Investment Migration Council

Author: Niu Ltd

  • 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’[1]. France’s Presidential election too was billed as a battle between a ‘hardline campaign against immigration’ and ‘the progressive, pro-business and socially liberal’[2]. 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[3].

     

    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[4].  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

     

     

    [1] https://www.rt.com/news/380754-dutch-election-wilders-rutte/

    [2] https://www.theguardian.com/world/2017/apr/23/macron-set-to-face-le-pen-after-first-round-of-french-presidential-election

    [3] https://www.usatoday.com/story/news/world/2017/03/27/german-election-mekel-schulz/99679214/

    [4] https://www.bbc.co.uk/news/uk-politics-39498647

     

  • Austrian Citizenship

     

    Basic requirements

    An application for Austrian citizenship in most cases requires – apart from some other requirements – that the applicant has a minimum time of lawful and continuous residence in Austria of at least 6 or 10 years, depending mostly on his current citizenship, his family background (e.g. married to an Austrian) and whether he is “highly integrated”. Besides the requirement of residency, in most cases advanced knowledge of the German language and a basic knowledge of Austria’s history and democratic structure is also needed. Furthermore, the applicant will have to provide proof of his income.

     

    Republic’s special interest

     

    There is however a possibility to apply for the citizenship on the basis of Art. 10 (6) of the Austrian Citizenship Act. This regulation allows a much favourable granting of the citizenship, if the applicant has already made extraordinary achievements and more of such can be expected from him. In these cases the Federal Government of Austria has to certify that the naturalization of such an applicant is “in the special interest of the Austrian Republic” because of his extraordinary merits.

     

    The Austrian Citizenship Act however doesn’t say precisely, in what field of activity these extraordinary merits have to be achieved. Typically, sports, art or science can be fitting, but also economic achievements can be taken into consideration, such as big investments or other economic benefit brought to Austria. A “golden investment” itself will not be enough though; the applicant will have to make prove of his extraordinary contribution to the Austrian society alongside his investment, like creating a substantial number of new jobs (possibly in a rural area), or transferring know-how or new technologies to Austria.

     

    If such a certificate is issued by the Federal Government, many of the basic requirements will not have to be fulfilled: neither will the applicant have to provide proof of his German or historical skills, nor will he need a certain period of lawful and continuous residence in Austria. Furthermore, he will be allowed to maintain his current citizenship as well, so that this is one of the few cases of legal multiple citizenship, which is otherwise mostly banned by the Austrian citizenship law.

     

     

    Author: Balazs Esztegar, Attorney-at-law, Vienna & Co-Editor of an up-to-date commentary on the Austrian Citizenship Act that has been published in April 2017.

  • A Positive for the Foreign National Investor PEPs and FACTA

     

    Politically exposed persons (PEPs), and foreign nationals who possess a U.S. temporary visa, before residency by investment may be subject to the U.S. foreign account tax compliance act (FATCA) and the financial action task force (FATF).

     

    Foreign National Investors (hereinafter FNIs) may obtain U.S. permanent residency by their investment of personal funds (USD$500,000.00 or USD $ 1 million), into a U.S. business which creates U.S. jobs by compliance with the U.S. immigration laws and regulations, as part of the EB-5 Immigrant Investor Program. The preparation and filing of the FNI petition with the United States Citizenship and Immigration Services (USCIS), which includes evidence of the lawful source of funds, to be approved by the USCIS, is the first step towards U.S. residency.

     

    The EB-5 regulations and policy state the FNIs shall provide evidence and authenticate the lawful source of personal investment funds, which includes bank account deposits and withdrawals.

     

    Proof of compliance with FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA)requirements and written statements or reports from the financial institutions detailing how they applied increased deep due diligence on POLITICALLY EXPOSED PERSONS (PEPs), such as a current or former senior foreign political figures (including both elected and non-elected executive, legislative, and administrative persons and members of political parties), their immediate family, and their close associates (including anyone widely known to maintain a close relationship with the public figure and anyone in a position to conduct substantial financial transactions on behalf of the political figure), as a result of the Panama Papers, puts the FNI in a positive position when showing the authentication and transfer of the lawful source of funds especially when referring to foreign bank accounts deposits and withdrawals.

    Notification to the USCIS of compliance adds to the authentication of the lawful source of funds evidence.

     

    It is worth noting, that the FNI may be considered a U.S. taxpayer, and subject to worldwide tax. As a result, the FNI must comply with FATCA requirements.

     

    The FNI is considered a U.S. taxpayer if s/he is physically present in the U.S. for more than 183 days in one year. The FNI may be legally in the U.S. as a B-2 visitor, F-1 student, E-2 investor, L-1 intracompany executive transferee, or professional working status, and may be earning income through employment or real estate holdings or by corporate business dividends or profits.

     

    A person who is present in the United States for less than 183 days, but at least 31 days, during a single year may still be considered a U.S. tax resident in that year if the sum of the number of days the person was present in the United States during the current year and the 2 preceding years (when multiplied by the applicable fraction) equals at least 183 days.

     

    FATCA requires Foreign Financial Institutions (FFIs) to report to the U.S. Internal Revenue Service (IRS), information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest.

     

    Many countries, such as China and Brazil, are signatories with the FATCA Intergovernmental Agreement (IGA).

     

    FFIs report bank account information to the IRS, while the FNI also will be required to report the bank account information to the Department of Treasury, by submitting an electronically special form.

