Author: Niu Ltd

A unique Canadian business immigration program opened for new applications on May 29. The Quebec Immigrant Investor Program (QIIP) offers international investors the opportunity to obtain permanent resident status in Canada by making a risk-free $800,000 CAD investment that is guaranteed by a Quebec government entity.

The QIIP is Canada’s only passive investor immigration program, and the program offers a number of other advantages. Certain other Canadian business immigration programs, as well as many programs internationally, such as the EB-5 program in the United States, require individuals to create a certain quota of jobs within a specified timeframe.

The QIIP, on the other hand, has no such requirement. Moreover, it also offers Canadian permanent resident status upon initial landing, with no interim status on a work permit. The applicant’s immediate family members may also be included on the application and obtain Canadian permanent residence, enjoying all the benefits that this status bestows, including universal health care and access to world-class education.

Further, the QIIP is a route not just to Canadian permanent resident status, but also to Canadian citizenship and the right to a Canadian passport.

Up to 1,900 applications will be accepted for processing during the current intake period, which is scheduled to run until February 23, 2018. A maximum of 1,330 of these applications will be accepted from foreign nationals from the People’s Republic of China, including the administrative regions of Hong Kong and Macao.

Though French proficiency is not required, applicants with an advanced intermediate proficiency in French are not subject to the intake cap and may submit an application at any time. Moreover, their applications are given priority processing.

The investment

The investment of CAD $800,000 is submitted through an approved financial intermediary (broker or trust company). This investment can be paid by the applicant, though brokers and trust companies also offer the possibility of financing the investment, which is guaranteed by a government of Quebec entity and returned in full after five years.

QIIP Requirements

• Minimum net worth

Applicants must have, alone or with an accompanying spouse or common-law partner, net assets of at least $1,600,000 CAN obtained legally, excluding the amounts received by donation less than six months before the date on which the application was filed. Assets such as property, bank accounts, pension funds, stocks, and shares may be included.

• Investment

Applicants must intend to settle in Quebec and sign an investment agreement agreeing to invest $800,000 CAD with an approved financial intermediary. The investment can be financed by a financial intermediary.

• Management experience

Applicants must have acquired a minimum of two years’ management experience in the past five years. The experience is not limited to commercial activities; it can also be gained at an international agency, department or government agency.

“Quebec offers something unique in the Canadian business immigration landscape, where investors may take a less hands-on approach to business. Indeed, the program may also be considered exceptional among international investor immigration programs,” says Attorney David Cohen.

“Based on previous application cycles, it is entirely possible that the QIIP intake cap may be reached before the scheduled end date next February. Therefore, I encourage potential applicants to take some initial steps, such as working with an eligible financial intermediary and proving net worth, as soon as possible. By doing so, potential applicants may have the greatest chance of success.”

Source: cicnews.com

A 2017 report by market research firm New World Wealth concluded that a record 82,000 millionaires moved to a new country in 2016, up 26% from 62,000 in 2015. The estimate is that approximately 100,000 millionaires will move country each year by 2018. A millionaire in this report is defined as those having at least US$1 million of assets less liabilities excluding the family home.

The number one destination is Australia with 11,000 millionaires moving here, followed by the USA with 10,000 millionaire immigrants and Canada with 8,000. United Arab Emirates and New Zealand fill spots four and five.

Interestingly the number one destination millionaires are leaving is France with 12,000 millionaires fleeing the country in 2016. The New World Wealth Report estimates that China ranks second.

What does millionaire migration mean?

There are estimated to be 13.6 million millionaires in the world. The 100,000 that are changing country is not a big percentage but it is worth thinking about what the net inflow of millionaires can do to a country, particularly one with a relatively small economy.

My analysis is based purely on scenarios I have put together with data that cannot be easily verify (see Table 1 below). I have assumed that most millionaires with net investable assets of US$1 million would live in a significantly above-average home, maybe worth US$2 to US$3 million. I have also assumed that millionaires who move to a new country, on average, have more than US$1 million of net investable assets, as ‘wealthier’ millionaires would have a higher propensity to move than the millionaires who barely ‘scrape’ onto the list. Some of these immigrants could have US$2 million, US$5 million or US10 million of net investable assets and would consequently want even bigger and better houses than those with ‘only’ US$1 million of net investable assets.

