The Hot New Immigration Destinations for China’s Wealthy
Unimpressed with the U.S., shut out of Canada, not deep-pocketed enough for Australia and spooked by Cyprus, mainland China’s wealthy are exploring unlikely destinations for immigration, including Portugal and the Caribbean.
Dubai-based Range Developments recently toured China and Hong Kong, seeking investors for its Park Hyatt development in St. Kitts. Range is selling individual $400,000 shares and is quick to highlight the investment’s most attractive return: A passport with visa-free access to most of Europe and other former British colonies at no extra cost.
Investors can obtain St. Kitts citizenship – and a passport, along with it — within six months of the investment. And the documents can be had without stepping foot in the country or taking a language proficiency exam, the company boasted at its presentation.
“This is very hot, selling very well,” said Jean-Francois Harvey, an immigration lawyer based in Hong Kong and agent for the developer, adding that he’s sold shares to “around 200” in mainland China. “It’s seen as a business tool for them. To travel without a visa is a very big deal to someone in China.”
Real estate investment isn’t the only way into St. Kitts. Immigrants can obtain citizenship through a $250,000 donation to the government’s Sugar Industry Diversification Fund, a sovereign wealth fund. Some agents recommend the donation route, especially for those who don’t have plans to live there.
To be sure, St. Kitts represents a sliver of the estimated 10,000 applications filed by Chinese investor-immigrants. The U.S. and Canada are the traditional top destinations, though their appeal has waned lately.
The U.S. EB-5 program, which requires would-be immigrants to put up $500,000 into a qualified business that provides at least 10 jobs, has been marred by a series of lawsuits including a scandal involving a Chicago developer accused of defrauding investors, many of whom were Chinese. Moreover, stringent tax laws scare away China’s ultra-high-net-worth individuals from investing.
Canada’s main investor immigration program, which required would-be immigrants to post up $800,000 in a zero-interest five-year loan to one of its provincial governments, was temporarily suspended last year.
Meanwhile, the U.K. and Australian programs are deemed expensive and difficult. The U.K. program requires applicants to invest £1 million (US$1.5 million) for a residency visa. Investors have to live in the U.K. at least 75% of the time during a 5-year period to qualify for citizenship.
The Australia program is the priciest, demanding 5 million Australian dollars (US$5.2 million) in investment into a qualified business to qualify for a residency visa. However, it only requires investors to reside 160 days over a four-year period to gain permanent residency.
As Chinese immigrants look elsewhere, unlikely destinations have emerged. Cyprus was a popular destination last year, immigration experts say. To obtain a 3-year visa, which allows access to the entire European Union, Cyprus requires a real estate purchase of at least €300,000 (US$391,320).
“Cyprus was heavily promoted in China and a lot of people went for it,” said Denny Ko, an immigration lawyer based in Hong Kong who works with many mainland Chinese clients.
But interest has flagged, due to the country’s economic troubles, and some promoters are trying new tactics to drum up interest. According to state-run news agency Xinhua, developers from Cyprus at the Beijing spring properties exhibition were offering two-for-one deals to Chinese investors looking to spend €300,000 on an apartment.
Immigration experts say Portugal is poised to be the next hot European destination.
Larry Wang, president of immigration consultancy firm Well Trend in Beijing, said the Portuguese government hopes to imitate Cyprus’ recent success by offering residency visas that can be converted to citizenship in six years. The cost: €500,000.
“There’s always a preference for real estate, so programs like this appeal to Chinese,” he said, adding that the requirements aren’t onerous: Investors have to live in Portugal just 7 days a year to maintain the visa.
Similar to Cyprus, St. Kitts has set an example for neighboring countries with its program. Antigua and Barbuda are expected to soon implement similar immigration schemes.
“Ninety-nine percent of my clients have never heard of St. Kitts,” said Hong Kong’s Mr. Ko. “But people look to it for freedom of travel, wealth planning and as a place of citizenship if they’re doing a foreign listing of a mainland company.”
The ultra-rich with fantasies of rubbing shoulders with Europe’s wealthiest are looking to Switzerland and Monaco, which are also seen as safer places for their wealth. To obtain residency there, investors must negotiate with local governments an annual lump sum tax. It’s not cheap: Expect to pay at least a €1 million annually to maintain residency.
“This is a prestige destination, for the really, really high net-worth,” said Mr. Ko.