     

    If the FNI does not comply with the reporting requirements, s/he will face penalties. The penalty can be substantial e.g., the FNI may have USD $1 million in a foreign bank account. The IRS will take 50% of the balance in this account for 6 years, totaling a penalty of USD $3 million.

     

    Currently there has been an increase in the number of PEPs intending to obtain U.S. residency by their investment. Politically Exposed Persons include a current or former senior foreign political figures, their immediate family, and their close associates. A “senior foreign political figure” is a senior official in the executive, legislative, administrative, military or judicial branches of a foreign government (whether elected or not), a senior official of a major foreign political party, or a senior executive of a foreign government-owned corporation.270 In addition, a senior foreign political figure includes any corporation, business, or other entity that has been formed by, or for the benefit of, a senior foreign political figure. A “close associate” of a senior foreign political figure is a person who is widely and publicly known to maintain an unusually close relationship with the senior foreign political figure, and includes a person who is in a position to conduct substantial domestic and international financial transactions on behalf of the senior foreign political figure.

    Offshore banking in Panama has become popular for PEPs because the Privacy laws in Panama restrict disclosure of information on bank deposits and there are no reporting requirements.

     

    However, reporting requirements for PEPs will be determined by whether they are U.S. tax payers.

    Even if the PEPs are not U.S. tax payers, their source of funds from bank accounts in Panama will be open to extensive due diligence and scrutiny by the USCIS, IRS, and Department of Treasury, more so today because of the Panama Papers incident.

     

    Recently, the New York Times, revealed in a report, that the well-known law firm Mossack Fonseca in Panama represented many clients in regard to tax planning. The law firm represented many U.S. tax payers and PEPs, but misguided them unlawfully, in evading U.S. tax and avoiding compliance with the financial disclosure laws.

     

    PEP clients of the law firm included individuals connected to Russian President Vladimir Putin; Prime Minister of Iceland; Prime Minister of Ukraine; King Salman of Saudi Arabia, and relative of Syrian President Bashar Al Assad, just to name a few.

     

    As a result of tax evasion, money laundering, and non-compliance with reporting requirements, the Financial Action Task Force (FATF) was formed and most countries became signatories.

    Through FATF, international cooperation amongst banks and financial institutions have led to heightened scrutiny of deposits in accounts, deeper due diligence (Know Your Customer), and enforcing reporting requirements.

    The United Nations Convention Against Corruption (UNCAC) and its signatories have also enhanced scrutiny of PEPs.

     

    In addition, U.S. Bank Secrecy Act requires bank due diligence on depositors in U.S. banks, and this due diligence will apply to U.S. banks in Panama.

     

    In the preparation of the EB-5 petition to obtain residency, a FNI can obtain documentation to show compliance with the reporting requirements, use documents to show how the financial institutions used comprehensive due diligence as to the FNI and, state how their bank or financial institution scrutinized their account deposits and withdrawals.

    This documentation as evidence in their EB-5 Residency Petition will support the credibility of the FNI authentication of the lawful source of personal investment funds, to be invested in the EB-5 project.

     

    A Positive for the FNI?

     

    Author: Edward C. Beshara IMCM, Attorney at Law/Managing Partner, Beshara Professional  Association

  • The Immigration Market in China: Threats and Opportunities

     

    For centuries, China has experienced many historical periods of emigration and in the era of modern emigration, large numbers of Chinese have migrated to popular immigration destinations such as the U.S., Canada, Australia, U.K., etc.   For many of these destination countries, China has been a top immigration source country.  But in recent years, significant policy changes in immigration and taxation from these destination countries, global economic events, along with capital outflow restrictions from China have raised concerns about the sustainability of the Chinese immigration market.  In this article, I will analyze some of the threats to the Chinese immigration industry and suggest some areas where there are still opportunities.

     

    THREATS

     

    CHINA’S SLOWING ECONOMIC GROWTH

    Gone are the years when China’s GDP experienced double-digit growth.  Up until 2015, China was the world’s fastest-growing major economy, with growth rates averaging 10% over 30 years.  However, the Central government has set its economic growth target to a modest 6.5% this year, giving policymakers more leeway to introduce painful reforms and contain financial risks.  With fears of a hard landing of the economy, come fears that this may impact the Chinese immigration market.  A devalued Renminbi means many prospective immigrants cannot meet minimum asset requirements for some immigration programs.  As well, China’s recent strengthening of capital outflow restrictions makes it more difficult for investor immigrants to get their money out of the country.  On the other hand, a slowing economy is a significant push factor for HNWIs and immigration is seen as a way to hedge against wealth devaluation as an investor immigrant could move capital out of the country and acquire property or invest in overseas businesses.

     

    LONG TERM VISAS

     

    Years of economic growth have made Chinese more affluent and with this new-found affluence came an increased desire to travel abroad.  According to the United Nations World Tourism Organization, since 2012 China has been the #1 source market in the world of outbound travellers, with travellers spending more than twice the tourism expenditure of the #2 country, the U.S. in 2016 (USD $261 bn vs $122 bn).  Thus it makes sense for countries to make it easier for Chinese to visit, with Western countries like Canada, the U.S., Australia and the U.K. routinely issuing long term visas, up to 10 years.  The relative ease of obtaining a travel visa may lead some Chinese to question the necessity of immigration.

