Wealth Migration Trends 2015
High net worth individual (HNWI) wealth is expected to reach a record US$64.3 trillion by 2016[1]. Of that, predictions show almost US$12 trillion is new HNWI wealth, fostered by robust expansion in most world regions. Symmetry can be seen between this HNWI growth and applicant numbers to global investor migration programmes over 2015, suggesting a correlation between growing private wealth and the demand for alternative citizenship and residency.
Growing appetite for investor migrant market
Markets around Europe continue to thrive with high applicant numbers in Latvia and Bulgaria. [2]Portugal has extended its Golden Residence Permit to encourage investment into science, cultural heritage and urban rehabilitation. Interest in Malta’s IIP remains high in its second year. By June 2015, the number of applicants in the Maltese citizenship program was just over 620, out of the cap of 1800 applications in place for the program. Australia introduced the Premium Investor Visa (PIV) in July 2015, allowing for fast tracking to permanent residence by virtue of complying investments of at least AUD15milion over 12 months, without any residence requirements. We see similar incentives with Antigua and Barbuda offering time-limited reductions in investment thresholds and fee waivers, as well as the work restrictions being eliminated in Spain.
Restrictions and closures of popular investor migration models
Popular investor migration models betray opposing themes. The United Kingdom doubled the minimum threshold for its popular Tier 1 Investor programme to £2 million in November 2014 and has introduced other administrative requirements on applicants. 2014/15 saw the closure of two highly popular programmes: Hong Kong’s Capital Investment Entrant Scheme (CIES) was suspended in January 2015; and Canada’s Federal Investor Programme was closed in June 2014[3].
Internal restrictions impacting top sending countries
An interesting development over the last twelve to eighteen months are restrictive measures by the two top HNWI sending countries. Since August 2014, Russia legally requires its citizens to notify the authorities if they obtain alternative permanent residency or citizenship, with the threat of criminal sanction for non-compliance. China’s State Administration of Foreign Exchange (SAFE) has imposed annual limitations on withdrawals outside of China on UnionPay bank cards[4]. Beijing was already imposing a daily limit on withdrawals. This may be the start of more draconian measures as capital has been flowing out of China at a fast pace in 2015 year, and could impact investor migration appetite from the country[5].
Restrictions within Schengen and developments in the EU
Border controls were temporarily re-introduced across parts of the EU in response to the ongoing refugee crisis and recent security threats in late 2015. This effectively resulted in temporary suspension of the Schengen system, potentially impacting all investor residents elsewhere in the EU, seeking to enter the Schengen space. Global security threats as the Syrian crisis are impacting certain investors. For example, Antigua and Barbuda are considering excluding Syrian nationals from its Citizenship by Investment Programme (CIP)[6]. St Kitts and Nevis has already imposed a suspension[7]. Others may choose to follow suit and the wider implications of this will need to be closely monitored over the first quarter of 2016.
[1] Cap Gemini Wealth Report
[2] https://www.migrationpolicy.org/sites/default/files/publications/Investor-Visas-Report.pdf
[3] No further applications to Canada’s programme were accepted from February 2014, and the programme closed permanently in June 2014. See https://www.cic.gc.ca/english/immigrate/IIP-EN.asp
[4] (effectively applies to all cards as UnionPay processes virtually all card transactions)
[5] Note that: 80% of applicants to the US’ EB5 are from mainland China; 81% of Portugal’s Golden Visas over a period of two years (up to November 2014) were issued to Chinese nationals; 43% of UK Tier 1 Investor visas were issued to Chinese nationals during the 12 months to the end of September 2014; 90%+ of applicants for Australia’s Significant Investor Visas (SIV) are Chinese nationals.
[6] https://antiguaobserver.com/syria-may-be-barred-from-cip/
[7] https://sknis.info/government-of-st-kitts-and-nevis-suspends-citizens-and-residents-of-syria-from-cbi-programme/
Author: Nadine Goldfoot, Partner and Head of Investor Immigration Practice, Fragomen LLP
