finland (81.2%), Italy (80.7%), the UK (80.3%), Ireland (80.2%), and Spain (80.0%), in that order.

    The US occupies 25th place on the QNI with a score of 70.0% — the country’s relatively poor standing is primarily due to its low settlement freedom compared to EU member states. China ranks 56th — a four-place improvement on last year, and the Russian Federation climbs up 2 positions to 62nd place. The UAE has attained its highest rank ever, securing 42nd place.

    The bottom three nationalities on this year’s QNI are South Sudan (157th), Afghanistan (158th), and Somalia (159th), with respective scores of 15.9%, 15.4%, and 13.8%.

    Brexit likely to sink quality of UK nationality

    EU countries generally perform extremely well on the QNI, largely due to the liberal degree of settlement freedom permitted between member states, as well as the stand-out quality of many of the nationalities in and of themselves. However, the UK could become the exception to this rule, with its current 8th position potentially in jeopardy if it crashes out of the EU without a deal in place.

    Prof. Dr. Dimitry Kochenov, a law professor and author of Citizenship (MIT Press, 2019) and Dr. Christian H Kaelin, Chairman of Henley & Partners and author of Ius Doni (Brill, 2019) are the co-creators of the Index. Prof. Kochenov explains: “The UK may be about to establish a world record in terms of profoundly undermining the quality of its nationality without going through any violent conflict.

    Depending on the still-to-be determined outcome of Brexit, the UK could see itself falling from the elite group of ‘very high quality’ nationalities into the ‘high quality’ bracket. A truly ‘hard’ Brexit would result in the UK having a nationality that does not grant Brits settlement or work rights in any of the EU jurisdictions or Switzerland, Norway, and Iceland: a collection of the most highly developed places on earth, greatly diminishing the quality of its own nationality in an irrevocable manner: either you have such rights, or not – and in such a scenario UK citizens won’t have them.”

    Although unlikely, in the worst-case scenario and depending on the economic downturn caused by Brexit, the UK could possibly fall even further and into the ‘medium quality’ tier alongside China and Russia.

    Climbers and fallers on the QNI

    Taking a retrospective look at the last five years, Timor-Leste (92nd) has been the highest climber on the QNI since 2014, rising 26 places and improving its value by 8.4% with a score of 33.1%. While Timor-Leste saw minor improvements in its Human Development and Peace and Stability scores, the country’s Travel Freedom score almost doubled between 2014 and 2018. Colombia (59th) has also made a significant gain of 19 places and 11.6% in value since 2014, with a current score of 43.3%. This is attributable to the increased economic integration of South American economies and its improved Travel Freedom score, which has doubled since 2014 following the visa-waiver agreement between Colombia and Europe’s Schengen Area countries in 2015.

    Other notable risers over the last five years are the UAE (42nd with a score of 50.3%), which has ascended 14 places in the rankings, Moldova (73rd with a score of 38.6%), which has gained 9 places, and Croatia (24th with a score of 73.8%), which has improved its value by 19.6% and risen 5 places in the rankings — these countries having benefited from improved Travel Freedom scores. By contrast, the quality of the Qatari nationality has plummeted as a result of regional diplomatic conflicts, dropping by 25 places since 2014 to its current 78th position with a score of 37.1%. Libya, too, has dropped by 25 places in the last five years, now in 145th position and scoring just 21.7%. The Libyan nationality has seen a significant deterioration in its Peace and Stability score, and its Travel Freedom score has also decreased since 2014.

    The inherent inequality of nationality

    Dr. Kaelin says the index is highly relevant to both individuals and governments. “It’s clear that our nationalities have a direct impact on our opportunities and on our freedom to travel, do business, and live longer, healthier, and more rewarding lives. The reality that the QNI describes is, in many respects, unfair and regrettable: in the majority of circumstances, our nationality plays an important role in establishing a highly irrational ceiling for our aspirations.” Prof. Kochenov adds: “The QNI is a clear illustration of the simple fact that speaking of the different nationalities of the world as equal, or even comparable, is misleading. We see that some nationalities offer bundles of rights, while others, quite clearly, are painful liabilities, dragging down the holders.”

     

    Source: henleyglobal.com
    Published: 20 November 2019

  • New EB-5 Rules May Not Take Effect on Nov 21 as 6-Year Re-Authorization Likely This Year

    New EB-5 rules raising the minimum investment to $900,000 are scheduled to take effect this week. But President Kraft of IIUSA thinks there’s a good chance that won’t happen.

    The new re-authorization bill “definitely eliminates gerrymandering, makes it very clear what projects would qualify in urban distressed areas and in rural areas,” says Kraft, speaking to IMI on the sidelines of last week’s Henley & Partners Global Citizenship Conference in London.