     

    INCREASINGLY DIFFICULT TO IMMIGRATE

     

    Chinese are finding it increasingly difficult to immigrate to traditional destinations like the U.S., Canada, and Australia, with each country posing specific challenges.  The Canadian FIIP (Federal Immigrant Investor Program) and the U.S. EB-5 program have similar success trajectories in that the former became a victim of its own success and the latter now becoming a victim.  The huge backlog of files for the popular FIIP became the Canadian government’s justification for terminating the program.  The current queue for the EB-5 program requires applicants to wait up to 7 years.  If the EB-5 is to survive and thrive, the huge backlog problem must be resolved.

    Other difficulties faced by prospective Chinese immigrants include more onerous documentation requirements to establish the legality of the source of funds, and an overall higher bar for immigration to popular Western countries.  Typically, as an immigration program matures, it becomes more selective in order to target a more specific and qualified type of immigrant.

     

    CONSTANTLY CHANGING ENVIRONMENT

     

    It has been said that one of the main differences between China and the West is that in the West policies remain the same but governments change while in China, the government remains the same but policies change, and oh how they’ve changed!  China transformed itself from a largely agrarian society to the world’s second largest economy.   The immigration industry in China has also experienced much change over the years and my company has been able to survive and thrive for the past 23 years largely because our focus has been to look beyond market share and competition and to more fundamental concerns of survival and sustainability in an ever changing business and regulatory environment.  Accept the fact that there will be change.  Talk to experienced people in the field who have no doubt experienced change before.  Handling change successfully begins with new goals and a good plan.

     

    OPPORTUNITIES

     

    EDUCATION AS A STEPPING STONE TO IMMIGRATION

     

    Detractors of the Chinese education system cite its emphasis on memorization and standardized testing.   China’s college admission exam (the gaokao) is a gruelling nine-hour exam spread over two days which TIME magazine calls the “most pressure packed examination in the world.”  Unfortunately, the importance of this exam means teachers focus mostly on the exams at the expense of teaching critical thinking and creativity leading many parents to look overseas for better quality education alternatives with a possible eye toward future immigration.

    The internationalization of higher education has resulted in more and more foreign students with many of them considering overseas education as a stepping-stone to permanent residency.  For example, Canada’s immigration system has programs in place which allow for international students to study and upon graduation from a post-secondary institution, qualify for a work permit and the acquired education and work experience in Canada count towards their immigration application.  Thus, an overseas education can result in immigration in the long term.

     

    ENDEMIC PUSH FACTORS

     

    POLLUTION

    In early May 2017, a sandstorm swept over Beijing causing the AQI (Air Quality Index) to skyrocket to 905, more than 36 times the WHO PM 2.5 safety standard.  In spite of the Chinese government’s best efforts and the issuance of the Action Plan for the Prevention and Control of Air Pollution which reduced coal consumption by closing polluting mills, factories, and smelters and switching to eco-friendly energy sources, air pollution is still a significant concern for many Chinese and remains an important push factor for immigration.

     

    FOOD SAFETY

    A 2015 Pew Global Attitudes survey found that  71% of Chinese considered food safety  a big problem.  From melamine-tainted milk to gutter oil to contaminated fruit to expired meat, the list goes on.  China’s tougher Food Safety Laws along with the State Council’s proclamation that food safety is a top priority are important steps but according to a 2016 Brookings Institute article, China’s food safety regulators greatest challenge is in the implementation of these laws due to the fragmented and chaotic state of the domestic food industry.  In the meantime, consumer anxiety over food safety remains and this continues to be another significant push factor.

     

    OVERCROWDING

    The scale of urbanization in China is unprecedented in human history, with its rise coinciding with China’s extraordinary economic boom and the emergence of megacities (population >10 million) of which 9 of the world’s 37 are in China.  Current daily life in China’s major cities means seas of pedestrians, jam-packed buses and subways, and stand still traffic jams.  Under such conditions, it is easy to imagine immigration being on the minds of daily Chinese commuters.

    Throw into this mix of push factors, other factors like the higher cost of living, the un-affordability of property (especially for young, first-time buyers) as well as work mobility restrictions and you can see that the desire to immigrate should remain high for the near future.  “ Zhè shān wàngzhe nà shān gāo” translates as a mountain looking enviously at another higher mountain and is the Chinese equivalent of “the grass is always greener…”  To many Chinese, they will always be looking abroad for higher mountains.

     

    Author: Larry Wang, President of Well Trend United Inc.

  • THE INVESTMENT MIGRATION FORUM 2017

    As a part of its annual events calendar, between the 5th and 7th June, the Investment Migration Council (IMC) will be holding its annual Investment Migration Forum in Geneva, Switzerland. This is a unique forum where key players from the academic, governmental, and professional sectors will come together to discuss the industry and its future.

    The mission of the IMC is to facilitate a greater understanding of the industry, the sharing of knowledge through professional development, publishing academic research papers and reports, combined with understanding and adherence to its code of ethics and professional conduct by its globally distributed 300+ members.

    The forum in Geneva will once again be held at the Grand Hotel Kempinski. Dubbed the ‘Davos’ of the Citizenship by Investment industry, it is a must-attend for the global investment immigration industry bringing together all stakeholders, in one neutral location, to unveil the latest new developments, emerging trends, and upcoming programmes. The themes of this year’s event will focus on changes in the global landscape during the last 12 months, and how it will impact investment migration and citizenship by investment trends and procedures. Topics including travel bans, the impact of Brexit on EU citizens, the refugee crisis, and the Trump presidency, will all be discussed by key note speakers, panels, and government roundtables.