Now let’s assume that of the 11,000 immigrant millionaires that come to Australia, 60% go to Sydney, 30% go to Melbourne and the remainder go elsewhere. In Sydney as an example, 6,600 immigrant millionaires are arriving every year wanting to purchase a property worth say A$3-4 million. Those with significantly more net investable assets probably want to spend A$5-8 million on houses and those with greater amounts of assets want to spend A$10 million plus on a house. These millionaires are looking to spend a minimum of $26 billion per year on 6,600 high-end houses in Sydney. And according to New World Wealth, millionaires are looking to spend this much every year as each new batch arrives. The prediction is also that this number is rising dramatically.

The problem becomes obvious. Sydney does not have enough expensive houses to accommodate all these new millionaires, and it looks to be getting worse. Of course, the result is lots of little ‘bubbles’ all around the world in places where millionaire immigrants decide they are going to live.

What does all this millionaire migration say about a country’s underlying economy? Clearly, the property sector and all ancillary services associated with property would be performing well. Of course, it does not necessarily follow that other parts of the economy benefit equally. You could even have extreme situations where those parts of the economy that benefit from millionaire inflow do well and other parts of the economy could go backwards.

Income inequality and the economy

Another way to think about millionaires is as the 1 percenters or the 0.1 percenters (see table below). In 1929, the top 1% of pre-tax income earners accounted for roughly 24% of all pre-tax earnings. This fell to 8.9% in 1976 but is once again at record levels of around 25%. The top 1% of earners in the world account for around a quarter to a third of all earnings and consumption in the world. This small 1% group and the even smaller 0.1% group have a disproportionate and large effect on the world economy. This small group of people also has a disproportionate effect on particular areas within our economy which may not translate to the greater economy.

The millionaire immigrant and the 1 percenters are creating bubbles around the world, especially in property in cities like Sydney, Vancouver, Auckland, Hong Kong and London. When we see such large demand and supply imbalances, we should consider the underlying factors creating these distortions. In small economies, these distortions are not necessarily a sign of the strong performance of the underlying economy.

Rather than conclude with a note of caution, our immediate problem is that we need to come up with a solution to satisfy this year’s and next year’s millionaire immigrant requirements!

Source: cuffelinks.com.au

As a controversial U.S. investment visa scheme comes under fresh criticism, Sam Walls of Little Rock, Arkansas, faces a different problem as he courts wealthy Chinese.

Walls and his team at Pine State Regional Center are looking to raise $200 million through the EB-5 investor visa program for a steel mill in the southern state of Arkansas – just the kind of project the scheme was set up to help.

But persuading a class of investors more accustomed to being pitched luxury high-rises in cities such as Los Angeles or Miami to buy into a heavy industry project in one of America’s poorest states is proving a hard sell.

“It’s a grind,” Walls said in an interview outside the EB-5 and Investment Immigration Expo in Beijing, a gathering of U.S. representatives of EB-5 projects and local agencies that promote them to Chinese investors and was closed to the media.

Walls, who is 47 and does not speak Mandarin, spent three months in China last year promoting the project, often traveling by high-speed rail between Beijing and Shanghai. He was once woken by an attendant and, thinking he had arrived in Shanghai, got off the train – four hours short of his destination.

Walls’ challenge is compounded by the fact that he is trying to sell a new steel plant in a country with about 400 million tonnes of excess steel production capacity, with plans to shut down 50 million tonnes of capacity this year.

“About the time we came to market you couldn’t open the paper in China and not read an article about the demise of the Chinese steel industry,” said Walls, 47, who is raising funds to refinance the $1.67 billion Big River Steel plant, which opened in February in Osceola, Arkansas.

The EB-5 program grants foreigners a U.S. green card – making them legal permanent residents – in exchange for investing $500,000 or more in a qualified project. The vast majority of such investment comes from China.

But the EB-5 program, which is up for U.S. congressional review in September, has come under fire from politicians who point to fraud and abuse, and to the fact that a scheme originally intended to bring jobs to high-unemployment areas has often been used to fund projects in wealthy neighborhoods.

The industry drew negative publicity earlier this month when the sister of Jared Kushner, a senior White House advisor and the son-in-law of President Donald Trump, held a marketing road show in China for a New Jersey luxury apartment complex developed by her family’s company.

While Jared Kushner sold his stake in Kushner Companies to a family trust early this year, the episode raised questions of potential conflict of interest. After a flurry of news stories following her appearance at marketing events in Beijing in Shanghai, Nicole Kushner Meyer, Jared’s sister, canceled appearances at two investor meetings planned in southern China.