    10,000 investors, not visas
    The bill would also do away with what EB-5 practitioners refer to as the “derivative interpretation” of the 10,000-visa quota, which counts family members of the main applicant toward the cap. When the law was first written, in 1992, explains Kraft, its writers anticipated 10,000 investor units – i.e., main applicants – rather than individuals. The derivative interpretation is largely to blame for the retrogression problem that’s driven EB-5 wait times up to as much as 20 years for certain applicant groups, notably the Chinese.

    A change in interpretation would have the effect of tripling the number of available visas (on average, each investor includes about two family members in their application), which would go a long way toward reducing the backlog.

    Sentenced to 17 years of retrogression, with possibility of parole after three years
    But Kraft also reveals another, more creative solution to the delays that, if he gets his way, will be part of the re-authorization; “parole”.

    “[parole] would allow people who are backlogged to apply for the parole category and enter the United States after three years and work and have the benefits of a green card until their application is approved. So, at least, they can come into the country and begin their lives.”

    Investment requirements under the EB-5 are governed by regulations that, in turn, are tied to the bill under which the program is authorized. In July this year, the Department of Homeland Security published new regulations that included an increase in minimum investments from US$500,000 and US$1 million to US$900,000 and US$1.8 million, respectively.

    The new regulations, however, are only scheduled to take effect on Nov 21st this year. Should a bill re-authorizing the EB-5 program pass before this date, obviating the current bill on which the new regulations are based, the planned increase to US$900,000 and US$1 million would not take place.

    The re-authorization bill now under consideration has price increases of its own baked into it, although they are slightly different: “Under the bill being considered right now, the minimum investment amount is US$1 million, and for non-TEA (Targeted Employment Area) it’s US$1.1 million,” reveals Kraft, who is also careful to point out that these numbers could change somewhat before the bill is finalized.

    The IIUSA President also indicates that while he’s quite confident new legislation will “get worked out”, he does not think it will be ready by November 21st but that it would most likely pass a month or so later. That means, in theory, we could see the new 900k/1.8 million prices being in effect for a period of just one month before the new rules take over.

    “There’s been a discussion of the possibility of holding off on any regulation implementation – if there’s just a four week period, it doesn’t make sense to put those regulations into effect as it would create a lot of confusion,” says Kraft, indicating that Congress may decide to never let the new regulations tied to the old bill materialize if a new bill is already slated for introduction.

    One of the major benefits of the new bill, Kraft highlights, is that it comes with a six-year authorization, which will provide sorely-needed certainty for the industry.

    “We haven’t had that [certainty] for many years. We’ve been going month-to-month, or six months, nine months, and so on, and that’s disruptive for practitioners in the US and also for investors from around the world.”

     

    Source: imidaily.com
    Published: 18 November 2019

     

  • Real Estate Stakeholders Worried Over Future of Passport Scheme

    Cyprus decided to revoke 26 citizenships granted to investors after the government came under intense pressure following allegations that members of Cambodia’s political elite and a fugitive Malaysian financier received Cypriot EU passports.

    These cases led to increased criticism of Cyprus’ Citizenship for Investment which was already under scrutiny from Brussels.

    Those to be stripped of Cypriot citizenship include Malaysian businessman Jho Low who is wanted by Malay authorities, the US and Interpol in connection with a multi-billion scam that broke in 2015 when he was managing an investment firm named 1Malaysia Development Berhad headed by the then prime minister of Malaysia Najib Razak. He denies any wrongdoing.

    The Real estate sector is concerned as it fears the emergence of more negative cases will further discredit the CIS scheme to which “the economy owes part of its recovery to”.

    A boom in the construction industry, especially luxury high-rises, is credited to the passport scheme which seriously took-off after the 2013 financial crisis.

    Developers of luxury homes are also facing external competition from countries like Greece which is preparing to launch a similar scheme.

    Outgoing president of the Association of Land Development and Construction Entrepreneurs Pantelis Leptos told Stockwatch the programme should be shielded as it has largely contributed to all sectors of the economy.

    He said the new stricter criteria that began to apply in the summer protect the scheme from being exploited by criminals.

    Korantina Homes CEO George Ioannou agrees that the project should be protected pointing out that the CIS was the only scheme to offer work to all families in Cyprus, directly and indirectly, from lawyers, accountants to cleaners and hoteliers.

    He also warns that “losing the scheme will have serious consequences on the economy” urging politicians to leave it out of their political disputes.

    Defending the government’s handling of the issue he said, “we definitely do not want criminals in Cyprus”.

    He argued that “these are old cases of investors who took advantage of the programme at a time when it was the only lifeline for the country”.

    Antonis Loizou, CEO of Antonis Loizou and Associates said even developers “were advertising the sale of Cyprus passports instead of promoting their properties”.

    Loizou argues “the scheme must continue based on sound criteria. Not all investors are cowboys. On the contrary, many foreign investors have been active in other sectors such as the hotel industry, marinas, golf.”

     

    Source: financialmirror.com
    Published: 11 November 2019

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