    One of the keynote speakers on the first full day of events is  Maria Patsalos a Partner at London law firm Mishcon de Reya LLP and Michael Frendo a Former EU Foreign Minister of Malta, who will discuss possible UK immigration policies after Brexit, This will be followed by a panel session entitled ‘Walls and Fences in the Modern World’ which will bring together Boriss Cilevics – Member of Parliament of Latvia, Madeleine Sumption- Director at the Migration Observatory at the University of Oxford, and Kristin Surak a Member of the Institute of Advanced Studies at Princeton university and a Professor of Politics at SOAS, UCL. Later in the day, guests will enjoy a 30-minute roundtable discussion which will bring together key players from almost every continent. Participants will include Francisco Alvarez De Soto a Managing Partner at Alves & Co Attorneys at Law, in Panama City, Pruet Boobphakam- President at Thailand Privilege Card, and Peter D. Joseph the Executive Director at IIUSA from Washington DC, amongst others.

    During Day two, delegates can sit in on a discussion on ‘The Necessary Evolution of the Investment Migration Due Diligence Model’ which will be headed by Chisanga Chekwe- Senior Advisor at Pace Law Firm, Toronto, James Swenson- global Head Enhanced Due Diligence at Thompson Reuters, London, and other industry leaders in the areas of due diligence. The discussion will drill down into developments in fraud prevention tools, and the increasing need to scrutinise PEPs.

    Other key highlights of the programme include- ‘The Risks of Citizenship by investment Programmes’ with Peter Vincent- Assistant Director General for International Policy at BORDERPOL and General Counsel at Thompson Reuters Special Services LLC, ‘Residence and Citizenship in Malta’ with Roderick Cutajar- Executive Chairman of the Malta Residence and Visa Agency, and ‘Avoiding the Effects of Travel Bans’ with Tammy Fox-Isicoff, a partner at Rifkin at Fox-Isicoff, Miami.

    The three-day forum will be rounded off with an address from Bruno L’ecuyer, the CEO of the IMC, and other Board and Committee Members. This year’s Investment Migration Forum is expected to attract over 300 academics, senior level representatives, academics, migration agents, law firms, wealth managers, UHNWI’s, government representatives, and international organisations involved in migration and citizenship by investment.

    To find out more about the full programme and to book your place, please visit: investmentmigrationforum.org

  • No Longer Just Talk – South Africans Really are Leaving the Country

    The recent credit downgrades by Fitch and Standard & Poor’s ratings agencies, and the potential effects of junk status, has wealthy South Africans seriously reviewing the available options for diversifying their personal interests and investment assets beyond the country’s borders.

    “We’ve certainly noticed an increase in local enquiries in the last couple of weeks,” said Nigel Barnes, managing partner at citizenship planning consultancy, Henley & Partners.

    “I think that concerns over the future growth and development of South Africa, and uncertainty about the sustainability of sectors, such as education, is finally driving South Africans to assess their alternatives in earnest.

    “In short, they are now acting on their concerns, rather than just voicing them among family and friends.”

    Citing Intergate Immigration consultancy, TimesLive earlier this month reported that inquiries about emigration shot up by 250% the day after president Jacob Zuma’s cabinet reshuffle announcement.

    “There’s a definite increase in people that are leaving. Profoundly, in the last two to three weeks. The day after the reshuffle our inquiries went up by 250%.”

    According to Barnes, the current trends are really just an uptick on what has been a steadily growing local interest in investment migration over the last few years.

    He pointed out that it was this rising demand for alternative citizenship that prompted Henley & Partners to launch a regional branch in SA towards the end of 2016.

    Barnes said that, of late, there has been a particularly significant increase in enquiries from High Net Worth Individuals (HNWIs) from other African countries.

    “This is hardly remarkable given that the continent’s citizens are, on the whole, the most restricted in the world when it comes to movement,” he said.

    Where are they going?

    Of the several international investment-migration options currently endorsed by Henley & Partners, the Malta Individual Investor Program (MIIP) is the most successful of its kind in the world, and one of the most popular with South Africans, said Barnes.

    A Maltese passport offers its holder the right of settlement in all 28 EU countries as well as
    Switzerland.

    “For those seeking European citizenship that can be passed down unlimited family generations (even dependent parents aged 65 and older may be included in the application), this is a very attractive programme – and the only one of its kind to be sanctioned by the EU.”

    The citizenship-by- investment programmes offered by some of the island nations in the Caribbean, which are among the most competitive in the world, have no residence or visitation requirements at all, Barnes said.

    According to Henley & Partners, a St Lucian passport can be obtained from as little as US$100,000, and it grants visa-free access to 127 countries, including the EU’s Schengen area, the UK, Singapore and Hong Kong.

    Grenadian citizenship, meanwhile, requires a capital outlay of between US$200,000 and US$350,000 (property investment), and offers unrestricted access to 124 countries, including the UK, the Schengen area, Brazil, China and other key markets.

    The country also holds an E-2 Investor Visa treaty with the US, allowing citizens to be eligible to apply for a non-immigrant visa.

    “Neither programme has any residency or visitation requirements, and processing for either passport can take less than four months. And, as with Malta, citizenship is transferable by descent,” said Barnes.