“I’m sure they’re sitting around in hindsight thinking, yeah, we probably could have thought that one through better,” said Walls.

CHANGES LOOM

In a sector where investors are wary of failing projects and policy changes that would jeopardize their visas, some Chinese migration agencies look to reassure potential investors their EB-5 projects will be successful, industry executives say.

U.S. securities law prohibits making false claims or failing to ensure clients are aware their funds are at risk.

“The one word that scares you – and I heard it here today – is the word ‘guarantee’,” said Walls. “Unfortunately that word gets thrown around a lot.”

Individual tickets for the one-day conference were available for $3,000 at the door, while a booth cost $30,000, one developer said.

Agents and developers expect changes to the EB-5 program, such as an increase in minimum investment levels or a tightening of oversight over the projects that qualify, although most who spoke with Reuters outside the event in Beijing last week said it was unlikely the program would be canceled. None besides Walls agreed to speak on the record.

“It’s supposed to encourage investment in the rural and highly distressed urban areas. But due to some broad definitions, everyone (meets these criteria),” said Walls, declining to say how much EB-5 funding Big River Steel had raised since it started investor outreach.

In March, Walls testified before Congress about “pervasive manipulation” in the investor visa program, and has been a proponent of reform as he says most EB-5 investments have gone to a handful of major cities.

“The vast preponderance of EB-5 investments have gone to arguably a handful of major gateway cities … If you’re the other 45-47 states you have not enjoyed much or any of the benefits of the program. You don’t necessarily build high-rise skyscrapers in Arkansas or Kansas.”

Source: reuters.com

A top executive at an international due diligence firm is warning agents of the Citizenship by Investment Programme (CIP) to be wary of Chinese applicants who are either on the run, or may soon be on the run from the law.

Vice Chairman and Global Head of Immigration Citizenship and Visa (ICV) Practice at Exiger Diligence, Kim Marsh, reminded the agents that the Government of China – Antigua’s largest market for citizenship – is “cracking down on corruption”.

Because of this, high net-worth Chinese nationals who may be targeted are looking for a way out – a second citizenship and the passport that comes with it.

“There’s a lot of PEPs [Politically Exposed Persons] on the run coming out of China now … More thought has to be given as to how we are going to analyse these individuals,” Marsh said.

He advised agents and due diligence providers to ask themselves, “How influential was that individual?”

“How far up the pecking order were they and how did they acquire their wealth? Did they have legitimate businesses or were they a government employee and got their wealth through envelopes stuffed with cash?” he said.

Marsh was the former president of IPSA International – another global due diligence firm that was recently acquired by Exiger Diligence. The Canadian was speaking to OBSERVER media on the sidelines of the Invest Caribbean Conference 2017 which took place in Antigua this week.

In financial regulation, PEP describes someone who has been entrusted with a prominent public function and therefore presents a higher risk for potential involvement in bribery and corruption by virtue of their position and influence.

When someone applies through the CIP, the agents who process their applications and the Citizenship by Investment Unit (CIU) are required to carry out rigorous due diligence to verify facts such as identity, background, financial history, and sources of wealth, among other things.

The Government of the Federation of St Kitts and Nevis has been accused of harbouring a Chinese fugitive – Ren Bia – who holds Chinese and St Kitts and Nevis citizenship, but is accused of swindling over US $100 million from a Chinese state firm.

“I don’t think [St Kitts and Nevis] can be criticised for that because as we’ve heard this week, Canada, the United States, Australia and New Zealand have all experienced this. You can have the best system in the world and you can still get people who are undesirables,” Marsh said.

The diligence expert said St Kitts & Nevis “can demonstrate they have a proper process in place and they did what was required” with the individual only later being declared a fugitive after acquiring citizenship.

Source: antiguaobserver.com

Citizenship by Investment Programmes (CIPs) in the Caribbean have been the subject of much criticism, even though the financial and economic benefits of the programmes are undeniable. These programmes are operated by: Antigua and Barbuda, Dominica, Grenada, St Kitts-Nevis and St Lucia.

Are those detractors right to decry the CIP? Do they pose dangers to other nations? And, are any such dangers potentially worse from Caribbean countries than from others that operate similar programmes? To answer these questions, a tour of CIP’s – by whatever name they are called – might be useful.