     

    Source: businesstech.co.za

  • Security over Profitability in the CBI says Dr. Harris

    Prime Minister of St. Kitts and Nevis Timothy Harris is confident that that the revamped Citizenship By Investment (CBI) program can protect it from criminally obtained money to obtain citizenship and is willing to sacrifice profitability in the program In order to ensure security in the process.

    Dr. Harris responded to questions that tainted money had been used by Ren Biao to obtain a St. Kitts and Nevis Passport.

    The Prime Minister said the improved due diligence now in the CBI allows for greater security to the program.

    “Somebody who has matters before the court, somebody who has families in countries that are prohibited or considered pariahs in the world, those persons would be flagged and our risk based assessment would ensure that by and large unless they can surpass the relevant requirements that would flow through that those persons would not make the grade in terms of being able to access our citizenship,” he said.

    Dr. Harris stated that by going through the layers of due diligence ensures that those who will receive citizenship are individuals that have no malicious intent.

    “We are subjecting every applicant to almost four to five different layers of due diligence and support and when we get that again, the risk based system that we used that would allow us then to make a judgement whether to approve or deny, and then we have built in our system that at regular intervals, we will do a look back to see what has happened then and then take the requisite action,” he said.

    The Prime Minister added that he was content to see the program sacrifice some profitability  for increased security measures.

    “In my view security must always triumph. We will not let ill-gotten gains be the determinant in terms of our policy prescription. I want to make the point that St Kitts and Nevis will never be under Team Unity a haven for criminals, we do not want them in our programme. We wish they were not part of our citizenry, the reality is that when they become citizens we have to deal with that reality and they form the pool of citizens, some who are well minded and some who are not so well committed to the patriotic good,” he declared.

    The Prime Minister further described some of the vetting procedures that take place under the program.

    “In our vetting process we look to see if these are politically exposed persons. Politically exposed persons are people with political contacts and relationships and generally they get a less favourable score when you are dealing with financial institutions,” he said, adding that the country the applicant is from is also a consideration.

    “If they are from high risk countries such as Iran and North Korea, countries that are described as state sponsors of terrorism all these are matters that we take into account. We do a broad check of media and criminal databases, sanctions list…and make a determination whether they are serious or pending legal regulatory or political matters that would require consideration,” he said.

    Dr. Harris stated that it was a complex business and that the government is looking to resolve the issues as best as possible.

    “We are looking at making some changes in relation to that particular legal framework to ensure that when people get money put in escrow for the Citizenship by Investment programme it is only used for the particular purpose among clients offer different purposes to the extent we can through legal requirements and legislation to ensure that we safeguard people’s money so that the integrity of the programme do not become undermined as a result of the inaction or adverse action of those who are service providers or fall in any other category under the program,” he said.

    He added that he is hopeful the time will come when the Federation could become more self-sufficient and  less reliant in the CBI.

    “I hope the time will come in the not too distant future where we can as a people reach that level of development that we can easily exit from this program,” he stated.

    Dr. Harris added that although it has brought significant benefits to St. Kitts and Nevis the evolving market place means that there are significant downsides.

    “We have to go back again to strengthen our tourism sector, our agricultural sector, our manufacturing sector, our education sector in terms of our ability to bring more of the kinds of institutions we have here,” he said.

     

    Source: thestkittsnevisobserver.com

  • US L1 Visa Favored by Chinese Investors

    A report published by Forbes – a leading global media company – states that Chinese investors are turning to the US L1 visa to extend their stay in America. The report comes amid increasing uncertainty over the future of the EB5 green card program.

    According to Forbes, the controversial EB5 immigrant investor scheme is ‘losing its appeal’ among Chinese investors. This has been attributed to a waiting list that spans several years, the possibility of the minimum investment threshold being increased, and the growing concerns about the program – including a rise in the number of fraud cases.

    The family of Jared Kushner the son-in-law of Donald Trump and a top adviser to Trump has come under fire for trying to use their connections to the White House to promote the EB5 green card scheme in China. This has added to the controversy over the EB5 immigrant investor scheme.  More recently the Kushner family has said that they will be taking less of a role in promoting the EB5 immigrant investor scheme in China.

    As a result, wealthy Chinese investors are opting for the L1A visa for managers and executives for entry to the US. The L1A non-immigrant US visa enables companies to transfer key personnel or company founders to oversee business operations, for up to seven years.  Chinese nationals are unable to come under the E2 Visa or E1 Visa which otherwise might also be considered instead as a US visa route.

    The largest international real estate portal in China, Juwai.com, is understood to host three to four visa-related events every month, according to the Forbes report. The portal’s CEO, Charles Pittar, revealed that when the US L1 visa is explained to Chinese investors almost one-third of EB5 applicants then decide to apply for it instead.  There are also other much cheaper green card visa routes such as the EB1C for international managers and executives.

    Pittar said: “What Chinese investors want is the path with least resistance – meaning minimal uncertainty, the shortest timeframe and the lowest cost possible.”

    EB5 Immigrant Investor Green Card program may become less popular

    Introduced in 1990, the EB5 program, which essentially enables wealthy foreign entrepreneurs to pay for a US green card, has generated billions of dollars in investment. According to the USCIS, since 2012, the program has generated $8.7 billion dollars’ worth of investment, and created 35,150 jobs.