People all over the world have always sought citizenship of countries other than those in which they were born. Historically – and at the present time – the majority of such people are economic migrants; people who leave their birth countries, seeking opportunities elsewhere. But, migration is no longer limited to the poor or the desperate, today there are tens of thousands of millionaires who are also seeking alternative citizenships.

CIPs are not restricted to a handful of Caribbean countries nor do they enjoy exclusivity in the field. Like virtually everything else in the world, the market for second citizenships is global and extremely competitive.

For, instance last year a record 82,000 millionaires acquired a second citizenship. The number of millionaires moving to another country jumped 28 percent in 2016 over 2015, reaching the highest level in history. Millionaires were enticed, courted and encouraged by a number of countries, including Australia, the United States of America, Spain, Portugal, Malta and Cyprus just to name a few. This year, the number is more than likely to be higher.

The point is: there is a demand in the global market for second citizenships. It is a demand worth billions of dollars, and many governments, including some who criticize the Caribbean for its CIPs, are very much involved in it.

The world’s top destination for millionaires seeking another citizenship is Australia. The second is the United States. And, neither of them has been a passive recipient of millionaires and their money. Both have active programmes, designed to lure millionaires to their shores. These programmes are cast as schemes for permanent residence leading to citizenship; they differ only in the length of the process, not in the purpose of them.

In 2012, Australia introduced a ‘golden ticket’ investor visa for US$3.8 million that has attracted more than 1,300 millionaires. It also has a cheaper programme at $770,000 that allows temporary residence and takes longer to get a permanent visa.

For 27 years, the United States has been operating what is called an ‘EB-5’ programme. It requires a $500,000 investment for a 2-year visa which can be turned into permanent residence and eventually citizenship.  Since 2012, the programme has generated at least $8.7 billion for the US economy. While, originally, it was meant to help finance projects in low-income areas, it has been used to attract Chinese millionaires to invest in high-end real estate projects.

Until 3 years ago, Canada was the third highest beneficiary of visa-investment programmes. Canada scrapped the programme in 2014, but two months ago, Quebec announced that, on the May 29, it will launch the Quebec Immigrant Investor Programme. For CAN$800,000 that programme provides permanent residence leading to citizenship in Canada. Not surprisingly, the programme while open for 1,900 applicants is providing for 1,330 applicants from the People’s Republic of China.

In the Australia programme, nearly 90 per cent of the 1,300 who signed-up were from China.

The point is many of the governments that express concern about Caribbean CIPs, run such programmes themselves earning billions of dollars and targeting the same millionaire communities as do the Caribbean jurisdictions.

The Caribbean has a right to a share of the feast on the global table, and not just to the crumbs that remain after others have fed themselves. Those, who continuously condemn the CIPs, also fail to acknowledge that all the governments, including those in industrialized nations that operate these programmes – by whatever name they are called-  do so as a means of bringing revenues and investment into their countries.  Small Caribbean countries have the same motivation; they have adopted these programmes out of economic necessity.

But, having said all that, Caribbean countries with CIPs should be aware that the critics hang their disapproval of CIPs on the peg of money laundering, tax evasion and terrorism. They claim that CIPs can be used for these purposes, even though they have failed to explain how or to produce evidence of instances where it has occurred.

That is why what is crucial to the success of these programmes and their acceptability, is vigorous, intense and transparent scrutiny of the applicants for citizenship. For the programmes to be successful, they certainly need applicants of high worth – and, in this regard, Caribbean jurisdictions must create new and exciting re

This demands that the process of vetting applicants must be constantly reviewed and regularly strengthened.  No other country should have doubts about them – not in a world where almost everything is capable of cross-border movement.  The five Caribbean governments must invest just as strongly in the robustness of their vetting system as they invest in the promotion of their citizenship.

Already, some Caribbean countries operate stringent vetting processes for CIPs, including referrals to Interpol and the Joint Regional Communications Centre, based in Barbados, that is connected to agencies in the EU, Canada, the US and the UK.

All the countries in the Caribbean should follow this pattern; by doing so, they would strengthen the confidence of other nations in the integrity of their system and give those nations comfort in not applying visa requirements.

In this way, the value of CIPs to Caribbean economies will endure and their native people will have reassurance in the worth of their own passports.

Source: caribbean360.com

Prime Minister Dr. the Honourable Timothy Harris says the Team Unity-led Government views the country’s Citizenship by Investment Programme (CBI) as an integral part of the long-term development of St. Kitts and Nevis that will “bring benefits to the next generation for another 30 years.”