    Real estate developers consider the program to be an ‘easy source of funding’, but the scheme’s popularity has led to an increasing number of problems, most notably, an extensive waiting list. 10,000 US greens cards are issued every year via the EB5 program, which is subject to quotas by country.   However, because of the way the quota system operates in reality most of the EB5 visas go to Chinese nationals.

    With 90% of EB5 applications arriving from China, there’s now an eight year waiting list for Chinese nationals hoping to secure an EB5 visa. Regulatory uncertainty has shrouded the program in recent weeks. Over the past two years, lawmakers have kept the EB5 scheme running via temporary extensions amid talks to increase the minimum investment amount.

    In January, the US Department of Homeland Security put forward proposals with a view to increasing the minimum investment amount to $1.3 million for areas in the US with high unemployment rates (up from the current investment of $500,000). Meanwhile, for all other areas, investors would have to part with $1.8 million, up from $1 million.

    It’s not clear if the minimum investment thresholds will come into force, with Congress currently caught up in other issues, the EB5 program does not top their priority list. However, the increasing uncertainty has made the scheme far less appealing for potential Chinese investors.  Congress it has to be said has had difficulty agreeing on significant changes to US visa law.

    Add to all this, a requirement for investors to provide proof of funds, wealthy Chinese entrepreneurs are further deterred from using the program. The Forbes report says that investors are turning to other US visas because the paperwork is ‘less strict than that of the EB-5, while decisions on visas are much quicker and far easier to predict.’

    Other immigrant and non-immigrant US Visa options for the rich

    With the future of the EB-5 program under scrutiny, there’s a negative feeling around it in China. One commentator said: “It’s partly because of the uncertainty of what will happen to the program. There’s no real certainty or security and some projects have failed. Some have been outright fraud.”

    Meanwhile, the Forbes report suggests that the L1 visa is a much more attractive proposition for Chinese investors. With no language or education requirement and no quota to contend with, an L1 visa can be acquired within one or two months in many cases.

    The L1 visa restricts an investor’s stay in the US to seven years.  The good news is that many foreign entrepreneurs can make an application for another US visa, such as the EB1C green card visa for multinational managers and executives within two years of entry to the US.

    Meanwhile, US green cards among wealthy Chinese investors are decreasing in popularity. Reaz Jafri, partner at Withers, a wealth management firm told Forbes: “Green cards are expensive and most billionaires don’t want to expose themselves to estate taxes and worldwide income.”

    It’s widely known that the US is one of only a handful of countries to tax its citizens on worldwide income. US Green Card holders are treated in a similar way to US citizens for tax purposes.  A recent list compiled by Nomad Capitalist and published by Bloomberg, ranked 199 nations based on their ‘value of citizenship’.

    The chart took into consideration, factors such as visa-free travel options, taxes levied on citizens living overseas, the flexibility to hold multiple passports and various other criteria. The US tied with Slovenia in the rankings – in 35th place – mainly due to its worldwide taxation system.

    Aside from the L1 visa, rich foreign investors turn to another sub-category of the EB1 visa, which is issued to overseas nationals with ‘extraordinary ability.’ According to Jafri, a ‘millionaire or billionaire who has successfully started a company in the US and made it public, becomes eligible for such a visa because of their business accomplishments.’   You can also be eligible for this visa right away based on your accomplishments outside the US.

    Despite the declining popularity of the EB5 program, the US remains an attractive investment opportunity for foreign entrepreneurs. Jafri said: “For certain types of people, the US is still seen as a bargain, a place where you can acquire hard assets and make investments with no risk of appropriation by the government. They’re pretty comfortable bringing money over.”

     

    Source: workpermit.com

  • Singapore Scales Up as a Major Player in Wealth Migration

    There is no doubt that Singapore has been attracting companies and firms from across the globe, given its relatively free economy. In 2016, the World Bank ranked Singapore second in the ease of doing business, further cementing its position as a global hub for firms.

    This has led to the steep rise in the interest and uptake of investor migration programs in Singapore not just for its citizens but also for the wealthy expat community that are residents in Singapore.

    In this exclusive interview with Singapore Business Review, Henley & Partners head of Southeast Asia Dominic Volek discussed how wealth and investment migration is fast changing not just in Singapore but in other countries.

    SBR: How has the trend of wealth and investment migration changed, especially in Singapore?

    In an unsettled, ever-changing world, acquiring an alternative residence or citizenship is increasingly being seen as the most worthwhile investment you can make as it reduces your exposure to risk, secures your families future and opens up new opportunities for you and your business.

    Increasingly popular worldwide, citizenship-by-investment programs provide a mutually beneficial solution for a growing movement of global citizens as well as governments seeking to drive economic growth. By offering greater choice, opportunity, freedom and security to talented and wealthy individuals from other countries, governments in turn secure much-needed foreign investment and enrich their own citizens by attracting people with proven business success and valuable networks.

    In Singapore, the interest and uptake of investor migration programs is on a steep rise – not for Singaporean citizens themselves as dual citizenship is not permitted and strongly enforced – but for the wealthy expat community that are resident in Singapore including Russian, Indian and Chinese nationals amongst others who are driven by the desire for better travel freedom which an alternative citizenship can provide. We are also seeing unprecedented levels of interest from Korean, Japanese and US nationals who, although they have very good passports from a travel-ability perspective, are seeking alternative citizenship and residence in more tax efficient jurisdictions.