Prime Minister Harris said this is why his Government continues to make significant investments in the citizenship programme. Such investments include the introduction of a 24/7 case management system that allows for round-the-clock, real-time monitoring of the status of CBI applications.

In addition to this, CBI applications now undergo a more rigorous, multi-layered due diligence system.

“We have rebranded our CBI programme as the platinum standard,” Dr. Harris said while speaking with the Press Unit in the Office of the Prime Minister.

The Prime Minister of St. Kitts and Nevis also said, “We have been careful to avoid any attempts to have a ‘market for lemons’ with respect to our own CBI programme. In the ‘market for lemons,’ all products are basically [viewed by the buyer as] the same [due to inadequate information about the product]. Therefore, we have said [to prospective investors] that we maintain the platinum standard and, as a result of that, we have ensured that we have the strongest due diligence programme and policies in place.”

The Honourable Prime Minister added, “We have had some of the best known and most experienced providers of due diligence services to assist us in providing risk profiles on our applicants. Beyond that, we coordinate with regional and international crime-fighting agencies that add another layer of due diligence with regard to the applications, and we coordinate with our international allies. This multi-layered due diligence approach ensures that at the end of the day those who succeed should be those with the highest credibility and highest integrity that are available.”

Dr. the Honourable Timothy Harris further noted that the Federal Cabinet is also considering alternative investment options in growth areas such as alternative energy, entrepreneurship and tourism, particularly medical and student education, “because we are looking at this as making a contribution to the next generation.”

“We are therefore concerned about sustainability, and so we have identified a number of areas that would be of legacy value to the generation after us,” Dr. Harris added.

Prime Minister Dr. the Honourable Timothy Harris continued, “We have identified alternative energy because alternative energy is now the accepted road to go as opposed to utilization of fossil fuels. It leads to sources of energy that preserve our environmental and our system’s health, and at the same time sources of energy that are renewable and affordable.”

Dr. Harris also identified public infrastructure as another alternative investment option.

“There is a need for us to ensure, at regular intervals, that our airports, our cruise ports and harbour facilities, our highways and roads are kept in good physical condition. As a consequence then, we need to preserve the investment in these particular areas of infrastructure,” the Prime Minister of St. Kitts and Nevis said.

Source: zizonline.com

To the Editor:

Re article, “EU Passports for Sale in Cyprus Lure Rich Russians” (Originally published on May 11):

Whilst we are strong advocates of independent and οbjective journalism, we regret to note that this article remains in our view a biased account. The citizenship by investment program is an investment program and in no way constitutes a “sale οf ΕU passports,” “sale οf ΕU citizenship” or “money-for-passports program” as is repeatedly and erroneously mentioned in the article.

The citizenship program requires that a residency permit is obtained prior to citizenship and that residential property of at least 500,000 euros is acquired as part of the investment and is held for life. This ensures that all successful applicants create and retain real ties with Cyprus for life. The minimum investment required (2.5 million euros οr 2 million euros in certain circumstances) is high compared with other programs and, as a result, restricts the number of applicants to a few hundred every year.

The article emphasizes the speed of obtaining citizenship, implying that the relevant control mechanisms and screening procedures are somehow lax or not rigorous enough. But citizenship cannot be obtained without first obtaining a residence permit — the minimum time required for completion of that process is three months. The speed and efficiency of that process is independent of the rigorousness of the screening procedures.

Eurοstat figures indicate that the number of third-country nationals obtaining citizenship in Cyprus is extremely small relative to most ΕU countries. In 2015, οnly 3,300 people obtained citizenship in Cyprus (in total, not just in the context οf the citizenship-by-investment scheme). Τhat is a mere 0.3 percent of the total number of citizenships granted in the EU and compares with 178,000 in Italy, 118,000 in the U.K., 114,400 in Spain, 113,600 in France and 110,100 in Germany. Ιn additiοn, since December 2013, all banks operating in Cyprus operate under the strictest anti-money-laundering regulatory framewοrk in Europe. Comparative framewοrks will be under adοption in all other EU countries four years later than Cyprus.

The article uses cliches, innuendo and conversations with anonymous characters to weave a skewed picture of reality. Τhe facts, figures and statements presented in the article are peppered with a series of ill-intentioned insinuations which are, at the very least, extremely unprofessional and out of place with serious journalism.

Nicos Christodoulides
Government Spokesman for Cyprus

Source: bloomberg.com