    SBR: Aside from its strategic location and business-friendly regulations, what do you think are the reasons why firms decide to set up shop in Singapore?

    Of course, from a geographical perspective, Singapore is ideally situated with excellent and easy access to some 650 million people all within a two to three-hour flight.

    With efficient regulatory processes, political stability, strong credit rating and very well-educated and English speaking residents – Singapore represent an attractive proposition for ‘setting up shop’. General living conditions are also extremely favourable with a good climate, strong economy, safety, efficiency and reliable public transport.

    As an International Finance Centre (IFC), Singapore will undoubtedly continue to play an important role in global finance markets and therefore continue to attract businesses. Although, in order to remain relevant and given the changes in global compliance requirements such as the Common Reporting Standard, the future of Singapore as an IFC will very much depend on its ability to refine its value proposition amid the changing regulatory environment – something that Singapore has historically managed to do quite well.

    SBR: On a global scale, where do you think do most people prefer to put up their investments?

    The Malta Individual Investor Programme is the most popular European investment migration program, and offers citizenship in an EU member state that is stable, neutral and highly respected. The application process includes the world’s strictest due diligence standards and vetting of applicants. It is also the most successful program globally, securing more than EUR 1 billion in new capital for Malta within the first 18 months of operation. Maltese citizenship provides an individual with the right to live, work and study in any of the 28 EU countries and Switzerland; visa-free travel to 167 countries, including Canada, the US and Australia; and it is an attractive place to live or own a second home, being strategically located with excellent air links.

    From a business and investment perspective, Malta stands to significantly benefit from the repercussions of Brexit as more and more companies are expected to move to Malta’s shores given its easy access to the EU, efficient regulatory process, political stability and high financial/credit rating. Maltese residents also speak English and are very well-educated.

    Malta also has a number of advantages that are supporting its emergence as one of the world’s most important financial jurisdictions with membership of both the EU and the Commonwealth and a solid tax framework with 65 tax treaties internationally.

    In the Caribbean, the Grenada Citizenship-by-Investment Program is one of the most popular options. The Caribbean state is ranked 37th on the Henley & Partners Visa Restrictions Index 2017, offering visa-free travel to 124 countries, including Europe’s Schengen area, the UK, Singapore, Brazil, China and Hong Kong.

    Grenada is also the only Caribbean country with a citizenship-by-investment program that provides visa-free access to China and the opportunity to apply to live and work in the US through the E-2 Investor Visa. In the Global Residence and Citizenship Programs 2016 report, Grenada ranks highly under the Physical Visit and Residence Requirements, as it does not require applicants to visit the island nation and there are no residence requirements.

    SBR: How does global security affect wealth migration? What are other threats that may hamper the growth of this trend?

    Global events such as Brexit, the US Administration under President Donald Trump, and recent terror attacks have indeed brought the topic of global security to center stage.

    Henley & Partners has noted an increase in the number of wealthy families and investors wanting to reduce their exposure to risk by gaining residency in another country that provides greater educational opportunities, financial freedom and security. In the context of greater global uncertainty and change, these individuals have realised the importance of diversifying not only their traditional investment portfolio, but also their citizenship portfolio.

    SBR: What opportunities will help shape wealth migration?

    Worldwide, governments are finding themselves not only competing for international talent, but also for investors, entrepreneurs and high net worth individuals and families, and having to now find new ways of generating growth based on this growing trend of wealth migration.

    In terms of investment migration opportunities, I can single out three further programs that are stimulating the movement of wealth worldwide.

    The Cyprus Citizenship-by-Investment Program has reduced the minimum requirement to EUR 2 million for all four investment options. Updates to the requirements were made in an effort to further promote foreign direct investment in Cyprus and align the program with the most recent industry requirements and standards. The investment options were also restructured and include the choice to invest in real estate or land development; purchase, create or participate in Cypriot businesses; invest in alternative investment funds; or a combination of the first three options.

    The Malta Residence and Visa Program was launched in 2015 and applications opened in February 2016. The program is geared specifically towards qualified, reputable third country nationals who can make a significant contribution to the economic development of Malta. This allows the individuals the right to reside, settle and stay indefinitely in Malta, with free movement of travel within the Schengen area.

    And finally, Grenada’s Citizenship-by-Investment Program has been revitalized, and now offers visa-free travel to all the major consumer markets, double taxation treaties with CARICOM and the UK, as well as an E-2 Investor Visa Treaty with the US, allowing successful applicants the right to enter, live, work and stay in the US by making an investment in a US business.

    SBR: Can you elaborate on citizenship-by-investment and residence-by-investment programs?

    The purpose of residence- and citizenship-by-investment programs is to enable individuals to acquire residence or citizenship by making an exceptional economic contribution to another country. The programs are structured to ensure that the investment contributes to the welfare, advancement and economic development of the country in which they wish to reside or belong too. It is often more about making an economic contribution than just an investment.

    In contrast to other foreign direct investments, where the investment decisions are based purely on competitive rates of return and provide for a certain level of economic efficiency, investors in residence- and citizenship-by-investment programs are generally willing to invest at less favorable rates or may acquire assets for more than their intrinsic value as the result of the inclusion of the passport asset in their investment decision.

    In recent years an increasing number of high net worth individuals have specifically acquired a second or third passport to diversify their personal exposure and options. They realise that not only their investment portfolio but also their citizenship portfolio, needs to be diversified to reduce risk and increase international flexibility. Having a second or third passport is still regarded as the ultimate insurance policy.

    SBR: What can you say about the future of global mobility? What trends can you see playing out in the years to come?

    Compared to a decade ago, there are now more residence- and citizenship-by-investment programs available for those who wish to increase their travel freedom as well as business and personal opportunities. More and more governments are embracing these programs as a means of stimulating economic development and growth, and there is an increasing number of wealthy and talented individuals looking to diversify their citizenship portfolios to give themselves and their families greater international opportunity, stability, freedom and security.

    Today, it’s progressively more common to be educated abroad and to have roots, footings, connections, residences and even citizenship in more than one country. In fact, it’s becoming the norm. It was recently reported that most people today move an average of 12 times during their lifetime, and this average is expected to increase in the coming decade. The desire for global mobility, additional security, and a better quality of life is increasingly driving the demand for these investment migration programs. Investors see these programs as an ‘insurance policy’ to reduce their exposure to risk, and ensure enhanced stability and security for their families. Henley & Partners believes this sector will continue to grow over the next decade.

    SBR: Anything else you would like to add and highlight?

    For wealthy individuals who hold passports of countries with fewer visa waiver agreements, a second passport can open up travel to countries previously restricted by time-consuming visa application requirements and processes. This second passport gives a business person access to the global market, which in turn creates opportunities for growth. Investors and their families can use this second passport to relocate to regions that can simultaneously provide them with better security, quality of life, education, and help them expand their businesses.

    In an unsettled, ever-changing world, acquiring a second citizenship is a wise decision and an investment for the future. When you acquire citizenship, your spouse and children, and sometimes your parents, can be included. Citizenship is for life and can be passed on to future generations, and depending on the country or countries of which you become a citizen, there is often no need to give up your current citizenship and you can, therefore, enjoy the benefits of both or all citizenships as states increasingly allow multiple nationalities.

     

     

    Source: sbr.com.sg

  • Business immigration can help support Canada’s economic growth, if done right

    Entrepreneur and investor immigration allows Canada to attract people that can launch innovative businesses, increase the flow of foreign direct investment to Canada, and support economic development goals such as building infrastructure. A new report by The Conference Board of Canada, Entrepreneur and Investor Immigration: Creating Jobs and Growth provides recommendations to help strengthen business immigration’s role in spurring Canada’s economic development. The report notes that while Canada has operated entrepreneur and investor immigration programs to support economic development since 1978, the programs have had limited success.

    “In recent years, Canada’s programs have struggled to meet policy objectives due to increased competition from all corners of the globe in attracting business immigrants,” said Craig Alexander, Senior Vice-President and Chief Economist. “However, as other countries are becoming less welcoming to newcomers, Canada can position itself to reap greater economic benefits from entrepreneur and investor immigration in the future by opening its doors to more foreign talent.”

    Highlights

    • Entrepreneur and investor immigration can support Canada’s economic development priorities, including building infrastructure, driving innovation, and attracting foreign direct investment and talent.
    • Enhancing matchmaking opportunities could help draw a greater number of highly talented entrepreneurs to Canada to launch innovative and globally-competitive businesses. It could also improve efforts to succeed retiring Canadian business owners.
    • A new federal immigrant investor program could draw more foreign capital to Canada but it would require strict monitoring and enforcement to ensure it benefits the economy and is supported by the Canadian public.
    • Providing entrepreneurs and investors with more supports could help them become more successful business persons in Canada.

    To date, the success of Canada’s business immigration programs has been hampered by challenges around selection criteria, low interest rates that limit the ability of provinces and territories to use immigrant investor funds for economic development, fraud, low immigrant retention rates, the burden of monitoring programs, and public concerns. The report makes the following policy recommendations to improve Canada’s immigrant entrepreneur and investor programs.

    Canada could attract more immigrant entrepreneurs by creating better matchmaking opportunities between prospective entrepreneurs and Canadian business persons. This would allow Canada to recruit more innovative entrepreneurs capable of launching globally competitive businesses that create wealth and jobs for Canadians. It would also allow Canada to support succession-planning for retiring Canadian business owners.

    A new federal immigrant investor program could benefit the Canadian economy by drawing more foreign capital to Canada to support key priority areas as infrastructure, affordable housing and venture capital. However, careful consideration is required for structuring investment requirements to ensure Canada maximizes the program’s economic potential. Strict program integrity measures would also need to be in place to address common public concerns such as Canada “selling citizenship”. A public awareness campaign would also be required to placate concerns regarding the impact of immigrant investors on real estate prices in major cities such as Vancouver.

    Canada must also be more cognizant of the international competition. While it was once a global pioneer in this field, many more countries operate entrepreneur and investor immigration programs. One way Canada can improve its global competitive standing is by shortening the time it takes to process applications.

    Making immigrant entrepreneurs and investors more aware of available learning and mentorship supports will help enhance their chances of success as business persons in Canada.

    The theme of this report will be further explored at The Conference Board of Canada’s 3rd annual Canadian Immigration Summit in Ottawa on May 9-10, 2017. The summit features the Hon. Ahmed D. Hussen, Minister of Immigration, Refugees and Citizenship and three provincial immigration ministers from Ontario, Quebec, and New Brunswick.

    SOURCE Conference Board of Canada

     

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